Business Enterprise in the American Revolutionary Era 9780231879224

Table of contents :
Preface
Contents
Part I. Introduction
I. The Late Colonial Business Scene
II. The Revolutionary Economic Forces
Part II. Years of Chance, 1775-1782
III. Massachusetts and Rhode Island
IV. Jeremiah Wadsworth and His Associates
V. Hudson Valley Business
VI. Robert Morris and His Group
VII. Pennsylvania to Northern Virginia
VIII. Activities Under Two Flags
IX. The Question of Business Freedom
X. Some Economic Consequences of the War
XI. Economic Developments in the 1780’s
XII. A Counter-Revolution and its Benefits
XIII. Commercial Banks, 1781-1792
XIV. Other New Enterprises: Conclusion
Appendix A New York Bank Stockholders, 1784 or 1785
Bibliography
Index

Citation preview

S T U D I E S IN H I S T O R Y , ECONOMICS A N D PUBLIC LAW Edited by the FACULTY OF POLITICAL SCIENCE OF COLUMBIA UNIVERSITY

NUMBER 439

BUSINESS ENTERPRISE IN T H E AMERICAN REVOLUTIONARY ERA BY

ROBERT A. EAST

BUSINESS ENTERPRISE IN T H E

AMERICAN REVOLUTIONARY ERA

BY

ROBERT A. EAST, Ph.D.

NEW COLUMBIA

YORK

UNIVERSITY

PRESS

LONDON : P . S . KING & SON, LTD.

1938

COPYRIGHT,

1938

BY

COLUMBIA UNIVERSITY

PRESS

PRINTED IN THE UNITED STATES OF AMERICA

Co MY WIFE ELIZABETH PADDOCK EAST

PREFACE IN seeking the origins of the corporate and other big business enterprises which appeared in steadily increasing numbers a f t e r the A m e r i c a n Revolution, the first twelve chapters of this study really serve as an introduction to the last two, in w h i c h the earliest of those enterprises are analyzed. Such a study the

necessarily

destructive

emphasizes

the

forces at w o r k

in

constructive

rather

than

the period, but this

in

n o wise invalidates the thesis. F o r if the facts cited do not explain the results, w h a t facts d o ? Surely not the destructive ones. N o r can it be argued that w h a t happened a f t e r 1781 was due solely to the financial leadership of A l e x a n d e r Hamilton. N o t only were his ideas not to materialize f o r another decade, but he was then to appear more truly as the spokesman for, rather than as the creator o f , a new business element. It is inevitable that some discussion of politics should accompany a monograph like this, since politics and business are closely related. In the t w o chapters which deal with that subject, however, the thesis requires an emphasis on economic factors which results in the virtual exclusion of many others. S u c h a treatment therefore makes no pretence to finality, but rather to a tentative hypothesis, to be weighed in the light of subsequent research. I say subsequent, because I do not believe that there has as yet been sufficient study of the Revolution through which to evaluate a w o r k of this type, even f r o m the political angle. Documents of a particular kind abound, but only a f e w really critical interpretations, especially those made upon a broad basis of social facts, have been forthcoming. Such an unfortunate situation is largely due to a heavy crust o f tradition, which has been only partially dispelled by the w o r k s of such men as W i l l i a m G r a h a m Sumner, Charles A . Beard, J. Franklin Jameson, Joseph Stancliffe D a v i s , A l l a n Nevins, E d w a r d C h a n n i n g , Charles H . Lincoln, and T h o m a s P. Abernethy. 7

8

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

It has been my good f o r t u n e to make this study under the direction of an historian fully a w a r e of the need f o r f u r t h e r critical investigation. T o P r o f e s s o r E v a r t s Boutell Greene of Columbia University I am indebted f o r my introduction to the problem, in his seminar on the Revolutionary E r a . In the years of research since then, he has given me heavily of his time and advice, combining scholarly criticism with a w o n d e r f u l a m o u n t of patience. In all fairness to him, and to those persons mentioned below, I should add that full responsibility f o r the development of the thesis, the research that lies behind it, and the f o r m of its presentation, rests with myself alone. Also of the D e p a r t m e n t of H i s t o r y of Columbia University, P r o f e s s o r J o h n K r o u t gave me the benefit of two readings of the manuscript, Professor H a r r y C a r m a n kindly criticized an early d r a f t , and P r o f e s s o r Allan Nevins helped in several important ways to enable me to complete the work. A portion of Chapter N i n e was developed in a history seminar conducted by D r . D i x o n R y a n F o x , formerly of Columbia University, and now President of U n i o n College. T o Dr. Charles A . Beard of N e w M i l f o r d , Connecticut, I a m g r a t e f u l f o r the heartening encouragement that followed his reading of a d r a f t , and to P r o f e s s o r N o r m a n S. B. Gras, of the G r a d u a t e School of Business, H a r v a r d University, f o r stimulating criticism that resulted in improvement of terminology and the avoidance of error on several points. F r o m his spendid knowledge of m a n u script sources in the period, M r . T h o m a s Robson H a y , of Great Neck, L o n g Island, gave me generous i n f o r m a t i o n . T h e J o n a than Jackson papers were made accessible through the kindness of Mr. Austin Clark, of W a s h i n g t o n , D . C., and helpful inf o r m a t i o n f r o m the N e w Y o r k State Library, Albany, w a s supplied by Miss E d n a Jacobsen of that institution. M i s s Josephine Mayer, of Teachers College, Columbia University, enlarged my knowledge about several important characters, and M r . Joseph Bailey, of N e w Y o r k City, and D r . Leith Skinner, M.D., of Albany, N e w Y o r k , both criticized portions of the manuscript. T h r o u g h the aid of M r . Gerald Snedeker

PREFACE

9

of The National Archives, Washington, D. C., the task of proof reading was lightened. T h e dedication of the book to my wife is inadequate tribute to the person most responsible for the ultimate completion of the work, not only by her steady encouragement but by her assistance in preparing it for the press. As an invaluable guide to the problems and personalities appearing in this study, the index should be carefully noted by the reader. It is a product of the fine scholarship of Mr. David M. Matteson, to whom all students of history have long had so much reason to be grateful. I am also indebted to the following institutions for opening their resources to me, and to their staff members who were uniformly courteous and helpful: The Essex Institute, Salem, The Baker Library of the Graduate School of Business, Harvard University, T h e Massachusetts Historical Society, Boston, The American Antiquarian Society, Worcester, The Connecticut Historical Society, Hartford, The Connecticut State Library, Hartford, The Rhode Island Historical Society, Providence, The New Y o r k Historical Society, The New Y o r k Public Library, T h e Library of the Chamber of Commerce of New York State, The New York Bank and Trust Company, The American Jewish Historical Society, The Library of Columbia University, New Y o r k City, The Historical Society of Pennsylvania, Philadelphia, The Library of Congress, The Division of Old Records of the W a r Department, The Treasury Department, Washington, D. C., and the Burton Historical Collection, in the Free Public Library, Detroit. ROBERT WASHINGTON, D. APRIL,

1938.

C.

A.

EAST.

CONTENTS PACK PREFACE

7 P A R T

I

INTRODUCTION

CHAPTER I The Late Colonial Business Scene

13

CHAPTER

II

T h e Revolutionary Economic Forces P A R T YEARS

OF

30 II

CHANCE,

1775-1782

CHAPTER

III

Massachusetts and Rhode Island

49

CHAPTER

IV

Jeremiah Wadsworth and His Associates

80

CHAPTER

V

Hudson Valley Business

101 CHAPTER

VI

Robert Morris and His Group

126

CHAPTER

VII

Pennsylvania to Northern Virginia CHAPTER

149 VIII

Activities Under T w o Flags

180 CHAPTER

IX

The Question of Business Freedom CHAPTER

195 X

Some Economic Consequences of the W a r

213 11

PACE P A R T YEARS

OF C O N S O L I D A T I O N

III

AND

CHAPTER

EXPANSION,

XI

Economic Developments in the 1780's CHAPTER

239 XII

A Counter-Revolution and its Benefits CHAPTER

263 XIII

Commercial Banks, 1781-1792 CHAPTER Other New Enterprises : Conclusion

1783-1792

285 XIV 306

ArpEKDix A BIBLIOGRAPHY

330

INDEX

357

CHAPTER I T H E L A T E COLONIAL BUSINESS SCENE THE early colonial period in America was largely devoted to the conquest of nature by persons possessed with an abundance o f purposeful energy but with little surplus wealth. As the frontier receded, however, and the flow of foreign capital increased, an element slowly emerged in the seacoast region blessed with an accumulation o f more o f the things of this world than were required for daily living. B y the eve of the American Revolution an impressive amount of personal riches, together with the control of large sums of mercantile capital, were at the disposal of certain persons fortunate enough to dwell in urban eastern communities, or in those small but vigorous towns which fringed the rivers and harbors of the Atlantic seaboard. S o greatly, indeed, had the pursuit of profits enriched the successful northern colonial merchant—the typical sedentary business man—that he could not only build up an elaborate commercial establishment frequently representing ten thousand pounds in ships and buildings, but could also acquire additional riches which enabled him to invest in many other fields. Nor was it the merchant alone who had such interests, for nonmerchant capitalists had also appeared in the character of those leisured persons called " gentlemen." These two categories of capitalist were not sharply distinguished one from the other, however, since members of commercial families both entered the more cultured professions and inter-married with the landed gentry and provincial office-holders. In pre-Revolutionary New Y o r k the merchant De Peysters and Rutgers were intermarried with the land-owning V a n Cortlandts; the Ludlows, Alsops, and Floyds were connected with each other and with landed families. In Pennsylvania the commercial Willings, McCalls, and Francises of Philadelphia were related by kinship and marriage with the land-owning Shippens and Yeateses. 13

14

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

Commercial, landed, and office-holding interests were similarly united in Massachusetts through such marriages as those connecting the Hutchinsons and Olivers, the Royalls, Olivers, and Vassalls, the Ervings and Shirleys. 1 The upper crust of society thus became fairly identical with its wealthy group, and an interest in commercial capitalism was accordingly wide-spread among members of the favored social groups. Since the well-being of commerce affected the interests of many persons other than merchants, it, together with agriculture, became fundamental for the business economy of young America. W h e n ships made quick and prosperous returns f r o m foreign lands, and when wharves bustled with the activities of longshoremen, then times were good f o r many a gentlem a n w h o k n e w n o t j i b f r o m j u r y s a i l ; t h e n local i n d u s t r y a n d

local borrower were apt to receive the capital they had long since needed. W h e n the contrary was true and commercial depression was felt, as frequently happened particularly because merchants would sometimes import excessive quantities of goods, then the whole internal economy and social structure of the colonies was disturbed. Hence it was that political consequences of a most serious and widespread character resulted f r o m new British commercial regulations in the pre-Revolutionary decade. This political situation should not, however, disguise the high potentialities which American shipping and its related enterprise presented in those same troubled years. Business had been especially developed by the late French and Indian W a r which, capping a half-century of steady business growth expedited by the neglect of imperial officials in enforcing British regulations, had stimulated colonial merchants and ex1 C f . statements as to this tendency by the genealogist W . S. Whitmore, in the Memorial History of Boston, I I , 563, 564, and his genealogical tables following; c f . also biographical sketches of members of such families in works of E . A . Jones and J . H . Stark, Loyalists of Massachusetts; V . D. Harrington, New York Merchant on Eve of the Revolution, Chap. I ; Thomas Balch, ed., Papers Relating Chiefly to the Provincial History of Penna., Intro., giving genealogical tables.

THE

LATE

COLONIAL

BUSINESS

SCENE

15

panded their interests. The conflict gave valuable opportunities to those interested in supplying the British forces, produced smuggling and privateering, fostered new trade routes, enlarged certain seaports, and opened roads to the West over which traders promptly drove their pack horses in wake of the armies which conquered Pittsburg and Niagara. 2 It is true that the war was succeeded by the inevitable depression during which many of the more extreme adventurers went bankrupt, but the business scene immediately after 1763 was in most places one of promise, American merchants particularly demonstrating their aggressiveness by continuing to reach out to nonBritish ports, in legal and illegal trade. 3 Though it may be argued that the interest of New Englanders in such new routes of trade was especially indicative of the increasingly burdensome nature of British commercial restrictions, it should be understood that it was still possible for some merchants there to make profits even in the preRevolutionary decade: Jackson and Bromfield of Newburyport, Massachusetts, cleared £ 7 , 5 9 1 profits on the slender trading capital of £1600 between 1766 and 1 7 7 4 / Moreover, it is clear that the whole question of the prosperity of shippers in New England, as elsewhere, was becoming contingent upon other than imperial factors alone: it was the steady growth 2 The war introduced a period of the greatest potential commercial activity m colonial times, according to John Stevens, Progress of New York in a Century, p. 36. For general effects from the conflict see William Weeden, Early Rhode Island, p. 264; Henry C. Dorr in Rhode Island Hist. Tracts, no. 15, 197; F. M. Caulkins, Norwich, Chap. X X I I ; on Albany, Mrs. Grant, Memoirs of An American Lady, pp. 51, 258; on new road construction and western trade, see May Burd, in Proc. Northumberland Hist. Soc., I l l , 82 ff, and Thomas Balch, ed., Provincial Penna., Intro., xcii. Merchants who benefited from the sale of supplies to the British army included Robert Ogden of New Jersey, John Watts and William Alexander of New York, and Charles Apthorp of Boston. 3 E. R. Johnson, ed., Domestic and Foreign Commerce of the U. S., I, 51; on clandestine trade with the Baltic region, see Harrington, op. cit., pp. 198, 199. 4 K. W. Porter, Jacksons and Lees, I, 257.

16

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

of a national economy which rendered Yankee commerce ever more tortuous, relating it to the interests and rivalry of merchants f r o m the middle provinces especially. 5 Boston, for example, had lost her West India trade monopoly of 1700, and, though she was still foremost in the sloop and schooner distribution of goods to coastal towns, New Y o r k was pressing her even in that line in Rhode Island and Connecticut. The latter situation was especially significant since Boston, lacking a rich agricultural hinterland, had already become partly dependent upon the middle colonies f o r cereals and upon Connecticut f o r beef. Y e t such an inter-dependence of provinces was excellent f o r the Boston commercial element, however distasteful the rivalry. Connecticut merchants were, on the whole, equally aware of expanding opportunities by 1 7 7 5 ; though still largely dominated by Boston and N e w Y o r k interests, they increasingly traded with the West Indies in their own vessels. They possessed a productive hinterland of their own, the Connecticut Valley having been the first region to produce a wheat surplus, 8 though before the Revolution other native products, especially beef and pork, were more plentiful for shipment. 7 In Rhode Island still other favorable business circumstances were in evidence, particularly benefiting Providence which was becoming a serious rival of Newport. In contrast with colonial Boston, both New Y o r k and Philadelphia had direct access to wheat-growing districts which gave foreign shipping the breadstuffs even England was beginning 5 This and the following generalizations are largely based upon a comparative analysis of Harrington, New York Merchant, Chaps. V , V I ; S. E. Morison, " Commerce of Boston on E v e of the Revolution," in Amer. Antiq. Soc. Proc., n. s., X X X I I ; M. A. Hanna, " Trade of the Delaware District before the Revolution," Smith College Studies in Hist., II. 6 C . B. Kuhlmann, Development of Flour Milling Industry in U. S., p. 8. H e points out that this declined until, by 1800, Connecticut had t o import wheat. 7 See H e n r y B. Stiles, /Indent Wethersfield, I, 542-552; on Connecticut doing business through N e w York instead of Boston after 1 7 5 1 , see A. M. Schlesinger, Colonial Merchants and the American Revolution, p. 26.

THE

LATE

COLONIAL

BUSINESS

SCENE

17

to demand." Merchants of both cities also participated in the commercial exploitation of the West on a scale naturally unequaled by Bostonians. Philadelphians, like Willing and Morris, had another special interest in the tobacco trade of the neighboring South where British factors, however, were still dominant. The commerce of the Pennsylvania port was further stimulated by enterprising Irish merchants who had settled there in considerable numbers after 1740, at least thirty of them having achieved prominence by 1775, taking their place along with the earlier established Norrises, Meades, and Conynghams. New Jersey continued to be dominated by the trading capital of her wealthy neighbors, but south of Philadelphia, Baltimore was achieving commercial independence, partly also at the expense of Annapolis, and was growing rapidly after 1750 as a result of the increased production of wheat in her back country.' Another important wheat and tobacco port was Alexandria, which was competing with Dumfries by 1775 for commercial supremacy in northern Virginia. 1 * Such growth of town, and of even something like national, economy, surely gave promise of an expanding commercial future (except for Newport and Annapolis, about which less can be said with confidence), despite the troublesome events of the age of George III. The prospects for business expansion were even further demonstrated by the number of other interests which wealthy persons in such towns continually utilized, and these probably amounted to more in the aggregate than those confined to the purely commercial field. These other types of investment amply demonstrate that, by the eve of the 8 On England's demand for wheat, cf. Harrington, op. ext., p. 170; Hanna, op. cit., p. 264, has much to say on the increasing of wheat exports from Philadelphia to southern Europe. 9 C. P. Gould, " Economic Causes of the Rise of Baltimore," in Essays Presented to C. M. Andrews, pp. 240, 247; on Philadelphia's influence in the Delaware region, however, see his " Money and Transportation in Maryland" Johns Hopkins Studies, X X X I I I , 13. 10 Fairfax Harrison, Landmarks of Old Prince William, II, pp. 407-410.

18

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

Revolution, a considerable amount of surplus capital was already available f o r any new business opportunities time and circumstance might bring forth. But they also point to the lack of anything like a highly specialized investment system in colonial America, since the individual capitalist still personally performed a variety of financial functions in much the same way as his commercial ancestors had done for centuries. The most important of these other investments were in real estate, wealthy men securing lands in cultivation, business buildings, or houses and wharves which assured an income in produce or rent. Notable examples of such investors in N e w Y o r k were the Bayards and Robinsons, a member of the last family having a " r e n t - r o l l " estimated at £ 1 , 2 5 7 . " Joseph Galloway, a Philadelphia lawyer with a mercantile fortune, claimed an annual rental of £ 5 0 0 from one city house alone, and income from seventy-five to £460 from each of nine other estates, besides an annual £ 3 0 0 from " money on interest." 1 2 Such landlords, as distinguished from home seekers, also sought uncultivated lands f o r pure speculation, though these were sometimes patented as political favors. Merchants were frequently foremost in this practice, even in small places. In Philadelphia a wealthy Indian trading group repeatedly advanced money at interest after 1 7 6 3 to George Croghan, a vigorous preemptor of the West. Affiliated with this group, however, were several persons not in trade, such as Goldsbrow Banyar, secretary of the province of N e w Y o r k . 1 3 Crude manufactures occasionally attracting capitalists were distilleries, sugar refineries, flour mills, pot and pearl ash works, iron furnaces and bloomeries. Merchants were naturally interested in enterprises so closely related to their trading activities. In Boston, f o r example, the Apthorps, Coffins, and 11 Harrington, op. cit., pp. 134, 135. 12 Loyalist

Transcripts,

vols.

3,

49,

50.

Such

claims

were

possibly

exaggerated. 13 Harrington, op. cit., Chap. I V ; A. T. Volwiler, Croghan ward

Movement,

pp. 260, 281, 288.

and the

West-

THE

LATE

COLONIAL

BUSINESS

SCENE

19

Brinleys were owners of distilleries, though even a counsellorat-law of that place could claim £ 5 0 0 annual income from the same source. 14 Iron-works attracted even greater amounts of local capital, in addition to much drawn f r o m E n g l a n d . 1 ' Several other Boston business men made investments in this field in late colonial times; and in Rhode Island Stephen Hopkins and the Brown brothers became concerned with Jabez Bowen in a well-known iron furnace at Scituate. Several New Y o r k merchants, retired and active, invested in local and N e w Jersey works, while the Aliens and Morrises of Philadelphia advanced iron manufactures f o r many years in Hunterdon County, New Jersey, and Bucks County, Pennsylvania. 1 9 Nonmerchant capitalists similarly financed such enterprises, as did Peter Oliver, Chief Justice of Massachusetts, who helped construct a slitting mill in Plymouth County in 1 7 5 1 . 1 7 T h e Livingstons of Livingston Manor on the Hudson owned the A n c r a m works, while the wealthy Maryland landowner, Charles Carroll, held a one-fifth interest in the famous Patapsco iron industry and was a capitalist to the additional extent of having over £24,000 owed him by debtors in 1 7 6 2 . 1 8 Indeed, it has been pointed out that at least six signers of the Declaration of Independence were directly connected with the iron industry, and that many important Revolutionary leaders had an interest in it. However, a depression in the industry around 1 7 7 0 is said to have been partially caused by a lack of capital. 1 " There is, on the other hand, virtually no proof that the " putting-out " system of textile manufacture involved colonials 14 E. A. Jones, Loyalists of Mass., passim; Loyalist Transcripts, vols. 3, 49. 15 Victor S. Clark, History

of Manufactures

in U. S., I, 145, 146.

16 Loyalist Transcripts, vol. 3; A. C. Bining, British Regulation Colonial Iron Industry, pp. 126, 127; J. M. Swank, Iron in All Ages,

of the passim.

17 Loyalist Transcripts, vol. 3. 18Kate Rowland, Charles Carroll, I, 60; Gould, "Money and Transportation in Maryland," Ioc. cit., pp. 113-120. 19 Bining, Colonial Iron Industry, pp. 84, 111, 112.

20

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

20

in a capitalist capacity: household manufacture was largely f o r home use. N o r did the decade of imperial strife and occasional commercial boycott, 1 7 6 4 - 1 7 7 5 , appreciably interest Americans in the textile industry. A linen " manufactory " was organized in Boston in 1764, a "Society f o r the Promotion of Arts, Agriculture and Oeconomy " in N e w Y o r k the same year, a silk company in Lancaster in 1 7 7 0 , and a textile " promoting " company in Philadelphia in 1 7 7 6 ; but these and other efforts were shortlived though their joint-stock character is significant. Public subscriptions were insufficient on several such occasions; men of capital generally refused to back the schemes. 21 Moreover, popular suspicion was characteristically aroused in Boston in 1 7 6 8 lest a subscription committee which was to run, at its own risk, a manufactory to employ the poor, should make undue profits. 22 The colonials were much better acquainted with simple investments secured by paper obligations in the f o r m of personal notes, bonds, and mortgages. Persons thus lending money were enumerated by John Adams as " Men of fortune, who live upon their income, and these generally choose to have a surplusage to lay up every year to increase their capitals," in addition to opulent merchants, widows, guardians of orphans, a f e w lawyers and clergymen, an occasional f a r m e r or tradesman, together with schools, colleges, towns, parishes and other societies. 23 A few specific examples may be mentioned. Phineas Bond, a Philadelphia lawyer, in 1 7 7 6 had " money at Interest on Mortgage Obligations and Notes " to the amount of £ 1 7 9 2 , while in N e w Jersey, Elias Boudinot, son of a retired merchant, was another lawyer who held numerous personal notes. T h e 20 A. H . Cole, American

Wool Manufacture,

I, 19.

21 Cf. Schlesinger, Colonial Merchants, pp. 65, 109, 110, 123, 130, 492, 502. Pre-war boycotts encouraged the Mass. shoe industry, h o w e v e r : Blanche Hazard, Boot and Shoe Industry, p. 29. 22 Doc. .02517, in Mass. Hist. Soc. 23 E. C. Burnett, ed., Letters of Members U , 248.

of the Continental

Congress,

THE

LATE

COLONIAL

BUSINESS

SCENE

21

estate of the w i f e of Sampson B l o w e r s of Boston " consisted o f houses, but chiefly of money lent on personal and real securities."

24

Lieutenant-Governor

Thomas

Hutchinson

had

money invested in " Bonds and D e b t s , " and S i r J o h n B e r n a r d claimed that nearly £ 6 0 0 0 were due him in A m e r i c a when the Revolution broke out. A great landowner in Massachusetts, H a r r i s o n G r a y , also had large sums out in the f o r m of bonds, while the estate of Cadwallader Colden, who had been an office holder in N e w Y o r k , listed in 1 7 7 6 loans due f r o m seventythree persons. 2 5 E v e n among the clergy the Reverend Mather B y l e s , the younger, of Massachusetts, held several bonds; and the Reverend A l e x a n d e r M u r r a y of Reading,

Pennsylvania,

o w n e d both bonds and mortgages. A n example of a doctor with large sums represented by paper obligations was Sylvester G a r d i n e r of the B a y Colony. 2 9 Merchants accepted such security in extending commercial credit as well as in making

personal loans. Several

New

Y o r k e r s on the eve of the Revolution had more than £ 1 7 , 0 0 0 invested in bonds and notes, though these amounts were exceptional. 27 Possibly it w a s such merchants there who advertised, in 1 7 6 9 , cash to discount bonds, bills, notes, and to lend on bottomry, and w h o also offered sums to be loaned on real or personal security. 2 8 Peter Faneuil of Boston claimed to have lost £ 2 5 0 0 in paper security as a result of the Revolution, and J a m e s B o w d o i n also loaned extensively. 2 ® In smaller towns, too, the trader w a s naturally the moneyed man. In Beverly, M a s s a chusetts, a merchant Cabot's w i d o w left in 1 7 8 1 a " Total of 24 Loyalist Transcripts, vol. 49; Elias Boudinot Ledger, passim; E. A. Jones, op. cit., pp. 16, 37. 25 Loyalist Transcripts, vol. 2; E. A. Jones, op. cit., pp. 29, 151; Colden Papers, New York Hist. Soc. Coll., LVI, 374. 26 E. A. Jones, op. cit., passim ; Loyalist Transcripts, vol. 50. 27 Harrington, op. cit., pp. 131, 132. 28 New York Chronicle, June 5-8, 1769, as quoted in Adolph Elias on, Rise of Commercial Banking Institutions in U. S., pp. 33, 34; Crooks Estate Settlement Book gives the investments of a wealthy New York trader. 29 Loyalist Transcripts, vol. 3; Mass. Hist Soc. Proc., VI, 360.

22

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

Bonds & Notes " amounting to £7399, as compared with a " Total of Inventory " of only £ 2 6 1 9 . Philip Schuyler, a lumber dealer and landed gentleman near Albany, was constantly acquiring personal notes. 30 I f the merchant w a s not the only colonial money lender, he was most frequently the banker for his neighbors. John Hancock loaned his friends money and credit f o r travel and general accommodation, and cashed pension certificates; he also held cash deposits in his big iron chest. Such was also the practice of Captain Richard Derby of Salem.® 1 More modern types of paper investment open to the colonials were the " s t o c k s " of the British national debt and the " funds " of the B a n k of England, investments closely related to the development of the modern state. However, the evidcncc f o r colonial interest in these or in the stocks of English trading companies is scanty, though several New Y o r k merchants and Henry L l o y d of Boston did invest in the " stocks," and though T h o m a s Hutchinson and General Bradstreet of Massachusetts did become interested in the " funds." 32 A probable explanation of the general reluctance to utilize such opportunities was the difficulty of manipulating securities f o r a rise and fall in the market at such a distance from England, as John Watts of N e w Y o r k found when he tried " gaming " in them. Moreover, interest rates from local investments were higher. Securities of colonial municipalities were readily pur30 Lloyd Briggs, History and Genealogy of (Boston, 1927), I, 54; Schuyler Papers, Box 42.

Cabot

Family,

1475-1927

31 A. E. Brown, John Hancock, His Book, pp. 250, 2 5 1 ; R. E. Peabody, Merchant Venturers of Old Salem, p. 2 3 ; cf. also Edward Edelman, "Thomas Hancock, Merchant," in / . Econ. Bus. Hist.. I, 89. Henry Laurens acted similarly in Charleston: Leila Sellers, Charleston Business on Eve of Revolution, pp. 49, 7 4 ; so apparently did Robert Morris in Philadelphia: c f . Morris to Mrs. McCall, Aug. 16, 1780, Morris Papers in New York Public Library. 32 Letter Book of John Watts, N e w York Hist. Soc. Coll., L X I , 1 4 2 ; Lloyd Papers, N e w York Hist. Soc. Coll., LX, 745; Loyalist Transcripts, vol. 3. Hutchinson held £4000 of the Funds when he died in 1780; the Bradstreet family " originally " held i6ooo of them.

THE

LATE

COLONIAL

BUSINESS

SCENE

23

chased, however, notably N e w Y o r k City bonds after 1750. Massachusetts treasury notes, bearing six per cent interest, were also considered good buys even by New Y o r k business men. 33 Though so many colonials had surplus wealth for these varied investments there was no widespread cooperation among them in financing business enterprise, even in trade. Investment technique was still rudimentary since business organization, of which the simple partnership was typical, was commonly confined to but a few persons. A n exceptionally large intercolonial business venture was the United Company of Spermaceti Chandlers, organized in 1761, which combined Boston, Providence, Newport, and Philadelphia firms to monopolize the candle market by controlling raw materials, manufacture, and prices; but its partners were not more than twenty in addition to the Brown brothers of Providence." Even the underwriting of marine insurance was a strictly voluntary practice by individual merchants from time to time, and not a company-controlled activity, except possibly for the Willing-Morris concern mentioned below. It was the most important kind of cooperative colonial business, however, and has long been recognized as a starting point for greater capitalist interests everywhere. It even involved inter-provincial relations : New Y o r k merchants underwrote for shippers elsewhere, particularly in Rhode Island. 35 There was a group of marine insurance investors established in Boston for many years before the Revolution at the " office " of Ezekiel Price, secretary to three provincial governors. 36 Another Boston o f 33 Cf. Harrington, op. cit., pp. 128-133. 34 C. G. Mason, " The United Company of Spermaceti Chandlers, 1761," Mag. New Eng. Hist., VII, 166-168. There is reference to a " New Spermaceti Manufactory," owned by Providence merchants after 1769, in the Nightingale-Jencks Papers, in Rhode Island Hist. Soc., under Jan., 1772.

35 Harrington, op. cit., p. 135. 36 Cf. brief sketch of Price and his business in New Eng. Hist. Genealog. Soc. Reg., X I X , 329, 330.

24

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

fice was that of E d w a r d Payne, a connection of the Amorys. In New Y o r k two such offices existed a f t e r 1 7 5 9 : the " O l d Insurance Office " at the Coffee House, and its rival, the " NewY o r k Insurance Office," set up by Anthony V a n Dam and patronized by the Crugers and Waltons. 37 Possibly the greatest place for this activity, however, was Philadelphia where Quaker capital often participated in it. 38 The organization effected there in 1 7 5 7 by Thomas Willing and Company, in which Robert Morris was a partner, was a notable advance beyond the loose association of the " offices." It consisted of " S i x Gentlemen of Fortune, their Stock cant be less than £80,000 which will make an addition of £600 to the Sum we could formerly have done here on any one Risque." Further cooperation by business men was badly needed, especially f o r the establishment of commercial banks, and it became increasingly feasible since the use of modern credit instruments partially broke down the independent business character of the colonial merchant and gradually developed something like a " community of interest " point of view. F o r example, bills of exchange were sometimes used f o r commercial remittances by open market purchasers who might transmit them through several other persons before they were finally " r e c e i v e d " by the drawees. 40 In Maryland bills on London passed freely f r o m hand to hand in the settlement of local debts. 11 The stoppage of payment on bills in 1 7 6 5 by a 37 Stevens, Progress of New York, p. 42; of the Insurance Company of North America,

T. H. Montgomery, p. 22.

38 Montgomery, op. ext., pp. 15-19, 165; J. A. Fowler, History surance

in Phila.,

p. 2 8 ; H . E. Gillingham, Marine

Insurance

in

History of

In-

Phila.,

P- 55 FF-

39 Quoted from Gillingham, op. cit., p. 31. 40 Harrington, op. cit., p. 115, only briefly mentions such open market purchasing of bills. Their importance is possibly minimized by A. H . Cole, in J. of Econ. Bus. Hist., I, 386 ff. 41 Gould, " Money and Transportation in Maryland," is interesting that in colonial Maryland protested bills over other kinds of debts in the courts, evidence of the legal basis necessary for this capitalistic function: ibid.,

loc. cit., p. 42. It had special claims development of the p. 38.

THE

LATE

COLONIAL

BUSINESS

SCENE

25

M r . Wheelwright of Boston occasioned general distress in mercantile circles there because, as John R o w e said, " a great number of people will suffer by it." 42 Such developments at least helped to give merchants a common credit consciousness, and showed the need of institutional banking discipline to discriminate in commercial paper at a time of business crisis. Y e t the colonials did not organize a single commercial bank, though Robert Morris later claimed to have laid the foundations for one in Philadelphia. 43 There were of course a few colonial land speculating and iron manufacturing " companies " and several trading and mining " companies," all possibly organized on some vague kind of joint-adventure basis; but shares of ownership in them were never circulated freely or even speculated in." This condition prevailed in spite of the contemporary development in England of commercial banks as well as of chartered and unchartered joint-stock trading companies; in spite of the fact that transferable stocks had long been known abroad. 45 A stock exchange was finally established in London in 1773, but there was not the remotest demand for one in colonial America. T h i s lag in the financial organization of colonial business was not due to an inadequacy of capital, as the foregoing paragraphs prove, but to other factors. Firstly, simple, personally supervised investments were both fairly safe and paid good interest, so that people were not disposed to seek new openings. Secondly, there was insufficient cooperative discipline 4 2 A . R . Cunningham, ed., Letters and Diary of John Rowe, p. 74. 43 Mat hew Carey, pub., Debates in the Pennsylvania

Assembly

. . . , p. 37.

44 J. S. Davis, Essays in the Earlier History of American Corporations, I, 91-98, mentions various unincorporated business " companies," and Swank, op. cit., passim, mentions iron manufacturing " companies " ; but the true joint-stock character of these is doubtful. T h e word had a loose meaning. 45 T h e s e English banks were of the partnership variety, because of the monopolistic character of the joint-stock Bank of England. Mr. Armand D u B o i s of the Columbia University L a w School, w h o has made an extensive study of eighteenth century English corporations, assures me that the " B u b b l e A c t " far f r o m destroyed unincorporated joint-stock companies, as is popularly supposed.

26

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

and a lack of constructive leadership in provincial business, built as it was upon the British empire. For example, the traditional reliance on British commercial credit—developing into a condition of economic bondage—retarded the establishment of commercial banks in America. Thirdly, imperial restrictions prohibited many distant trading ventures, hampered some colonial industries, and forbade the formation of unincorporated joint-stock companies which such greater group enterprises might have utilized. Moreover, the power of colonial governors or assemblies to incorporate was questionable and always cautiously exercised. 48 But the fact that the law forbidding unincorporated companies was obeyed better in the colonies than in England also reflects the colonial lack of interest in such companies. Possibly an equally important retarding influence was the hostility in the colonies themselves toward the merchants and their advanced methods. The colonial mind was predominantly agrarian—almost medieval—in many respects.47 There were innumerable colonial restrictions against regrating, engrossing, and forestalling—the old protests against a refinement of trade methods by " big business " wholesalers. Privilege through charters was especially feared by the common people. " M y son, fear thou the Lord and the K i n g ; and meddle not with them that are given to c h a n g e " (Proverbs 2 4 : 2 1 ) , was a sentiment expressed in Boston in 1 7 1 4 in protest even against incorporation of the town, because " then the Rich will exert that right of Dominion, which they think they have exclusive of all others." 48 Even manufactures in pre-Revolutionary Connecticut were jealously regarded by " the people." 48 4 6 D a v i s , of.

cit., I, 29, 107 et passim., s h o w s that this w a s true, t h o u g h

h e attributes absence of c o r p o r a t i o n s p r i m a r i l y t o e c o n o m i c and social f a c t o r s . 4 7 T h i s w a s e s p e c i a l l y true in early c o l o n i a l A m e r i c a : cf. E. A . J. J o h n s o n , American

Economic

Thought

in the Seventeenth

Century,

pp. 30, 83; cf. a l s o

Clive D a y , " Capitalistic and S o c i a l i s t i c T e n d e n c i e s in the P u r i t a n C o l o n i e s , " Annual

Rep.

A m e r . H i s t . A s s o c . , 1920, esp. pp. 233, 234.

4 8 Col. S o c . M a s s . Pub.,

X , 348-352.

49 Cf. L. H . Gipson, Jared Ingersoll,

p. 264.

THE

LATE

COLONIAL

BUSINESS

SCENE

2"J

Such hostility against business men revealed itself in politics on the paper money question, which arose because the system of private investment fell far short of supplying the capital wants of the whole provincial society. Hence, in the eighteenth century, there were loud demands for the " capitalism " of land banks and provincial loan offices. While the merchants were not opposed to paper currency as such ( f o r business needed a convenient kind of money), they did want it issued with restrictions. Unfortunately, popular opinion was against them and their own private schemes.50 Governor Pownall of Massachusetts saw in the public paper money agitation—and he was not wholly unsympathetic with it—the fear that there was danger of the benefits of trade becoming " a monopoly to the monied merchant only." 51 Much of the hostility was due simply to the speculative tendencies of profit-seeking individuals. Serious complaint was raised in Maryland against paper money itself being used for such purposes by " infamous Jobbers . . . merciless wretches that grind the very Poor," as Secretary Calvert himself said. 5 " A pamphlet attacking " capitalists " who were said to speculate in exchange bills and in gold and silver at a time of public necessity, was published in Boston in 1750, entitled Massachusetts in Agony.53 In part such feeling was due to sectional animosity, as suggested by Charles Biddle in his Autobiography when he wrote that " those from the westward look upon the people in any of the commercial towns as little better than swindlers. . . ." M Even the lending of money aroused similar resentment, as undoubtedly among Pennsylvania farmers be50 Cf. E. S. Sparks, Agricultural Credit in U. S., p. 77 et passim; cf. also A . M. Davis, " Currency and Banking in Massachusetts-Bay," passim, in 3 Pub. Amer. Econ. Assoc., I, Part 4, II, Part 2. 51 T h o m a s Pownall, The Administration p. 227.

of the Colonies (London, 1768)•

52 Quoted in Gould, " Money and Transportation in Maryland," loc. cit., pp. 105-107. 53 A . M . Davis, op. cit., Part 2, p. 186, refers to it. 54 P. 142.

28

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

cause, according to Robert Morris, money lenders preferred to deal with citizens of the city, and country folk could not obtain loans." A n Act of Maryland's legislature in 1 7 0 4 set six per cent as the legal interest rate and retained it until the Revolution. The South Carolina legislature not only reduced the rate to eight per cent in 1748, but even threatened to forbid the charging of interest on " book debt." 58 Anti-urban and anticommercial feeling was indeed very evident in colonial politics on the eve of the revolt, 57 and in face of all such hostility elaborate business organizations were perhaps inadvisable. It may possibly be argued that business failed to develop further simply because the colonials were not possessed of a sufficiently aggressive business mentality. It is a dubious point, however. E v e n

in early P u r i t a n communities some apprecia-

tion of the necessity f o r competitive business enterprise was manifest. 5 8 That the colonial period produced forward-looking merchants, needs small proof. E v e n little Providence had its restless Captain James Browne, who set his famous trading progeny an inspiring example by boldly striking out into new fields of trade, and into distilling and fabrication—thus effecting a system of vertical business interests. 5 ' A n d there were business men of his caliber in other towns in the eighteenth century. They all worked largely along isolated rather than cooperative lines, however; they were never completely " entrepreneurs " in the sense of persons possessed with visions of big business organization. The expansive character of late colonial business was nevertheless evinced by the steady growth of both trade and sea55 Carey, Debates in the Pennsylvania

Assembly,

p. 96.

56 Gould, op. cit., p. 113 ; D. A. Wallace, Henry Laurens, p. 49. 57 Cf. Gertrude Kimball, Providence in Colonial Times, p. 286; J. W . Griffith, Annals of Baltimore, p. 73; Charles Lincoln, Revolutionary Movement in Penna., p. 83; W . G. Sumner, Financier and Finances of American Revolution, I, no. 58 Johnson, American Economic Thought, pp. 213-219. 59 There is an excellent sketch of his career in G. P. Krapp, ed., The Letter Book of James Browne of Providence, Merchant, Intro.

THE

LATE

COLONIAL

BUSINESS

SCENE

29

ports, together with the accumulation of considerable surplus wealth in the hands of a socially prominent element which made investments in a variety of enterprises. There would be good reason to argue from all this that even more rapid business advances would inevitably have followed, were it not for the additional fact that there was a conspicuous lag in colonial business organizations at that very same time. Group investment mechanisms were largely lacking, less by reason of restraints inherent in the unspecialized nature of commercial capitalism than because of the traditional reliance of colonials on British commercial credit, accompanied by serious imperial restrictions and by a general economic provincialism which an agrarian public opinion intensified. Should such drawbacks be removed, however, and private enterprise be given a freer hand, and should reasons arise for investors to become dissatisfied with some of their older interests, it is evident that the basis was already partly laid for the growth of large scale business upon the English pattern. How the Revolution contributed greatly to that end is the theme of the following chapters.

CHAPTER II T H E REVOLUTIONARY ECONOMIC FORCES C O N S T R U C T I V E forces for advancing the modern economy have accompanied all recent wars. Those which appeared during the American Revolution include the encouragement of a gainful and speculative business spirit; the expansion of some markets, foreign and domestic, along with the loss of others; the stimulus for new investment ideas, resulting f r o m war loans and f r o m the discouragement of older investment habits; the rise of new business groups and the idea of large scale business association, as a result of extraordinary war activities. A brief sketch here of such important developments will serve as an introduction to the detailed material on business conditions, and to a discussion of the struggle in politics against the old anti-commercial prejudices, found in the following chapters.

There is considerable evidence of a gainful spirit at work during the Revolution. " T h a t Speculation, peculation, and an insatiable thirst for riches " which " seems to have got the better of every other consideration and almost of every order of Men " was a frequent complaint of Washington. H e was particularly bitter against forestallers at army expense in addition to " Speculators, various tribes of money makers, and stock jobbers of all denominations " whose " avarice and thirst f o r gain " he declared threatened the country's ruin. 1 Yet this attitude was but an aspect of that temper which, by promoting exceptional profit-taking, has ever encouraged greater business activities. As Walter Bagehot said, a provincial mind cannot be stimulated to make risky investments without such spec1 J . C. Fitzpatrick, ed., The 383, 467, X I V , 300, ct 30

passim.

Writings

of

George

Washington,

X I I I , 335,

THE

REVOLUTIONARY

ECONOMIC

FORCES

31

2

ulative inducements. H a d it not been at a time when "the passion f o r speculation was peculiarly active " that the B a n k of England had been f o u n d e d ? 3 Such a speculative attitude was that of numerous merchants who now sought new opportunities f o r profit, frequently regardless of the political consequences since many of them were quite unsympathetic with the American cause. F o r the R e v o lution was not a war of the " nation in arms," but a civil war in which only a third, according to J o h n Adams, was vigorously Whiggish. Furthermore, the merchants had the tradition of trade being a law unto itself, as it had been to the great profit of some of them and considerably to the advantage of the French in the last colonial war. Illegal trading methods were common and generally condoned, and the English spirit of the times was most conducive to irregularity in relations between business and the state. T h e generation of Dean Tucker and A d a m Smith, identifying social gain with self-interest, and adhering to the theories of John Locke (who had been foremost in his own day in defending profit on the loan of money), increasingly resented political restraints on private enterprise. 4 Thus, though Great Britain was under Congressional ban as an import source and an export destination during the war, there is evidence that hazardous English trade was carried on by many American merchants. A lingering taste for English goods, even at exorbitant prices, whetted mercantile zeal. T h e Virginian, Carter Braxton, wrote in 1 7 7 9 : " T h e y [English manufactures] are so much to be preferred that America now winks at every importation of their goods." 5 Nathaniel Little2 See a consideration of the argument for speculation by Ray Morris, in the Atlantic Monthly, June, 1914, p. 804 ff., quoting Bagehot. 3 J . E. T. Rogers, First

Nine Years of the Bank of England

(Oxford,

1887), P- 54 On Tucker and Locke, cf. E. Lipson, Economic III, 224, 327. 5 Quoted in Sumner, Financier, considered disloyal.

I, 129.

History

of

England,

Sumner adds that the letter was

32

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

ton S a v a g e of that state drew on the credit of John Norton and Sons of London in 1 7 7 7 f o r goods delivered at St. Eustatius." T o London went David H . Conyngham during the war, to pay " 8000 guineas for bills drawn by houses in Philadelphia." 7 One voyage actually made directly from England to Boston was later described by L o r d Sheffield, who also stated that there was a tremendous indirect war-time flow of English goods by w a y of the West Indies and Nova Scotia. 8 William Cabot of Salem, Massachusetts, was in England " on business " in December, 1 7 7 7 , it is said." T h e bulk of British goods, however, came by way of Amsterdam, in which fashion William D. Cheever of Boston, who was bitter against the war, received shipments. 10 Codman and Smith of that town sent a representative to Europe in 1 7 8 1 , and advised George Meade and Company of Philadelphia that he would go " first to Holld f m thence not impossible to E d. his plans will be of a mercantile nature in which it would give him pleasure to serve y o u . " 1 1 Jonathan A m o r y of Boston advised a brother abroad in 1 7 8 2 , " A n d the English goods except they be prize goods are prohibited by Congress, yet I think they might be so managed that by Invoice and mixed with Holland goods, that there would be but little difficulty. A n d English goods sell best. . . . " 1 J 6 Susie M. Ames, "A Typical Virginia Business Man of the Revolutionary Era," in J. Econ. Bus. Hist., I l l , 416. 7 D. H. Conyngham, " Reminiscences," in Wyoming Hist. Genealog. Soc. Proc., V I I I , 206. Perhaps such payments were in part for pre-war debts. 8 J. B. H. Sheffield, Observations on the Commerce of the American States (London, 1784), p. 250 et passim; cf. also David MacPherson, Annals of Commerce, III, 590, 591, 719, 720. 9 Samuel Curwen, Journal

and Letters

(London, 1864), p. 250.

10 Cheever to various-English merchants, Jan. 15, Feb. 2, 1779, Sept. 29, 1781, in Caleb Davis Papers, 26, 23. 11 Feb. 22, 1781, in Codman and Smith Letter Book. 12 G. E. Meredith, Descendants of Hugh Amory (London*, 1901), p. 231. On the English trade of a Rhode Island merchant, see Commerce of Rhode Island, 7 Coll. Mass. Hist. Soc., II, 98.

THE

REVOLUTIONARY

ECONOMIC

FORCES

33

In addition to such illegal adventures, gainful opportunities arose in a variety of unusual ways. Noah Webster declared that a large number of persons participated in an " itinerate commerce " in paper money. Such speculation was possible in 1780, for example, when exchange in Boston was seventy-five currency dollars for one " hard " dollar, against seventy for one in Providence. In May, 1781, Continental money was actually exchanged at seventy-five for one in Boston against two hundred and twenty-five in Philadelphia. 11 According to an army contractor, depreciation was in part due that month to the " intervention of a Company of Jobbers who have made the exchange of money a matter of commerce." A t that very time there were on the road from Philadelphia to Boston " numbers of men, loaded with the old currency; among the rest a Mr. Timo Palmer who has made three Tours to Philadelphia; he started yesterday from Hartford and will put up at Moore's [ ? ] in Boston; he has a quantity which he obtained at the rate of three hundred for one. . . ." " Similar opportunities were available for importers who could juggle goods and currency at different places." Speculation also offered in bills of exchange with relation to the currency: Jonathan Amory wrote in March, 1781, that since the state legal tender act was repealed, " I f I could receive it [paper money for debts] now as Bills of Exchange are low, I could do very well with it." i e A year later Caleb Davis of Boston attributed fluctuation in bills to the work of " sundry Speculators." " 13 Cf. Albert Bolles, Pcnna., Province and State, II, 40, 41; Commerce of Rhode Island, II, 101; William Gouge, Short Hist, of Paper Money and Banking in the U. S. (Phila., 1833), p. 27. 14 Oliver Phelps to Caleb Davis, May 13, 1781, Davis Papers, 10a; cf. also statement of Oliver Wolcott, March, 1781, in Burnett, Letters, V I , 3 5 ; also, Pelatiah Webster, Political Essays, pp. 179, 185. 15 Cf. Sumner, Financier, I, 89, citing John Adams as authority. 16 Meredith, Amory, p. 225. 17 T o John Van der Funk, Amsterdam, Davis Papers, 23.

34

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

There were other indications of the gainful spirit of the times. " I f you have not bought any more Powder I beg you would not as it sells very Dull," wrote a New Hampshire merchant to a correspondent in 1780. 1 8 John B r o w n of Providence is said to have been accused by neighbors of holding up work on Continental frigates to give better attention to private enterprise. 18 A monopolistic agreement was made by several merchants of Philadelphia together with General Arnold in June, 1 7 7 8 , to " d o " the inert Quaker City on merchandise supplies. 20 Illicit trade was considerable, as we shall see, and contact with British-held ports not infrequent. Jeremiah Wadsworth of Connecticut, late Commissary General, received prices of goods in the enemy controlled New Y o r k City in May, 1780, f r o m merchant Nathaniel Shaler, f o r use of various H a r t f o r d business men, 2 1 and Samuel Breck of Boston actually visited Manhattan in the summer of 1 7 8 1 . 2 2 The merchants were not alone, however, in keeping an eye on their own interests in such ways. T h e Reverend William Gordon, the future American historian, was not averse to getting English goods by way of Amsterdam. 2 3 T h e participation of Congressman Samuel Chase in flour " cornering " activities, on the approach of the French fleet,24 is but one example of the general desire 18 Edmund Roberts to John Rogers, Nov. 2, 1780, Hudson-Rogers Papers, B o x 2. 19 " John Brown " in Diet. Amer. Biog.; his brother, Moses, was not in sympathy with the war at all: cf. Augustine Jones, Moses flrozem, p. 15. 20 The agreement is printed in Scharf I, 390 n.

and Westcott, Hist,

of

Phila.,

21 Shaler to Wadsworth, May 25, 1780, in Wadsworth Corresp. in the Conn. Hist. Soc., as are all references to Wadsworth Papers unless noted to the contrary. 22 Breck to Wadsworth, July 22, 1781, ibid.; Daniel Parker, the U. S. army contractor, was apparently purchasing goods in New York City, through Mason and Malbine, as early as July, 1781 : cf. Parker to Captain Watson, July 17, 1781, ibid. 23 T o Gordon, May 15, 1781, de Neufville Letter Book. 24 " Samuel Chase " in Diet. Amer. Biog.; cf. also political speech against Chase in Maryland Journal and Baltimore Advertiser, Oct. 7, 1788, accusing

THE

REVOLUTIONARY

ECONOMIC

FORCES

35

of the public to profit at the expense of the French forces. Opinion f r o m another quarter was strongly expressed by several sailors, when requested to remain in the service of V i r ginia in 1 7 7 7 : " C o u n t r y here or Country there damn my E y e s and limbs but I'll serve them that give the best w a g e s . " 25 General Henry K n o x expressed the viewpoint of many when he wrote regarding his privateering ventures, " I am exceedingly anxious to effect something in these fluctuating times, which may make us lazy f o r l i f e . " 29 Privateering did indeed encourage this spirit everywhere, as is seen in an advertisement in Wethersfield, Connecticut, in 1 7 7 8 , addressed to " A l l Gentlemen Volunteers who are desirous of making their fortunes in eight weeks. . . ." L u x u r i o u s public tastes were in line with such attitudes and reveal the use of a greater variety of consumers' goods. J e f ferson was painfully aware of " our disposition to l u x u r y . " " Samuel Hazard wrote in 1 7 8 0 that, while some were reduced to pitiable straits, " the rich . . . are more luxurious and extravagant than formerly. Boston exceeds even T y r e ; f o r not only are her merchants princes, but even her tavern-keepers are gentlemen." 28 Philadelphia was a g a y place in 1 7 7 9 f o r a man with means, having " advanced so f a r in luxury in the third year of our Independency as the old musty Republics of Greece and R o m e did in twice as many hundreds." 28 T h e soldiers remained so poor, Timothy Pickering wrote his w i f e in 1 7 8 2 , " while the citizens in general of the United States indulge a luxury to which, before the war, they were him of illicit trade activities in 1782 and 1783; cf. also Jeremiah Wadsworth to James Calhon, Feb. 4, 1779, in Wadsworth Papers in N e w York Hist. Soc. 25 Tyler's

Quart. Mag., I, 153.

26 Francis Drake, Henry

Knox, p. 61.

27 Writings

Ford, ed., IV, 188.

of Jefferson,

28 Quoted in Memorial Hist, of Boston^ III, 171; cf. statement by Jonathan Amory, Dec. 14, 1781, as to extravagant dress in Boston, in Meredith, Amory, p. 229. 29 Quoted in B. Sterner, Janus

McHcnry,

p. 25.

36

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

30

strangers! " Holland gin and French claret became popular drinks. 31 General Greene called it all " the common offspring of sudden riches." Boston, he said, was nothing compared to Philadelphia, where even public dinners gave evidence of dissipation.32 The " habits of Luxury contracted in the Late W a r " continued to be lamented in Boston after 1 7 8 3 . " It follows that there must have been considerable business activity to supply the needs of such high civilian living, in addition to army wants. Even the French and Indian War had not so greatly increased foreign trade connections nor so stimulated the domestic exchange economy as the Revolution now did. The need for inter-regional shipments, for example, is illustrated by the fact that not only did Boston continue to send to New York and Chesapeake Bay for flour, but that even Connecticut sometimes bought it from Maryland. Rhode Island, also in need of such provisions for military use, received them from Pennsylvania, Virginia, and elsewhere.34 In New Jersey, Trenton became a great provisions center for the American forces, shipments of supplies, especially flour, being sent from Pennsylvania and other places. North Carolina beef and pork were necessary for the forces in V i r g i n i a , " while the northern 30 O. Pickering, Timothy

Pickering,

I, 376.

31 According to Edward Channing, " Commerce During the Revolutionary Epoch," in Mass. Hist. Soc. Proc., X L I V , 375-37732 Greene quoted in Oberholtzer, Philadelphia, I, 287; see the description of a public dinner by Thompson Westcott, " History of Philadelphia," in Phita. Sunday Dispatch, April 14, 1872; also Writings of Washington, Fitzpatrick, ed., X I I I , 467. 33 Records Commissioners, Reports

of City of Boston,

X V I I I , 130.

34 Cf. Rhode Island Hist. Soc. Pub., n. s., V I I I , 253; N e w London County Hist. Soc. Papers, I, Part 4, p. 35; Rhode Island Hist. Soc. Coll., V I , 224; Col. Recs. State of Rhode lslarui, V I I I , 142; Official Letters of Governors of Fa., I, 357. It is true that state embargoes on foodstuffs especially were sometimes laid, but they were freely violated. Congress resolved on several occasions against such inter-state trade restrictions. It does not follow from the above that business as a whole enjoyed a net gain. See Chapter Ten. 35 Letters of Moore Furman, pp. 5, 19, 55 et passim; City and County, p. 99 n ; Tyler's Quart. Mag., I, 147.

Scharf,

Baltimore

T H E R E V O L U T I O N A R Y E C O N O M I C FORCES

37

Continental troops relied upon the beef a n d f o r a g e o f M a s s a chusetts a n d Connecticut, and upon the cereals o f P e n n s y l v a n i a a n d the upper H u d s o n V a l l e y . In such f a s h i o n did the produce o f the c o u n t r y move, despite all w a r obstacles. A s f o r f o r e i g n trade, the " c o m m e r c i a l declaration o f independence " o f A p r i l , 1 7 7 6 , completely broke the n a v i g a t i o n laws f o r the first time and opened A m e r i c a n c o m m e r c e to the w o r l d . S o o n a f t e r m o s t colonial import duties w e r e separately

ex-

tinguished by the several states; not until 1780 did P e n n s y l vania, f o l l o w e d b y other states, re-impose low import tariffs. 3 0 M e a n t i m e , provincial c u s t o m house monopolies, such as A n n a polis held in M a r y l a n d and N e w p o r t in R h o d e Island, w e r e abolished t o the a d v a n t a g e o f

their rapidly g r o w i n g

rivals,

Baltimore and Providence. T h e resulting n e w trade w a s largely w i t h northern E u r o p e a n countries

from

warned away

which American

b y the

forbidding

merchants finger

of

w e r e no Cape

longer

Finisterre.

S w e d e n established direct trade relations in 1780, a f t e r h a v i n g " g r a d u a l l y " a d m i t t e d A m e r i c a n ships prior to that date, a n d also acted a s a depot f o r the n e w A m e r i c a n trade w i t h Russia." 7 T h e F r e n c h w e r e particularly eager t o develop the A m e r i c a n market

f o r their m a n u f a c t u r e s and to secure tobacco in e x -

change, as illustrated by activities o f the merchants o f N a n t e s whose

American

trade

boomed

until

1778

or

I779- S 8

Six

F r e n c h c o m m e r c i a l houses w e r e established at B a l t i m o r e d u r ing or i m m e d i a t e l y a f t e r the war. 3 9 T h o u g h B o r d e a u x w a s not 36 Albert A. Giesecke, American Commercial Legislation before 1789, pp. 128-130. 37 Adolph Benson, Sweden and the American Revolution, pp. 42, 44; on the whole question of American foreign trade, cf. Channing, " Commerce During the Revolutionary Epoch," loc. cit. passim. 38 Cf. Gaston Martin, " Commercial Relations between Nantes and the American Colonies during the War of Independence," in J. Econ. Bus. Hist., IV, esp. pp. 826, 827; its abrupt decline after 1779 from Nantes possibly throws some adverse light on what is said about Bordeaux's trade in 1781. 39 Griffith, Annals of Baltimore, p. 102.

38

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

the leading port for the American trade, ninety-five vessels cleared from there for the States between January, 1777, and March, 1 7 7 8 . French exports were still large in 1 7 8 1 . " This commerce seemed a road to riches to young John Trumbull; and Michael Hillegas, an office holder who considered himself " a poor slave to his country," wanted a merchant of Baltimore to invest for him five hundred or a thousand pounds in a venture to France in 1 7 7 8 . " The Franco-American treaty of that year had indeed prepared the way for a new commercial age. Numerous Americans even went to France and set up branches of commercial houses: . . there are now so many Americans in France that almost every one has their friend to apply to," wrote John Welsh of Boston, who had a brother there in 1 7 8 2 . "

Indeed, by the

end of the war rumor had it that some of these were even in league with French manufacturers to keep up prices of exports to America." Jonathan Williams, Jr., of Boston, Franklin's great-nephew, settled at Nantes to handle public goods as well as private ships like the Robin Hood which Caleb Davis, W. D. Cheever and other Boston merchants sent out in 1781. 4 4 One of the Nesbitts of Philadelphia settled at Nantes in 1777 also, representing Robert Morris; there, too, was the strenuous Elkanah Watson, late an employee of the Browns of Providence. Watson formed a firm with a Frenchman and kept his American acquaintances supplied with printed lists of " Merchandises at Nantes, for and from America." 45 A t L'Orient 40 John Bondfield to Robert Morris, Bordeaux, March, 1778, in Morris Papers m New York Public Library; cf. statement by Morris, Dec. 5, 1781, in Sparks, ed., Diplomatic Correspondence of the American Revolution, X I I , 6 2 ; Daniel Parker to Wadsworth, June 4, 1781, Wadsworth Corresp., mentions 14 ships from France bound for Boston. 41 Autobiography X X I X , 233, 235-

of John

Trumbull,

p. 8 0 ; Penna.

Mag.

Hist.

42 T o Jacob Welsh, Nov. 1, 1782, John Welsh Letter Book. 43 To Jacob Welsh, April 23, 1783, ibid. 44 Cheever to Williams, Aug. 29, 1781, Caleb Davis Papers, 23. 45 One of these is in ibid., 10a, under March 2, 1781.

Biog.,

THE

REVOLUTIONARY

ECONOMIC

FORCES

39

were a Mr. Bromfield and William Gibbs from Boston, the latter a friend of Andrew Craigie and Watson, and also Joseph Irwin of Philadelphia, representing Blair McClenachan. Other Americans—Greenleaf of Newburyport, Codman, Welsh, and Austin of Boston, Hopkins of Hartford, Ray of Albany, Conyngham of Philadelphia—made hurried business trips to France. Some of them also found opportunities in Spain, as did Richard Harrison of Alexandria and John Jones of Boston, both of whom settled at Cadiz; but the Spanish-American commerce which such merchants as the Tracys of Newburyport and Aaron Lopez of Rhode Island carried on with Joseph Gardoqui and Sons of Bilbao, was not new like most of the French trade. The new Revolutionary commerce which Spain did offer to Americans in 1780 was with her colonies in the West Indies, a lucrative market for lumber and provisions. 44 Dutch firms similarly developed many American interests. Like the French and Spanish, they invested in American privateers out of Baltimore. 47 American trade directly with Holland, and with the Dutch West Indies, grew rapidly. In 1 7 7 9 Nicholas Brown of Providence sent " Loan Office Certificates " to be invested in goods at Amsterdam, 48 and Griffin Greene of Newport went to Holland the following year with a cargo of tobacco and rice.49 The Boston merchants Davis and Cheever had financial relations with London through John Hodshon of Amsterdam, and imported goods from the latter.50 William Bingham of Philadelphia established a partner in Holland. A Jewish firm of Amsterdam shipped goods in 1 7 8 1 to Aaron Lopez of Rhode Island and Isaac Moses of Philadelphia, while 46 MacPherson, Annals of Commerce, III, 71911. It was said that Americans could lose half their ships in this trade and still profit largely. 47 E. E. Reid in Clay-ton Hall, ed., Hist, of Baltimore, I, 505. 48 William Weeden, Early Rhode Island, p. 347; similarly, John Welsh of Boston sent Loan Office " bills " to Cadiz. 49 William Littlefield to Wadsworth, Aug. 28, 1780, Wadsworth Corresp. 50 W . D. Cheever to James Treedthick and John Hodshon, Feb. 19, 1779, Feb. 29, 1760, Oct. s, 1782, in Caleb Davis Papers, 26.

40

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

the Crommelins of Amsterdam carried on American trade throughout the war with various patriotic merchants, 51 and doubtless with their loyalist relatives in New Y o r k . Perhaps the most active Dutch house in the American comrrferce was J o h n de Neufville and Son of Amsterdam. Their eagerness to participate in it is revealed in their letter books: in the latter half of the war they solicited the attention of every American merchant of parts. F o r example, they sent sixteen ships to the States in 1780 and 1 7 8 1 , engaging particularly with Alexandria merchants in the tobacco trade and also selling goods to the Continental army clothiers, Otis and Henly of Boston. A s early as 1 7 7 8 the de Neufvilles had been keenly interested in a proposed commercial treaty with the United States. 5 2 It is not surprising that in May, 1 7 8 3 , twenty-one out of fifty ships in the port of Philadelphia were D u t c h ; 5 3 nor that many vessels continued to be fitted out in Holland f o r the States after that date; nor that American houses, such as L e R o y and B a y a r d of N e w Y o r k and Bingham and Gilmor of Philadelphia, enjoyed the backing of Dutch capital a f t e r the w a r ; nor that Dutchmen continued to invest in American securities and in land, canal, and bank schemes in the following decade. Revolutionary developments prepared the way for all these things. Though the lending of money to private persons was sadly discouraged by the upheaval, war borrowing by Congress and 51 Commerce

of Rhode Island, II, 152 et passim.

52 de Neufville Letter Book, p. 32 et passim; cf. also Mass. Hist. Soc. Proc., X L I V , 372; also Friedlick Edler, " D u t c h Republic and American Revolution," Johns Hopkins Studies, X X I X , pp. 80, 81, though this may have been a different John de Neufville. 53 A. H . Kohlmeier, " Commerce Between the United States and the Netherlands, 1783-1789," in Studies Inscribed to J. A. IVoodbum, p. 12, quoting a contemporary newspaper. P. J. van Winter, Het aandeel van den Amsterdamischen handel aan den opbouw van het Amerikaansche gemeenebest ( T h e Hague, 1927), I, is said to deal exhaustively with this American-Dutch trade. There were also many ships fitting out for America in 1783 f r o m Ghent, and an Antwerp Society intended to found a branch house in Phila.

THE

REVOLUTIONARY

ECONOMIC

FORCES

41

the states w a s a new development with far-reaching consequences : financial capitalism is said to have originated largely in the financial necessities of modern states." T h e bulk of the domestic loans w a s represented by the L o a n Office certificates, estimated in principal at over eleven million dollars, an enorm o u s sum for those times. T h i s seems to indicate immense b o r r o w i n g by Congress, w i t h certain important qualifications. T h e s e certificates were also used f o r the payment of supplies received f r o m merchants. 5 5 M o r e o v e r , what loans were made were not commonly in specie: the Anti-Federalists

probably

correctly declared in 1790 that little or no domestic

"hard"

money had been loaned to Congress. 5 9 T h e certificates w e r e more usually secured in exchange f o r Congressional bills o f credit (Continental c u r r e n c y ) , or f o r goods priced in that currency. 6 7 T h e y were always more desirable than bills of credit because they carried a promise of interest, amounting to six per cent a f t e r F e b r u a r y , 1 7 7 7 , to be paid in bills of exchange on the commissioners to France. T h e acquisition of certificates, in short, w a s g o o d policy f o r getting rid of Continental currency. A f t e r 1780 holders of certificates also benefited by C o n 54 H e n r y See, Modern

Capitalism

( N e w Y o r k , 1926), pp. 28, 33.

55 Cf. Henry Laurens' s t a t e m e n t in B u r n e t t , Letters, I I I , 248. T h e r e is m e n t i o n of L o a n Office certificates being sent t o a r m y supiply p u r c h a s e r s in t h e Chalcmer and W h i t e L e t t e r Books, and in the N i g h t i n g a l e - J e n c k e s P a p e r s . T h e P e n n a . L o a n Office books in the T r e a s u r y D e p t . show t h a t m a n y m e r c h a n t s received e n o r m o u s sums of them, undoubtedly in e x c h a n g e f o r s u p plies. Cf. a l s o A n t i - F e d e r a l i s t c h a r g e s m 1790 in C. A. B e a r d , Economic Origins of Jeffersonian Democracy, p. 139. W e h a v e noted above t h a t m e r c h a n t s sent t h e m a b r o a d t o pay f o r goods. T h e m e r c h a n t s as a class p r o b ably did not retain t h e m a t this t i m e ; indeed, t h e r e is a m e m o r a n d u m of " R e m a r k s on r a i s i n g supplies," 1779, in t h e R o b e r t M o r r i s P a p e r s in t h e L i b r a r y of C o n g r e s s , in which M o r r i s a r g u e s t h a t L o a n Office certificates should be t a x e d ; t h a t m a n y persons h a v e w h o l e estates in them, receiving 6 % interest, o n w h i c h n o t a x e s a r e l a i d ; t h a t the b u r d e n of t a x a t i o n a c c o r d ingly f a l l s on m e r c h a n t s , f a r m e r s , a n d m a n u f a c t u r e r s . 5 6 B e a r d , Jeffersonian

Democracy,

p. 140.

57 C h a r l e s Bullock, " F i n a n c e s of t h e U n i t e d S t a t e s , 1775-1789," Bui. U n i v . W i s e . H i s t . Ser., I, p. 142.

42

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

g r e s s reckoning their specie v a l u e on the basis of a table o f currency

depreciation w h i c h w a s behind real depreciation

in

point o f t i m e : that is, the m a r k e t value of the bills of credit at the time their possessor m i g h t " loan " them f o r the certificates, w a s invariably less than the value w h i c h the ruling o f 1 7 8 0 fixed upon t h e m . " N e v e r t h e l e s s , even merchants selling g o o d s to C o n g r e s s in this w a y w e r e c r e d i t o r s ; and so w e r e a n y persons w h o received the certificates f r o m the merchants. F o r the securities immediately took on a negotiable quality which, E l i a s B o u d i n o t said, was

the original

idea.5'

They

thus

became

instruments

of

" p u r e " capital ( t h o u g h not completely realized as such until the d a y s

of

Hamilton's

funding measures)

and

sometimes

a s s u m e d a credit character f o r business transactions at once.°° Other tirely

for

evidences supplies:

of

Congressional

such

were

debt w e r e

various

received

commissaries'

en-

notes,

58 Settled April 18, and June 28, 1780: " . . . this table does not show the full amount of the depreciation; and consequently the holders of the loan certificates lost nothing by the action of Congress in repudiating the paper money." Ibid., p. 143. Cf. Pelatiah Webster's suggestions for a scale of depreciation for the certificates in 1780, in his Political Essays, p. 94, and also his table of currency depreciation according to Phila. merchants, ibid., pp. 501-502, which does not jibe well with the official table. In May, 1778, H e n r y I^ureris wrote of rumors of a " gainful infamous traffic . . . by means of loan office Certificates which have been . . . passed for ready Money; but the prices of articles produced by them were enhanced 25 to 30 P r . Ct. to the emolument of the contracting parties . . . . " (Burnett, Letters, I I I , 248.) In 1782, John Witherspoon admitted that Loan Office certificates always had greater value than other kinds of government paper, but he denied that many had gained by paying for them in depreciated money " because of Tender laws value." (Ibid., V I , 416.) Bullock is undoubtedly correct in his summary, though the amount of gain thereby cannot be settled here. 59 Beard, Jeffersonian Democracy, p. 144. A. Bolles, Financial Hist, of the U. S., I, 260, 261, says that this was not the original intention of Congress, but gives no authority for his statement. 60 M a r g a r e t M. Myers, New York Money Market, I, 11, denies this; but there is some evidence to the c o n t r a r y : c f . the use of the certificates in commerce in 1778 in the Huntington Papers, Conn. Hist. Soc. Coll. X X , 130, and their use in foreign trade as cited above.

THE

REVOLUTIONARY

ECONOMIC

FORCES

43

treasurers' promises to pay, etc. These, too, eventually entered the credit system of the country, though also at depreciated values. Goods were offered f o r sale in N e w Haven in 1 7 8 4 f o r " banknotes, Morris' notes, M r . Hillegas' notes, Pickering's certificates, soldiers' notes, state money, lumber, grain, oxen " and other things. " R . Morris & M r . Hillegas' notes, new emission money, all sorts of public securities " would be taken by Albany traders. 41 Soldiers' pay certificates of some states were similarly accepted in many places, as in New Y o r k a f t e r 1 7 8 1 , when they could be exchanged f o r land grants. Wealthy investors like John Delafield the broker and Nicholas L o w the merchant then secured them f o r this purpose. 62 In fact, all evidences of Congressional debt, and probably most state securities, eventually turned into business credit paper or investment securities. T h e funds of societies and individuals became tied up in them. T h e influence such transactions had in consolidating economic interests and in acquainting the public with new investment ideas, can never be ascertained. That the cumulative effects of it all were great cannot be doubted. Borrowing in foreign countries also stimulated private business since it introduced much specie and the first large amount of non-English capital into America. F r o m 1 7 8 1 to the end of 1 7 8 3 over five hundred thousand dollars in hard money arrived through loans," 3 in addition to that spent by the English and French forces and to that secured f r o m the new Spanish H a v a n a trade. W a r loans more frequently assumed the nature of commercial credits. Those by Dutch capitalists, f o r example, 61 N e w Haven Col. Hist. Soc. Papers, IV, 129; Howell and Tenny, Hist, of Albany County, p. 620; ef. also statement of George Minot, Insurrection in Mass., p. 21, that Federal and State debt notes were becoming substitutes for cash. 62 Docs. 9113, 14383, 4484, 32597, Adjutant General's Office: Division of Old Records (hereafter referred to as Div. of Old Recs.). 63 Bullock, op. cit., p. 147; withdrawals of specie, early in the war, were probably heavy, but figures on them are sheer guesswork.

44

BUSINESS

ENTERPRISE:

REVOLUTIONARY

paralleled the n e w H o l l a n d - A m e r i c a n

trade. 8 4

ERA

T h i s extension

of commercial credits by both F r e n c h and D u t c h , t h r o u g h loans or commercial practice, made possible f o r A m e r i c a n s a partial escape f r o m E n g l i s h c o m m e r c i a l domination. M o r e o v e r , loans at the end o f the w a r by such D u t c h houses as the W i l l i n k s , Staphorsts, and D e la L a n d e and F y n j e led them to other A m e r i c a n speculations in the p o s t - w a r years. T h e y came to believe in the economic f u t u r e o f A m e r i c a , of w h i c h M o r r i s painted a roseate p i c t u r e : " O u r

Robert

Establishments,"

he

once w r o t e W i l l i n k and S t a p h o r s t , " h a v e not yet taken that F o r m and obtained that S o l i d a r i t y w h i c h public C r e d i t requires but there is a B a s i s o f national W e a l t h w h i c h like a n e w a n d rich M i n e must yield p r o f u s e l y to the first well directed E f f o r t s o f taxation. Besides w h i c h w e h a v e an extent of territory w h i c h alone f o r m one respectable Creditors."85

In O c t o b e r ,

1782, such D u t c h

uncultivated

Security

to

financiers

our pur-

chased 50,000 dollars w o r t h o f stock in the B a n k o f

North

A m e r i c a , sold them by M o r r i s f o r the U n i t e d S t a t e s

68—an

excellent e x a m p l e o f the close connection between private interests and public

finance.

A b o v e all, the w a r e n c o u r a g e d the business g r o u p idea since it g a v e cooperative experience to n u m e r o u s individuals. P r i v a ateering ventures w e r e financed as in earlier w a r s by an elaborate share system i n v o l v i n g m a n y persons in single

under-

takings. It is said that in B e v e r l y , Massachusetts, " S h a r e s in vessels w e r e reckoned in e i g h t s a n d multiples o f that f r a c t i o n and, in absence o f other k i n d s o f investment, the inhabitants o f the seaport t o w n s b o u g h t and sold them as stocks are b o u g h t and sold today. M e n used their shares in ships as c o l l a t e r a l ; bought and sold f u t u r e s ; h e d g e d a g a i n s t possible losses; sold 64 A l e x a n d e r G i l l o n of Charleston, S. C., is an e x a m p l e of persons appreciating the c o n n e c t i o n b e t w e e n anticipated Carolina

Hist.

Ccnealog.

D u t c h loans and t r a d e : cf.

South

Mag., X , 3, 4.

65 Financier's Letter B o o k s , E , p. 446; o n interests of D u t c h capitalists in A m e r i c a a f t e r 1780, cf. P a u l D . E v a n s , Holland 66 L a w r e n c e L e w i s , Bank

of North

Atncrica,

Land Company,

p. 48.

p. 3 ff.

THE REVOLUTIONARY

ECONOMIC

FORCES

45

short and played the game f o r all it was worth. . . .Under these conditions the control of vessels passed rapidly f r o m hand to hand." " Such activities were not peculiar to that place. A rum distiller of Ipswich, Massachusetts, bought up many shares, usually f r o m sailors. 88 W a r risk was modified f o r most trading ventures by a similar cooperative spreading of investments. T h e merchant Lopez family held a one-sixtyfourth interest in a West Indies voyage in 1 7 8 0 ; 6 9 a H a r t f o r d merchant actually bought a one-ninety-sixth interest in a ship in 1778. 7 0 Another group activity encouraged by the war was in marine underwriting. H i g h insurance rates, ranging from twenty to fifty per cent on ship and cargo, afforded tempting profits which had the same results in Revolutionary America as in England 7 1 —of enlarging and standardizing marine insurance practice. Earlier wars had illustrated the tendency of high rates to increase greatly the number of persons cooperating to underwrite single policies. 72 During the Revolution two new insurance companies were opened in Charleston, South Carolina, in 1 7 7 6 ; the first marine insurance company of Newburyport, Massachusetts (Tristram Dalton, secretary), was established that same year; in 1 7 8 2 James J e f f r e y opened an office in S a l e m ; two new offices appeared in N e w Y o r k C i t y ; Barnabas Deane established an office in Wethersfield, Connecticut, in 1 7 7 7 , possibly because Connecticut shippers seem to have had 67 O. T. Howe, "Beverly Privateeers," Col. Soc. Mass. Pub., X X I V , p. 421; for examples, cf. Curwen, Journal and Letters, p. 257, Ralph Paine, Ships and Sailors of Old Salem, p. 64 ff.; Stewart and Jones Accounts, Feb. 18, 1781, evince such practices in New York City. 68 Ipswich Hist. Soc. Pub., X X I , 10. 69 Commerce of Rhode Island, II, 93. 70 Wads-worth Cash Book, 1776-1779, under Jan. 15, 1778. 71 Cf. W . D. Winter, Marine Insurance (1929 ed.), pp. 14-16. In 1777, insurance men at Charleston, S. C., were said to be making big profits: Deane Papers, Conn. Hist. Soc. Coll., X X I I I , 78. 72 A Boston Ship Insurance Book, 1747-1756, in the Essex Institute, is an excellent illustration of such developments during an earlier war.

46

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

to rely upon Philadelphia f o r insurance at the beginning of the w a r ; J o h n H u r d organized a most successful company in Boston in these years. A n d older insurance groups continued to flourish along side of the newer in all of the leading seaports. 73 A r m y provisioning also tended to create private business associations of larger size and greater complexity than those existing in colonial days. This was especially the case a f t e r 1 7 8 1 under the contract system of Morris, and British and French contracts offered excellent opportunities of which Americans were ever aware. Eliphalet Dyer wrote from Philadelphia in December, 1 7 7 5 : " I n d e e d , they mean to engross everything if possible at this place and are Constantly Intriguing with one or another of the Delegates for places, Pensions, Employments, Contracts etc." 74 Wherever an army was, there soon congregated a host of private traders. " Merchants as f a r Eastwardly as Boston have brought goods to Y o r k t o w n since the capitulation of Cornwallis," a correspondent informed Bernard Gratz in late 1 7 8 1 . " Loyalist merchants similarly followed the British army to Y o r k t o w n and elsewhere. Cooperative discipline and the national point of view were inherent in all army organization. Even the aides-de-camp of Washington's military family formed a significant group when one considers how many persons of post-war business importance were members: Stephen Moylan of the Philadelphia trading brothers; John Fitzgerald, an Alexandria merchant and future bank organizer; Alexander Hamilton; James 73 David Ramsay, Hist, of South Carolina (Charleston, 1809), II, 236; E s s e x Instit. Coll., X X V , 1 7 ; Colonial Records New York State Chamber of Commerce, p. 346; Mary K. Talcott, Hartford, p. 533; Huntington Papers, p. 282. Alexander Dorsey of Baltimore possibly only established his office during the war. Thomas Brereton of Baltimore resumed his insurance business in 1781. John Jenckes i-n Providence moved into a regular business office in 1782. (Gillingham, Marine Insurance in Phila., p. 107; Rhode Island Hist. Tracts, no. 5, p. 207 n . ) . 74 Burnett, Letters,

I, 279.

75 W . V. Byars, ed., B. aiui M. Grots,

Merchants

in Phila.,

p. 207.

THE

REVOLUTIONARY

ECONOMIC

FORCES

47

M c H e n r y of the mercantile family of Baltimore; Richard V a r i c k , future lawyer f o r business interests in N e w Y o r k ; B e n j a m i n Walker, a New Y o r k broker in later y e a r s ; Tench Tilghman, a post-war partner of Robert Morris. Still other persons who were to become prominent in the business organizations of the new nation were employed in the army commissariat. Such were the Congressional purchasing and prize agent in the West Indies, William Bingham, and several of the host of commercial agents acting f o r Congress abroad, notably Jonathan Williams of Boston and the Nesbitts of Philadelphia. Continental prize and purchasing agents at home including such outstanding merchants as Daniel Tillinghast in Rhode Island, William L u x at Baltimore, and J o h n Langdon at Portsmouth, N e w Hampshire. 7 8 E v e n more important as a great post-war capitalist was Jeremiah W a d s w o r t h of Connecticut, the Commissary General of the Continental forces in 1 7 7 8 and 1 7 7 9 , among whose deputies were many future agents of big business. Deputy Quartermaster Generals included the enterprising Nehemiah Hubbard of Connecticut, Henry Hollingsworth of Maryland, and Moore F u r m a n of N e w Jersey, all eager participants in post-war activities. T o these should be added the names of those purveyors of miscellaneous supplies who also became active in the new nation's business—such as Oliver Wolcott, J r . , of Connecticut, the L o w r e y s of N e w Jersey, and Robert Lettis Hooper of Pennsylvania. M a n y of them were merchants, or had mercantile relatives and friends. A l l were learning the importance of national business organization and cooperation. A s to the effects of these or other activities upon private fortunes, the case frequently will be found quite clear. Indeed, our story might well be written in biographical form, discussing the careers of but a handful of the more fortunate, including not traders alone but also successful privateer owners, army 76 Alice G. Waldo, " Continental Agents in America, 1776-1777," in Americana, V I , 1144 ff.; Out-Letters of the Marine Board, I, 38 et passim. All these persons a r e mentioned in later chapters.

48

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

contractors, millers, prize agents, lawyers, and speculators in confiscated loyalist estates. Such figures will appear in the motley throng of our review, replacing older persons who were elbowed out of the spotlight of wealth and power, f o r the names of such newcomers were frequently those of leaders in the future business undertakings in the northern states. With such points in mind regarding the business spirit and opportunities of the times, we can now consider in greater detail the changing economy, f r o m both regional and personal angles.

CHAPTER III MASSACHUSETTS AND RHODE ISLAND THE evacuation of Boston by the British in 1776 resulted in the alienation of a minority of the local merchants as loyalists, many long representative of the most important economic and social groups. Those remaining, however, were not necessarily without respectable antecedents. Though in the eyes of Thomas Hutchinson even John Hancock and James Bowdoin were from relatively newly risen families, 1 certain W h i g merchants of Boston already headed wealthy alliances in the late colonial period, such as had been built up around the Phillipses and Wendells. In the smaller towns of northern Massachusetts also, important commercial groups had been established through colonial marriages such as those made by the Tracys of Newburyport and the Lees of Marblehead. T o the war-time commercial opportunities of such groups and to the activities of other persons more recently prominent we now turn our attention. Massachusetts was fortunate in enjoying a war-time commerce from which her rival, New Y o r k , was largely excluded. Alexander Hamilton wrote, in 1781 : " Massachusetts is in a different situation from any other [state]. Its position has made it impossible for the enemy to intercept its trade; while that of all the others has been greatly injured or totally obstructed. It has become, in consequence, the mart of the States northward of Pennsylvania; and its commerce has enlarged itself much beyond its former limits." 2 He might have added that illicit trade with Nova Scotia was carried on under a variety of guises, occasionally winked at by the authorities; that the State Council often gave permits for vessels to go to 1 Thomas Hutchinson, Hist, of Massachusetts-Bay 293, 297, 298.

(London, 1828), III,

2 Works, Federal ed„ III, 35349

50

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

neutral nations when embargoes forbade such trade directly.' T h e r e w a s also a g a i n f u l spirit marking the activities of many persons there: an agent in Boston on clothing business f o r the Congress in J a n u a r y , 1 7 7 7 , wrote of " t h e many Dificulties we have mett with in this Business f r o m People whose station in life ought to make them above the A r t & Chicanery going f o r w a r d ; the grasping disposition of those People to seize every Opportunity in their P o w e r to increase their

private

Interest, & the Duplicity daily carried on makes this Business exceedingly disagreeable." * T h e commercial opportunities of

1 7 7 6 are evident in the

statement by Elias Hasket D e r b y of Salem, that one hundred per cent profits were made on importations of cocoa, sugar, and powder, and one hundred and fifty per cent " more than common " on linens, cottons, and paper. Though the D e r b y s were owners of many successful privateers, R i c h a r d

Derby

found more profit in trade than in privateering as the w a r progressed, 5 this, however, being a distinction between activities which were in fact closely related. Such early opportunities m a y not have been open to Boston merchants because of the British occupation, 6 and the year a f t e r was doubtless a time of confused recovery there, but goods were soon available f r o m privateering voyages and the demand f o r many commodities w a s accelerated by Continental a r m y needs. One of the latter w a s clothing which Boston imported principally f r o m F r a n c e 3 Cf. O. T. H o w e , in Col. Soc. Mass. Pub., X X I V , 362, 364, 3754 Abraham Livingston to Robert Morris, Jan. 23, 1777, Morris Corresp., in Library of Congress. Cf. also the complaint in the Boston Gazette, April 6, 1778, that " the thirst after gain is g r o w n so insatiable." Quoted by R. V . H a r l o w , " Economic Conditions in Massachusetts during the American Revolution," in Col. Soc. Mass. Pub., X X , 176. 5 R. E. Peabody, Merchant

Venturers

of Old Salem,

pp. 40, 41.

6 However, Curson and Seton of N e w York wrote, May 10, 1775, quoting a London correspondent, " H o w e v e r extraordinary it may appear, yet w e find there is now shipping f r o m this place [London] for Boston nearly as much goods as ever for the Merchants t h e r e . . . O Worthy Boston." Misc. M S , "Alsop," in N e w York Hist. Soc.

MASSACHUSETTS

AND

RHODE

ISLAND

51

and Spain. In J u l y , 1 7 7 8 , f o r example, seven vessels had recently arrived with this article, 7 which fact also indicates the resumption of direct importations generally. In A p r i l , 1 7 7 8 , trade w a s at a " low e b b " in Boston, but now because of a " want of money " and the caution of purchasers

8

rather than f r o m a lack of goods. In F e b r u a r y , 1 7 7 9 ,

prices of W e s t India goods were actually falling, doubtless because of a surplus, and in M a r c h there were " Great Quantityes of Melasses at Markett and more D a y l y droping in." * T h e r e w a s a large influx of European goods also by

1779.

S e r i o u s attention w a s given by the Boston town meeting i n A u g u s t of that year to control of prices of importations, " so various in their kinds and qualities."

10

Jonathan A m o r y began

to import all kinds of things f r o m E u r o p e in 1 7 7 9 — r i b b o n s , knives, window glass, and linens. 1 1 W o r d came to J e r e m i a h W a d s w o r t h in September, 1 7 8 0 , that Boston had plenty of cloth; that three or f o u r vessels had arrived within a week and that more w e r e expected daily. If Boston could not supply w h a t one needed, commodities were available at Salem, B e v e r l y , or N e w b u r y p o r t f r o m prize captures. 1 2 Goods must have been, more than plentiful by March, 1 7 8 0 , when J o h n Eliot wrote that return cargoes were worth

less than shipments

from

B o s t o n ; yet sales prices remained so high above costs that the importing business continued to be attractive. 1 ® 7 Doc. 22714, Div. of Old Recs. 8 Henry Livingston to " Father," April 3, 1778, Redmond Coll., in New York Public Library. Under March 16, 1778, in Boston Records Commissioners, Reports, XXVI, 10, " The great Decline of Trade " is mentioned. 9 Huntington Papers, pp. 116, 129. 10 Boston Reports, XXVI, 78. 11 Meredith, Amory, p. 219. 12 From M. Merrill, Sept. 14, 1780, from S. Broome, Aug. 7, 1780, Wadsworth Corresp. 13 Eliot cited in Sumner, Financier, I, 84; Codman and Smith wrote Moses Michael Hays, Oct. 31, 1780, that prices in Boston were three times sterling costs. Codman-Smith Letter Book.

52

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

In December, 1780, A m o r y set up two relatives in trade, and they did very well. He began to remit money abroad f o r his brother to save or invest in goods; he sent 100,000 livres in December, writing that trade continued better because regulatory price acts had been abandoned and gold and silver could be demanded f o r goods. 1 4 The presence of the French fleet and army at that time made available the bills of exchange necessary f o r such remittances and increased the amount of hard money in Massachusetts, f o r merchants had been supplying the French fleet, securing bills or gold in payment, and French commissaries were going through the state on purchasing tours. 1 5 In August, 1 7 8 0 , English goods, wines, and currants were advertised in a Boston newspaper, in exchange f o r " Hard or paper money, French, Spanish, or Dutch bills of exchange." 1 9 There continued to be an abundance of goods in Boston in the la9t years of the war despite the falling off of prize captures. Not only did English manufactures seep in, but merchant J o h n Welsh even wrote abroad in J u l y , 1 7 8 2 , that, since Americans preferred British goods which were forbidden importation, French textiles could be " pack'd & marked the same as tho' manufactur'd in England to as great deception as the English formerly imitated the French for Quebec markett. . . . " 1 1 The result of all this feverish activity along with earlier priva14 Meredith, Amory.

pp. 223, 224.

15 Cf. R- V. Harlow, in Col. Soc. Mass. Pub., X X , 184, and following remarks by S. E. Morison; cm Breck and Halsey, cf. b e l o w ; on Barrdl, Ellen Bulfinch, Charles Bulfinch, p. 41, and also below. 16 Quoted in Memorial

Hist.

Boston,

IV, 1917.

17 T o Jacob Welsh, July 2, 1782, John W e l s h Letter B o o k ; c f . Boston Reports, X X V I , 214, on importations in 1781. Increasing importations eventually meant decreasing profits, as prices fell. W . Donnison wrote Samuel Nightingale of Providence, from Boston, Jan. 11, 1782, of falling prices; how " vessels of the new Construction have fallen amazingly "; how underwriters were after money "like wolves" ; but a Dutchman, Jan V a n der W e r f , complained to him in Oct., 1783, that he did not make the 20% profits in Providence that he did on goods sold in Boston and Philadelphia. NightingaleJenckes Papers.

MASSACHUSETTS

AND RHODE ISLAND

53

teering successes was the extensive use of luxuries in the maritime towns of Massachusetts during the war years. It had reached a climax by J a n u a r y , 1 7 8 3 , when Welsh ordered an investment in children's toys. Massachusetts also re-shipped foreign items to other states, receiving foodstuffs largely in payment. Most important of these was flour, which frequently came f r o m the Chesapeake region. 1 8 It probably was this article which Henry Livingston, who moved from the Hudson Valley and settled in Boston, could o f f e r in exchange for the imported textiles on which in 1 7 7 9 he expected to make a " profitt of £ 1 5 0 0 0 L . M . " 18 Upper New Y o r k also furnished Boston at this time with considerable grain and flour 20 which could be used for such inter-regional payments. T h e state was stimulated in other ways by war conditions. Some manufactures, especially milling and distilling, were encouraged. Merchant Caleb Davis developed a chocolate mill in 1 7 7 8 . 2 1 E a r l y in the war clothing was made f o r the army in almost every town, 22 and Samuel Phillips of Andover must have been but one of the many who manufactured gunpowder. Jonathan Winship, J r . , later an important merchant, founded the beef-slaughtering business of Brighton in 1 7 7 5 , subsequently supplying American troops and the French fleet.2® The inland town of Springfield participated in a great flow of trade and in local manufactures, serving especially as a military supply depot, as a lumber and beef center, and as a cart18 An instance is found in Wadsworth to Jacob Cuyler, May 7, 1779, Widsworth Papers in New York Hist. Soc. 19 Henry Livingston to " Father," May 12, 1779, Redmond Coll. 20C/. Boston Reports, X X V I , 139; cf. also Chapter Five. 21 Receipt under Aug. 1, 1778, Davis Papers, 9b; on the stimulus to manufacturing, cf. Familiar Letters of John and Abigail Adams, p. 313. 22 Statement of Benjamin Church, in Essex Instit. Coll., XLVII, 234. 23 S. E. Morison, Maritime Hist. Mass., p. 59n.; Winship was of a famous mercantile family, however.

54

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

24

ridge-making town. Farmers apparently prospered from high prices for food stuffs until 1780, and in that year were even said to have drained all the ready money out of Boston. 25 That farmers considered their opportunities inferior to those of the traders, however, is evident from a statement of Jeremiah Wadsworth in 1 7 7 8 : " T h e purchasers of flower from the Eastward are, many of them, those who have amassed much wealth by a disgraceful inland trade; and the inhabitants of the New England states in general have neglected the cultivation of wheat and turned their attention to trade and never will return to cultivation till necessity obliges them." 24 T h e general situation was probably not too incorrectly summed up a year later by Jonathan Amory when he wrote, " Tho our money has depreciated yet the internal strength of the Country is greater than when the war first began as there is hardly a T o w n but what has got more rateable Polls in it than at the first of the W a r , but tho' many individuals suffer yet the farmer & the bulk of the people get by the war. . . . " 27 Bearing in mind this general condition of affairs, let us survey the business experiences of certain individuals. In Massachusetts, as elsewhere, government needs in clothing and foodstuffs gave employment to numerous persons. F o r example, Messrs. Otis and Andrews of Boston received the appointment of Collector of Clothing for the Continental forces in November, 1 7 7 7 , from which office the " emoluments were considerable," according to Otis himself. (They may have received the appointment because Congress, a year before, had been indignant over the enormous prices and cash demands of 24 Henry Booth, " Springfield during the Revolution," Conn. Valley Hist. Soc. Papers,

II, 301 ff.

25 Harlow, in Col. Soc. Mass. Pub.,

XX,

176-182; Sumner,

I, 84, quoting a contemporary. 26 Public

Papers

of George

27 Meredith, Amory,

p. 219.

Clinton,

I V , 303.

Financier,

MASSACHUSETTS

AND

RHODE

ISLAND

55

28

certain Massachusetts clothing contractors. ) Otis had been on a state committee to buy clothing f o r the army in 1 7 7 6 . A f t e r 1 7 7 9 he was associated in the Continental business with one Henly. 2 9 Otis, too, had trouble with contractors' prices which continued to provoke Congressional inquiry, as in 1 7 7 8 with a M r . Jackson, " a principle Contractor in the Business " who " owns his asking me 2000 per Cent, and justifies the price he sold the goods for, at the same time avers nobody can say that he sold f o r 1800 or 2000 per Ct. f o r he did not sell by advance." 30 Otis and associates handled enormous sums of money and shipped goods all over the country. F r o m December, 1 7 7 7 , to J u l y , 1 7 7 8 , Otis and Andrews furnished the army 18,000 suits of clothing, in addition to hats, blankets, and other things. They sent shoes and clothing to the army at Providence in 1 7 7 9 ; ninety-eight hogsheads of clothing to Springfield in November, 1 7 8 0 ; forty " t r a i n s " of the same to Newburgh the same month; thirty-one wagon loads to Philadelphia a year later. 3 1 Other goods were handled by them on occasion: Jeremiah Wadsworth addressed "Oatis & H e n l y " on March 1 5 , 1 7 7 9 , concerning General Greene's request that they send vessels f o r 6000 casks of rum, " and if one half goes f o r the freight of the others the Continent must purchase the other half if wanted. . . . " 32 Merchant Thomas Cushing was Commissary General of Massachusetts f o r five years as well as an agent f o r the Congressional Marine Committee, in which latter capacity he 28 S. E. Morison, Harrison Gray Otis, I, 2 1 ; Sumner, Financier, I, 143. Otis' partner may have been Benjamin Andrews, brother-in-law of Samuel B-eck. 29 H e may have been of the Henly family which furnished merchant Tiomas Russell with a wife. 30 Burnett, Letters, III, 98 n.; see also, Laurens to Otis, May 13, 1778, on p 233, ibid., in regard to payment troubles. 31 Morison, Otis, I, 2 1 ; Gates Papers, Box XI, no. 298, XII, no. 228, in New York Hist. Soc.; docs. 25278, 26413, Div. of Old Recs.; Hugh Hughes letter Books, " Letters Promiscuous," under Nov. 2, 1781. 32 Wadsworth Papers, in New York Hist. Soc.

56

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

handled naval funds and superintended the building of a f r i g ate in 1777. 8 3 Provisions f o r state troops, however, were more largely the concern of young Oliver Phelps, formerly a trader of Granville, Massachusetts, who was appointed a state superintendent of army purchases in 1 7 7 7 , a title apparently retained to the end of the war. 3 4 A s partner in the private concern of Phelps and Champion he also became a great contractor f o r beef after 1 7 8 0 with Wadsworth and Carter, the French agents. Caleb Davis of Boston was even more deeply involved in various kinds of public business, especially in his capacity as state agent for prize vessels, at least after 1 7 8 1 . In 1 7 7 7 he had also received sums f o r warrants on the state f o r supplies furnished the army and for timber used in building a state vessel, and between November, 1 7 7 6 , and April, 1 7 7 7 , he sent over two thousand pounds worth of goods to the Northern Continental army on account of Massachusetts. Still acting for the state, Davis paid Thomas Russell for rum in August, 1 7 7 8 ; twice that year he made similar payments to Samuel Breck f o r small amounts of sugar. 3 5 A f t e r 1 7 8 1 D a v i s was also the Boston agent f o r the Continental Board of W a r , f o r whom he settled accounts with such persons as William Bingham and John Holker of Philadelphia. His business acquaintanceship grew accordingly, like that of young Elbridge Gerry, the merchant and politician of Marblehead who did considerable importing f o r the public in addition to carrying on private trade successfully; 3 6 or like that of merchant Nathaniel Appleton, the Continental Loan Officer f o r Massachusetts. Still another Bostonian whose public services provided excellent training f o r post-war activities was Andrew Craigie, Apothecary General of the Continental forces. With William 33 Lemuel Cushing, Cashing Family (Montreal, 1877), pp. 35, 36; Letters of the Marine Committee, I, 10, 39, 169 n. 34 Oliver S. Phelps, Phelps Family

in America

(Pittsfield, 1899), II, 1321.

35 Mass. Hist. Soc. Proc., LIV, 2 1 7 ; Davis Papers, 9b, 20, passim. 36 " Elbridge Gerry," in Diet. Amer.

Biog.

Out-

MASSACHUSETTS

AND

RHODE

ISLAND

57

B r o w n , one o f his a r m y assistants, Craigie made several unsucessful attempts during the w a r to establish a private medical supply h o u s e . " H e successfully did so soon a f t e r the W a r in N e w Y o r k

City, together with another former assistant,

F r a n c i s W a i n w r i g h t . C r a i g i e ' s later speculative career, h o w ever, was largely the result of

his

P a r k e r , the merchant and a r m y

friendship with

contractor of

Daniel

Watertown,

Massachusetts, and with P a r k e r ' s brother, D r . B e n j a m i n P a r ker o f N e w t o n , an apothecary f r o m w h o m Craigie may have learned the business. C r a i g i e ' s Boston connections were centered around his brother-in-law, the merchant Bossenger F o s ter, w h o owned in 1782 state and Congressional securities o f over £4000 specie value which he had received in exchange f o r goods sold at " full value."

38

T o w a r d the end of the w a r the name of T h o m a s Russell of Boston appeared on d r a f t s used in Continental payments since he was a confidential agent of Robert Morris, the F i n a n cier. 38 Still other merchants acquired unusual business experience in the management of public

finances,

as, f o r example,

Nathaniel G o r h a m and Stephen H i g g i n s o n w h o were a special committee on finance in the Massachusetts legislature in 1 7 8 1 ; and T h o m a s W a l l e y w h o w a s appointed in 1780 to settle state accounts f o r supplies. T h e benefits derived by individuals f r o m such services as these is frequently debatable, but there is little doubt as to the profitable character of w o r k done f o r the French forces. T h e five per cent commission purchasing which Samuel Breck and his partner Green did in 1 7 8 1 — t o g e t h e r with T h o m a s L l o y d H a l s e y — f o r the French n a v y at Providence and Boston, and 37 B r o w n to Craigie, Aug. 12, 25, 1780, Sept. 11, 1782, Craigie Papers. Craigie was a cousin of the Massachusetts Congressman James Lovell, w h o may have secured him his appointment. 38 Foster to Craigie, July 7, 1782, ibid. 39 Doc. 21690, and Rec. Books, no. 80, p. 98, no. 152, p. 198, Div. of Old Recs. Russell is also mentioned in Jeremiah Wadsworth's public account books, 1777-1778, f o r earlier public services or goods.

58

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

for a French military hospital in West Boston, was an especially attractive opportunity to combine patriotic services with private profits. From six to twenty-one thousand pounds of Massachusetts currency passed monthly through Breck's hands. It indirectly benefited many persons. Bread was purchased from William Breed, flour from Aaron Lopez, rum from Jarvis and Johonnot, oil from Nathaniel Appleton, beef on one occasion from John R. Livingston and Moses Brown, oznaburgs from Thomas Russell, general supplies from Jonathan Winship and other merchants. Breck and Green likewise had the enviable opportunity of handling the prizes captured by the French squadron, and of negotiating great quantities of bills on France on a three per cent commission basis." In the field of private commerce the activities of several Boston merchants are instructive for an understanding of the economic situation, though broad generalizations should not be hastily drawn from such evidence. Caleb Davis is again an example. In 1778 he was concerned with Oliver Wendell in a vessel from North Carolina. In October of the same year his sloop Friendship was chartered to a public commissary in Baltimore, the public being charged one-quarter of its cargo value for freightage. A year later Davis received payments from seven persons for their shares in the schooner Dave and cargo, and he also owned one-eighth or one-quarter in the schooner Hawk that year. In 1781 he was connected with Clark and Nightingale of Providence in other vessels.41 That Davis' economic position must have been fairly good is revealed by the fact that he was concerned in 1779 with labor and supplies for a " house in Nassau St." which he apparently was building. The Amorys have left a record of more substantial commercial activity in 1778 and 1779 when they held an interest 40 Breck and Green Account Book "A", passim. This book is in the handwriting of Nalbro Frazier, clerk of Breck. The French Crown was figured in Nov., 1781, as equal to six shillings, eight pence of Mass. currency; the Mass. pound was figured at seventeen livres, t c n ( ? ) , sous Tournois: ibid., p. 71. 41 Davis Papers, 20, passim.

MASSACHUSETTS

AND

RHODE

ISLAND

59

in at least twenty ventures, though this sometimes consisted of but one-half or one-quarter of a share, and rarely over one whole share. The cost of such shares in a large ship venture averaged around one hundred pounds, however, and fractions sold for corresponding sums. Sometimes the A m o r y s simply owned " portions " of a cargo and outfit, all of which makes it evident that many commercial undertakings out of Boston were jointly financed by merchants for the purpose of spreading war-time risk. These ventures in 1778 and 1779 were to a variety of places, indicating the commercial opportunities available. Several were to South Carolina, bringing back deerskins, rice, and hemp; to North Carolina; to V i r g i n i a ; at least one to Connecticut; and a number to the West Indies. A m sterdam, Holland, was the destination of one brig; and Cadiz and Bilbao, Spain, were markets sought by a ship and a schooner. It cannot be argued, however, that fortunes were made thereby: Jonathan A m o r y ' s European business did not really pick up until the close of the period these records cover. On several ventures, moreover, the A m o r y s lost heavily, especially by reason of captures; but on others they made profits, such as £277 on a quarter interest in the schooner Lucy to V i r ginia, £235 on a one-sixteenth interest in the schooner Hazzard to St. Cruz, £108 on a one-eighth interest in the sloop Mirabile Dictu to " St. Petre's." The profits from the schooner Eagle's voyage in 1779, on which three prizes were taken, were especially large; so were those from a venture of the brig William to Amsterdam in 1778. 42 Some light is thrown on the commerce of Boston in the later war years by the correspondence of the firm of John Codman, Jr., and William Smith, sons of merchants of some pre-war importance. There were two other Codmans concerned with this firm—Stephen, who went to Europe in the spring of 1782, and Isaac; and the marriage in 1781 of John Codman, Jr. to a sister of merchant Thomas Russell strengthened the firm's 42Amory MS, Ship Account Book. What interest they had in the Eagle is not apparent, but its account is given in detail.

60

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

standing. Thomas and Chambers Russell owned the snow Industry together with this firm and did considerable business for it from time to time. The firm's other important American connections were with several Philadelphians: George Meade, Thomas FitzSimons, and William Turnbull. By May, 1780, Codman and Smith were concerned with the last especially in shipments to and from Gardoqui of Bilbao: white oak pipes, headings, and spars were sent to Spain, and flaxseed and tobacco to Holland, while salt and lemons were imported from Spain and sold in Boston at a " great price " in August. 43 Turnbull was also used by the Boston house to purchase exchange in Philadelphia, this amounting to as much as 10,000 livres at a time. On another occasion he was informed that he could get money for them through Robert Morris, or by drawing on the Continental Clothier General; and in January, 1 7 8 1 , he was ordered to remit to them with a draft from John Holker, the French Consul, on Thomas Russell. Though Codman and Smith had made at least one unfortunate venture with Meade by June, 1780, they continued to be interested in foreign cargoes with both Meade and FitzSimons, warning the latter on May 30, 1782, however, that the risk of capture off Philadelphia was greater than at any other time. The West India market also appealed to these Bostonians and, together with Russell, they shipped fish and lumber to Guadeloupe in March, 1 7 8 1 . They also sent the ship Commerce there with flour, which Meade probably secured for it, in September, and another ship to the Spanish colonies in November. The Boston market itself was good for Philadelphia flour in February, 1 7 8 2 . " Codman and Smith's foreign trade with Gardoqui had temporarily come to an end in November, 1780, as a result of disagreement over freight rates. Thereafter Butler and Matthews at Cadiz, Ingraham and 43 T o Butler and Matthews, Aug. 4, 1780, Codman-Smith Letter Book. Isaac Smith had a half interest in their shipments to Spain. They were also in correspondence with Samuel and M o s e s Myers of Amsterdam.

44 To Meade and Co., Feb. 26, 1782, ibid.

MASSACHUSETTS

AND

RHODE

ISLAND

6l

Bromfield at Amsterdam, and Jonathan Williams at Nantes were their principal foreign agents; but a year later German steel, cordage, ticklenburgs, knives, and handkerchiefs were again ordered from Gardoqui. Somewhat similar activities were carried on by John Welsh of Boston, who had a side interest in supplying the French forces in America with flour.45 In 1781 he was interested in the Codmans' Commerce, bound for the West Indies; like them, too, he had a brother representing him abroad in 1782, as did such other Boston families as those of Cheever, Williams, and Bromfield. Jacob Welsh was to go to London in March of that year to buy " ruby foyl " and to send it back carefully marked, " for reasons you may guess." 48 His interests were like those of a son of W . D. Cheever, who wrote from Copenhagen to a London merchant in September, 1781, in thanks for goods just received.47 Such New England merchants sometimes transacted their foreign business through the de Neufvilles of Amsterdam, who deserve special mention at this point. The Bostonian Caleb Davis and the Cheevers who were concerned in the ship Robin Hood; Joseph Barrell, Jarvis and Russell, Paschal and Smith, and Loring and Austin who were concerned in the Juno or the Hannah; and the Tracys, Greenleafs, Stephen Hooper, and Tristram Dalton of Newburyport who were concerned in the Minerva or the Gates, all consigned cargoes to or received them from the de Neufvilles in 1781. The Gates' voyage was financed, however, by drafts on the Gardoquis. The de Neufvilles also handled bills of exchange for Americans, as for Oliver Smith of Boston. Indeed, they were concerned with Americans in every important port held by the patriots, from 45 John Welsh Letter Book, passim. See Chapter Five on the flour business. 46 To Jacob Welsh, Feb. 9, March 29, 1782, Welsh Letter Book. On Jan. 12, 1781, Codman and Smith requested Gardoqui for letters of introduction for Isaac Codman to " your friends in Amsterdam and England ": ibid. 47 W. D. Cheever"s son to Michael Joy (of London), Sept. 29, 1781, Davis Papers, 23.

62

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

New Hampshire to Virginia, and also became acquainted with Americans in business abroad, such as Elkanah Watson at Nantes." The war-time commerce of the seaports of the North Shore —Marblehead, Salem, and Newburyport—and of Portsmouth, New Hampshire, can be mentioned but briefly and then only to show that it was active throughout most of the war. Such places were given especially enviable opportunities f o r both domestic and foreign trade by the closing of the port of Boston in 1 7 7 4 and 1 7 7 5 , much of their enlarged foreign traffic being with Gardoqui of Bilbao, Spain, with whom merchants like Richard Derby of Salem had long been acquainted. 4 * Rising prices continued to encourage such activities along the North

Shore

even

after

the

reopening

of

Boston.

In

1776

Stephen Higginson, Francis and George Cabot, John Cabot, and John L e e all touched at Bilbao with cargoes, some of which were taken on to Amsterdam. Superfine blankets, velvets, fashionable broadcloth and other finery, in addition to " musketts " and goods f o r Congress, were imported by them from Spain in October, 1 7 7 6 , and November, 1777. 5 0 T h e following year the Cabots of Beverly gave directions to a captain to use " O ' R i l y and Smith " at " Coruna," and Jonathan Williams at Nantes, France, f o r management of their cargoes and prizes. 51 All these merchants, especially the Cabots and Joseph Lee who were partners, continued to have common interests in ships. John and Andrew Cabot held a one-sixteenth 4 8 d e N e u f v i l l e Letter Book, passim; c f . also Charming in Mass. Hist. Soc. Proc., X L I V . The de Neufvilles sent some silks to " Lady Adams, Braintree," in 1781, as noted in Letter Book, p. 11. 49 R. E. Peabody, " The Derbys of Salem, Mass.," E s s e x Instit. Coll., X L I V , 197; c f . also Porter, Jacksons and Lees, I, 266, 268, 272, 279. 50 T. W . Higginson, Stephen Higginson, pp. 45, 46. Higginson, however, apparently was not too well acquainted with the Bilbao market. Gardoqui to Joseph Lee and Co., Oct. 8, 1776, Zach Rurchmore to Lee, Oct. 15, 1776, and draft of letter under Nov. 1777. Lee-Cabot Papers. 51 John and Andrew Cabot to Capt. H u g h Hill, Oct. 17, 1778, Timothy Orne M S , in E s s e x Instit.

MASSACHUSETTS

AND RHODE ISLAND

63

share in the brig Active with Lee in 1 7 8 0 ; these three, with George Cabot and the captain, owned the brig Hector in 1777. Lee and George Cabot together owned the prize ship Willson in 1778. Lee also held one-eighth of the brig Polly in 1780, and shares in others; he paid sums on three ships built in 1780, on two galleys built in 1782, and on " v e s s e l s " being constructed the following year. 52 Though many of these were largely used for privateering purposes after 1777, several also carried letters of marque which enabled them to trade as well as to plunder. Such Massachusetts firms were frequently able to use southern products with which to make foreign remittances. Joseph Peabody, who got his business start as a privateer captain for the Derbys and Cabots, took at least two cargoes of salt to Virginia before the close of the war; he secured flour at Alexandria and carried it to Havana." The Lees and Cabots sought rice and tobacco at Charleston in 1 7 7 7 ; the Derbys carried tobacco to England in the fall of 1783 and sold it there for good profit. 54 It is an interesting commentary on the war-time methods of several Salem merchants that a ship owned by George Crowninshield, Nathaniel Silsbee, John Collins, and Joseph White was taken prize by an American privateer in 1 7 8 1 because its cargo was intended for British Bahamas. 55 A s to Newburyport, it is said that only one out of thirty sail to the West Indies failed to make the trip safely in 1 7 7 8 and 1 7 7 9 ; " the success of the Tracys of that place in trade previous to 1778 would partially confirm such a statement for an earlier period. Though the firm of Jackson, Tracy and 52 Lee-Cabot Papers, passim. 53 M a r y C. C r a w f o r d , Famous Families

of Mass., II, 298, 299.

54 Burchmore to Lee and Co., June 1, 1777, Lee-Cabot P a p e r s ; he carried Loan Office certificates to make purchases with. Cf. also Peabody, Merchant Venturers, p. 52, and Chapter Eight of this work. 55 Cf. J . L. H o w a r d , Seth Harding, Mariner, p. 137 ff. 56 Cf. C. W . Upham, Timothy Pickering,

II, 147.

64

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

T r a c y w a s dissolved in 1 7 7 7 , f o r one t h i n g because privateeri n g or trade in letter-of-marque ships was supplanting the r e g ular

commerce,

its profits on

merchandise

from

successful

t r a d i n g e f f o r t s a m o u n t e d to over £19,000 in three

troubled

y e a r s b e g i n n i n g in 1 7 7 4 , a g a i n w h i c h stood in contrast to its c o n t e m p o r a r y losses in p r i v a t e e r s . " P o s s i b l y

f o r this

reason

the firm w a s able to f u r n i s h supplies to the Continental Q u a r t e r m a s t e r ' s department in December,

1776."

In

Portsmouth

the career o f J o h n L a n g d o n w a s especially o u t s t a n d i n g in both public and private enterprise. A s N a v a l A g e n t there, it m u s t h a v e been L a n g d o n w h o m J o h n B r a d f o r d accused in 1 7 7 6 o f s e i z i n g all Continental prizes w h i c h stopped o v e r n i g h t in P o r t s m o u t h , instead o f p e r m i t t i n g them to g o on to B o s t o n w h e r e , Bradford

claimed,

they

would

sell

f o r double

the

money."

T h a t L a n g d o n w a s eager to get contracts f o r building C o n t i nental f r i g a t e s is b e y o n d dispute. 8 0 P u r c h a s i n g s u g a r f o r R o b e r t M o r r i s in F e b r u a r y , 1 7 7 7 , he w r o t e a letter w h i c h also s h o w s his interest in private b u s i n e s s : he " intended t o h a v e Speculated t o s o m e Considerable A m o u n t but the S u d d e n rise o f all A r t i c l e s , the great C l a m o u r o f the people a g a i n s t M o n o p olies, and the Critical S i t u a t i o n o f a f f a i r s j u s t then prevented m y g o i n g a n y f u r t h e r — a n d Since then, A c t s of these States E s t a b l i s h i n g the P r i c e s o f all M e r c h a n d i z e A m o u n t to hibition. . .

Pro-

,"61

It is k n o w n

that p r i v a t e e r i n g

helped

make

the

fortunes

o f several M a s s a c h u s e t t s families d u r i n g the R e v o l u t i o n , but it is unlikely that most participants gained by it, especially after

1780.

It should be noted, h o w e v e r ,

that the

greatest

5 7 P o r t e r , Jacksons and Lees, I, 17, 337, 338. 5 8 Rec. Book, no. 98, p. 15, Div. of Old Recs. 5 9 B r a d f o r d to Morris, Congress.

Sept. 5, 1776, M o r r i s

Corresp., in L i b r a r y

of

6 0 Cf. Burnett, Letters, I, 282, 283, 434, 495, 496, II, 359; cf. also Everett S . Stackpole, Hist. New Hampshire, II, 281. 6 1 T o Robert Morris, Congress.

Feb.

18, 1777, M o r r i s

Corresp.,

in L i b r a r y

of

MASSACHUSETTS

AND

RHODE

ISLAND

65

number of privateering commissions issued in Massachusetts was in 1781, with 1782 a close second and 1779 third; and that the state contributed a greater total of privateers than any other.62 Presumably, the amount of activity depended to some extent upon the relative possibility of success. In December, 1781, a Boston town committee report mentioned the "astonishing successes " which had " hitherto " attended privateering.83 It also benefited those purchasing captured goods and ships, hastily sold at auction. John Bradford, Continental Marine Agent at Boston, acknowledged having purchased one prize for himself which he sold for a good profit.64 Merchants Isaac Smith, Ebenezer Storer, and William Phillips occasionally assisted Bradford, whose position was later filled by lawyer John Lowell. One case of successful privateering, proved beyond all doubt, is that of the Cabots of Beverly. Before the war the firm of John and Andrew Cabot, though of good credit, had no great prominence in New England. By the end of the war it had become one of the most prosperous firms in the state.85 Joseph Lee of Beverly and Richard and Elias Hasket Derby of Salem seem to have been similarly successful: Lee's ship Pilgrim took over thirty prizes in less than two years, though he probably owned only a part of her, his investments in such vessels ranging from one thirty-second to one-half interest.88 Other prominent post-war shippers of Salem must have been similarly successful, such as William Gray, son of a master shoemaker, 62 Figures computed from G. W. Allen, Mass. Privateers of the Revolution, passim; J. F. Jameson, American Revolution as Social Movement, p. 103; Morison, Maritime Hist. Mass., p. 29; William Weeden, Econ. Social Hist. New England, II, 770-771; R. V. Harlow and S. E. Morison in Col. Soc. Mass. Pub., X X , 184, 192-193. 63 Boston Reports, X X V I , 214 216. 64 Bradford to Caleb Davis, Feb. 12, 1781, Davis Papers, 10a. 65 O. T. Howe, in Col. Soc. Mass. Pub., X X I V , 421. 66 Pea body, Merchant Venturers, pp. 45, 46; idem in, Essex Instit. Coll., X L I V , 215; C. E. Trow, Old Shipmasters of Salem, p. 85; Porter, op. cit., I, 22, 4 i i , 413.

66

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

who owned shares in at least eight privateers in 1 7 8 1 - 1 7 8 2 alone, and who purchased a good house in 1 7 8 3 when but thirty-three years old.87 On the other hand the Tracys of Newburyport both partly made and lost a fortune in the same practice. 68 In Boston Stephen Higginson was an outstanding business figure a f t e r having thus made, according to a family biographer, a fortune of 70,000 dollars in Salem in the early war years. 89 Other Boston merchants especially active in privateering were Joseph Barrell, John Coffin Jones, John Codman, Leonard J a r v i s , Mungo Mackey, Thomas Russell, and James Swan. This was also a leading interest of John R . Livingston, of Clermont, New Y o r k , who had located in Boston during the war f o r commercial purposes. 70 Still other persons also of future business importance, but with smaller interests in privateers, cooperated in financing ventures, and shares passed rapidly from hand to hand. A s Boston's war-time commercial interests grew, the town became a center of remarkable activity in the purchase and sale of foreign bills and drafts. Jonathan Jackson mentioned being " o n the E x c h a n g e " there in 1 7 8 2 . 7 1 Bills were necessary f o r credit transactions, but their fluctuating values, inviting speculation, might work good or evil f o r the individual merchant. Isaac Wikoff of Philadelphia became involved in difficulty in November, 1 7 7 9 , when he sought to repay Joseph Barrell of Boston f o r goods purchased through the Webbs of Wethersfield; WikofF found that both bills and the pound sterling had gone up in the meantime, and that people refused to 67 Edward Gray, William Gray, p. 10 et passim. 68 J. J. Currier, " Ould Newbury", XI, 510; Porter, op. cil., I, passim. 69 Higginson, Higginson,

pp. 551-557; Hunt's Merchants

Mag.,

p. 43.

70 Allen, Mass. Prh>atccrs, passim; Charles Lincoln, Naval Records of the American Revolution, passim. 71 To Oliver Wendell, Nov. 21, 1782, Jackson Letters of Mr. Austin Clark. Robert Morris said, in 1781, that Boston was the bill market for the Eastern states, as Phila. was for the Southern: Sparks, Diplomatic Corresp., XI, 465".

MASSACHUSETTS

AND RHODE I S L A N D

67

part with French bills at all. 7 2 On the other hand, in J u l y , 1 7 8 1 , it w a s profitable f o r J o h n Welsh to import goods, even though they a f f o r d e d small profit, " as the profitts on Bills are so great E x c h a n g e being now f r o m 3 0 to 3 3 ^ 3 p.ct. discot f r o m par, & I think likely to continue s o . " T h i s w a s true in spite of the " nine million livres which the French friggates brot last w e e k . "

73

F o r bills fell and rose as the French came

and went, despite the e f f o r t s by the French agents to prevent excessive discounting. T h e y actually rose f r o m twenty-five to ten per cent discount within a f e w days around December 2 6 , 1 7 8 2 . W e l s h , f o r one, again luckily anticipated this. 7 * Bills were most commonly bought f o r remittances. E l k a n a h W a t s o n at Nantes i n f o r m e d Caleb D a v i s on F e b r u a r y 1 7 8 1 , that he and J o n a t h a n Williams had negotiated

16,

Davis'

Spanish bills through bankers in Madrid, and had shipped the proceeds back in goods. 7 5 In 1 7 7 9 and 1 7 8 0 B e n j a m i n Greene and S o n s of Boston repeatedly purchased bills to remit to Lane, S o n and F r a s e r of L o n d o n , on an old " Adventure to L o n don " account. T h e y paid T h o m a s Russell £ 2 0 0 " S o l i d C o i n e " on one occasion f o r credit on an E n g l i s h house; they purchased bills on London, French, and A m s t e r d a m houses, originally held by such persons as T h o m a s C. V e r n o n , Stephen G r e e n l e a f , J a m e s B o w d o i n , and Isaac Smith. 7 9 T h e management o f bills stimulated mercantile cooperation. T h u s , C o d m a n and S m i t h frequently purchased them, when cheaper, in Philadelphia, through Meade and Turnbull. In D e cember, 1 7 8 0 , Turnbull w a s told that he would be " t h e best 7 2 W i k o f f to Barrell, Nov. 14, 1779, doc. 29227, Div. of Old Recs. 73 To Richard Harrison at Cadiz, July 10, 28, 1781, Welsh Letter Book; but in December, the discount rate was falling, i. e., the value of the bills was increasing, by reason of the French fleet having left " the E a s t " : ibid., to Harrison, Dec. 19, 1781. 74 To Jacob Welsh, Dec. 26, 1782, Welsh Letter Book. 75 Davis Papers, 10a. 76 Greene and Sons Account Books, no. 3, 718, 719, 720; the bills were usually not secured from these original owners.

68

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

j u d g e whether or not it will be f o r our Interest t o h a v e the proceeds invested in bills o f E x c h a n g e w i t h y o u , as w e mean t o a p p i o p r i a t e w h a t m a y be in y o u r hands to that p u r p o s e . "

77

S a m u e l B r e c k a n d one o f the G r e e n s w e r e used b y a P h i l a delphian in 1 7 8 1

to remit 1 2 0 0 livres T o u r n o i s

in bills on

F r a n c e , 7 8 f o r B r e c k w a s v e r y active in selling bills w h i c h he secured

from

the

French

forces.

These

amounted

to

over

£30,000 specie value in 1 7 8 1 , a n d w e r e purchased principally b y Boston merchants.7' I n connection w i t h the F r e n c h c o n t r a c t i n g w o r k o f

Jere-

m i a h W a d s w o r t h o f H a r t f o r d still other bills or d r a f t s on the F r e n c h g o v e r n m e n t w e r e secured. T h o m a s L l o y d

Halsey

of

P r o v i d e n c e sold most o f these in B o s t o n f o r W a d s w o r t h at a commission o f two and one-half per cent. Bills were high in A u g u s t , 1780, T h o m a s Russell p u r c h a s i n g John H o l k e r ' s bills o n the F r e n c h a t only five per cent discount f o r h a r d m o n e y ; 8 0 b u t W a d s w o r t h noted a considerable increase in the discount r a t e on F r e n c h bills at B o s t o n d u r i n g the n e x t year, as f o l l o w s : 5 % discount f o r hard m o n e y in M a y , 1 7 8 0 ; 1 5 % in A u g u s t ; 2 0 % and 2 5 %

in A p r i l , 1 7 8 1 . 8 1 B y July, 1 7 8 1 , H a l s e y h a d

b u t a dull m a r k e t f o r t h e m ; they could not be sold " while t h e y are so P l e n t y & H a w k e d about at any P r i c e , " he complained. 8 2 T h e T r a c y s o f N e w b u r y p o r t took g r e a t

quantities

o f them f r o m h i m at this time, h o w e v e r , at t w e n t y - t w o and one-half

per cent discount,

losses. In A u g u s t ,

possibly

to meet their

1781, W a d s w o r t h and Carter

shipping

complained

77 To William Turnbull, Dec. 14, 1780, Codman-Smith Letter Book; there are other comments on exchange in letters to Meade or Turnbull of May 4, 8, June 29, Aug. 13. 1780. 78 Peter Wikoff to Joseph Barrell, Jan. 30, 1781, doc. 29226, Div. of Old Recs. 79 Breck and Green Account Book "A", 108-117, gives sets of exchange, prices, and names of purchasers. 80 Russell to Wadsworth, Aug. 21, 1781, Wadsworth Corresp.; a Daniel O'Dell sold these in Boston for Holker. 81 Memorandum under April 13, 17*81, ibid. 82 To Wadsworth, July n , ibid.

MASSACHUSETTS

AND

RHODE

ISLAND

69

to the French that while they had obeyed Robert Morris' orders against selling any more bills, persons from the eastern states came to Philadelphia and sold them, regardless, damaging their market value. 63 Moses Michael Hays became the regular broker for Wadsworth in Boston at the end of the war and acted in a similar capacity for the public, thus assisting Jonathan Jackson in 1783. 84 In other parts of New England merchants were similarly active in the manipulation of exchange. John Rogers of Providence said in September, 1780, that French bills, selling at twenty per cent under par, were " the best thing now to purchase on the principle of speculation." He intended to take them abroad where they could be negotiated at but five per cent discount in France, or ten per cent in Holland; then he would invest the proceeds in goods purchased in Holland or, in case of peace, in England. 85 Aaron Lopez and Moses Seixas of Newport closely followed both the Boston and Philadelphia bill markets in 1780-1781. In January, 1781, Seixas reported that in payment for flour, which was plentiful in Newport, the French gave seven dollars in bills at par, against its ordinary price of five dollars per hundred weight; he significantly added that the French Treasurer General, who drew the bills, " q u a r ters with us." 84 That the war stimulated the organization of marine insurance groups in Boston and other New England seaports, has already been noted. Nothing indicates better the associating influence of marine underwriting than the way Beverly firms used Boston insurance capital at the beginning of the war. Joseph Lee secured £2360 insurance on a brig from Bilbao in 1776 from eighteen persons including Joseph Barrell, Thomas Russell, and William Powell of Boston (all signed for b y 83 T o French Intendant, Aug. 17, 1781, ibid. 84 Wadsworth and Carter Waste Book, 1783-1784, under March 5, April 7, May 27, June 12, 1783; Jackson to Wendell, Sept 23, 1783, Jackson Letters. 85 Commerce of Rhode Island, II, 107. 86 Ibid., II, 119, 122; cf. also pp. 61, 123, 128.

yo

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

" S a m W a r d " ) , in addition to the Cabots, Derbys, and Dodges of Beverly and Salem. Andrew Cabot of Beverly secured a policy the same year, underwritten almost exclusively by Bostonians, Tuthill Hubbard and Robert Pierpont participating together with those mentioned a b o v e . " Ezekiel Price and E d w a r d Payne continued to run their Boston offices. Rates were so high that it was little more than a gambling proposition, with the cards stacked in favor of the underwriters. John Welsh thought that insurance could be secured " to greater advantage by vast odds in France than in A m e r i c a " in 1782, 8 8 which, if true, indicates that Americans had to pay higher rates because of a lack of domestic capital relative to the demand. Such opportunity was utilized by the enterprising John Hurd, who formed a real " company " sometime before 1 7 8 3 , composed of twenty Boston merchants and their friends each of whom automatically took one-twentieth share in any policy signed for by any three of the associates. This was a significant advance on the looser voluntary methods of the earlier offices. In Hurd's company by 1 7 8 4 were some of the most active war-time merchants of Boston, Cambridge, and Salem. 89 T h e surprising thing about H u r d was that he had spent his thirty years since leaving H a r v a r d in politics at Portsmouth, returning to Boston by 1 7 7 9 because political faction in New Hampshire had disgusted him. That he was 87 Policies under Nov. 19, Dec. 3, 1776, Lee-Cabot Papers; the rate on both voyages, from Bilbao, was 30%, and they rose as high as 60% later. 88 To Jacob Welsh, June 19, 1782, Welsh Letter Book; however, a Copenhagen merchant wrote Caleb Davis, Aug. 29, 1781, that he thought the contrary was true: Davis Papers, 23. 89 Insurance Library Assoc. of Boston, Reports, 1888-1 goo, pp. 43-46. Hurd's group included Thomas Russell, Joseph Barrell, James Swan, John Lowell, Samuel A. Otis, Jonathan Jackson, John Codman, Jr., Samuel Brown, Crowell Hatch, Mungo Mackey, Joseph Cordis, Chambers Russell, John Bromfield, Thomas Dennie, William Smith, Richard Soderstrom, Benjamin Hall of Med ford, Thomas Lee of Cambridge, Timothy Fitch and William Gray of Salem. This may have been the group originally associated with Price, who retired about 1781, or 1783: New Eng. Hist. Genealog. Soc. Reg., X I X , 330.

MASSACHUSETTS

AND RHODE I S L A N D

Jl

of the H u r d goldsmith family and brother-in-law of a prominent Boston merchant, Thomas Walley, probably assisted him in his new and successful profession. Turning to the Rhode Island situation during the war f o r independence, it should first be remarked that Providence already had a small but important mercantile group solidified by family ties. Its center was the Brown family, represented 1 7 7 5 by the famous brothers, Nicholas, Joseph, John, and Moses, sons of the enterprising Captain James mentioned above, and by their surviving paternal uncles. Their first cousins already were, or soon a f t e r 1 7 7 6 became, connected with the important Bowens, Arnolds, Howells, Cushings, and Dexters of the town. The Brown-Hopkins-Jenckes-Bowen mercantile combination was powerful in east side Providence on the eve of the war as was the growing firm of Clark and Nightingale on the west side. 90 T o these merchants Congress accordingly turned in 1 775 when it first sought supplies and ships in Providence. A number of them were on a local committee to construct frigates," 1 and John Brown, " a stormy petrel and bold adventurer," secured a contract to import goods f o r the Secret Committee of Congress, his brother Nicholas having a onethird interest. Commissions of two and one-half per cent on sales abroad, and the same on return purchases, netted them ¿ 1 4 0 3 on a voyage for firearms in 1 7 7 6 . They had received 20,000 dollars for such work in December, 1775. 8 2 Perhaps 90 Gertrude Kimball, Providence in Colonial Times, pp. 243, 294-298; W. E. Foster, "Stephen Hopkins," Rhode Island Hist. Tracts, no. 19, 97 n., 109, 152-153; William Weeden, Early Rhode Island, pp. 324, 330; W. F. Crawford, " Commerce of Rhode Island with Southern arid Continental Colonies in the Eighteenth Century," Rhode Island Hist. Soc. Coll., X I V , ¿27 et passim. 91 E. M. Stone, Our French 2oard, I, 46.

Allies,

p. 1 3 ; Out-Letters

of the

Marine

92 Weeden, Early Rhode Island, pp. 238, 239. This section is sadly inidequate because the great collection of Brown Papers in the John Carter 3rown Library is now inaccessible.

72

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

it was to ship Congressional supplies that John B r o w n advertised in November, 1 7 7 6 , f o r 2 5 0 hogsheads and 4000 hogshead hoops " immediately." 93 The Secret Committee consigned several foreign cargoes to Clark and Nightingale, and to Thomas Greene, in the summer of that year. Clark and Nightingale also had pork for use of Continental troops in their Providence store in April, 1779. 9 4 Doubtless many such Providence merchants tried, like Aaron Lopez, formerly of Newport, to sell goods to the state Clothier General. Most Continental goods passed through the hands of Jabez Bowen's halfbrother, Ephraim Bowen, J r . , Deputy Quartermaster General, who, incidentally, acquired a private interest in the tobacco trade before the end of the war. 8 5 Another important commissary of supplies was John Russell, of a firm of trading brothers. Welcome Arnold was still another agent f o r state supplies on several occasions; he was also appointed to investigate the possibilities of manufacturing woolen clothing f o r the troops. 96 In 1 7 7 6 John Jenckes, probably the insurance officekeeper of that name, was the state agent for purchasing prize vessels. There is difference of opinion as to the war-time condition of Providence. In 1 7 7 7 , while protesting bitterly against increased taxes and price regulations, a town committee headed by John B r o w n declared that the war had ruined the place, that shipping was rotting, that wealth was being invested elsewhere, and that privateering successes were few. 97 F o r the w a r period as a whole several writers have held to a similar opin93 Providence

Gazette and Country Journal,

Nov. 23, 1776.

94 A. G. Waldo, in Americana, V I , 1147; Gates Papers, Box X I , no. 144, no. 147; Samuel Nightingale Account Book, 1765-1785 mentions Continental powder handled. 95 Cf. " Revolutionary Correspondence," Rhode Island Hist. Soc. Coll., V I , passim; on Oct. 26, 17S2, he gave power of attorney to VVadsworth and C a r t e r to collect money due him f r o m Samuel Beall of Williamsburg, V a . : W a d s w o r t h Corresp. 96 Records of State of Rhode Island, V I I I , 230, 638. 97 W . R. Staples, Annals of the Town of Providence,

pp. 228, 273, 284.

MASSACHUSETTS

AND

RHODE

ISLAND

73

i o n ; 8 8 but this is not entirely true. Only during the British occupation of Newport — from December, 1776, to October, 1 7 7 9 — w a s the foreign trade of Providence seriously checked, a condition promoting inland trade. In the long run Providence gained much of Newport's trade," and her local industries were encouraged: muskets were manufactured, a paper mill was started, the Jenckeses established a " steel manufactory," the tanning and saddlery business grew. 100 In 1780 the French Commissary General noticed " large tracts of country cleared and many houses recently b u i l t " near Providence. 101 Another Frenchman stated that the people of the town and state were money crazy: " The inhabitants of the coast, even the best Whigs, carry to the English fleet anchored in Gardner bay provisions of all kinds, and this because they are well paid." 102 Without doubt there was much illegal trade with the British. A n employee of Moses Brown wrote him on October 10, 1776, that he was accused of engrossing provisions to send to New York for " hows fleet," and asked Moses to defend him against such charges. Moses himself had contemplated a trip there only a month before, for one thing to collect money for John Brown. 1 0 3 French gold also helped give Providence prosperity in the latter half of the war. Citizens of the town claimed 4600 silver dollars from the French army 98 Cf. H e n r y C. Dorr, " T h e Planting and Growth of Providence," Rhode Island Hist. Tracts, no. 15, 233; Weeden, Early Rhode Island, pp. 321, 347; both admit that certain individuals profited. 99 Weeden, op. cit., p. 278; also Weeden, " Newport," in Amer. Antiq. Soc. Proc., n . s . , X V I I I , 117; A l l a n Nevins, American States During and After tke Revolution, p. 226. 100 Stone, op. cit., p. 7 n . ; Providence Gazette, Dec. 21, 1776; R. M. Bayles, td., Hist, of Providence County, I, 580, 586, 589. 101 Journal of Claude Blanchard, 102 G. S . Kimball, ed., Pictures

p. 77. of Rhode Island in the Past, p. 87.

103 Samuel Starbuck t o Moses Brown, John to Moses Brown, Sept. 12, J776, M o s e s B r o w n Papers.

74

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

in 1 7 8 2 f o r damages to property; it w a s paid under protest as an exorbitant sum. 1 0 4 Concerning commercial conditions prior to 1 7 8 0 , a statement of Governor Greene to a member of the Massachusetts General Court in October, 1 7 7 9 , is relevant: " T h e r e having been no access by sea to any port in this state f o r almost three years, the f e w vessels

fitted

by our merchants

are

always

ordered in your State. T h e privateers owned here send their prizes into your ports. . . . T h e retailers of foreign articles in this place have no supplies but f r o m your S t a t e . "

105

It un-

doubtedly was true that Providence had considerable internal commerce that year, as demonstrated by the appointment of J o h n B r o w n and Joseph Nightingale to protest against M a s s a chusetts' inland trade restrictions, similar to those of Connecticut,

which

were

said

to

have

injured

Rhode

Island. 1 0 ®

Indeed, horses, f o r a g e , and pork were frequently taken f r o m the state to other parts of the country throughout the war, inland commerce in army supplies alone being considerable. Wheat was brought to Providence f r o m Connecticut as early as

1

7 7 5 to be ground into flour f o r the a r m y near B o s t o n ;

and the presence of the French later necessitated the sending of great quantities of provisions to Rhode Island f r o m the Chesapeake region. 1 0 7 H o w e v e r , there w a s no lack of foreign goods in Providence even while the British held Newport. T h e newspapers show that numerous prize captures were sold locally in the first year of the war at least, and that, by the close of 1 7 7 7 , quantities of imported goods were available, though these m a y have been brought overland f r o m Boston or South S h o r e Massachusetts 104 H. W . Preston, " French Troops in Providence," Rhode Island Hist. Soc. Coll., X V I I , 21 ; cf. also Stone, op. cit., p. 3 2 7 ; Weeden, Early Rhode Island, pp. 255, 327. 105 Rhode Island Hist. Soc. Coll., 106 B. Crowell, Spirit

V I , 245.

of '76 in Rhode

Island, p. 197-

107 " Revolutionary Correspondence," Rhode Island Hist. Soc. Coll., V I , passim; Royal Hinman, ed., Hist. Collection of Conn., p. 331 ; Commerce of Rhode Island, II, 107.

MASSACHUSETTS

AND RHODE ISLAND

75

ports. In November, 1 7 7 7 , such W e s t India products as sugar, chocolate, and logwood were advertised. J o h n B r o w n also had tea, R u s s i a n duck, oznaburgs and other E u r o p e a n

importa-

tions f o r sale. In J a n u a r y and F e b r u a r y , 1 7 7 8 , Lisbon salt, rum, sugar, steel, pottery, raisins, and indigo were available. T h e Russells had a variety of E u r o p e a n manufactures f o r sale in March. A month later H e n r y Tillinghast had medicines j u s t received f r o m France. Welcome A r n o l d had every kind of E u r o p e a n fabrics, including velvets and silks, and a quantity of W e s t India produce on hand, as had the Russells and J a c o b Greene in J a n u a r y , 1 7 7 9 . 1 0 8 D a v i d Lopez wrote f r o m P r o v i dence in J u l y ,

1 7 7 9 , that W e s t India goods had fallen in

price, which would indicate a surplus; he did add that local markets were entirely governed in price by those in Boston. 1 0 9 There was even a shortage of ships in F e b r u a r y , 1 7 7 9 , when the Continental Deputy Quartermaster wrote that he could not obtain a suitable ship in R h o d e Island, to g o to South C a r o lina f o r rice, " on any terms."

110

T h e career of Welcome A r n o l d also casts some doubt upon Greene's statement. A n admiring son-in-law wrote many years later that A r n o l d , only thirty years o f age in 1 7 7 5 and the son of a f a r m e r ( o f means and with good f a m i l y connections, h o w e v e r ) , had entered trade with little or no capital in 1 7 6 9 , first with his brother T h o m a s Arnold, then f r o m 1 7 7 3 to 1 7 7 6 with Caleb Green. Arnold went " boldly " into the W e s t India trade in 1 7 7 6 , securing parts in many adventures to scatter the risk. Until A u g u s t , 1 7 7 8 , he was exclusively so e n g a g e d ; he " must have greatly advanced his business, and greatly increased his capital." It was all " hazardous but very profitable commerce."

111

T h o u g h A r n o l d was in politics a f t e r 1 7 7 8 he

108 Providence Gazette, under dates. 109 Commerce of Rhode Island, II, 63.

110 E. Bowen to N. Greene, Feb. 8, 1779, " Revolutionary Correspondence," loc. cit.

111 Tristam Burges, "Memoir of Welcome Arnold." Burges may have remembered imperfectly as to dates; he mentions the necessity of relying

76

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

had become the largest advertiser of goods in the Providence Gazette by the end of the war. In 1779 he and David Lopez planned to go on a " Speculating Journey to the Eastward in order to improve some Moneys. . . ." 1 1 2 The Browns were also particularly fortunate early in the war by reason of their control of spermaceti matter and candles. In 1776 Moses and Nicholas hastened to buy up all the available " head matter " at Nantucket. 113 When James Swan of Boston sought one hundred boxes of candles from Moses in August, 1777, the latter refused to sell. Not until the next March would he part with any of them and then only for a high price, but not as high, he claimed, as Nicholas was getting. 1 1 4 It is true that before August, 1777, the Browns had t o close their spermaccti w o r k s because of the c i r c u m s t a n c c s

of the times (including the fact that cost of manufacture rose more in the preceding two years than cost of material) ; but Moses Brown and Thomas Arnold then erected a salt works in its place. Though Moses ostensibly retired from commerce during the war, he possibly invested his capital with brother John, who was anything but inactive; the latter owed him for certain notes in 1 7 8 1 . 1 1 8 From 1779 until 1782 the commerce of Providence with Europe also expanded. Nicholas and John Brown, for example, then traded with their former employee, Elkanah Watson at Nantes, in supplies for Congress and in articles of finery.117 In the latter half of the war merchants of Providence increasingly advertised goods in the local Gazette. Moreover, the appearance of new names there like Sterry and Murray, upon inland trade at one time. He also says that Arnold was foremost in advancing money to the United States during the war. 112 Commerce of Rhode Island, II, 55. 113 Moses Brown Papers, passim. 114 To James Swan, March 24, 1778, ibid. 115 Moses Brown to "Brethren," Aug. 22, 1777, ibid. 116 John to Moses Brown, April 7, 1781, ibid. 117 Weeden, Early Rhode Island, pp. 346, 347.

MASSACHUSETTS

AND

RHODE

ISLAND

77

Thomas Richardson, and Thurston and Jenkins, is a clue to expanding commercial interests. In September, 1780, Sterry and Murray offered " English " and West India goods for sale; two months later Clark and Nightingale and Zachariah Allen needed staves and hoops at once for shipments; and A m o s Throop offered tea, raisins, and medicines " exceeding cheap." In January, 1781, Richardson had European goods, " just imported " ; Swedish iron and Holland rum were offered by another merchant. The largest advertiser was Arnold, as has been said, and occasionally he also called for hoops and staves. Before or immediately after the conclusion of the war, moreover, he had developed direct relations with the Baltic region, importing Russian hemp, sail cloth, and iron, and also with Mediterranean Europe. 118 Similarly, by 1782 Clark and Nightingale were importing directly from Holland for sale in Providence; the year before they were interested in establishing a new Boston commercial house, headed by a merchant just returned from Europe. 118 Opportunity certainly came to several Providence merchants after 1779 in the needs of the French forces. The French owed John Brown 1000 dollars for cordage in 1781. 120 Thomas Lloyd Halsey, who had married a sister of Jabez Bowen and who was only thirty-four years old in 1775, became most prominently connected with such supplies there. In 1777 he had prepared to go to France as agent of " the Owners of the Privateers Fitted out by the Merchants of New England," but was somehow detained. General Sullivan recommended l i m to Count D'Estaing in 1779 as a supplier of provisions for the French fleet in Providence. Halsey subsequently went to Boston and contracted to supply the troops under Rochamteau, continuing in charge of such work there for three years 118 Burges, op. cit.; the greater part of his fortune was made in this, prob;bly over a long period of time. 119 Nightingale-Jenckes Papers, passim. 120 John to Moses Brown, April 7, 1781, Moses Brown Papers.

78

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

together with Samuel Breck. 121 Cooperating with agents of Wadsworth and Carter, other French contractors, Halsey also managed the sale of large quantities of bills on France for a commission. In December, 1 7 8 1 , he wrote for 200 teams to carry supplies from Hartford to Poughkeepsie. 122 Soon after the French left in 1782 he had a physical collapse and was carried home in the " c h a r i o t " of Breck. On March 5, 1783, however, he was in Philadelphia where he paid John Carter a sum on behalf of John R. Livingston of Boston. 123 That same year he was appointed French commercial agent for Rhode Island. Another merchant who similarly partook of the French opportunities was Christopher Champlin of Newport, who had been victualing agent of the British fleet before the war. He secured permission in September, 1780, to ship flour out of Connecticut for the use of the French. 124 There are only fragmentary records concerning the privateering ventures of Rhode Island merchants, most of which were out of Providence. Secondary writers have declared that they were generally successful. 125 In November, 1776, Dr. Ezra Stiles wrote, " It has been computed that this War by prizes by building ships of War & the Navy has already within a year and a half brought into Providence near Three Hundred Thousand Sterling; which is double the Property of the whole Town two years ago." 126 Though the first year was undoubtedly the most successful one for captures, Nicholas Brown continued to be very active in this enterprise as did John Innis 121 " Thomas Lloyd Halsey's Account of his Part in the Revolution." C f . also, Jacob L. Halsey, Thomas Halsey of Hertfordshire, England, and Southhampden, Long Island (Morristown, 1895), pp. 478, 479. 122 Halsey to Jeffrey, Dec. 22, 1781, Wadsworth Corresp. Halsey requested 2169 specie dollars of W a d s w o r t h on Oct. 23, 1781, for transporting French goods from Providence to B o s t o n : ibid. 123 Wadsworth and Carter Waste Book, 1783-1784, under date. 124 Commerce

of Rhode

Island, II, 107.

125 Bayles, op. cit., I, 188; Staples, op. cit.. p. 270. 126 Quoted in I. B. Richmond, Rhode p. 220.

Island,

A

Study

m

Separatism,

MASSACHUSETTS

AND

RHODE

ISLAND

79

Clark, o f Clark and Nightingale. Shares in ships passed rapidly between individuals and groups, but perhaps many persons, like General Nathanael Greene, lost by their participation. There can be no doubt that the war left Providence in an advanced economic position. Her neighbors could no longer refer to her as a place only fit to supply their tables with pickled oysters. 1 2 8 She now possessed a larger mercantile population and a commerce truly international. Into her port came ships from various European countries, financed by the Russells, Nightingales, John Brown, Welcome Arnold, and Nathan Green. 1 2 9 127

127 W i l l i a m P . Sheffield, Prhvtecrsmen of Newport... (Address before Rhode Island Hist. Soc., Feb. 7, 1882), pp. 29, 3 3 ; an appendix, pp. 58-63, gives a fragmentary list of privateers and captures; it relates principally to the activities of Providence merchants. 128 Burges, op. cit., says that such was the pre-war saying. 129 E . g., c f . doc. 561, Emmet Coll.

C H A P T E R IV J E R E M I A H WADSWORTH A N D HIS ASSOCIATES THOUGH the Connecticut R i v e r valley w a s the first region to produce surplus grain in the colonial period, by 1 7 7 5 it w a s meat provisions, especially beef and pork, which constituted the principal exports of the district. These products became indispensable to the Continental and French forces during the Revolution. T h u s in the heart of N e w E n g l a n d a remarkable war-time activity developed among a number of traders, w h o continued to cooperate in post-war capitalist enterprise, under the able leadership of Jeremiah W a d s w o r t h of H a r t f o r d . Northern a r m y needs constantly

brought together

f r o m localities like western Connecticut and

goods

Massachusetts.

T o N e w Y o r k City in 1 7 7 6 , f o r example, the patriot forces brought oats f r o m N o r w i c h , linseed oil f r o m H a r t f o r d , and corn f r o m S t r a t f o r d , as well as nail rods f r o m N e w J e r s e y , country linens f r o m Pennsylvania, corn and oats f r o m Dobbs F e r r y , and lumber f r o m A l b a n y . 1 A s the w a r progressed traffic between upper N e w Y o r k and the N e w E n g l a n d states especially assumed large proportions because of the British capture of N e w Y o r k City. Boston to H a r t f o r d to Claverack to Rhinebeck on the Hudson, or Springfield to H a r t f o r d to N e w b u r g h on the Hudson, became popular westward routes of

travel.

Goods going in the other direction, probably in smaller quantities, might reverse such routes; or they Albany

to Boston by w a y

of

Kinderhook,

might g o Hartford,

from and

Springfield. Tents and clothing f r o m Boston, salt and horses f r o m Providence, oakum, rum, cordage, steel, soap, candles, wheat, beef, and pork f r o m Massachusetts and towns

flowed

westwardly;2

and especially

Connecticut

to Boston

went

1 Hugh Hughes Letter Books, " 1776," passim. 2 Ibid., "Letters to Connecticut, 1780-1781," "Letters to Massachusetts, 1780," " Letters to Albany, 1780-1782," " Letters Promiscuous, 1780-1781," all passim. 80

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

8l

flour from New York and western Massachusetts. Caravans of as many as two hundred teams traversed these regions.® In 1 7 8 2 Alexander Hamilton estimated New York's importations from New England at about fifty thousand pounds annually, and New England's imports from New York State at thirty thousand pounds. The balance was paid in gold which New York had because of military expenditures.4 Connecticut men immediately appreciated such war-trading opportunities, as we shall see in the clash of supply interests around Albany in 1775. East Windsor became a "provisions center," probably for rye grain, principally; Norwich was a " storehouse " of provisions and general supplies.5 From a triangular section of the Connecticut Valley especially—encompassing Hartford, Connecticut, and Granville and Hatfield, Massachusetts—native produce flowed most freely. Here were the homes of the war-traders Jeremiah Wadsworth, Oliver Phelps, Israel Chapin, Julius Deming, and Epaphroditus Champion. Hampden and Hampshire counties of southern Massachusetts were excellent cattle lands.* From the first, army supplies in Connecticut were handled by enterprising men, such as those appointed by the state in April, 1775, including Henry Champion, Thomas Mumford, and Jeremiah Wadsworth. 7 Innumerable persons in turn han3 Pitkin and Lewis of Farmington agreed to furnish 200 teams to transport goods from Hartford to Poughkeepsie. Jeffery to Wadsworth, Jan. 5, 1782, Wadsworth Corresp. 4 Works,

Federal ed., IX, 272.

5 H. R. Stiles, Ancient Windsor, I, passim; D. C. Address (Norwich, 1859), p. 72; A. C. White, History P. K. Kilbourne, Biog. Hist, of Litchfield, Conn., p. career of Oliver Wolcott, Deputy Quartermaster of 1779-17®°-

Gilman, Historical of Litchfield, p. 93; 24 ff., especially on Continental Stores,

6 On this trade, the Champions and Deming, cf. Nathaniel Sylvester, Hist, of the Conn. Valley in Mass., I, 398; White, Litchfield, pp. 135, 137; F. B. Trowbridge, Champion Genealogy ( N e w Haven, Conn., 1891), pp. 278-280, 440-446. The Champions lived in Colchester, Conn.; Deming became related to them by marriage. 7 R . R. Hirtman, ed., Hist. Collection of Conn., p. 169.

82

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

died or furnished supplies for these men and for such Continental Commissaries as Joseph Trumbull and Peter Colt. T h e merchant Huntingtons of Norwich were very active in this army trade; so were Thomas Shaw of Groton, Nathaniel S h a w , J r . and E d w a r d Hallam of New London, John Davenport of Stamford, Barnabas Deane of Wethersfield, and Ezekiel Williams of Hartford. 8 The business growth of H a r t f o r d was especially noticeable because of the town's safety from attack and its reception of new commerce caused by the abandonment of the shore road to New Y o r k . H a r t f o r d was also a place of confinement f o r loyalists f r o m northern New Y o r k and a place of refuge f o r patriots from New Y o r k City and Long Island, all of whom h a d t o purchase their l i v i n g while i n e x i l e . In 1 7 8 1 the F r e n c h

established a hospital in Hartford, which required supplies. It is not surprising that Wadsworth built a new store in 1 7 7 9 ; that Thomas Seymour planned to erect a grist and saw mill there that same year." Most important of the Connecticut traders during the R e v o lution was this Jeremiah Wadsworth, the son of a H a r t f o r d minister and the nephew of the merchant Talcott of Middletown. A f t e r following the sea until 1 7 7 3 , he had settled in H a r t f o r d . His father had left an estate of some two thousand pounds, unusually large f o r a clergyman; so Jeremiah, a young man of thirty-two in 1 7 7 5 , had not only a good family background but also some property. 10 8 Cf. Huntington

Papers,

passim.

9 W . D. Love, Colonial History of Hartford, pp. 193, 318; Journal of Claude Blanchard, p. 110; Jeffery to Wadsworth, Dec. 2, 13, 1779, Wadsworth Corresp. On complaint of Hartford citizens about British prisoners paying so well as to keep commodity prices high, cf. Hinman, op. cit., p. 599. 10 Horace Wadsworth, Wadsworth Family (Lawrence, Mass., 1883), pp. 80, 8 1 ; G. L. Walker, First Church in Hartford (Hartford, 1883), pp. 277, 310, 463; P. H. Woodward, Hartford Bank, pp. 32-34. His mother was a daughter of Gov. Joseph Talcott; his wife, daughter of a minister Russell of Middletown, was related to the Pierponts of New Haven, and her brother and sister both married Talcotts.

J E R E M I A H WADSWORTH AND HIS A S S O C I A T E S

83

A t the beginning of the war Wadsworth was sufficiently unoccupied at home to be in Philadelphia in the company of his ambitious neighbor, Silas Deane, who thought well of him and wanted the public to do so. Wadsworth soon became a commissary of supplies for Connecticut, purchasing clothing and pork in 1 7 7 5 ; soon after, he began to buy for the Continental troops. In October, 1 7 7 5 , he was ordered by Governor Trumbull to store and equip a state brig. u His various public duties held him at the " Saw Pitts," Rye, in the late summer of 1776. He purchased clothing and hospital goods in August, ordered large quantities of grain, and received sums of money from the Continental Quartermaster and Commissary Generals. On October 12, Wadsworth was credited in the Continental Quartermaster's accounts, " T o cash paid himself," 30,000 dollars. During the next two years his books show that as Deputy Commissary General, he handled large sums for the public, paying out to such persons as Ephraim Bowen, Jr., of Providence, and Thomas Russell of Boston, 12 In November, 1 7 7 7 , Wadsworth was so busy he refused the office of Commissary General of Prisoners for Connecticut.1® In 1778 he received cash for dozens of Loan Office certificates. So well had he conducted himself in this bewildering variety of work that Eliphalet Dyer could write on February 8, 1 7 7 8 , shortly before Congress elected Wadsworth Commissary General of all the Continental forces, " they hear much of Capt. Wadsworth. the eyes of the public, the army, and Congress are mostly on him. . . . I dare say Mr. Wadsworth might 11 L. F. Middlebrook, Hist, of Maritime Conn., I, 23; Wadsworth, Wadsworth Family, p. 82; Conn. Revolutionary Archives, XVI, 51, 52, IX, 4, 49. He did other work for the state, including the management of confiscated estaites, 1780-1781. 12 Docs, 28301, 29539, Rec. Book no. 98, p. 53, Div. of Old Recs.; Wadsworth to Captain Starr, Sept. 29, 1776, Wadsworth Papers in New York Hist. Soc.; Cash Book, 1776-1779, Wadsworth Papers in Conn. Hist. Soc. 13 To Mr. " B o t t i n o t " (Boudinot), Nov. 5, 1777, Wadsworth Papers in New York Hist. Soc.

84

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

have any terms. . . . " 14 This office, in which he received a f t e r April 9, 1 7 7 8 , one-half of one per cent of all money received and expended by the department, he would have spurned had he known beforehand of the subsequent price " Regulating A c t " of Connecticut, similar to that being urged in Massachusetts in June, 1 7 7 8 . 1 5 His commissions, not excessive but " Considerable Compared with what some other persons who have been engaged in the public Service have got or rather lost," apparently aroused some resentment. 16 Wadsworth resigned the Commissary Generalship in December, 1 7 7 9 , amid the usual complaints. R o y a l Flint and Peter Colt, also in the public service, sympathized with him, the latter resigning his own post at once and the former a little later. 17 Y e t Congress, on December 24, requested Wadsworth to contract f o r flour and provisions; and his successor, Blaine, continued to seek his assistance in securing provisions f o r West Point, " f o r without your aid Teams cannot be procured." 18 Though engaged in 1 7 8 0 in settling his army accounts, Wadsworth stated in June that he was busier f u r nishing supplies to the forces than when in office. 19 H e had undoubtedly been as much of a success in public service as the confused times permitted. F r o m this time on Wadsworth was a free agent, engaging in some private enterprise with John Chaloner, of Chaloner and White of Philadelphia, with whom he had done consider14 Burnett, Letters, 15 T o Washington, Hist. Soc.

III, 78. June 4,

1778,

Wadsworth

Papers

in

New

York

16 Jesse Root to Wadsworth, Oct. 6, 1779, W a d s w o r t h Corresp.; Burnett, Letters, IV, 476. 17Royal Flint to General Greene, Dec. 19, 1779, Peter Colt to ( F l i n t ? ) , Dec. 21, 1779, Wadsworth Corresp. 18 Blaine to Wadsworth, no date, ibid. 19 T o Oliver Ellsworth, June 17, 1780, ibid. H e did so in spite of the resentment he felt over his treatment; his loyalty to the public service is further revealed in his letter of M a y 2, 1780, to Shadrach Osborn ( D o c . 034608, Div. of Old Recs.), appealing for help for the army at W e s t Point.

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

85

able public business. Chaloner kept him informed of conditions of trade, ship building, bills of exchange, and insurance in Philadelphia, and on March 29, 1780, bought a one-thirtysecond part of a privateering brig, the General Wayne, for £5000 on " our joint account." 20 Wadsworth was also connected with Theodore Hopkins, of Hartford, when the latter sailed from Boston, April, 1780, to look after trade matters abroad; 2 1 they continued this relationship until after the war. Such private business of Wadsworth was in keeping with that of the Hartford district. There, for example, were his friends, the socially prominent Webb brothers of Wethersfield, whose war activities were considerable, for one reason because they were personally acquainted with many important business men. Joseph Barrell, the Boston merchant, was their " brother " ; Samuel A. Otis, the public clothier, was a facetious Boston friend; Silas Deane was their stepfather.22 The Webbs engaged in privateering, which was very successful out of Wethersfield in 1779, retaining as legal counsel William Samuel Johnson and Oliver Ellsworth. In 1777 they engaged in the Martinique trade together with Joseph Trumbull, former Commissary General of Continental troops, and Jacob Sebor; they handled government clothing and they were concerned on one occasion at least with Wadsworth in the West India trade. Though Samuel B. Webb lamented to Wadsworth in 1779 that public virtue was " Totally damn'd," he also wrote, " Mr. Colt tells me he mentioned to you his purchase of Powder and prospects of the great profits arising thereon— your Hum servt. had dip'd in the same way. the powder was sold by Mr. Barrell for more than double the cost, but Judge our disappointment when by the last post we hear that the powder is all condemned and Turned on our Hands, & that article since fallen one half. . . . this is my first Essay on 20 From Chaloner, March 3, 29, 1780, Wadsworth Corresp. 21 From Samuel Broom, May 3, 1780, from T. Hopkins, April 29, 1780, ibid. 22 W. C. Ford, ed., Correspondence of Samuel B. Webb, I, II, passim.

86

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

Speculation, D a m the luck." A f e w months later Webb wrote Barrell that he, Barnabas Deane and others were going to N e w p o r t to see the French fleet and a r m y , and " if you J o s e p h Barrell with half a dozen other Cleaver fellows f r o m B o s t o n will take it in y o u r heads to meet us there you'll make us happy—and I haven't a doubt you may find some business in the speculateing w a y which will make it worth your w h i l e , — as I am told their is many goods come out in the fleet, dont hesitate."

23

Joseph Webb erected a tannery some time later

a n d sought the business of the " F r e n c h hides." U n d e r such circumstances it would have been strange had not the private concerns of

" Jerry"

Wadsworth

also

in-

creased, even while he held public office. A n interest in the sale of goods is apparently revealed in his letter of M a r c h 1 8 , 1 7 7 6 , addressed to some Philadelphia merchants, stating that Boston was about to be evacuated, that the Continental troops would not be kept " in this Quarter — and the demand

for

Goods will not be great here if Y o u have not A l r e a d y purchased I desire Y o u will not Purchase any of the Goods which M r . Seabour directed. . . . M r . W e b b is now at C a m b r i d g e on his return we shall write you more f u l l y . "

24

On A p r i l 6,

1 7 7 9 , W a d s w o r t h indirectly admitted Stephen K e y e s ' charge that he was carrying on private trade in cattle and

other

things, since he claimed that it was but " equally prejudicial to the Publick with the trade you are persueing in stores " ; he added that Stephen's brother, A m a s a K e y e s , knew of all his transactions. 2 5 In 1 7 8 0 , W a d s w o r t h ' s brother-in-law M a t thew Talcott sent him an " Original M a s t Contract."

26

Probably in 1 7 7 9 , while Commissary General, W a d s w o r t h also formed a private commercial connection with

General

23 Webb to Wadsworth, Dec. 9, 1779, W e b b to Barrell, July 16, 1780. Ibid., II, 225, 274. 24 T o Benjamin Mershal and Brothers, W a d s w o r t h Papers in New Y o r k Hist. Soc. 25 T o Stephen Keyes, W a d s w o r t h Corresp. 26Talcott to Wadsworth, Feb. 4 (1780?), ibid.

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

87

Ncthanael Greene, then Quartermaster General, and with Barnabas Deane of Wethersfield and Hartford." The career of Barnabas Deane had been as much moulded by war conditions as was that of Wadsworth. Barnabas not only took over the trade of his brother, Silas Deane, but he was also active in pu)lic service: shipping supplies to Fort Ticonderoga, transposing iron and handling supplies for Connecticut, constructing a Continental frigate at Chatham.28 He was thus well prepared to manage the affairs of the new concern, " Barnabas Deane and Company," for which Wadsworth and Greene supplied the capital. The connection of such promineit public officers was necessarily kept a secret, Greene warning Wadsworth in April, 1779, that "however just and upri^it our conduct may be, the World will have suspicions to ou- disadvantage. . . . By keeping the affair a secret I am coifident we shall have it more in our power to serve the conmercial connection than by publishing it." 29 The nature anl success of the firm's work, however, are largely unknown. Deane and Wadsworth together had sought to furnish Cmnecticut Valley spars and masts to various states as early as August, 1776. 30 In 1779 they constructed the frigate Trumbul on a commission basis of five per cent; 3 1 they were also thm concerned in a voyage to Port-au-Prince from Middletovn, had a three-eighths interest together in the construction 7 Cf. J. H. Trumbull, "A Business Firm in the Revolution," Mag. Amer. Hit., VII, 17-28. 8 Conn. Rev. Archives, III, 53, 56a, 633a, X, 238, X I X , 401, X X X I , 205, x : x v , I53ak, X X X V I I , 163. 9 Penna. Mag. Hist. Biog., X X I I , 211 ff.; cf. Silas' inquiry about the fin in Deane Papers ( N e w York Hist. Soc. Coll.), I l l , 421, though he aparently knew nothing of Greene's interest in it. 0 " Dean & Wadsworth " to —, Aug. 22, 1776, Wadsworth Papers in Ntv York Hist. Soc.; they had already supplied the " Ship we are buildin)" at Chatham. Wadsworth knew the lumber business from his apprenticship. 1 On settlement of this frigate account, Benjamin Walker wrote Wadswcth, Oct. 31, 1788, Wadsworth Corresp.

88

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

of " another " brig, financed a voyage to Hispaniola f o r sugar and coffee, and together purchased bills in H a r t f o r d on which they hoped to realize thirty per cent profits in Philadelphia. 32 In 1 7 8 1 Deane and Company did work f o r Wadsworth and Carter and the French troops. Deane wrote Wadsworth in January, 1 7 8 2 , about " o u r s h a r e " in a sale of lumber to the West Indies, and of the return of a brig in the H a v a n a trade. 33 Whether all such activities after 1 7 7 9 were a part of the concern with Greene, however, there is no way of telling. Greene occasionally received news from the other two on commercial matters 3 1 and at least one d r a f t of £900 of Greene on Wadsworth was honored toward the end of the w a r ; but so well was the secret of the firm kept that Oliver Phelps, an associated contractor, did not learn of Wadsworth's connection with Deane until i784. 3 S Jeremiah Wadsworth first became a commercial figure of great importance, however, by reason of his contracts with the French forces. He had been with the Marquis de LaFayette in May, 1 7 8 0 , and in June engaged with the French commissary of supplies " to execute the business which you [ L a F a y ette] proposed to me." This seems to have been for supplying forage and horses. 36 A number of other persons, however, including several from H a r t f o r d County, Walker and Company of Boston, and even Vermont traders, also secured such early contracts f r o m the French at Providence. 37 On J u l y 26, 32 From Barnabas Deane, Dec. 2, 8, 1779, ibid. Deane was probably also interested in the distillery Wadsworth considered erecting in 1781 : Wadsworth to Chaloner, Aug. 3, 1781, Chaloner-White Papers. 33 Wadsworth and Carter Waste Book, 1781, under July 24, Oct. 26; Deane to Wadsworth, Jan. 28, 1782, Wadsworth Corresp. 34 E. g., Greene to Wadsworth, Oct. 26, 1781, ibid.; there is a curious passage in this letter, as though written in code. Greene apparently withdrew from the firm sometime in 1781. 35 From Phelps, Nov. 30, 1784, ibid. 36 Wadsworth to LaFayette, June 21, 1780, ibid.; cf. also, LaFayette to Luzerne, June, 1780, in Amer. Hist. Rev., X X , 359. 37 Stone, Our French

Allies,

p. 216. The work of T. H. Halsey at

JEREMIAH

WADSWORTH AND HIS ASSOCIATES

89

Connecticut appointed W a d s w o r t h as agent to secure specie f r o m the French, with which he w a s to purchase clothing f o r the state. 38 In the meantime, R o y a l Flint, retired f r o m public service, set out to represent W a d s w o r t h at R h o d e Island where the French advanced him m o n e y ; 3 8 and Peter Colt, Nehemiah H u b b a r d , and

David

Trumbull

began to buy

W a d s w o r t h throughout Connecticut and

supplies

for

Massachusetts—such

as w o o d f r o m the Huntingtons of N o r w i c h and cattle offered by Oliver Phelps. Y e t by July 27 W a d s w o r t h resolved not to continue in the " french business,"

40

though Flint, Colt and others continued

to write him about it. B y A u g u s t 24, serious trouble arose when the French refused to accept some of W a d s w o r t h ' s small cattle, which Flint did not believe would be condemned by the " proper persons." W a d s w o r t h was obviously in a fair w a y to ruin with Flint resolving to seek a contract f o r himself, the French beginning to purchase beef of " P a r k e r & C o . , " and a certain " M r . Carter " obtaining such provisioning business f o r himself at Newport. 4 1 W i t h i n a month, however, order was brought out of chaos by the union of W a d s w o r t h w i t h the dashing M r . Carter. B e f o r e October 12 W a d s w o r t h and Carter together memorialized the French to handle all their supplies; this resulted in f o r a g e and meat contracts for N o v e m b e r and December at five per cent commissions, with purchases payable in as little hard money as possible, Continental paper, and bills on Paris. 4 2 P r o v i d e n c e h a s a l r e a d y been m e n t i o n e d . T h e c o n t r a c t o r s w e r e paid o n e - t h i r d in c a s h , t w o - t h i r d s in bills o n F r a n c e . J o h n Carter apparently w a s a p a r t n e r in the W a l k e r C o m p a n y . H a l s e y to J e f f e r y , O c t . 30, 1781, m e n t i o n s a l a w suit b e t w e e n C a r t e r and W a l k e r . C o u l d this h a v e been B e n j a m i n later a n a i d e o f

Walker,

Washington?

3 8 G o v e r n o r a n d Council o f Conn, t o W a d s w o r t h , July 26, 1780, W a d s worth Corresp. 3 9 F l i n t t o W a d s w o r t h , June 28, J u l y 4, 1780, ibid. 40 W a d s w o r t h to

( D a v i d T r u m b u l l ? ) , J u l y 27, and t o D e Corney,

July

29, ibid. T h e F r e n c h w a y o f d o i n g b u s i n e s s w a s t o o e x p e n s i v e , h e c o m p l a i n e d . 41 F l i n t t o W a d s w o r t h , A u g . 24, 25, 1780, ibid. 4 2 M . T a r l e t o W a d s w o r t h , Oct. 12, 1780, ibid.

90

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

The French even apologized to Wadsworth, begged him to supply again, and gave him bills figured at five livres five sous to the dollar, which was five more sous than usual.43 The nature of the firm of Wadsworth and Carter is revealed in this agreement of October 1 7 : That the said Carter having contracted with Mr. Daure Regisseur of Provisions for the French Army to furnish One Thousand hundred Weight of Wheat Flour and Two Hundred Sacks of Rye Flour, and also with the Intendant of said Navy to furnish Two Thousand four hundred Bushills of Pulse doth agree that the said Contracts shall be a joint Concern between him and said Wadsworth and said Parties having agreed to supply the Demands of said Army it is agreed that the Profits deducting all charges shall be equally divided between them as also all Profits arising from Prizes which shall be taken by the Vessels of the French Fleet and Consigned to either or both of them. . . . 44 This was one of the most significant business documents of the Revolutionary era. Who was " Mr. Carter " ? His real name was John Barker Church." Of good family, he fled from England for personal reasons 46 and arrived in America at the beginning of the war, when he assumed the alias of Carter. He was appointed Commissioner of Accounts for the Northern Army in 1776. William Duer gave him a letter of introduction to General Philip Schuyler in September of that year,47 and Carter presently 43 Wadsworth to Gov. Trumbull, Oct. 27, 1780, ibid. 44 Agreement made at Newport, witnessed by E. Champion and John Jeffery, under Oct. 17, 1780, ibid. 45 I am indebted for suggestions as to material on Carter, as on other problems, to Mr. T. R. Hay, of Great Neck, Long Island. See the erroneous sketch of Carter, " Intimate Friend of Old Celebrities in America and Europe," by J. S. Minard, J. of Amer. Hist., II, pp. 48-63; he is also refered to in A. M. Hamilton, Intimate Life of Alexander Hamilton (London, 1910), passim. 46 For gambling with others' funds, according to Isaac Sears, in a letter to Horatio Gates, Dec. 24, 1779, Gates Papers, B o x XIII, no. 386. 47 Duer to Schuyler, Sept. 4, 1776, " Military Papers," no. 572, Schuyler Papers.

JEREMIAH

WADSWORTH AND HIS ASSOCIATES

91

eloped with Schuyler's attractive daughter, Angelica, securing through her social contacts which probably account for his being at Newport as an important business man in 1780. Perhaps such a dashing fellow provided the social touch necessary in a combination with the able but provincial Wadsworth. That Carter was occasionally indirect in his methods is seen in his trying in 1777 to buy his benefactor Duer's lands on the Hudson at Fort Miller in a sub rosa fashion for his fatherin-law. 48 Moreover, if Claude Blanchard's insinuations were true, that the banker and one of the important commissaries of the French army were not above lining their own pockets during the American campaign, 49 the cosmopolitan Carter was probably a good man to handle such slippery agents. Carter's family connection was invaluable even after the original French contracts were secured. From Newport, October 25, 1780, he hastily wrote Wadsworth in this interesting fashion: Parker brot me a letter from Schuyler, he acquaints me he will be at Hartford on a Committee the beginning of next Month, Parker says part of their Business is to endeavor to agree that the states may supply the French army you will see him on that Subject such a Matter must not take Place—pray send him the enclosed Letter. . . . 50 However effective this plea to Schuyler may have been, the contracts were not interfered with by state action. Wadsworth and Carter purchased directly from numerous Connecticut traders, such as the Huntingtons of Norwich, and James Lloyd of Fairfield County, hay, oats and rye. 51 They 48 Carter to James Mulligan, Sept. 9, 1778, Misc. Ms " C ", in New York Hist. Soc. 49 Cf. Journal of Claude Blanchard, pp. 87, 106; on page 50 he mentions Carter at Newport, in July, on provisioning work. 50 Under date, Wadsworth Corresp. 51 Carter to Joshua Huntington, Nov. 9, 1780, Misc. MS " C ", in New York Hist. Soc.; Lloyd Papers, II, 770 et passim. The Huntingtons did a variety of work for them: cf. F. M. Caulkms, History of Norwich, p. 418.

92

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

more frequently acted through a remarkable group of agents and sub-contractors, often with experience in the Continental commissariat, including James Watson, Peter Colt, Nehemiah Hubbard, Oliver Phelps, and David Trumbull, the last two selling them great herds of cattle of southern Massachusetts, the others scouring Connecticut for flour, beans, and hay. 52 Hubbard and Colt were certainly their responsible agents, as was Royal Flint of Windham who was in charge of their deliveries at Providence. John Cooke did work f o r the firm at Newport. All purchasing was done with hard money or bills of exchange, the latter, drawn on the French government, frequently first cashed by Wadsworth and Carter through Thomas Lloyd Halsey in Boston or J o h n Chaloner in Philadelphia. Such bills eventually found their way back to France f o r collection through houses like that of Richard Harrison at Cadiz or Elkanah Watson at Nantes, 5 3 for whomever purchased them from Wadsworth and Carter. The greatest of their sub-contractors in flour was Daniel Parker of Watertown, Massachusetts, who supplied Wadsworth as early as October, 1 7 8 0 . " Parker was especially important by reason of his later connection with William Duer and others in American army contracts, but the French needs gave him his start. B y June, 1 7 8 1 , Parker was concerned with Morgan Lewis and Henry Cuyler of Albany in purchasing flour f o r Wadsworth, and Parker and Lewis filled at least one contract with him before the fifteenth of that month." 52 W a d s w o r t h and Carter French A r m y Accounts ( I ) ,

passim.

53 E. g., R. W . Pettingill, ed., Letters from America, pp. 263, 264; such a draft is preserved on page 227 in vol. iv of the N e w York Public Library's six vol. illustrated ed. of G. C. Mason, Reminiscences of Newport. 54 Carter to Wadsworth, Oct. 23, 1780. A n Andrew Carente of Boston had a forage contract with them. Parker to Wadsworth, June 28, 1781, mentions a " D o c t o r " Carente negotiating large sums in bills at Boston. W a d s w o r t h Corresp. 55 F r o m Parker, June 4, 1781, f r o m Lewis, June 15, 1781, W a d s w o r t h Corresp. Lewis had " laid " himself out for the flour business and wanted more contracts such as the one he and Parker had had. See Chapter Five.

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

93

In July William Duer was acting with Parker and Lewis in securing forage, work which was not completed to the satisfaction of John Carter." Trouble with forage supplies at Fishkill, New York, continued through July, Duer characteristically blaming Parker." There followed some hectic days in Hartford while Wadsworth was away. His clerk frantically wrote Royal Flint, August 27, " pray for Gods sake, bring on what money you can " ; rumors were afloat that Parker was secretly concerned with another contracting firm.58 In the fall of 1 7 8 1 Wadsworth and Carter had to pay out large sums of money on Parker and Lewis' account at Boston—such as 1 1 4 4 crowns for flour, paid them by Peter Colt on September 10, and a French order of 10,000 dollars on Bowdoin and Read of Boston, taken up for Parker on October 24.™ B y this time Wadsworth was in Virginia for the French, commanding all kinds of batteaux and supplies for use of the troops before Yorktown and improving his business acquaintance with such Virginians as Samuel Beall of Williamsburg, and John Fitzgerald and Charles Simms of Alexandria. In his work he received the cooperation of the Continental Quartermaster General, Timothy Pickering. 40 A f t e r this campaign of 1 7 8 1 was over Wadsworth and Carter continued to supply French needs (which Parker handled, when Wadsworth was away from Hartford) ; but their new and equally important work in the year 1782 was under the so-called American Contract to furnish provisions to the Continental troops at West Point and neighboring posts from 56 Carter to Wadsworth, July 6, 1781, ibid. 57 Duer to Wadsworth, July 23, 1781, ibid. 58Jeffery to Wadsworth, Sept. 6, 1781, ibid. The other firm was " Noyse and Wheaton." 59 Wadsworth and Carter Waste Book, 1781, entries under dates given, also under Nov. 9. 60 On the business side of the campaign, and the connection of Wadsworth and Carter with it, cf. Pickering's letters in Rec. Book no. 82, pp. 108, 209, sio, 222, no. 127, p. 261, ami doc. 28764, Div. of Old Recs.

94

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

October 1 5 to the end of the year. The contract was given them by Ezekiel Cornell of Rhode Island, by order of Robert Morris. 6 1 The usual staff of sub-contractors was employed in the American work but with several new figures. Melancton Smith helped settle their accounts at Newburgh in April, 1783. 6 2 When general accounts were settled in Boston and Philadelphia in March and April, John R . Livingston of New Y o r k and Boston appears along with Parker, Duer, and Morgan as having done business for Wadsworth and Carter. 8 3 Miscellaneous facts about the business of this partnership may serve to close this account. Wadsworth's command of specie was sometimes great. On June 3, 1 7 8 2 , 39,000 crowns were received by the firm f r o m its agent Chaloner in Philadelp h i a . 0 4 C a r t e r received f r o m R o b e r t M o r r i s o n M a r c h 5 , 1 7 8 3 ,

half profit on 7 3 , 7 0 0 livres in bills of exchange bought at five shillings six pence and sold at six shillings three pence. T h e same day Carter recorded a profit of over one hundred per cent on goods received f r o m Theodore Hopkins at L'Orient and sold to Daniel Parker. On June 6, 2 1 , 6 0 0 livres in bills were drawn on L e Conteulx and Company, a banking firm used by the French government, in f a v o r of the contractor Comfort Sands, in exchange f o r Sands' " N a v y Bills " f o r 2 8 , 1 0 0 livres. 65 A variety of business firms had become indirectly connected with Wadsworth and Carter. Wadsworth paid on M a y 10, 1 7 8 3 , a protested bill drawn by Otis and Henly on the Clothier General. On October 28, 1 7 8 4 , Wadsworth was empowered by Nathaniel Gorham of Boston to draw on him for a sum owed Carter by an associate of Gorham. 69 61 Rec. Book no. 64, p. 131, ibid. 62 Rec. Book no. 72, p. 74, ibid.; Wadsworth and Carter Waste Book, 1783-1784, mentions M. Smith and Co., under May 10, 1783. 63 Waste Book, 1783-1784, passim. 64 Cash Book, 1781-1782. 65 Waste Book, 1783-1784. 66 Gorham to Wadsworth, Oct. 28, 1784, Wadsworth Corresp.

JEREMIAH

WADSWORTH AND HIS ASSOCIATES

95

Meantime, in J u l y , 1 7 8 3 , Wadsworth had gone to France where he concluded a satisfactory financial settlement with the government. Though knowledge of the firm's profits is f r a g mentary, the settlement resulted in thousands of pounds being remitted to it by the bankers L e Conteulx, through a London house. 67 B y the end of that year Wadsworth owned 4 1 , 6 0 0 specie dollars worth of stock in the newly founded Bank of North America in Philadelphia. It adds to an appreciation of his career to think of him in September, 1 7 8 3 , gazing upon one of the new wonders of the world, a balloon ascension in Paris, perhaps in company with that cosmopolitan business acquaintance of his, Elkanah Watson, who also saw it. S o f a r had talents and opportunities carried these strdnuous provincials. The war-time careers of certain persons associated with Wadsworth — many of whom participated in the capitalist activities of the following decade—were almost as astonishing as his own. Y o u n g Oliver Phelps of Granville, Massachusetts, was one of these. Trader and storekeeper, he became a deputy commissary on the staff of General Champion in 1 7 7 6 , f r o m which he was appointed Superintendent of Purchases f o r Massachusetts, as has been noted. A s early as April, 1 7 7 7 , Phelps appears on Wadsworth's account books as receiving flour, probably for the Massachusetts troops. In March, 1 7 7 9 , he delivered over one thousand barrels of provisions to the Quartermaster General," 8 and he is repeatedly mentioned in Wadsworth's public records from that time on. Requesting 67 Wadsworth and Carter French Army Accounts ( I ) , under Sept. 29, 1783 ff. Under July 1, 1783, is a notation that " w e " owe J. Wadsworth £46,142, and Carter (Church) £52,822. In the Waste Book, 1783-1784, under June 5, 1785, the balanced account of the "American Contract" has a Profit and Loss total of £12,608, being eleven-twelfths of the balance, one-twelfth credited to Charles Stewart. 68 Wadsworth to Jacob Cuyler, March 16, 1779, Wadsworth Papers in New York Hist. Soc. Phelps would seem to have done this as a private individual, since his Massachusetts public activities would hardly have included such work.

96

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

any private business which Wadsworth might have in February, 1 7 8 0 , " he began to supply horses and cattle to the French in J u l y of that year. He assured Wadsworth in September that he could furnish flour, and subsequently became one of the great private sub-contractors f o r Wadsworth and Carter, though he was still acting officially for Massachusetts in 1 7 8 1 . 7 0 Receiving bills on France in payment, Phelps sent herds of cattle to the firm, his droves even passing through Philadelphia.' 1 H e was a partner in all this private work with Henry Champion and they continued to assist Wadsworth when the latter held the American army contract. 72 Phelps* sister-in-law was the aunt of young James Watson, who likewise worked f o r Wadsworth. 7 3 Phelps in turn had several important aides, a m o n g

whom

Israel Chapin of Hatfield was the most important; another was Timothy Edwards, also an aide of Schuyler's at Albany. 7 4 Phelps wrote Chapin in J u l y , 1 7 8 2 , that he had received funds f r o m Robert Morris for beef; Phelps and Champion, with Chapin's help, contracted about the same time to supply Comf o r t Sands who was provisioning the American " M o v i n g A r m y . " 75 Continental payments were realized but slowly in September, and Phelps was a f r a i d that Chapin could not get " Breck & P o r t e r " to advance money on Morris' bills. 79 69 Phelps to Wadsworth, Feb. 19, July 3, io, 1780, Wadsworth Corresp. 70 Mentioned as such that year in doc. 035480, Div. of Old Recs. 71Jeffery to Chaloner, Nov. 28, 1781, Wadsworth Corresp. Other N e w England hucksters drove cattle as far as Philadelphia during the war. 72 Wadsworth and Carter Waste Book, 1783-1784, under July 4, 1783, et passim. On the Champions Julius Deming, and government supplies, cf. Trowbridge, Champion Genealogy, pp. 278-280, 440-446, for careers and war-time correspondence. 73 On his career and family, see O. S. Phelps, Phelps Family, II, 1317, 1321; he was only 26 years old when the war broke out. 74 Edwards to Chapin, April 24, 1782, O'Reilly Documents, V, no. 39; on Chapin's relations with Phelps, cf. ibid., V, nos. 40, 41, 53; they sought a " grass " contract, July, 1782: ibid., V, no. 42. 75 Ibid., V, nos. 43, 45. 76 ¡bid., V, no. 47.

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

97

Phelps, Champion and C o m p a n y also furnished William D u e r with a r m y provisions at S a r a t o g a in 1 7 8 3 , " just as they earlier supplied Daniel P a r k e r , D u e r ' s partner, with b e e f . "

Phelps

also kept Chapin closely i n f o r m e d in A p r i l of the possibilities o f contracts with the " B — h A r m y " ; and " i f they [the B r i t i s h ] shou'd not want the Cattle we shall want them f o r our own Army."

79

A n d coming events cast their shadows b e f o r e

when in A u g u s t , 1 7 8 3 , Chapin, Charles Phelps, and " E p o p h redtus " Champion purchased 1 1 2 acres of land together at Greenfield, Massachusetts. These men were to be great land speculators in the future. Nehemiah

H u b b a r d of

Haven, Royal

Flint

of

Middletown, Windham,

Peter Colt of

and J a m e s

New

Watson

of

W o o d b u r y have been mentioned as other aides of W a d s w o r t h in the last years of the w a r ; but they were well known to h i m b e f o r e the days of the French contracts. Hubbard had served his apprenticeship in the store and ships of W a d s w o r t h ' s uncle Talcott, probably alongside of J e r e m i a h himself, and he speedily rose in the public supply department a f t e r the w a r broke out until he became a Continental Deputy Quartermaster G e n eral f o r Connecticut. W a d s w o r t h ' s public records mention him frequently, as h a v i n g done such considerable things as

to

organize a v o y a g e to Charleston in 1 7 7 9 to secure rice f o r use in N e w England. 8 0 Colt, F l i n t , and W a t s o n were

Yale

graduates, the last t w o just out of college in 1 7 7 6 , Colt h a v ing had some previous experience in the W e s t India trade. A f t e r holding several minor supply positions, Colt became in 77Rec. Book no. 121, pp. 325, 330, Div. of Old Recs. 78 Peter Colt to John B. Church, Jan. 18, 1783, Wadsworth Corresp.; also Henry Champion 2nd to Wadsworth, Nov. 2, 1790, ibid. 79 To Chapin, April 15, 10, 1783, O'Reilly Documents, V, nos. 62, 60, also no. 59. This was after the preliminary peace articles had been signed. 80 Edward W. Day, One Thousand Years of Hubbard History (N. Y„ 1895), pp. 341-344; P. H. Woodward, Hartford Bank, p. 47; agreement for the Charleston voyage in Greene Letters, Continental Congress Papers, vol. 173, I, no. 319. He declined the public service under Pickering, "having it in my Power to do much better for myself in other business."

98

BUSINESS

ENTERPRISE:

1 7 7 7 a Deputy C o m m i s s a r y

REVOLUTIONARY

General of

ERA

Purchases

for

the

Eastern Department of the Continental forces, in which capacity he even visited Dutchess and Westchester counties, N e w Y o r k , and of course appeared on W a d s w o r t h ' s public account books in connection with numerous expenditures. 8 1 Flint, son of a merchant, began making saltpeter in Wethersfield in 1 7 7 6 ; he acted as

Hubbard's

assistant

the next year

when

they

together purchased one hundred tons of flour f o r the service and handled quantities of Continental clothing; and in

1778

he became an Assistant

main

Commissary

General

of

the

army. 8 2 A s a purchasing commissary for Connecticut, W a t s o n had become especially well acquainted with the purchase and distribution of pork and beef in N e w England. H e also acted as Wadsworth's agent to investigate the illicit flour trade in N e w Y o r k in 1 7 7 9 ; when he went to F o r t Schuyler a year later W a d s w o r t h introduced him to the command there as a " Gentleman of Strict honor & integrity."

83

T h u s all these y o u n g men were intimate with

Wadsworth

in his C o m m i s s a r y Generalship in 1 7 7 8 and 1 7 7 9 and were w o n d e r f u l l y well prepared, on resigning their public offices, to assist him in his private contracting with the French. T h e i r w o r k then included, as already noted, sub-contracting or selling provisions on their own account to W a d s w o r t h and C a r t e r ; but they were also agents of the partnership, directing a variety of

its activities. In September,

1780, H u b b a r d and

Wads-

worth even owned cattle together, and the former discussed a possible flour contract for W a d s w o r t h with Oliver Phelps that month. In 1781 W a d s w o r t h paid out various sums on H u b bard's accounts with other persons, received flour f r o m him, 81 See F . B. D e x t e r , 3 Yale George Clinton, I V , 90.

Biographies,

pp. 65, 66; Public

82 D e x t e r , op. cit., pp. 477, 478; H i n m a n , Conn., pp. 444, 449; Papers, pp. 385, 388, 397. 83 D e x t e r , op. cit., pp. 638, 639; C o n n . Rev. A r c h i v e s , i n d e x , Public Papers of George Clinton, I V , 833, V I , 62.

Papers

of

Huntington "Watson";

J E R E M I A H WADSWORTH AND HIS ASSOCIATES

99

84

and gave him bills on France in payment. The Colts, Peter and his nephew Elisha, not only sold goods to Wadsworth but the former also traveled for him with the French troops in 1 7 8 1 , handling foodstuffs. 85 Flint was the Providence agent of Wadsworth and Carter much of the time. In July, 1 7 8 1 , however, he too traveled south with the French, cooperating with Colt; he was in " Y o r k , " Virginia, in November of that year, purchasing forage and provisions. 88 Watson sold wheat and flour to Wadsworth and Carter, and in July, 1783, managed the final sale of certain goods belonging to the firm, to Parker and Company, and to himself, all of which were in his possession when accounts were settled.87 Among minor figures similarly associated in procuring supplies for the French were David Trumbull, the cattle man of Lebanon, Thomas Mumford, merchant of Groton, and the Huntingtons of Norwich. Several Hartford men who had such minor dealings with Wadsworth should be noticed also since they later followed his lead in many local enterprises. Among them were the merchants John Morgan, John Chenevard, and John Caldwell. Morgan, a young Yale graduate, also had a state supplies' account, in 1782 at least, though he had come to Hartford only the year before. 88 Chenevard had relations with Wadsworth in the Continental commissariat and ran an account with the state from 1780 to 1782. In 1783 he supplied flour to Edward Hallam of New London, for a 84 Hubbard to Wadsworth, Sept. 30, 1780, Wadsworth Corresp.; Wadsworth and Carter Waste Book, 1781, under July 24, Aug. 6, Nov. 9. 85 Colt to Wadsworth, June 26, 1781, Wadworth Corresp. Oct. 9, 1780, Colt wrote of his desire to get in on flour contracts which Wadsworth and Hubbard might secure. 86 Flint to Wadsworth, July 1, Flint to Carter, Nov. 29, 1781, Wadsworth Corresp. 87 Wadsworth and Carter Waste Book, 1781, passim; also Waste Book, 1783-1784, esp. under July 8, 1783. 88 Conn. Rev. Archives, X X X V , i53eg; Memorial I, 657, for his career.

History

of

Hartford,

IOO

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

v o y a g e to H a v a n a apparently on the state's account. 8 9 Caldwell purchased f o r Connecticut and received m a n y sums of hard money f r o m W a d s w o r t h and Carter, though his o w n purchasing of corn in July, 1780, impeded the efforts o f W a d s w o r t h s agents. 9 0 Several Bull brothers of H a r t f o r d dealt in state and Continental supplies throughout the war, and repeatedly appear on W a d s w o r t h ' s public and private accounts. O n e had the best tavern in town, and they owned a store in w h i c h public goods were frequently deposited. Ashbel Wells, friend of N o a h W e b ster, w a s in V i r g i n i a in January, 1782, on business for W a d s worth. 9 1 A m a s a K e y e s had commissariat relations with him, as did H e z e k i a h Merrills. Several other H a r t f o r d men did transportation work

f o r Wadsworth

a n d Carter, while

m a n Butler sold them supplies and Daniel Olcott

Nor-

furnished

them with horses. In fact, everyone of a business character in or near that place was connected with a r m y supplies and all inevitably had some dealings w i t h the French contractors. It is not surprising, therefore, that W a d s w o r t h had a united H a r t f o r d group behind him in some of his post-war enterprises; nor that he himself became a great post-war capitalist w i t h national interests, like R o b e r t Morris, f r o m w h o m , h o w ever, he differed in business character, being of a less sanguine nature. 89 Wadsworth Cash X X X V , 153«, 233bc.

Book,

1776-1779, passim;

Conn.

Rev.

Archives,

90 Conn. Rev. Archives, X V I I , 135, 196, X X X I I I , 50; Wadsworth Waste Book, 1781, passim", James Hooker to Wadsworth, July 7, 1780, Wadsworth Corresp. 91 Wells to Jeffery, Jan. 31, 1782, ibid.

CHAPTER V HUDSON V A L L E Y BUSINESS THE parts played in the Revolution by the upper Hudson and the Connecticut River valleys were complementary. N e w Y o r k wheat, plus that from Pennsylvania and Maryland, and Connecticut and Massachusetts beef and forage were staples of the northern Continental armies. Considerable Connecticut produce was transported westwardly, and Hudson Valley cereals even reached Boston overland. Albany was the headquarters for the Hudson River commerce, as Hartford was for that of the Connecticut. This was especially true in the first half of the w a r ; but even when the Continental camp was located at Newburgh, considerably to the south, Albany was still an important center for assembling white pine lumber from the lands along the Hudson and wheat from the lower Mohawk Valley. The important development of the Mohawk region came after the w a r ; but as early as 1773 the Schenectady firm of Phyn and Ellice had gone into the domestic flour trade. 1 It is not true that the war stimulated wheat sales for all traders there—loss of the New Y o r k market at first checked it for some, as the day book of Glen and Sanders of Schenectady shows 2 —but there probably never was a surfeit of grain around Albany. John G. V a n Schaick, a merchant of that place, had orders in 1777 for some ten thousand bushels, which he only partly filled.' A r m y demands made up for much of the loss in the normal grain market. Philip Schuyler was told in February, 1777, that farmers would only contract to sell a part of their wheat: " the remainder they are determined to Grind themselves and sell the Flour to 1 R. H. Fleming, "Phyn, Ellice and Company," Toronto Univ. Contribs. to Canadian Economics, IV, 27. 2 It ends with 1777, however. On page 288 reference is made to one sale of flour to a Continental commissary, Aug. 8, 1775. 3 To H. H. Kip, Jan. 22, 1788, in Van Schaick Letter Book. The orders were for Henry Van Vleck and Son. 101

102

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

the Army in the Spring when they expect the price will be much higher and they will have the advantage of tiding etc." * Army needs also helped out the lumber trade. The merchants who engaged in these two products were doubly fortunate, for on their trade Albany's future was to be built. Albany's business growth, certainly apparent by 1780, 5 was due not only to its becoming a distributing point for great quantities of army goods and provisions, but also to more strictly private trade. Philip Schuyler complained in 1777 that " a set of monopolizers " in Albany County was purchasing such great quantities of wheat, peas, corn, and boards that a supply could not be obtained for public use.8 Overland trade with Boston was carried on by private individuals as well as by public commissaries. The Albany merchant John Tayler was in correspondence with Joseph Barrell of Boston in 1779, importing liquor, salt and other things into Albany via Springfield. Tayler also had an agent in Philadelphia.7 Daniel Parker bought flour of a Schenectady merchant in 1782 and transported it to Boston via Great Barrington, sending back salt in payment.8 The commercial opportunities available around Albany are suggested by the career of young Albert Pawling, who resigned a commission in the army in 1779 to enter trade there." One of the Wendells of Albany found it desirable to go into the brewing business during the war. 10 Jacob Vandenheyden was employed with many agents in 1778 around Great Barrington, buying flour for the French fleet at Boston. 11 4 From Daniel Hale, Feb. 8, 1777, Schuyler Papers. 5 Howell and Tenney, County of Albany, p. 609. 6 B. Lossing, Life of Schuyler, I, 162. 7 Taylor Corresp., in Tayler-Cooper Papers, under Oct. 4, Nov. 17, 1779, et passim. John Blair was the Philadelphia agent. 8 Parker to M. S. Ten Eyke, Aug. 24, 17&2, Misc. M S " P " , in N e w York Hist. Soc. 9 John Woodsworth, Reminiscences of Troy, pp. 53-55. 10 Abraham Evertse Wendell Day Book, 1760-1793, passim. 11 Public Papers of George Clinton, IV, 91. One "Keachum" furnished

HUDSON

VALLEY

BUSINESS

IO3

Most of the private trade, however, was connected with the army supply business. From the latter, unfortunately, many merchants around Albany were at least theoretically barred because of their hostility for several years to the Continental cause. Many merchants of importance in the pre-war period were not only refractory in the matter of swearing allegiance to the New York Provincial Congress, but also notably active in providing bail for other disaffected persons. 12 In April, 1 7 7 7 , Richard Varick wrote that Toryism was predominant in Albany. 1 3 By 1779, however, some of the merchants had changed their politics; moreover, it is debatable whether this early loyalist attitude caused them any serious financial losses. John Stevenson did not take an oath of allegiance even in 1779, yet he was able to build his famous mansion in Albany during the war. 1 * The public supply business at Albany was at first largely carried on by Philip Schuyler with a small group of Whig neighbors, then, after 1780, by groups of private contractors. While Schuyler was Major General from 1776 to 1 7 7 9 he certainly had a great deal to say about supplies for the Northern Department, to which he personally sold considerable lumber and some provisions. His military secretary, Richard Varick, and such other agents as Daniel Hale, John Lansing, Jr., and Philip Van Rensselaer, transacted much of this business for him. The successive Continental supply agents around Albany—Walter Livingston, Morgan Lewis, and Hugh Hughes —had assistants such as Jacob Cuyler, John and Henry Glen, Teunis Van Vechten, and Christopher Yates who represented locally prominent and frequently related landed and commerflour from New York State to the French fleet off New England in 1781: Halsey to Wadsworth, July 11, 1791, Wadsworth Corresp. Cf. below for other examples. 12 V. H. Paltsits, ed., Minutes Albany County), passim.

of Commissioners

for

Conspiracies

(of

13 April 14, 1777, Schuyler Papers. 14 Cf. Joel Munsell, Annals of Albany, I, 283; Papers of Clinton, III, 605.

104

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

cial families. The Glens and Schuylers, f o r example, were connected through the wealthy trading Sanders family. Philip Schuyler and the father of M o r g a n Lewis, moreover, had supplied the British army in the French and Indian W a r , when J o h n Tayler, also mentioned above, had got his start in business by trading with the military forces on Lake George and at Oswego. 1 5 The origins of this Revolutionary group can thus be traced to commercial activities in the provincial period. Schuyler's activity in making purchases f o r the Northern A r m y soon resulted in peculation rumors (probably started by his political enemies in New E n g l a n d ) , f r o m which he was handsomely vindicated by Congress. 1 9 Members of the Schuyler group, however, like many Connecticut persons (as noted in the next chapter), were certainly eager to participate in the supply business. In the Joseph Trumbull-Walter Livingston commissariat dispute in 1 7 7 6 1 7 Schuyler warmly supported the latter, whose attitude toward the service is revealed in his letter to Schuyler of October 20, 1 7 7 5 : " A l t h o I was a Servant to the Public yet I have a right to work by night f o r m y s e l f , " providing the public should not suffer thereby. 1 8 J a c o b Cuyler, who bought flour f o r Livingston in 1 7 7 5 , wrote Schuyler that he would be glad to serve him " in any Business that may be done in Albany & in Particular the Business [purchasing flour] I have mentioned to you." He wanted Schuyler's recommendation f o r such work. 1 9 The Livingston family readily participated in it. Philip V a n Rensselaer owed his commission to purchase barreled pork to Deputy Commissary Robert Livingston; Walter Livingston's cousins, J o h n R . 15 On Tayler, cf. Gorham Worth, Random 16 Cf. Burnett, Letters,

Rccollcctions

of Albany,

p. 6gn.

II, 41, 42, 357.

17 Cf. Joseph Trumbull, " Joseph Trumbull," N e w London Co. Hist. Soc., Papers, II, 342; E. C. Burnett, " T h e Continental Congress and Agricultural Supplies," Agricultural Hist., II, passim; see also Chapter Six. 18 Schuyler Papers. Livingston had worked for Schuyler prior to his public appointment. 19 July 22, 1775, ibid.

HUDSON

VALLEY

BUSINESS

105

and Abraham, secured appointments to handle clothing and provisions for the New York troops.20 All this, of course, was done on a commission basis. Schuyler was ordered by Congress in April, 1776, to purchase large quantities of army stores; 2 1 that year Walter L i v ingston paid to him large sums of public money for purchases made through Richard Varick, who bought in turn from William Duer, James Caldwell, Daniel Hale (an old employee of Schuyler), and others.22 In the first half of the war Schuyler secured cattle for the army through Henry Van Rensselaer, Peter Ten Broeck, and Silas Sprague (of Sprague and Skinner of Williamstown, Massachusetts), largely in the Berkshire region. Timothy Edwards occasionally aided in such business, just as he and Sprague were later used by Oliver Phelps in cattle deals. Edwards also made trips between Boston and Albany, bringing back Indian goods and other public supplies. The accounts of Varick from November, 1775, through May, 1776, balanced at £ 1 3 2 , 7 5 9 , giving some idea of the magnitude of army needs.23 On Schuyler's estate at Saratoga were lumber and flour mills and a general store. Between July, 1775, and June, 1 7 7 6 , the store furnished the public some £444 worth of " sundries." 24 John Graham, Schuyler's Saratoga agent, was grinding 300 barrels of " Contenental F l o w e r " in March, 1 7 7 7 ; he had some more which he sold to " good advantage." On his own account Graham apparently also engaged in sutlering. " Sorry to trouble your Excellency Concerning a Bearth at Forte gorge," he wrote Schuyler, " but as I have your permission I made Bold to let you no that I can Gete none ex20 Munsell, Annals of Albany, VII, 218; E. P. Livingston, The oj Livingston Manor, p. 536.

Livingstons

21 Journals of Continental Congress, IV, 304. 22 Military Accounts, 1776-1782, Schuyler Papers; Duer to Feb. 1, 1776, Schuyler Military Papers, no. 568. 23 Military Accounts, 1776-1782. 24 Ibid.

Schuyler,

IO6

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

cepting an old Barrck room at the East of Joneses house & that was S o open that it took the man who Sels f o r me a whole week to Repreve it before he Derst trust his bizness in it." 25 A f t e r December, 1 7 7 6 , John Hansen was in charge of the sale of public Indian goods f o r Schuyler, at F o r t Schuyler; some of these were purchased from John Tayler at Albany. 2 6 Between April and September, 1 7 7 6 , Schuyler sold Stephen Moylan, Quartermaster General, £ 1 1 4 6 worth of plank and boards. B y the end of that year the public owed him £4797 for use of his teams, lumber, and provisions. In August, 1 7 7 7 , Morgan Lewis owed Schuyler £2807 for such supplies, and about the same amount in 1778. Lewis hired the General's saw mills in 1 7 8 0 for 2 1 5 days at five pounds a day, and was indebted for the sawing of logs at twelve pounds a hundred. In December, 1 7 8 1 , 800 of Schuyler's logs were used by the Deputy Quartermaster at Saratoga. 2 7 Schuyler also furnished Robert Morris, on the latter's urgent plea, with flour for the main army in 1 7 8 1 , Morris later complaining that the five per cent commission charged was double what he was accustomed to pay. 28 Hugh Hughes, who superseded L e w i s in 1 7 8 0 , continued to rely upon Schuyler's judgment and his mills. If Schuyler " thinks it eligible that his Mill should saw Plank," it was to be done.2* Together with John Tayler, Henry Glen and others he signed a subscription list in J a n u a r y , 1 7 8 1 , enabling the state to purchase 10,000 bushels of wheat on the guarantee of their signatures. 30 Schuyler was unfortunate in being underbid in December, 1 7 8 1 , for a contract to furnish W e s t Point 25 Graham to Schuyler, March 4, 1777. 26 Hansen to Schuyler, Dec. 30, 1776, Feb. 1, 1777; Tayler Account Book, under April 14, 1777. 27 Military Accounts, 1776-1782. 28 Morris to Schuyler, Sept. 14, 1781. 29 To Nicholas Quackenbush, July 2, 1781, Hughes Letter Books, " Letters to Albany." 30 Misc. M S " New York," no. 73, in New York Hist. Soc.

HUDSON

VALLEY

BUSINESS

IO7

31

with supplies; but in April, 1782, he contracted with William Duer for the latter to furnish army posts in northern New York. 3 2 So he continued to be closely tied up with army needs in one way or another, cooperating with many persons who had business relations with him in post-war years. Schuyler's financial position is indicated by his ability to pay Jacob Cuyler on September 24, 1 7 8 1 , £ 1 9 5 0 in specie— in " half Joes," English and French Guineas, Spanish Pistoles and Moidores. 33 It is significant, too, that both Schuyler and Cuyler were able in 1778 and 1780 respectively to order goods from New York City for family use.34 Nor is it hard to understand, in the light of Schuyler's complex work, why he was the chairman of a meeting of public creditors of the United States in Albany, September 30, 1 7 8 2 ; nor why he and several of his associates in public work were on a committee to correspond with similar groups elsewhere to agitate for a national meeting to rectify the public credit situation. 35 Among other persons who sold supplies to the Northern Army was Haym Salomon of New York who purchased stores " to go Suttling to Lake George " in 1776, according to Leonard Gansevoort who gave him an endorsement to Schuyler. 88 Jacob Vanderheyden had supplied merchandise to Montgomery's Canadian expedition the previous year. 31 Morris to Schuyler, Dec. 3, 1781, Schuyler Papers. 32 Morris to Hale, Aug. 13, 1782, Financier's Letter Books, D, p. 112; doc. 29782, Div. of Old Recs., witnessed by Alexander Hamilton and Walter Livingston, the latter attorney for Duer. Schuyler had a bill of £240 on Duer, July 23, 1782, for value furnished: Accounts-Personal, 1780-1782, Schuyler Papers. 33 Accounts-Personal, 1780-1782. Oct. 12, 1781, he loaned Cuyler 800 dollars in specie, payable on demand; he also paid for other personal things at this time in specie. 34 From Gabriel Ludlow, N e w York, Jan. 6, 1778, Schuyler Papers ; Jacob to Henry Cuyler, April 14, 1780, Papers of Clinton, V, 617; Schuyler sent thirty " half Joes " by Major Acland for his purchases. 35 Annals of Albany, I, 282. They emphasized the sufferings of those who bad been creditors to the U. S. prior to 1778. 36 Gansevoort to Schuyler, June 12, 1776, Schuyler Papers.

108

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

Goods for New Y o r k regiments, f o r L e w i s , f o r Schuyler, and f o r the Commissary General of Clothing, also frequently came f r o m John Tayler in 1 7 7 6 and 1 7 7 7 . " S a w mills of the Fondas, V a n Antwerps, and Offlers, near Albany, furnished planks to Hugh Hughes in 1 7 8 1 , as did Schermerhorn's and Yates' mills near Schenectady in 1 7 8 0 - 1 7 8 2 . The former loyalist merchant, Cornelius Glen, offered to sell three tons of " German S t e e l " to the public in 1 7 8 1 , and flour continued to be collected by various commissaries around Schenectady. 38 In 1 7 8 1 , however, most Continental supplies began to be f u r nished by contractors with the Financier f o r set sums and definite periods, beginning in December when Melancton Smith and Jonathan Lawrence agreed to supply all the army posts north of

Poughkeepsie

with wood,

forage, and

provisions. 3 9

Sub-contractors worked in turn under such men, as Henry Glen, f o r example, sought to do. 40 New Y o r k State also continued to purchase great quantities of provisions with which to meet the quota of supplies requisitioned by Congress, but there is no record of the persons furnishing them. These war-time activities of Albany merchants had important local effects, but the private contracting for army supplies of William Duer and his associates eventually had even international repercussions. T o the work of these men who operated during the war largely in the Hudson Valley, we next turn our attention. Duer's career as business entrepreneur in general and as a r m y contractor in particular (and army contracting continued to support all his later schemes), was presaged by his pre-war attempts to secure British army supply business. 41 It is im37 Tayler Account Book, passim. 3S Hughes Letter Books: to Peter Yates, June 19, 1781, "Letters Promiscuous"; from Nicholas Quackenbush, Jan. 31, Feb. 14, 1781, April 27, 1782, " Letters to Albany." 39 Pickering to Hughes, Dec. 28, 1781, " Letters to Albany." 40 Glen to Parker, Sept. 2, 1783, Misc. M S " G ", in New York Hist. Soc. 41 There are references to his pre-war career in R. H. Fleming, " Phyn, Ellice and Company," loc. cit., pp. 20, 21.

HUDSON

VALLEY

BUSINESS

IOÇ

portant that Philip Schuyler was one of his early A m e r i c a n acquaintances in the upper H u d s o n lumber and milling business. 42 D u e r also had pre-war connections with that mysterious A m e r i c a n , Stephen S a y r e , a banker in L o n d o n in 1 7 7 3 , w h o w a s o f some importance in Revolutionary S o o n a f t e r a r r i v i n g in A m e r i c a ,

diplomacy. 4 *

D u e r demonstrated a

re-

markable ability to adapt himself to the economic and political trends in his new environment. Eventually he contributed a fillip to A m e r i c a n business methods which dismayed some w h o cherished traditional colonial practices. " H e w a s , " wrote the caustic A l e x a n d e r G r a y d o n , " of a dashing cast, a man o f the world, confident and animated, with a promptitude in displaying the wit and talents he possessed, with very little regard to the decorum, which either time or place imposed " ; one w h o would " play the bashaw in prosperity."

44

O f such stuff

w a s the leading A m e r i c a n " undertaker " of the age. It is unnecessary to enlarge upon the account of

Duer's

political career except to note these interesting facts. In C o n gress he earned the gratitude o f Elias Boudinot in 1 7 7 8 b y securing f o r the latter repayment of certain sums expended on A m e r i c a n prisoners, which prompted Boudinot to term him " a M a n of much feeling."

45

H e w a s accused of being deep

in a " plot " to support Silas Deane, when that gentleman w a s causing so much heart-burning

in Congress. 4 6

directly associated by dark insinuations

in the

He was

Philadelphia

press w i t h W i l l i a m Constable and Benedict A r n o l d 42 Cf. J. S. D a v i s , Essays ations, I, 114.

in the Earlier

History

in-

of American

in the Corpor-

43 D u e r to Sayre, June 24, 1773, D u e r Corresp. 44 Graydon, Memoirs, pp. 302, 303. D a v i s , Essays, I, " W i l l i a m D u e r , Entrepreneur," esp. pp. 334, 335 is a brilliant critical account largely of Duer's p o s t - w a r career. 45 Burnett, Letters, II, 358. It should be borne in mind that questions about the use of public funds were an important factor in Congressional politics ; cf. Chapter N i n e . 46 B y R. H . Lee, ibid., I l l , 352. D u e r also helped to unhorse the " C o n w a y Cabal " that year.

IIO

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

Lovely Nancy smuggling affair of 1779, which had a passing influence on both Congressional and Pennsylvania politics." Duer's business interests developed from the outbreak of war when in 1775 and 1776 he furnished the army with plank for bridges, and masts and spars for Continental frigates on the Hudson. In the latter year he also procured teams, powder, and supplies for the New York troops.48 The Continental Quartermaster General Thomas Mifflin requested him in October, 1776, to purchase boards, bricks, and lime, and to cooperate with one of the Livingstons in securing 30,000 bushels of grain for which, apparently, Duer "paid himself" 15,000 dollars.49 Duer's agents purchased for Mifflin in New York while those of Jeremiah Wadsworth did the same in Connecticut. On October 26, 1776, Mifflin assured Duer that " as I now depend on you for all my Supplies of Grain, Hay & Straw I cannot, nor do I think it right to, apply to any other Gentleman in this colony for the same Articles " ; and he endorsed an order for 30,000 dollars in Duer's favor. 50 In 1777 Duer erected barracks for 2000 men at Peekskill, on Mifflin's orders. 81 Duer's business activities fell off in 1778, and he did little more the following year except to make some sort of an agreement with Robert Morris on May 11 which was never carried out.52 By January, 1780, however, his interests had broadened, and he was seeking a French navy mast contract with Silas Deane, James Wilson, and with Deane's commercial friend, 47 Penna. Packet, April 3, 1779, referred to in Burnett, Letters, IV, 153 n.; cf. also, ibid., IV, 13411., and proceedings of Arnold's court martial as to details of the affair. 48 Davis, Essays,

I, 115, 116.

49 Mifflin to Duer, Oct. 19, 20, 1776, Duer Papers, I; Rec. Book no. 98, p. 7, Div. of Old Recs. 50 Duer Papers, I. 51 Davis, Essays,

I, 116.

52 Morris to Duer, Jan. 15, 1785, Duer Papers, II, Morris asking him to take their names from the 1779 agreement and to consider it canceled.

HUDSON V A L L E Y

BUSINESS

III

the F r e n c h m a n de C h a u m o n t . 5 8 A s early as M a r c h , D u e r w a s r e c e i v i n g his business mail in care o f D e p u t y Morgan

L e w i s at A l b a n y : as,

for example,

Quartermaster correspondence

w i t h B a r n a b a s D e a n e about possibilities o f a " contract " a n d the p u r c h a s e o f bills o f e x c h a n g e . 5 4 H e also made a c o m m e r cial a g r e e m e n t , probably in July, 1780, w i t h John R . L i v i n g ston, p a y i n g purpose of linens. 5 5

the latter a

" first S u m "

in A u g u s t

for

" l a y i n g out in B o s t o n " in part f o r wines

He

carried

on a v a r i e d

mercantile

the and

correspondence

that y e a r w i t h P e t e r W h i t e s i d e s and C o m p a n y o f Philadelphia. D u e r ' s relations w i t h M o r r i s soon became more e x t e n s i v e . H o w g o o d it w a s to be out o f public service, he w r o t e to that g r e a t m e r c h a n t o n A u g u s t 27, 1780. H e expressed regret t h a t M o r r i s t h o u g h t that political considerations made " the P r o s e cution of

o u r proposed plan at this time H a z a r d o u s . . . . "

Duer continued: T h o u g h I am anxious to commence the Enterprise before the Conclusion of the war (being Sensible that the Profits of one S u c cessful V o y a g e would lay a sufficient Foundation for the Prosecution of E x t e n s i v e Commerce in T i m e of Peace) yet I am apt to believe it will be Prudential to see what aspect the affairs of our Friends will wear at the Close of the Y e a r in the Quarter our E y e s are turned to before w e commence so Expensive an outfit. . . . In the mean T i m e I find myself justified by Experience in declaring that a judicious Purchase of forfeited Lands on the Improved P a r t s of this State is by f a r the most Elgible mode I know of Improving a Fortune in a Secure way. In consequence of our former conversations and of the Renewal of the idea in your Letter, I have lately attended to the sale of some improved Farms. . . . 53 Davis, Essays, I, 119. It was probably unsuccessful in this form, though Duer got out masts for the French through John Holker in 1781 (c/. below, also Chapter Six), and Morris wrote Duer, Sept. 17, 1780 (Duer Papers, I ) , that Holker had gone with Wilson to his " Mast-Territory." Duer wrote Holker, Jan. 23, 1781 (Misc. MS " D", New York Hist. Soc.), about payments for a " Cargo of Masts." 54Deane Papers (Conn. Hist. Soc. Coll.), p. 150. 55 Livingston to Duer, Aug. 2, 1780, Duer Papers, I.

112

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

H e had bought two f a r m s on the Beverly Robinson estate f o r Morris, and one f o r himself. The price was a little high, since Duer characteristically arrived at the sale late and had to repurchase them; but they were nevertheless a fine bargain; for, he argued, " money is more than 22 f o r one in which you pay." M o r r i s stood to get four per cent on his investment in rent, and to make two hundred per cent profit when he chose to sell. M o r r i s was not too enthusiastic about this sort of business at the time and had given no positive orders to purchase, but Duer had had " an Itch " to buy. 08 The purchase money was finally sent by M o r r i s on September 1 7 , but he had a hard time securing it. Duer was to repay the sum advanced in interest bills because Morris, buying bills on France as fast as possible,

f o u n d them difficult to procure since J o h n

Holker,

the French Consul, kept the price as high as possible." M o r r i s also wrote Duer in September of several commercial schemes which might a f f o r d a profit. Duer could open a store at Albany and make a good deal of money by purchasing goods in Philadelphia and New England to sell in the North country. Duer's " plan " had, in the meantime, been communicated by Morris to J o h n Holker, who " likes it very well, but your demand of Yi the Profitts and J4 advance of Capital he thinks too much." T h i s probably had to do with the mast contract. Then followed this singular statement, doubtlessly r e f e r r i n g to the abandoned commercial scheme of August, and expressed in the delightfully peculiar fashion of the times: I am pretty clear it will not do to pursue our plan to Ch - a [China] at present, and altho' Cabbage planting is the most Noble & best of all possible Occupations, one that will make the pot boil if well followed, yet I fear it will not afford a pot boiling so often, as you and I have been taught to think necessary and therefore 56 Morris Corresp., in Library of Congress; Morris would have to advance money even for Duer's farm, Duer having no funds of his own, apparently. 57 Morris to Duer, Sept. 17, 1780, Duer Papers, I.

HUDSON

VALLEY

BUSINESS

113

we must try to find Beef to our Cabbage by some other means, but never forgetting or neglecting to raise the Cabbages.5* The month of October, 1780, found Duer, with inexhaustible fertility of suggestion, urging Morris to join him and Schuyler in seeking a flour contract with the French fleet and army. There was a big wheat crop in the Hudson Valley which would provide a surplus for milling. Since there was danger of the " Eastern states " doing this French work, there was no time to lose. The Marquis de LaFayette had been approached in a " confidential manner " and had assured Duer that the French officers had no confidence in the ability of the states to supply them. The Marquis insisted that Schuyler be a party to the contract because of his well known abilities in transportation. (Schuyler told Duer that the contract had been pressed on him while a member of the Congressional Committee at Camp, for which reason he had refused it.) S o Schuyler and John Holker should be joined with them. T h e four would make a total profit of £20,000 " Y o r k " currency on approximately 20,000 barrels of flour to be sold the French in the coming year. French bills would have to be accepted at two-thirds of par with specie, for the French officers were complaining of the great loss in discount. 59 O f course this scheme never matured, since Wadsworth and Carter had better contacts and were already doing business with the French. O n closer examination it appears as wishful thinking by Duer, for Schuyler's name was used freely and probably without his sanction. W e may leave Duer for a moment to turn to the activities o f his future principal partner in the American army business, 58 Ibid. 59 Duer to Morris, Oct. 12, 1780, Morris Corresp. in Library of Congress. Morris to Duer, Dec. 27, 1780, Duer Papers, I, says that " Bank " funds are too exhausted for any " New contracts," and advises him to hold his goods and try to sell flour to the French. Holker to Duer, Dec. 23, 1781, Duer Corresp., orders him to send flour to Hartford, to be forwarded to Mr. ( T h o m a s ? ) Russell at Boston, doubtless also for the French.

114

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

bearing in mind that the f o r e g o i n g relations prepared the w a y for Duer's army contracting with M o r r i s in 1782 and for the epoch-making v o y a g e of the Empress

of China

in 1784.

T h e partner referred to was Daniel Parker of W a t e r t o w n , Massachusetts, w h o m we have noted as seeking French contracts in A u g u s t ,

1780, and as supplying

Wadsworth

and

Carter f r o m the time they secured those contracts for themselves. H i s brother, D r . B e n j a m i n Parker, sold bread to the Continental troops as early as

1 7 7 7 . Daniel

Parker's

back-

ground is largely unknown, 6 0 though his international importance is common knowledge. O n e of his letter books is our principal source concerning his business activities before he became formally involved with Duer and L e w i s M o r g a n in June, 1 7 8 1 . L i k e W a d s w o r t h and Carter, with w h o m most of his business in 1781 w a s done, Parker employed numerous agents such as George Merrills at H a r t f o r d , Zenos Parsons at Springfield, Cornelius Glen at A l b a n y , and Joseph K e t c h u m at Red H o o k on the Hudson. These men secured flour and f o r a g e for him. In April, 1 7 8 1 , P a r k e r wrote Merrills of his engagement to supply 1000 barrels of flour at N e w p o r t and the same amount at H a r t f o r d for W a d s w o r t h ; some of this M o r g a n L e w i s w a s to gather at Albany. 6 1 W a d s w o r t h also wanted Parker and L e w i s to contract to supply all the f o r a g e ( c o r n and oats) they could gather, in M a y ; but there was danger of losing W a d s 60 There are several young Daniel Parkers with Boston mercantile relatives during the Revolution mentioned in New Eng. Hist. Genealog. Soc. Reg., VI, 3/6. 61 Parker Letter Book, April 5, 1781, erroneously dated 1780. Cornelius Cuyler at Albany, Joseph Kingman at Canaan, Conn., and Moses Church at Springfield also did work for Parker. H e sold flour to Stephen Higginson and Samuel Breck of Boston, this year. Some of this he secured through John Welsh of Boston, who in turn secured it from Joseph Ketchum. On one occasion, Ketchum forwarded flour by John Caldwell of Hartford. Russell in Boston also had something to say about such deliveries: cf. Welsh to Thurston and Jenkins (of Providence), Dec. 31, 1781, and Welsh to Ketchum, July 12, 1782, Welsh Letter Book.

HUDSON

VALLEY

BUSINESS

115

worth's flour business then because J. Cuyler was " poisoning " Schuyler's mind against Parker and Lewis, for his own ends.*1 Meanwhile, Duer had been looking around for any business he could pick up. On June 15 he wrote his father-in-law, William Alexander, M a j o r General in command of the Northern Department, " I f you can with Propriety bring it about, that I may make the Purchases of what Articles they may need in this State, you will oblige me Extremely. . . . " Duer desired a hint to General Washington and to the Quartermaster General of the French army in the matter, acknowledging it to be a delicate subject. 63 Such, indeed, were the interests of the Duer-Parker-Lewis concern, papers for which were agreed to on June 21, which was the forerunner of the firm known as Daniel Parker and Company, or Duer and Parker. The original agreement was that Duer, Parker, and Lewis were to be jointly concerned in the sale and purchase of provisions in the counties of Ulster-Orange and Dutchess, New Y o r k , except in flour contracts for the French troops in which Duer was to have no part. Parker was to purchase supplies and handle bills of exchange, Duer to make contracts, and Lewis, apparently, to be the distributing field man.64 The activities of the firm were legion. Its important work in 1781 was in sub-contracting forage for Wadsworth and Carter, 65 and in this Duer was fully concerned. Within a week of the signing of the agreement he was getting out 2000 bushels of forage for John Carter in the aforesaid counties, where prices rose rapidly on rumors of the French needs.66 Joseph Ketchum purchased forage for the firm around Red 62 Parker to Lewis, May 14, Parker to Merrills, April 5, Parker to Carter, April 25, 29, 1781, Parker Letter Book. 63 Duer to Sterling, June 15, 1781, Alexander Papers, V, in New York Hist. Soc. 64 Agreement in Duer Corresp., Box VII, folder 6. 65 See Chapter Four. 66 Parker to Lewis, June 26, 1781, Parker Letter Book; Duer to Wadsworth, June 24, 1781, Misc. MS " D ", in New York H i s t Soc.

IL6

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

Hook, but this was sold directly to the F r e n c h ; Parker wrote Duer that he had informed Carter of " our connects" in French army supplies. 87 Parker, however, continued to sell bills for Wadsworth and Carter in Boston, and Duer continued other private work, such as getting out masts from the Connecticut Valley, which were collected at Wethersfield for J o h n Holker and the French fleet.68 T h e most notable event of the summer of 1 7 8 1 was the introduction of Holker into the Parker-Duer group. On A u g u s t 2 5 he wrote Duer to get William Turnbull and everyone else together to come to an understanding about Parker. Holker was henceforth a key man f o r the associates in the French business; as French Consul at Philadelphia, he wined and dined military officials on occasion. T h e decision of Robert Morris, Superintendent of Finance, to supply the Continental troops on a contract basis, gave the firm new opportunities in the fall of 1 7 8 1 . Back in J u l y , Duer had sounded out Morris on this, having heard that Schuyler had some flour-supplying business, assuring Morris that he ( D u e r ) was not engaged in doing this f o r the French (which technically was true), and throwing out an unctuous assurance about " bearing a Part in the Toils of my F r i e n d . " 69 Though Morris was never completely taken in by Duer's professions, on October 1 6 he empowered him to supply flour to General Heath, 70 and thereby began a series of government engagements which Duer enjoyed almost continuously until his failure in 1 7 9 2 . On November 6 Morris accepted Duer's o f f e r of 1000 barrels of beef f o r the troops on the Hudson, and encouraged him to bid on the West Point contract. Duer 67 Parker to Duer, June 26, 1781, Parker Letter Book. The French army seems to have depended entirely on Duer and Parker for forage at this time. 68 Holker to Duer, July 19, 1781, Duer Corresp., objecting to high prices Duer wanted for them. 69 Duer to Morris, July 11, 1781, Morris Corresp., in Library of Congress. 70 Morris to Duer, Oct. 16, 1781, Duer Papers, I ; Financier's Letter Books, B, p. 46.

HUDSON

VALLEY

BUSINESS

II 7

did so, but w a s underbid by C o m f o r t S a n d s . " H o w e v e r , D u e r and P a r k e r secured a contract to ration the main army, beginn i n g January i , 1 7 8 2 ; and in F e b r u a r y D u e r w a s a w a r d e d the Northern Posts contract, acting through his attorney, W a l ter L i v i n g s t o n , and his Philadelphia agent, W i l l i a m T u r n b u l l . " A l l of these contracts probably went to the associates as a group.

Parker

had been anxiously

watching the

American

a r m y trading prospects f o r some t i m e . " Possibly it was at the beginning of this year, 1782, that the firm of Daniel P a r k e r and C o m p a n y was re-organized; then, at least, John H o l k e r secured a third part o f D u e r ' s " Contract f o r the posts north of Poughkeepsie " and went £5000 security f o r D u e r ' s fulfillment. It w a s the first of a number of mistakes by

Holker

which eventually involved him over £53,000 largely on the company's account, according to his version of the story. 7 1 T h e partners henceforth seem to have been Holker,

Duer,

Parker, and possibly R o y a l Flint and Melancton Smith. T h e s e , at least, tried to settle with H o l k e r in the spring of 1784. B e f o r e the firm w a s dissolved, Archibald S t e w a r t ( D u e r ' s old clerk for w h o m he had requested f r o m Schuyler a forage-supplying position in the N o r t h e r n Department in 1 7 7 7 ) , W i l l i a m T u r n bull of Philadelphia, and W a l t e r L i v i n g s t o n of N e w Y o r k had become closely associated with i t ; so had creditors of Holker, such as T h o m a s Russell and Samuel Breck of Boston, y o u n g N a l b r o F r a z i e r and T h o m a s F i t z S i m o n s of

Philadelphia."

71 F i n a n c i e r ' s L e t t e r B o o k s , B , pp. 102, 202. 7 2 R e c . B o o k no. 69, p. 36, D i v . o f O l d R e c s . ; F i n a n c i e r ' s L e t t e r

Books,

B, p. 436. 7 3 P a r k e r t o D u e r , N o v . 22, 1781, P a r k e r L e t t e r B o o k . 74 Cf.

the l o n g r e v i e w o f H o l k e r ' s c o m p l a i n t s a g a i n s t D u e r , in his l e t t e r

t o D u e r , D e c . 18, 1789, D u e r Corresp. D u e r t o H o l k e r , M a r c h 19, 1782, ibid., thanks h i m f o r g o i n g s e c u r i t y f o r the c o n t r a c t w i t h o u t solicitation. 75 H o l k e r t o D u e r , J u n e 4, 1784, F i t z S i m o n s t o D u e r , J u n e 2, 1784, D u e r C o r r e s p . ; c f . a l s o , D a v i s , Essays,

I, 121 n. I n the G r a t z Coll., is a l e t t e r

f r o m F i t z S i m o n s t o M e l a n c t o n S m i t h , A u g . 12, 1786, o n a f f a i r s o f

Parker

and C o m p a n y . T h e s e w e r e b e w i l d e r i n g , t o s a y the least, especially in c o n n e c t i o n w i t h the v o y a g e o f the Empress

of

China.

IL8

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

It should be noted also that Duer bought f o u r shares of Walter Livingston's thirteen-twenty-fourths interest in the M o v i n g A r m y Contract of 1782, held by Sands, Livingston and C o m p a n y ; 7 6 and Parker apparently did something similar—he was the Livingston company's agent for collecting money in New England, and its eastern supply factor. 77 In other words, there was more cooperation than competition between the contractors for army business. True, the two firms competed f o r foodstuffs at times; but in June, 1 7 8 2 , when there was " a combination, and a pretty powerful one to raise the price of flour," Duer sent word f o r Parker to meet him at Walter Livingston's, apparently so that common action might be taken in the matter. 78 Innumerable persons did business with Parker and Duer. Melancton Smith and Company sold them liquor in 1 7 8 2 , and Smith claimed to have had a contract from Parker to deliver flour to the French at Newport, some of which was sold there by " Mr. H a y s . " 79 John Welsh continued to furnish flour f o r Parker at Newport in 1 7 8 2 . Isaac Clason, a future important N e w Y o r k grocer, sold Parker flour on the H u d s o n ; so probably did Robert Livingston of the Manor and his son Henry. 8 0 Duer secured goods f o r the store he opened at Albany f r o m a variety of places. Supplies f o r the company's stills established at Poughkeepsie in 1 7 8 2 came f r o m Thomas Russell of Bos76 H o l k e r t o D u e r , M a r . 23, 1786, Dec. 18, 1789, D u e r C o r r e s p . H o l k e r h a d an interest in D u e r ' s interest in Livingston's interest in S a n d ' s c o n t r a c t ! 77 Cf. P a r k e r to Sands, Livingston and Co., Sept. 7, 1781, Oct. 10, 1782, P a r k e r L e t t e r Book. H o l k e r to D u e r , Dec. 17, 1785, D u e r Corresp., dem a n d s to k n o w the names of all c o p a r t n e r s u n d e r the n a m e of Sands, L i v i n g s t o n and Co. 78 D u e r to P a r k e r , J u n e 9, 1782, D u e r C o r r e s p . O n Feb. 7, 1782, M o r r i s himself w r i t e s D u e r ( D u e r P a p e r s , I ) t h a t he u r g e d Livingston to join D u e r in t h e c o n t r a c t f o r the posts n o r t h of Poughkeepsie. 7 9 R e c . Book no. 1 2 1 , p. 269, Div. of Old R e c s . ; P e t e r Colt to W a d s w o r t h , J a n . 1, 1785, W a d s w o r t h Corresp. 80 Papers P a p e r s , I.

of Clinton,

V I , 459; Livingston to D u e r , J u n e 17, 1782, D u e r

HUDSON

VALLEY

BUSINESS

Iig

ton, and iron plates f o r the same from Samuel Ogden of the N e w Jersey furnaces. T h i s distillery was an ambitious undertaking, apparently designed to put an end to the firm's dependence on the overland rum trade with Boston; part of the liquor was to be sold Sands and Company for army use. It consisted of at least f o u r stills and was managed by Schuyler's old storekeeper, Daniel Hale, who had previously represented Duer on business. Holker paid for the entire plant, thus investing £4500 in " Certificates and Locations " (with which N e w Y o r k paid its soldiers). 8 1 The near end of the war and the re-opening of the seacoast trade destroyed any possible success of the plan. H o w well Parker and Company made out in their various contracts in 1 7 8 2 is debatable. Morris wrote of Duer's losses, in August, but in October Parker admitted profits. Parker, moreover, was sufficiently satisfied to express his desire to keep up the business with Duer in a " Contract for ' 8 3 . " 82 Y e t certain signs pointing to disaster may be seen in Parker's activities that year. H e was constantly pressed to meet creditors' claims; and his mercantile ambitions led him into foreign trade — together with Barrell, Greenleaf, and several lesser Boston merchants—at the very end of the war when there was the least hope of success. A s early as October, 1 7 8 1 , he sent salt and wine to Virginia to be exchanged for tobacco to be forwarded to Butler and Matthews at Cadiz; but goods received back, f r o m Ingraham and Bromfield of Amsterdam, he had to sell on very easy terms a year later. Whereas he sent abroad but half a sloop's cargo of tobacco in October, 1 7 8 1 , a year later he had ideas of shipping 1 4 0 0 hogsheads on a large ship. Parker came to look upon the contracting business, even anticipating future contracts, simply as a means to the 81 Duer to Holker, Dec. 11, 1781 (also marked 1782), Duer Corresp. Parker had written Cornelius Glen, July 11, 1781 (Parker Letter B o o k ) , about carrying out a distillery establishment. 82 Parker to Duer, Oct. 26, 1782, Duer Corresp.

120

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

83

end of financing his foreign cargoes. B y the beginning of 1 7 8 3 he began to close his Dutch accounts, but only to make connections with a French house, L e Conteulx and Company, probably an error in judgment. Nevertheless, in November, 1 7 8 2 , army contracts for the next year were secured by Daniel Parker and Company and quantities of supplies continued to come under its control. £ 1 5 0 0 of goods were purchased of J o h n R . Livingston on the Hudson. Parker shipped European goods f r o m Boston to Albany, in care of Cornelius Glen, f o r Duer. 84 A great meeting of beef contractors was called at Springfield around December 1 , when Phelps, the Champions, David Trumbull and others considered handling a million pounds of beef. 85 Parker now even felt powerful enough to dominate the Boston bill market, to force the Treasurer of the French fleet to recognize his depreciation of bills from twenty to thirty-three per cent discount: " t h e very great funds now at my Command will oblige him to comply with my Request—as I have now Such Sums at Command as to furnish him with 100,000 Dollars Cash." When he secured the French bills he planned to raise them ten per cent within fifteen days and thus reap a great profit; but this was to offset earlier losses: " i t is almost a Certainty that I shall raise them to the rate at which we received them of M r . Morris in a very Short T i m e . " 86 He must have had agents in many places to cooperate in this, such as Glen at Albany to whom he sent notices of exchange rates to be his guide in local dealings. 87 83 T o Ingraham and Bromfield, N o v . 22, 1782, et passim, Parker Letter Book. H e was, however, worried about the effects of peace on business. 84 Parker to Duer, N o v . 25, 1782, Duer Corresp. 85 Ibid. " Gore " would receive flour for the " garrison." 86 Ibid., and another letter to ( D u e r ) , undated, around Dec. 1, in Parker Letter Book. " Gore " should not worry. 87 Parker to Cornelius Glen, N o v . 14, 1782, Parker Letter B o o k ; he has not heard f r o m Schuyler about the flour he disposed of.

HUDSON

VALLEY

121

BUSINESS

T h e contract f o r 1 7 8 3 w a s beset with difficulties not easily surmounted. L a r g e sums were required as security by M o r r i s since certain contracts had been consolidated. T h i s

necessi-

tated D u e r and P a r k e r getting persons to underwrite

their

contracts f o r 1 5 0 , 0 0 0 dollars. 8 8 P a r k e r had only 1 0 , 0 0 0 dollars of his o w n to put up and needed security f o r 20,000 dollars m o r e on his account. H e wrote Duer on November 3 that the man he was depending on had to see someone in Portsmouth b e f o r e he would back him. T h i s may have been Joseph Barrell. D u e r had a d r a f t on T h o m a s Russell to assist him in raising his share. 8 9 Moreover,

P a r k e r and Company had to battle

against, or compete with, speculators in the currencies who, f o r example, by manipulating Massachusetts notes had made money dear the previous financial

September. 9 0

Parker

had

similar

difficulty when trying to collect f r o m Massachusetts

f o r S a n d s , Livingston and C o m p a n y : " I saw 5 per Cent pr M o n t h o f f e r e d to a Publick B r o k e r yesterday to discount a note of 1 0 0 0 Dolls payable on the 1 5 J a n y this amounted to 1 5 p cent discount, when a Collector can avail himself of such an advantage, no Cash is to be expected f r o m him. . . . " M o r e over, there was uncertainty about the value of Morris* notes on J o h n S w a n w i c k , which made merchants uneasy. 9 1 T h e coming of peace opened opportunities which temporarily staved off the company's dissolution. T h e British forces in N e w Y o r k offered a speculation in a r m y supplies. P a r k e r wrote D u e r and R o y a l Flint on M a r c h 2 6 , 1 7 8 3 , f r o m N e w Y o r k C i t y , " Immediately on the arrival of the Packet at Philadelphia with the accounts of peace I applied to M r . M o r r i s & Genl Lincoln f o r recommendation to S i r G u y Carlton, as a Contractor f o r the British a r m y . T h e y g a v e me such Letters as were necessary. . . . "

H e was sure of

a contract, and

" J u d g e Smith " should come to N e w Y o r k " f o r his sake & 88 Parker to (J. Wadsworth?), and Parker to Duer, Nov. 3, 1782, ibid.

89 Duer to Parker, Nov. 14, 1782, Duer Corresp. 90 Parker to Duer, Sept. 18, 1782, Parker Letter Book. 91 Parker to Sands, Livingston and Co., Oct. 10, 1782, ibid.

122

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

o u r s . " P a r k e r was sending 40,000 dollars in M o r r i s ' notes to be invested in flour as speedily as possible. 92 H e succeeded in getting appointed as one of the United States commissioners on the evacuation of the city, together with William S . Smith and Egbert Benson, and secured the contract. E a r l y in J u n e , the British

Commissary

20,000 barrels of

General

flour

empowered

in N e w

Parker

to

furnish

Y o r k and N o v a Scotia, a

smaller contract being given to the N e w Y o r k loyalist firm of M u r r a y , Sansom and Company. 9 3 P a r k e r may have secured other contracts later. In September he made an

agreement

with N a l b r o F r a z i e r of Philadelphia, whereby the latter agreed to buy £ 3 0 0 0 Sterling " in Government bills at 2 p %

above

parr to be paid in this city." P a r k e r probably worked in N e w York

with an Englishman,

Thomas

Dickason

of

London.

T h e Philadelphia agent to receive F r a z i e r ' s money was to have been J o h n R o s s , the Scotch f r i e n d of M o r r i s , but he wisely refused to become implicated. 94 The a f f a i r s of Daniel P a r k e r and Company had by this time resolved into a series of wrangles, though the company w a s active in trade until December, 1 7 8 3 . P a r k e r fled the country in 1 7 8 4 , his future necessarily being abroad because of

the

number of outraged creditors in America. H i s objective also was to secure commercial credit in E n g l a n d or Holland f o r the purpose of

financing

an international tobacco trade or a

public securities speculation; his good f r i e n d A n d r e w Craigie was to be his American representative. A s the basis f o r E u r o pean speculations, P a r k e r had public money which J a m e s Lovell, Massachusetts revenue collector f o r Robert M o r r i s , unwisely permitted him to get hold o f . H e also had about 7000 specie dollars worth of public securities (of some 40,000 dollars face value) half of which were purchased with cash furnished him 92 Duer Papers, I. 93 Historical Manuscripts Commission, Report on American Manuscripts, I V , 143. Holker was in o n this. H e w a s to see W a t s o n : Holker to Ducr, April 22, 1783, Duer Corresp. 94 Frazier to Parker, Sept. 3, 22, 1783, Frazier Letter Book.

HUDSON

VALLEY

BUSINESS

123

by John Pierce who was to share equally in profits from the adventure. Dr. Aaron Dexter of Boston also accused Parker of having taken out more than his share of the stock in a drug trading house they had formed just before he left. With such assets, for he was penniless otherwise, Parker secured credit with De La Lande and Fynje, a wild Dutch house which crashed soon after, whose London partner in 1784 was Frederick William Geyer, a Boston loyalist. Parker's later activities need not concern us except to note this: he speedily got any number of Europeans interested in the possibilities of speculation in American securities, for whom Craigie later became the principal American agent. 95 Duer also contemplated leaving America, in November, 1783. Perhaps he merely sought to open new trade with the Far East, for the Empress of China was financed by Parker and Company, with help from Morris, 98 and Duer had been in India as a young man. However, he possibly also wanted to escape creditors; the V a n Schaicks of Albany swore out a writ of capias to prevent his leaving, on November i. 97 This situation casts doubt upon his economic well-being. There is no direct evidence that the war greatly augmented his fortune; indeed, in November, 1784, Jacob Sebor of Connecticut contemptuously said, Duer " is so well known at present, that none but Foreigners will put themselves in his power." 98 W h a t the war did for Duer, as for all those involved in Parker and Company, was to develop broader business contacts upon which future speculations could be built. Unfortunate as participation in the company had been for John Holker, who lost every95 Lovell to Craigie, Oct. 23, 1783; Dexter to Craigie, May 8, 1785; and many letters from Parker to Craigie, all in Andrew Craigie Papers. In the Craigie Legal Documents, under March 2, 1786, is a memorandum on the Pierce agreement. 96 Daniel to Benjamin Parker, Oct. 18, 1783, on the " China business." Morris would advance cash, but have no other interest, ibid. 97 T o Varick, Nov. 1, 1783, Varick Papers, in Tomlinson Coll. 98 Sebor to Silas Deane, Nov. 10, 1784, Deane Papers (Conn. Hist. Soc. Coll.), p. 203. Cf., however, the summary in Davis, Essays, I, 122, 123.

124

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

thing thereby, to many it a f f o r d e d acquaintance with a new kind of

" big business," and developed relationships

which

helped make possible the economic enterprise of the following decade. Such also were the consequences f o r C o m f o r t Sands and his associates whose contracting in the Hudson Valley

had

several novel features worthy of relation. Sands, L i v i n g s t o n and Company had either Continental or Massachusetts

pro-

visioning business as early as November, 1 7 8 1 . It supplied the troops under General

Heath that fall. 8 9 U n d e r the title of

C o m f o r t Sands and Company it later secured the big W e s t P o i n t contract; and, as Sands, L i v i n g s t o n and Company, it had the M o v i n g A r m y contract of J a n u a r y , 1 7 8 2 . M o r r i s also gave S a n d s hospital and clothing contracts soon a f t e r . Associates of this firm were the Sands b r o t h e r s — C o m f o r t , J o s h u a , and R i c h a r d s o n — W a l t e r L i v i n g s t o n , the f o r m e r commissary, and, on one occasion at least, Tench Francis of

the mercantile

f a m i l y of Philadelphia. 1 0 0 T h e troubles encountered by this firm were many, even resulting in accusations of dishonesty against C o m f o r t

Sands

by no less a person than the C o m m a n d e r - i n - C h i e f , 1 0 1 who, it should be added, never had much patience with the commissariat. M o r r i s also failed to make Sands proper payments in 1 7 8 2 ; he pointed out in defense, however, that the principal contractors got together to make joint demands on him. 1 0 2 S u c h joint action must have included both Duer and P a r k e r . M o r r i s , however, also had such troubles with the beef

con-

tractors who had " private and subordinate Agreements with each other." E v e n W a d s w o r t h and Tench Tilghman, he said, 99 Parker to Sands, Livingston and Co., Sept. 7, 1781, Parker Letter Book; Morris to Comfort Sands, Financier's Letter Books, B, pp. 286, 287. 100 Morris to Tench Francis and Richardson Sands, May 29, 1782, about the Moving Army contract, Financier's Letter Books, C, p. 340. 101 Louis Hatch, American Revolutionary Army, p. 116; cf. also, Rec. Book no. 60, p. 74, Div. of Old Recs., on Washington's anger. 102 Morris to President of Congress, Oct. 21, 1782, Financier's Letter Books, D, pp. 334-339-

HUDSON

VALLEY

BUSINESS

seemed to consider certain rates given money."

103

f o r beef

125

as " hush

In other words, M o r r i s ' hopes of private

com-

peting contractors handling public supplies in an ideal w a y came to a sorry end. T h e government had to pay 40,000 dollars to break the W e s t Point contract with Sands, and litigation about it dragged on for years. 1 0 4 M o r r i s m a y have been correct w h e n he bitterly wrote C o m f o r t Sands, " I have been i n f o r m e d that the Contractors were Gainers by the Dissolution of the C o n t r a c t . "

105

H o w e v e r that may have been it is true that

Sands, like Duer and his associates, w a s able immediately a f t e r to play a prominent role in the financial affairs of N e w Y o r k C i t y . W e shall discuss the post-war interests of these men in later chapters. 103 Morris to Ezekiel Cornell, Oct. 10, 1782, ibid., pp. 299, 301. 104 Statement of Arthur Lee, Papers of Clinton, I V , 449. 105 T o Sands, March 11, 1783, Financier's Letter Books, E, p. 153; also his bitter letter to the Sands group, Oct. 10, 1782, Letter Books, D, p. 303.

CHAPTER VI R O B E R T MORRIS A N D H I S GROUP DURING

the

Revolution

the business

of

Robert

Morris

assumed large proportions, like that of S i r Joseph H e m e , an E n g l i s h m a n of William I l l ' s time, w h o similarly

developed

through the management of w a r finances, a r m y contracts, and mercantile a f f a i r s into a great capitalist entrepreneur. 1 T h e effect of it all on M o r r i s ' private fortune is a much mooted point.

H e has been quoted as having said that he

broke " about even " f r o m his war-time commercial ventures, in spite of having lost one hundred and fifty vessels. 2 A B r i t ish spy said of him in 1 7 7 8 that he was " g r o w n extremely rich, was the first promoter of privateering and the commerce to F r a n c e and the W e s t India Islands."

3

Another

contem-

p o r a r y put it even more strongly, a r g u i n g that M o r r i s gained especially

by privateering, through his relations

Holker, the French consul, and

f r o m special

with

John

opportunities

a f f o r d e d by his political power. 4 A critical modern scholar has concluded, with no reflection on M o r r i s ' patriotism, which was great, that his public service connections enabled him to profit largely as a private individual. 5 N o allegations to the contrary h a v e been able to explain his post-war commercial eminence and power, compared with his provincial situation in

1775,

though he had been a leading young merchant of Philadelphia at the earlier date. T w o important circumstances influencing Robert M o r r i s in 1776

were, that he was

W i l l i n g of

the business partner

of

Thomas

Philadelphia, and that he became involved in a

1 On H e m e , cf. Lipson, Economic

Hist, of England,

III, 215.

2 J. F. Watson, Annals of Phila., II, 329. 3 Quoted in Sumner, Financier,

I, 208.

4 The translator of Marquis de Chastellux, Travels I, 200 n. 5 Sumner, Financier,

126

I, 206.

in North

America,

ROBERT

MORRIS

AND

HIS

GROUP

127

European commercial speculation with Silas Deane, late of Wethersfield, Connecticut. The first assured Morris of social and business backing by the mercantile and landed interests of the province of Pennsylvania. This was particularly important since Morris himself lacked such a family background, being representative of the newer commercial interests of Philadelphia. The Willings had old and extensive social connections with the Shippen, McCall, and Francis families, the last two still having commercial representatives in Philadelphia in 1 7 7 6 . T h o m a s Willing was brother-in-law of the rich Quaker merchant, Samuel Powel." Morris' connection with Deane involved him in the first of a series of war-time enterprises whereby he gathered together a group of associates whose interests became closely tied to his own in public and private commerce and finance. Deane himself was a remarkable man whose career, like that of Morris, was one of expanding ambitions. Though the son of a blacksmith, Deane secured an education at Y a l e and then practiced law in Wethersfield, Connecticut. In 1 7 6 3 he married Mehitable Webb, wealthy widow of a merchant of that place, and straightway became a considerable merchant himself. About 1 7 6 7 he took f o r a second w i f e a member of the politically influential Saltonstall family, and entered politics. In the Connecticut legislature Deane became interested in the improvement of commerce on the Connecticut River. 7 He was also an active member of the Susquehanna claimants of Pennsylvania lands, in which agitation many Connecticut politicians were involved. B y 1 7 7 4 , however, he began to repudiate the ex6 On the Willing connections, see Thomas Balch, ed, Provincial Hist, of Penna., Intro. The McCalls had most extensive commercial relations of their own, with members married to merchant Swifts, Kembles, Inglises, and Searles. The Francises were connected with the commercial Tilghmans and Coxes. A niece of Thomas Willing was married to merchant Cadwalader, and the Cadwaladers were connected with merchant Samuel Meredith who, in turn, was brother-in-law to the prominent importers, George Clymer and Henry Hill. •7 Stiles, Wethersfield, I, 490-548.

128

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

treme propaganda of the Susquehanna Company whose claims conflicted with those of many wealthy Philadelphians, including Robert Morris. 8 His change in attitude did not cost him the friendship of such Connecticut persons as the Trumbulls, the Williamses, Eliphalet Dyer, and Jeremiah W a d s w o r t h ; but a certain coolness sprang up between Deane and Roger Sherman. When Deane entered the Continental Congress in 1 7 7 4 he was speedily drawn into the Congressional faction which stood for commercial opportunity. F o r his friends in Connecticut, for example, he became the spearhead in the business side of Congressional politics. Thus in 1 7 7 5 - 1 7 7 6 there was a quarrel between Connecticut and New Y o r k over the right to supply the New England troops around Albany with goods and f o r age, ostensibly involving questions of military r a n k ; " but Deane wrote Schuyler on August 1 5 , 1 7 7 5 , " I wish you could contrive by some little employ, to engage some of Our Connecticut People to be busy in assisting to procure Y o u provisions. . . . Cattle & Sheep as well as Pork, can best be procured in this Colony & I think that employing Capt. E . Phelps would serve Y o u r Cause as his acquaintance & Connections in this Colony are extensive. . . ." 1 0 Jedediah Strong of Connecticut had earlier written Schuyler that God forbid any one colony should try " t o monopolize every emolument." 1 1 Captain Phelps told Walter Livingston, Schuyler's nominee f o r handling supplies, that if he (Phelps) did not furnish provisions from Connecticut that he would " disoblige that Colony." Phelps had even offered earlier to resign his Connecticut office provided he could continue to f o r w a r d the provisions. 1 2 The question of rank was obviously a front f o r material interests. 8 Cf. Julian Boyd, " Connecticut's Experiment in Expansion: the Susquehanna Company, 1753-1803." J. of Econ. Ilus. Hist., I V , 56, 61-63. 9 See Chapter Five.

10 Schuyler Papers.

11 Strong to Schuyler, July 27, 1775, ibid. 12 Livingston to Schuyler, July 29, Oct. 3, 1775, ibid.

ROBERT

MORRIS

AND

HIS

GROUP

129

Deane was constantly seeking other opportunities for relatives and friends. O n July i , 1775, he warned his brother Barnabas about threatening commercial restrictions.1® While a member of the Secret (Commercial) Committee of Congress, he wrote his wife's brother-in-law, Thomas Mumford of Groton, " wish I could see you, or some other of my Connecticut Mercantile Friends here, as it would be in my power to help them, and in them to serve their country . . . if you will come down, the sooner the better." 14 His brother Barnabas secured the building of the Continental frigate Trumbull.1* In both September, 1774, and March, 1776, Jeremiah Wadsworth was in Philadelphia in Deane's company, and was described by the latter as " a valuable person, and I wish the public may become sensible of his worth " 1 8 — a s indeed it did. The prospects of profit in western lands also appealed to Deane. A scheme for a colonizing project failed in 1 7 7 4 ; but he continued to be interested in it, encouraged by that enterprising merchant Pelatiah Webster, and in 1776 he wrote on the matter to the Secret Committee, suggesting that European capital be raised to support an Ohio colony." Other economic ideas of Deane are as interesting: his suggestion to Morris to establish an insurance company in Philadelphia in 1 7 7 6 ; his later proposal to Congress to establish a bank; his conservative ideas on paper-money financing; his interest in western land companies; his belief, after 1780, in the feasibility of introducing steam engines into America; his hope in 13Deane Papers ( N e w York Hist. Soc. Coll.), I, 67. 14 Oct. 15, 1775, in Burnett, Letters, I, 230. 15 Out-letters

of the Marine

Committee,

I, 46. Silas Deane w a s on the

Congressional committee directing naval construction: cf. Burnett, Letters, I, 277. 16Deane Papers ( N e w York Hist. Soc. Coll.), I, 120, also pp. 13, 16. 17 Land sales there would make him rich, Webster said: Hinman, Hist. Coll. Conn., pp. 535-539; A. B. Hulbert, Ohio in the Time of the Confederation, p. i f f . ; Deane Papers ( N e w Y o r k H i s t . Soc. Coll.), I, 383, 450.

Deane wrote Morris in similar vein, April 15, 1780: Morris Papers in N e w York Public Library.

130

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

1784 (the dream of a broken m a n ) of securing E n g l i s h capital f o r canal construction in N e w Y o r k . 1 8 In short, Deane approached the concept of an " economic m a n . " L i k e M o r r i s , he was self-made (in rather an invidious sense) and ambitious; his end, like that of Morris, w a s tragic. T h e opportunities for commercial speculation which

came

to Deane and M o r r i s originated in the w o r k of the Secret Committee, organized to import supplies f o r the Continental troops. T h i s committee placed

commission

contracts in the

hands of W i l l i n g and M o r r i s ( M o r r i s having become its chairman in December, 1 7 7 5 , replacing W i l l i n g ) , of Deane, and of the merchants John Alsop, L e w i s of N e w Y o r k

Philip L i v i n g s t o n ,

and

Francis

( f o u r of them being members of

the

committee). B y September, 1 7 7 5 , Congress w a s already disturbed by rumors that the house of W i l l i n g and M o r r i s stood to make a profit of £12,000 on powder deliveries. 1 9 T h e w o r k of the committee resulted in a vitriolic controversy in C o n gress f o r several years on the general theme o f business and patriotism, in which M o r r i s and Deane were the particular objects of attack. T h e facts are shrouded in obscurity since the committee's account books were probably burned long a g o ; but there was apparently some justification f o r the charges. T h i s is suggested in statements by a Congressional Committee of Finance in 1788, and by reports of the A u d i t o r and C o m missioner of the Revenue in 1 7 9 1 and 1795. Deane, M o r r i s , and M o r r i s and John Ross jointly, were then still held in debt to the U n i t e d States f o r large sums of money unaccounted f o r under the Secret Committee " Indian Contract " of 19, and under a contract of M a r c h 1 8 D e a n e Papers Hist,

of

Banking

( N e w Y o r k H i s t . S o c . Coll.), in U. S.,

( C o n n . H i s t . S o c . Coll.), 19 Journals

p. 12; idem,

of Continental

Congress,

20 S u m n e r ,

II,

214; docs.

Many

other Sumner,

I, 4 3 ; Deane

Papers

I, 495.

I I I , 4 7 3 ; cf. J o h n A d a m s ' r e c o l l e c the S e c r e t

I, 265 n. S e e a l s o Chapter

Financier,

February

I, 2 8 6 ; W . G.

Financier,

pp. 197, 2 1 1 ; Stiles, Wethersfield,

tions as t o the original c o m p o s i t i o n of Burnett, Letters,

1,

1776. 2 0

Committee,

quoted

in

Nine.

28793, 29304, D i v .

M o r r i s w a s involved in the contracts three w a y s .

of

Old

Recs.

ROBERT

MORRIS

AND

HIS

GROUP

I3I

persons participated in commerce on behalf of the Congress; though the Lees of Virginia were rancorous critics of the Morris clique there is no reason to doubt Arthur Lee's list of forty-four other American merchants who also had Secret Committee commission business. These included John Langdon of Portsmouth, the Browns of Providence, Thomas Mumford of Groton, Livingston and Turnbull of New York, John Ross, Blair McClenachan, and George Meade of Philadelphia, Braxton and Harrison of Virginia, William Bingham of Martinique, Jonathan Williams of Nantes, France, and Barnabas Deane. 21 Their activities are evidence of the national cooperation which was developing among business men. When Deane left for Europe in the spring of 1776 he had contracts to purchase Indian goods and military supplies, and was authorized to sound out French sentiment for American independence. He was to represent himself as a private merchant. Stopping at Martinique on the way, he may have seen William Bingham, the American agent and private trader from Philadelphia, who was a party to Deane's private concern with Morris. " Mr. Bingham now goes out to Martinico in order to procure some arms for the Governor and with another view that I need not mention as he will write to you," Morris informed Deane on June 5. 22 Before leaving Philadelphia, Deane had written his wife of how " a Concern, different from my contract, is to support me." 23 This is the first clue to the formation of an international commercial and land-speculating group organized around Deane and Morris, and which is said eventually to have included Conrad Gérard, later French minister to America, M. le Rey de Chaumont, a French govern21 Papers of Clinton, IV, 451. On clothing secured for the Secret Committee, by Livingston and Turnbull, see N e w Eng. Hist. Genealog. Soc. Reg., X X X , 335. Langdon had been an original member of the committee. C f . also Morris' statement about the many American merchants having such contracts or work, in Sumner, Financier, I, 224. 22 Deane Papers 23 Ibid., I, 122.

( N e w York Hist. Soc. Coll.),

I, 137.

132

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

ment contractor, M . Ferdinand Grand, banker of Paris, S i r G e o r g e Grand, broker of A m s t e r d a m , and T h o m a s Walpole, a member of the English Parliament. T h e i r commercial business involved not only the purchase of supplies f o r America, sometimes by purchasing American prize ships through J o n a than Williams ( U n i t e d States prize agent at Nantes, greatnephew of Franklin and perhaps a secret partner of

Deane)

which ships were frequently re-purchased by Deane f o r Congress, but also trading with the enemy. 2 4 S u c h a grand scheme w a s described by the indefatigable but gullible English spy, P a u l Wentworth, in November, 1 7 7 6 ; it w a s said to involve a £ 4 0 0 , 0 0 0 capital, the Crommelins of A m s t e r d a m were also supposed to be concerned, and its trade w a s said to be restricted to clothing and dry goods, not including military stores curiously enough. 2 5 Robert M o r r i s was enthusiastic about the possibilities

of

this venture. " Y o u may depend that the persuit of this plan deserves your utmost E x e r t i o n & attention so f a r as y o u r mind is engaged in making money, f o r there never has been so f a i r an oppert'y of making a large F o r t u n e since I have been conversant in the W o r l d . . . , " he i n f o r m e d Deane in A u g u s t . 2 8 T h e actual profits made, however, can only be conjectured, though a recent writer thinks there is no reason to 24 C f . France," N o v . 26, g o i n g to interests,

Thomas Abernethy, " Commercial Activities Amer. Hist. Rev., X X X I X , passim-, cf. also 1776 ( D e a n e Papers [ N e w Y o r k Hist. Soc. Amsterdam " in our Company Transaction." c f . Conway, Paine, I, 137.

of Silas Deane in Bancroft to Deane, Coll.] I, 364) about On Gerard's private

2 5 " P a u l Wentworth Intelligence Received, N o v . 23, 1776." B. F. Stevens, Facsimilies of Manuscripts, no. 1 3 1 ; Deane to Morris, Oct. 1, 1777 ( M o r r i s Corresp. in Library of Congress), speaks of their joint adventure with Chaumont; cf. also Chautnont to Morris, Jan. 7, 1777. Deane Papers (New Y o r k Hist. Soc. Coll.), I, 450. In the Samuel Osgood Papers in N e w York H i s t . Soc., I, under Mar. 3, 1780, is an extract f r o m a letter from Williams about both public and private goods he is shipping. 2 6 D e a n e Papers ( N e w York Hist. Soc. Coll.), remarks in ibid., pp. 233, 459.

I, 1 7 6 ; cf. also his similar

ROBERT

MORRIS

AND

HIS

GROUP

133

doubt that they were high. 27 It is true that goods from Europe could command 400% profits in 1776, as Jonas Phillips of Philadelphia assured a Dutch correspondent. They were as scarce in Virginia as in Philadelphia at that time, when they were selling for four or five times their usual price.28 Early in 1777, however, Morris was upbraiding Deane for having "missed so fine an opportunity of making a Fortune — The prices of all imported goods have been enormously high." 28 But the reference may have been to a separate agreement with Deane, whereby the latter was to send goods to America by way of the West Indies, where their agents included Bingham at Martinique and Isaac Gouverneur at Curaçao. Morris was to ship back tobacco, indigo, and rice by the same route.30 Such a variety of Morris—Deane big business activities involved many American associates. For example, they invested in privateering out of France between 1776 and 1778 with four Philadelphia merchants: John Ross, John Maxwell Nesbitt, David Hayfield Conyngham, and William Hodge, all interested at one time or other in the Revenge which was captained by a cousin of Conyngham. 31 Ross, a Scot by birth and a West India merchant of Philadelphia after 1763, became an agent of the Secret Committee commissioned to export goods from France. Richard Henry Lee said that Deane had advanced Ross 400,000 livres by June, 1779, and that he was " one of the commercial league on public funds." In addition 27 Abernethy, op. cit., p. 479. 28 Amer. J e w i s h H i s t . Soc. Pub., X X V , 129, 130; W . V . Byars, ed., B. and M. Gratz Merchants, p. 155, also p. 157 o n " expectations f r o m Independency," in regard to prices in Virginia. 2 9 Feb. 27, 1777, Deane Papers

( N e w Y o r k H i s t . Soc. Coll.),

II, 14.

30Ibid., I, 174 on the joint s c h e m e ; cf. b e l o w on Bingham's interest. M o r r i s said, in 1779, in reply to Paine's criticism, that he had had but three ventures with Deane, all unsuccessful : Sumner, Financier, I, 223 ; cf. a l s o Deane Papers, II, 423, III, 260 ff., on other relations of theirs. 31 Cf. Sumner, Financier, I, 207 ; Deane Papers, II, 263 ; C. H . Lee, Vindication of Arthur Lee, p. 14; R. W . Neeser, ed., Cruises of Gustavus Conyngham, passim.

134

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

to his official business Ross engaged in strictly private enterprises. In 1777 he was exporting salt from Bordeaux, " of no great vallue & will render profit in case it gets safe." He was in Hamburg in November, 1776, representing Morris with whom he continued to be associated in various ways. He later became a financial agent for several of the states.32 John Maxwell Nesbitt, a partner of D. H. Conyngham in a firm known under the former's name in Revolutionary years for " political reasons," had several brothers also in trade. One was the partner of General Walter Stewart in Philadelphia after 1779; another, Jonathan Nesbitt, set up in 1775 a mercantile house at L'Orient, France, under Morris' patronage.33 Conyngham was also involved in Congressional purchasing in France but returned home in 1779 after having stopped at Martinique where Deane had predicted he could carry on commerce between France and the United States " to the greatest advantage." Conyngham married in 1779 a daughter of the Philadelphia merchant William West, whose wife was a Hodge and probably related to the William Hodge above mentioned as the fourth partner in the Revenge. Hodge also did work for the United States in France from 1776 to 1779 and was later a private trader in the West Indies.34 The fitting out of the Revenge through Deane's influence and with French connivance aroused the ire of Arthur Lee, who charged that it was financed at public expense.35 It had 32 W. M. MacBean, Biog. Reg. of St. Andrews Soc., I, 22; Franklin, Works, Bigelow, ed., VII, 51, 108; "Memoir of John Ross," Penna. Mag. Hist. Biog., XXIII, 77 ff.; Burnett, Letters, VI, 272; Deane Papers ( N e w York Hist. Soc. Coll.), I, 352, II, 64; W. C. Ford, ed., Letters of William Lee, II, 596; Kate Rowland, George Mason, I, 333; Penna. Mag. Hist. Biog., XLVII, 7733 D. H. Conyngham, " Reminiscences," in Wyoming Hist. Genealog. Soc. Proc., VIII, 189, 190, 214, 221; H. C. Campbell, Friendly Sons of St. Patrick, p. 126. 34 Conyngham, " Reminiscences," loc. cit., pp. 259, 260, 264; Campbell, Friendly Sons, p. 107; Deane Papers, II, 31, 376 ff. 35 Cf. Sparks, Diplomatic terest in it, however.

Corresp.,

I, 449, 450. Congress had a part in-

ROBERT

MORRIS

AND

HIS

GROUP

I35

an unusually prosperous privateering career off the coasts of Spain and France and in the West Indies, and then, in 1779, was chartered by the State of Pennsylvania through the state's agent, Blair McClenachan, on terms called " heavy." 34 McClenachan himself had been interested in a privateer out of France, in November, 1 7 7 6 . " Deane had several other less sucessful private schemes which involved Morris or his associates. It was rumored in 1 7 7 9 that Deane, Morris, James Wilson the lawyer, the Nesbitts, and William Duer had a plan to establish a new commercial house at Nantes. 38 In December, 1778, Deane, Wilson, Duer, and Don Juan de Miralles, " late of the Havannah," now of Philadelphia, had proposed a ship mast contract to the French, similar to one which John Langdon of Portsmouth was seeking for himself and in which he wanted Deane's aid. 38 On March 3 1 , 1779, articles of agreement were finally concluded between Duer and Rey de Chaumont, " Contractors with the Court of France," Deane and Wilson, " Contractors with the Court of Spain," and Mark Bird, Wilson's brother-in-law, to seek mast contracts from various foreign navies.40 But Duer was still trying to secure such business from the French, through Deane, in February, 1780. Deane was told that his brother Barnabas had his own " Prospects on the Connecticut River " in this line, and advised that John Holker should be made a party to the plan since he had a suspicious attitude concerning it. 41 36 Cruises of Conyngham, passim; Penna. Archives, 1779, pp. 228, 234, 252, 310; Conyngham, " Reminiscences," loc. cit., p. 205 n. The prizes were sold by Bingham and Conyngham in the Indies, by Gardoqui in Spain, and by the Tracys in Newbury port. 37 Deane Papers, I, 357; cf. also, Ruth Y. Johnson, "American Privateers in French Ports," Penna. Mag. Hist. Biog., LIII, 352 ff. 38 Sumner, Financier,

I, 226.

39 Duer Lumber Book, under Dec. 29, 1778; Langdon to Deane, Feb. 9. 1779, Deane Papers, III, 347. 40 Duer Lumber Book. 41 (Duer to Deane ) Feb. 5, 1780, Duer Corresp.

136

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

M o r r i s ' business associates steadily grew in number because he took advantage of every commercial opportunity. B y March, 1 7 7 7 , he had opened regular intercourse with the Dutch island of St. Eustatius, that war-time international trading mecca. T h e new Spanish colonies' trade also engaged Morris in the flour and sugar traffic in 1780. 4 " His foreign connections, such as those mentioned above, not only enabled him to contract to furnish Congressional supplies but also to secure private goods, some of which he sold to other government purchasing agents, such as J a m e s Mease, the Clothier General, in 1 7 7 8 . " T h e public supply business brought Morris into contact with two men especially. One was John Holker, the French consul in Philadelphia a f t e r 1 7 7 8 , who had become interested in American business while still in France, where Deane and Franklin had empowered him to make soldiers' clothing contracts at a two per cent commission. 4< The other was William Turnbull, a young Scotch immigrant to America in 1 7 7 0 who was a flour purchasing commissary for Pennsylvania in 1 7 7 9 , frequently a business associate of Abraham and Walter L i v ingston of N e w Y o r k , and a business partner of Holker and Pierre M a r m i e ( w h o had come to America as LaFayette's secretary) in 1 7 8 1 . Morris is said to have been associated with this firm of Turnbull, Marmie and Company that year when it was given the highest tax assessment in Philadelphia. 15 In 1 7 8 2 Turnbull and William Duer sought Continental army 42 J. F. Jameson, " St. Eustatius in the American Revolution," Amcr. Hist. Rev., V I I I , 686. Conyivgham, " Reminiscences," loc. cit., p. 220. 43 E. g., " Report of James Mease, 1778," doc. 22714, Div. of Old Recs. 44 Agreements in South Carolina Hist. Genealog. Mag., II, 116-118; c f . also, Deane Papers ( N e w York Hist. Soc. Coll.), I l l , 39, 173. Holker sold clothing to the U . S. in 1778: doc. 22714, Div. of Old Recs. The New York Daily Advertiser, Aug. 17, 1786, gives death notice of a John Holker, apparently his father, an English cotton manufacturing pioneer in France. 45 A. D. Turnbull, William Turnbull, pp. 9, 10; Sumner, Financier, II, 163; doc. 033836, Div. of Old Recs.; Continental Congress Papers, 192, no. 329. See also Chapter Five.

ROBERT

MORRIS

AND

HIS

GROUP

I37

contracts f r o m M o r r i s as Financier, and T u r n b u l l and W a l t e r L i v i n g s t o n secured one together. 4 * A n o t h e r Philadelphia firm, Peter W h i t e s i d e s and C o m p a n y , w a s frequently used by M o r r i s and associates on both public and private business throughout the w a r . G e o r g e C l y m e r and T h o m a s F i t z S i m o n s of Philadelphia also were later declared b y an Anti-Federalist writer to have been invariably included in M o r r i s ' activities a f t e r 1777, 4 7 and there is no reason to doubt it. T h e Nesbitts were even more closely connected w i t h him, especially in the tobacco trade. M o r r i s also handled the war-time business, or funds, o f T i l g h m a n and Francis, a prewar

commercial

house

of

Philadelphia. 4 8

Among

northern

merchants with w h o m he occasionally transacted business were T h o m a s M u m ford of Groton, T h o m a s Russell o f Boston, and John L a n g d o n of Portsmouth. T h e northern connections w e r e necessary because M o r r i s had to dispose o f E u r o p e a n manufactures, W e s t India sugar, and products o f the middle states, and to collect produce with which to make remittances abroad either f o r himself or f o r Congress. John B r a d f o r d of B o s t o n wrote in M a y , 1 7 7 6 , that he had purchased a fine b r i g

for

Morris, had secured a master w h o k n e w the " B a y o f B i s c a , " and had bought t w e n t y - f o u r tons o f sperm oil, whale bone, fish, and other things f o r the Bilbao market. 4 9 P r o b a b l y these were Congressional

purchases; nevertheless

it is

significant

that M o r r i s was involved in the trade o f such typically

New

England products which had been largely handled by

New

England shippers before the w a r . Opportunities

in the tobacco trade

particularly

M o r r i s and increased his business acquaintances. the eve of the Revolution the A m e r i c a n

intrigued

T h o u g h on

tobacco crop

was

46 Cf. below, also Chapter Five. 4 7 " C e n t i n e l " in Ind. Gazette, N o v . 24, 1788, quoted in M c M a s t e r and S'.one, Penna. and Federal Constitution, p. 698. 48 T. W . Balch, ed., Willing

Letters,

p. 66.

49 Bradford to Morris, May 30, 1776, M o r r i s Corresp. in Library of Congress.

138

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

worth nearly as much as the combined other exports of the mainland colonies to Great Britain, it was largely a monopoly of British factors and of A m e r i c a n partners of British merchants. H e r e was a rich field f o r French and American commercial exploitation; it is significant that the first loan to the rebel colonies came f r o m the French tobacco " F a r m e r s Gene r a l " in 1 7 7 7 . 5 0 Tobacco w a s equally important during the w a r f r o m a political point of v i e w ; it w a s used by the Secret Committee to pay f o r goods purchased abroad by Deane, and S i r George Collier actually thought it furnished the principal financial

support of the rebels, through export activities of the

Chesapeake merchants. 6 1 T h a t it also offered a valuable speculation is shown by the profit M o r r i s made f o r the U n i t e d States on one sale of V i r g i n i a tobacco in 1 7 8 1 ; but probably there w a s increasing difficulty in shipping it in the latter half of the w a r . " Willing and M o r r i s were interested in this tobacco trade before the w a r but their share in it doubled in 1 7 7 6 .

Their

V i r g i n i a associates in this at first were Carter B r a x t o n and Benjamin H a r r i s o n , J r . T h e

f o r m e r wrote William

Aylett,

Deputy C o m m i s s a r y General of V i r g i n i a , in September, 1 7 7 6 , o f f e r i n g to sell him rum, sugar, and wheat (having done so previously), and asking about ships and tobacco, explaining that he acted in part f o r M o r r i s . " H a r r i s o n was a commission agent f o r M o r r i s in 1 7 7 6 , apparently working through him f o r the Secret Committee "

but with an eye also to private

speculation. While Deputy P a y m a s t e r f o r the Southern A r m y 50 Bullock, " Finances of U. S.," loc. cit., p. 146. 51 Collier quoted in Va. Hist. Reg., I V , 185. 52 Sumner, Financier,

II, 128; L. C. Gray, Agriculture

in Southern

U. S-,

II, 59i. 53 "Letters of Col. William Aylett," Tyler's

Quart. Mag.,

I, 93; both

Braxton and Benj. Harrison, Sr., were political supporters of Morris. 54 Cf. letters from Harrison, Sr., in 1777, in Robert York Hist. Soc. Coll.), pp. 408, 410.

Morris Papers

(New

ROBERT

MORRIS

AND

HIS

GROUP

I3y

(the small returns from which office disgusted h i m ) , " Harrison wrote Morris in May, 1776, that he was contemplating " your Scheme of a Store." What drygoods there were in Virginia were coming from Philadelphia and they were very scarce; " any Price could be got for them, but we must be satisfied with a reasonable Profit. I believe there is not a Pocket Handkerchief to be Bought in all Virginia." 54 Harrison straightway got Morris into trouble, a committee of Williamsburg accusing him in June of depreciating Virginia currency by drawing on Willing and Morris at two per cent advance. " A Popular Frenzy prevails through this Country, & I suppose we could not be able to convince it that our motive was to serve it, & only be payed for our Trouble and Risque," he complained to Morris. 57 But there is something suspicious in Harrison's careful method of keeping Morris' name from his " Office Books " in connection with the tobacco purchasing. He also opened an account of the discounted bills of Morris which he used, as " This will clearly ascertain the Profits that we make by this Business. . . ." " Morris, John Maxwell Nesbitt, and the Smiths of Virginia were also together interested in tobacco and other matters on the Eastern Shore of the Old Dominion until 1778 at least." Willing and Morris were further engaged there with the Quaker firm of Pleasants, Shore and Company in the latter year. (This Quaker firm had competed with the Secret Committee itself in buying up the tobacco crop of 1776.) 80 In 1778 Morris was concerned with Braxton again, with Samuel Beall of Williamsburg, and probably with John Ross of Phila55 Harrison to Morris, April 4, 1776, Morris Corresp. in Library of Congress. 56 Ibid., May 17, 1776. 57 Ibid., June 29, 1776. 58/Wrf., May 17, 1776. 59 Cf. Susie M. Ames, in I. of Econ. Bus. Hist., Ill, 414. 60 Sumner, Financier, II, 164; Morris Papers (New York Hist. Soc. Coll.), p. 408.

140

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

delphia in the tobacco business. B y the end of the war Morris had numerous local representatives in this trade, among them Richard Graham of Dumfries and Josiah Watson of A l e x andria. 61 H e likewise held in 1 7 7 9 a seven-sixteenth interest in a salt and tobacco agreement with new foreign merchants of Baltimore. 6 " There Robert Gilmor became his principal local agent before going to Holland as a partner of William Bingham. The steadily rising price of tobacco abroad encouraged Morris in all this w o r k ; a sharp advance in price in the fall of 1 7 8 1 was especially fortunate for Willing and Morris who were ahead of the Philadelphia market at that time with considerable purchases on hand. 6 * Other commercial associates of Morris who turned early in the war to the " sot-weed " opportunities include George Meade and Thomas FitzSimons. 6 4 Simeon Deane, brother of Silas, having returned from France in 1 7 7 8 bearing news of the treaty, also hurried to Virginia on tobacco business, Silas having paved the way f o r him through contacts with John K i n g and Company of Petersburg, Norton and Beall of Williamsburg, and a tobacco agent of Rodrigue Hortalez and Company (the firm of Beaumarchais). The following year Simeon claimed partnership with " a Number of the most Capital Fortunes & of the greatest influence," among whom were Holker and de Chaumont and for whom Morris was at least an agent. 65 One of the great tobacco houses sometimes used by Philadelphians was Wallace, Johnson and M u i r of Annapolis and Nantes. Their correspondents by 1 7 8 1 included many members of the Morris group in addition to the Stewarts and Grahams of Baltimore and Annapolis. 66 This firm's 61 Cf. B. and M. Gratz, preface, p. 21; see index for references to Watson. 62 Agreement of May 3, 1779, Morris Papers in N e w York Public Library. 63 Willing

Letters,

p. 88.

64 Cf. Official Letters

of Governors

of Va., I, 57; Burnett, Letters,

I, 276.

6 5 D e a n e Papers ( N e w York Hist. Soc. Coll.), II, passim; Deane Papers (Conn. Hist. Soc. Coll.), passim. Beall and Silas Deane had had hopes of contracts with the French Farmers as early as 1776.

ROBERT

MORRIS

AND

HIS

GROUP

I4I

correspondent at L'Orient, France, was the brother of J o h n M a x w e l l Nesbitt. On closing its books in 1 7 8 3 Wallace and Company owed Morris about five thousand pounds. 67 Profits in the trade are evident in their statements that the weed sold in France in 1 7 8 1 at an advance of 9 0 % to 1 0 0 % , though heavy freight and insurance charges cut deeply into gains. Such war-time experience as this evidently spurred Morris on to monopolize the French wholesale tobacco business in the years of the Confederation, through contracts with the French F a r m e r s General. T h e most successful Philadelphian in the Morris clique, both in public service and private trade, was young William Bingham. He is commonly held to have made a fortune while Congressional agent in the West Indies f r o m 1 7 7 5 to 1 7 8 0 , though there is some dispute as to his wealth before the war. T o m Callender, the vigorous Anti-Federalist pamphleteer of the 'nineties, called Bingham the son of a Philadelphia breechesmaker. His father had made a wealthy marriage, however, and the boy had graduated f r o m the College of Philadelphia in 1768. 6 8 That Bingham made an independent fortune early in the war is undoubtedly true. Officially, Bingham did work f o r Virginia and purchased on a commission basis f o r the Secret Committee; he also managed prizes and outfitted vessels f o r Congress. Privately, his work consisted, in part, of transactions with Willing and Morris which undoubtedly worked in with the international scheme outlined above. Bingham usually secured half the profits and commissions on all trade handled for Willing and 66 Wallace, Johnson and Muir Letter Book, passim. 67 To John Swanwick, April 30, 1783, ibid. 68 Tom Callender, Letters to Alexander Hamilton, King of the Feds, Letter Two, p. 23; "William Bingham," in Diet. Amer. Biog.; Watson, Annals of Phila., I l l , 2 7 1 ; Penna. Mag. Hist. Biog., X L V I , 57 ff.; Scharf and Westcott, Phila., II, 883; cf. references to him in Burnett, Letters, III, 219, 380, IV, 49. It is admitted by all authorities that he made out very well at Martinique, to put it conservatively.

142

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

M o r r i s . " T h e y sent minute instructions to him at Martinique in September, 1 7 7 6 , about goods and credits for " y o u r connection with u s . " All sorts of foreign merchandise were in demand in Philadelphia in 1 7 7 6 and tobacco was high in France at that time, which made commerce profitable. 70 T h e r e was difficulty at first in securing European backing, though Delap of B o r d e a u x finally offered them £5000 Sterling credit. J o h n R o s s was abroad and would ship out goods ; T h o m a s Morris and Deane were together in France and " may probably do the same." 71 Schweighhauser of Nantes, Delap of Bordeaux, and Limozine of H a v r e were French merchants also expected to send goods to Bingham in 1 7 7 7 to be relayed to Philadelphia. One of the Moylan brothers at L'Orient received shipments of tobacco f r o m them on occasion. Molasses, rum, coffee, sugar, and other West India produce were also desired in Philadelphia since they continued high in price, and these Bingham was to secure in the islands. 72 In return he received flour as well as tobacco from Morris. Many American merchants did business with Morris and Bingham. T h e Stewarts of Baltimore and Norton and Beall of Virginia purchased tobacco for them. Goods were sold f o r them in Baltimore by L u x and Bowly and Jonathan Hudson ; in V i r g i n i a by Isaac and Thorogood Smith, and by Hooe and Harrison ; in the North by Thomas Russell of Boston. Medicines, linens, blankets, and " brimstone " were successfully imported f r o m abroad, and staples f r o m the West Indies. A m o n g Bingham's agents handling the precious traffic were Stephen Ceronio at Cape François, Isaac Gouverneur at 69 M o r r i s to B i n g h a m , Feb. 16, 1777, Morris Papers in Library of Cong r e s s . T h e f o l l o w i n g r e f e r e n c e s are also to this collection, unless specified to the contrary. 70 W i l l i n g and M o r r i s to B i n g h a m , Sept. 14, 24, 1776. 71 Ibid., Sept. 14, 1776. D e a n e is said to have helped secure F r e n c h credit f o r W i l l i n g and M o r r i s in 1776: Sumner, Financier, I, 207. 72 M o r r i s to B i n g h a m , Feb. 16, 1777, Oct. 1, 1778. James to Stephen M o y l a n , D e c . 10, 1777, ibid., gives interesting c o m m e n t s on commercial activities of A m e r i c a n s in France.

ROBERT

MORRIS

AND

HIS

GROUP

I43

Curaçao, and Cornelius Stephenson at St. Eustatius. Morris in turn frequently shipped and imported together with his principal Philadelphia associates : that is, several persons would take shares in a common cargo, as, for example, when Morris secured a one-quarter part of the ship Eliza and Mary's cargo sent by Meade and Company to Martinique in December, 1 7 7 8 . " However, Morris could write Bingham in October of that year, " Messrs. C, Nesbitt & Co. & I have a good many concerns together but I do not incline to form any more general Connections or partnerships neither is it necessary for if I can but once get the command of my time I have in every other Respect the means of doing as much business as I chuse." This, perhaps, indicates his enlarged business position. How profitable the Morris-Bingham connection was cannot be determined. It should be added, however, that they had a common interest in privateers as well as in trade; and Bingham's position for outfitting such craft at Martinique was particularly fortunate. The net proceeds from the sale of one brig's cargo shipped from Hispaniola in 1778 amounted to £13,780, one-half of which went to Morris, one-third to Bingham, and one-sixth to the ship's captain.74 Medicines sold in Virginia in 1778 netted Bingham's half £4078 " T h i s Curr'y," and " they were sold at the highest prices ever given." 75 On December 14, 1778, Bingham had a favorable balance of £ 1 3 , 7 1 2 with Morris, in addition to an unknown quantity of Loan Office certificates which Morris had purchased for him and taken out of the account.70 Bingham already was keenly interested in such public securities. He even had a plan for making the certificates negotiable 73 Morris to Bingham, Dec. 14, 1778. T h o m a s FitzSimons was a member of Meade and Co., and wrote in Sept., 1783 (Penna. Mag., X I X , 401), of " some extensive commercial Concerns " he had had with Martinique prior to the peace. 74 Account of sale under Nov. 25, 1778. 75 Morris to Bingham, Oct. 1, Dec. 14, 1778. 76 [bid., Dec. 14, 1778; Bingham to ? J a n . 14, 1778, Gratz Coll., speaks of a balance in his favor of 343,105 livres.

144

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

abroad, though M o r r i s regretfully advised him that lack

of

duplicates made them too risky a shipment. 77 O n M a y 5, 1 7 7 8 , M o r r i s wrote B i n g h a m that, according to directions, he had " procured the amount of E i g h t T h o u s a n d Dollars in Certificates bearing date before the first of M a r c h and have w r o t e into N e w England where money is become scarce to buy up a Parcell there in which expect to succeed but here People will not part with them." If he could not get them in Boston or Portsmouth where money w a s tight, he would place 40,000 dollars f o r B i n g h a m in the recently issued L o a n Office notes, " not doubting but those taken out of the Office a f t e r the 1st of M a r c h will before long be put on the same footing w i t h those of an early date."

78

B i n g h a m continued to urge M o r r i s

to buy, but M o r r i s replied on October 1, 1778, " I should h a v e entered on the Speculation y o u proposed of b u y i n g up the L o a n Office Bills of E x c h a & remitting them to you but none were issued untili the 10th of this month & now they ask 500 to 650 pr ct f o r them, a price so enormously high can not answer your purpose or mine. . . ." B i n g h a m had private business besides that with M o r r i s .

In

1778, f o r example, he tried to make a private sale of rum to the State o f V i r g i n i a , shipping it thither on a public vessel through the good offices of Richard H a r r i s o n w h o w a s Martinique as a private trader and a V i r g i n i a

in

commercial

agent. 7 " A t any rate, B i n g h a m had done so well in his various activities by 1780 that he could return to Philadelphia, m a r r y a daughter of T h o m a s W i l l i n g , enter trade with and under the name of Mordecai L e w i s , and henceforth be counted as one of the very rich Philadelphians. 77 M o r r i s to B i n g h a m , Oct. 1, 1778. M o r r i s a c k n o w l e d g e d that f r e e u s e of them abroad w o u l d aid c o m m e r c e , but w h e n he had proposed t o C o n g r e s s that they be issued in that c o n v e n i e n t

f o r m , the plan m e t w i t h " v i o l e n t

opposition." 78 M o r r i s to B i n g h a m , M a y 5, 1778. 79 Cf. thereby.

Letters

of

Governors

of

Va.,

I, 307. H a r r i s o n g o t

into t r o u b l e

ROBERT

MORRIS

AND

HIS

GROUP

I45

A final example of a member of the Morris group engaging in both public and private business is John Holker, whose early interest in army clothing has been discussed. He continued to receive such goods in America from the French contractor, Louis de Chaumont. In addition to his army contracting associates already mentioned, Holker was closely connected with Thomas FitzSimons of George Meade and Company. Meade's schooner Swan was chartered by Holker and together with FitzSimons he furnished the French fleet at Philadelphia with provisions in 1779, for Holker was also Agent for the Royal Marine of France. It is said that his other private interests included speculation in paper money which enabled him to buy a fine house " almost for nothing." 80 We have seen, however, that he eventually got into financial difficulties with Duer and Parker in New York. It is enlightening to note some of the persons Morris employed in his work as Financier of the Finances of the United States from 1 7 8 1 to 1784, a position he accepted only on condition of his being free to continue private business. The significance of the national policies he then inaugurated—the removal of embargo restrictions so as to enable merchants to trade freely, and the installation of a competitive contract system for army supplies—is discussed elsewhere. The magnitude of Morris' official work is revealed by the wide distribution of his personal notes drawn on a government clerk, John Swanwick, who became a partner in the firm of Willing and Morris in 1783. These notes, with considerable command over bills of exchange, gave Morris an exalted notion of his powers and encouraged the pernicious habit of bill-kiting which subsequently proved disastrous. He was notably prompt in securing payment of old Congressional debts due to such commercial associates of his as Bingham, Ross, and Holker, who in 1781 received sums totaling 400,000 livres, 80 South Carolina Hist. Genealog. Mag., II, 41; Penna. Archives, 1779, p. 407; Penna. Colonial Recs., XI, 645; Sumner, Financier, II, 163.

146

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

81

a fact which excited the wrath of Arthur Lee. Bills which Morris drew on the Willinks of Holland on another occasion in 1 7 8 3 were made out in f a v o r of Ross, Peter Whitesides, and Isaac Hazelhurst of Philadelphia, who could supply him with exchange for immediate use. 82 Among his other agents was William Turnbull (with whom he is said to have had a private interest about this time) who, for example, purchased flour f o r the government in 1 7 8 1 . 8 3 Morris continued to be associated with Holker in various public transactions, and with the bill broker who took orders from Holker, H a y m Salomon. 84 Salomon agreed with Morris on J u n e 8, 1 7 8 1 , to help him sell bills owned by the United States at a commission of not more than one-half of one per cent. 85 The Boston Jewish broker, Moses Michael Hays, sought similar official work from Morris on several occasions in 1 7 8 2 , but was unsuccessful. Richard Yates of New Y o r k , Thomas FitzSimons of Philadelphia, and William Imlay of H a r t f o r d were among his other important financial agents from time to time. Some of the business men who secured army contracts f r o m Morris have already been mentioned, such as Duer, Parker, Livingston, and Sands. Philip Schuyler also had an Indian supply contract with him in 1 7 8 1 and 1 7 8 2 , and provided him with batteaux and flour on at least one occasion. 80 John Tayler and a M a j o r Popham of N e w Y o r k seem to have had some sort of a contract in 1782. 8 7 Another New Yorker, Melancton 81 Sparks, Diplomatic Corrcsp., Sumner, Financier, II, 17.

X I I , 59; Papers

of Clinton,

IV, 449;

82 Sparks, Diplomatic Corrcsp., X I I , 422, 423 ; cf. also, Financier's Official Diary, June 23, 1781, for work of Ross. 83 Financier's Letter Books, A, p. 345; this was to repay Holker who had assisted Morris with 4000 bbls. 84 A copy of a letter from Holker to Salomon is in ibid., pp. 250-253. 85 Financier's Official Diary, under date. 86 Financier's Letter Books, A, pp. 367, 368, C, p. 45. 87 Popham to Tayler (1782), John Tayler Corresp.; he would try to fill the contract as well as " Mr. Sands."

ROBERT

Smith,

figures

MORRIS

AND

HIS

GROUP

l47

in M o r r i s ' account settlements f o r that year.**

J a c o b C u y l e r and C o m p a n y S a r a t o g a in 1783.

supplied p r o v i s i o n s to troops a t

Leonard Gansevoort and Company of

b a n y , T h o m p s o n and S k i n n e r o f W i l l i a m s t o w n , and

Al-

Phelps,

C h a m p i o n and C o m p a n y o f Granville, Massachusetts, did s i m i lar w o r k at that time, possibly a c t i n g as sub-contractors. M o r r i s ' principal financial a g e n t in the N o r t h a n d E a s t w a s T h o m a s Russell, w h o held the marine a g e n c y at B o s t o n desirable post f o r w h i c h J o h n R . L i v i n g s t o n

(a

unsuccessfully

a p p l i e d ) . W h e n M o r r i s w a n t e d to make a remittance o f 3 5 0 0 gold

or

silver dollars to S c h u y l e r

at

A l b a n y , he d r e w

on

Russell f o r the m o n e y the latter w a s collecting in B o s t o n in September,

1781,

America.80

for

subscriptions

to the

Bank

of

North

Russell met other M o r r i s d r a f t s and sold public

g o o d s . It doubtless w a s c o n c e r n i n g h i m and D u e r ' s contracti n g partner, Daniel P a r k e r , that Stephen H i g g i n s o n w r o t e in 1 7 8 3 w h e n he complained o f the " most scandalous C o n d u c t " o f the M a r i n e Department, w h i c h built a n d hastily sold s h i p s : " T h e reason o f all this is v e r y plain, w h e n w e attend to t h e terms o f Sale, and the P e r s o n s w h o have purchased them, M r . M o r r i s ' A g e n t s purchased both o f these S h i p s , M r . Russell o f the H a g u e and M r D . P a r k e r the B o u r b o n . "

80

J o h n L a n g d o n continued as marine a g e n t in N e w shire. New

Hamp-

O t h e r s o f M o r r i s ' associates w e r e T h o m a s L o w r e y Jersey,

f r o m w h o m he b o u g h t

flour

in

1781;91

of also

S a m u e l P a t t e r s o n a n d R i d l e y and P r i n g l e o f M a r y l a n d , c o n t r a c t i n g o r p u r c h a s i n g agents in both M a r y l a n d and D e l a w a r e . T h e B a l t i m o r e merchant, R o b e r t S m i t h , represented M o r r i s a t Havana

as early as July, 1 7 8 1 . A m o n g

Pennsylvania

mer-

chants, T e n c h F r a n c i s w a s M o r r i s ' r i g h t - h a n d m a n on s u c h occasions as the b r i n g i n g o f specie f r o m B o s t o n in S e p t e m b e r , 88 Financier's Letter Books, E, p. 14. 89 Ibid., A , p. 369.

90 Quoted in J. S. Davis, Essays on Corporations, I, 121.

91 Financier's Letter Books, A, p. 100.

I48

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

1 7 8 1 , which made possible the establishment of the Bank of North America. In December, Francis and Matthias Slough of Lancaster secured a contract to supply the military posts in the Jerseys for the following year. Prospects in that line had caused General E d w a r d H a n d to reflect, " the Contract will be great and if judiciously made must turn to good Acct. cant Slough & Some of my Lancaster friends profit by it— I wish they would, & think the Service I could render a contractor in the field equal to a Small Share in Stock," so he wrote Jasper Yeates. 9 2 In V i r g i n i a a principal tobacco purchasing agent was Daniel Clarke, who made shipments to A m sterdam f o r the Financier. 93 Clarke also had private business relations at this time with the former United States commercial agent at N e w Orleans, Oliver Pollock, w h o in t u r n

was

then active in the Havana and tobacco trade together with William Constable. 94 Thus did Morris co-ordinate the work of a great group of business men, drawn from all parts of the country. Thus was the basis laid f o r numerous nation-wide enterprises of the post-Revolutionary decade, in which Morris frequently became a leader. 92 Feb. 2, 1782, E d w a r d H a n d Papers in N e w Y o r k Public Library. 93 Financier's Letter Books, E, pp. 242, 410. 94 Constable to Pollock, N o v . 19, D e c . 10, 1782, Feb. 19, 1783, in Library of Congress. Pollock w a s then in Richmond.

CHAPTER VII P E N N S Y L V A N I A TO NORTHERN VIRGINIA T H E private history of Robert Morris is not the business history of the struggling Republic, nor even of the port of Philadelphia. Though the activities of Morris and his associates invariably intrude upon any discussion of business in the Quaker City, they constitute but a portion of the economic picture and afford only a partial explanation of the post-war developments there, which were bigger than the undertakings of any one man, colossus though he seemed to be. Philadelphia's normal business life was disrupted by the British occupation and by the constant threat to commerce in the Delaware, but her mercantile activities continued to be considerable. The presence of the British in 1 7 7 7 - 7 8 made possible a trade in army supplies f o r many of the merchants who remained; and those patriotic merchants who left the city managed to carry on some commerce, such as that which Morris and Nesbitt conducted f r o m Mannheim, and William Bell from E g g Harbor, New Jersey. In 1 7 8 1 it was said that the improvements in public and private credit during the opening months of Morris' career as Financier made the commerce of Philadelphia " really flourish " ; 1 but there is no reason to believe that it was stagnant in the previous three years. Indeed, the activities already noted of the Morris associates belie such an assumption. Moreover, Philadelphia had an expanding hinterland, though she had to share it with Baltimore. In 1 7 7 7 Elias Boudinot called Lancaster and surrounding territory " this new W o r l d , " adding, " I found trade going on here as brisk as ever you see it in the City. The Shops are full of Goods, and every B o d y busy, so that you would think yourself in a Sea port town whose Trade was open—but Extortion 1 By Thomas McKean, in Burnett, Letters, it represented " recovery," however.

op. cit., V I , 146. He says that 149

150

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

& E x t r a v a g a n c e is multiplyed many fold beyond N e w sey."

2

Jer-

It is suggestive of such expansion that the Pennsyl-

vania Assembly was petitioned in 1 7 8 0 to open the important D a r b y road through to Market Street, Philadelphia, the heart of the commercial section. 3 T h e evacuation of Philadelphia in June, 1 7 7 8 , was followed by the brief confused period of Arnold's military rule when retail stores were closed and some wholesale goods seized f o r public use. T h e activities of speculators in Philadelphia were then accordingly legion. T h e y even prevented the a r m y suppliers f r o m buying rum in J u l y , 1 7 7 8 ; and in the fall they began to " lay in " f o r the winter in flour especially, some speculators coming to Philadelphia f o r that special purpose. 4 The

regular commerce was not entirely cut off, however.

A r o u n d J u l y 30, seventeen sail entered Delaware B a y , 5 though a month later considerable risk was attached to such ventures. T h e W e s t India trade also gradually improved, even rum being plentiful in Philadelphia in A u g u s t . Local merchants, moreover, had the one thing greatly desired on the islands at that time, flour. " There is no article of A m e r i c a n produce that will yield so great a P r o f i t , " William B i n g h a m wrote on September 1 6 , 1 7 7 8 , f r o m Martinique. 0 In October William J e n nings at St. Eustatius ordered the Caldwells of

Philadelphia

to return his sloop immediately, filled with the best

flour.7

T h e W e s t India trade was also stimulated by the demand f o r cloth, which prompted Chaloner and White to send bills there 2 " Em B.," Emmet Coll. 3 Joseph Jackson, Market Street, Phila., p. 199. In 1779, Pelatiah Webster {Political Essays, p. 42) thought that a considerable degree of business recovery had taken place, new branches of business being established, etc. 4 Chaloner and White Letter Books, 1778, passim. One J. Musgrove was called a noted speculator in flour. 5 To Ephraim Blaine, July 30, 1778, ibid. 6 To ? Gratz Coll., in Hist. Soc. Pa. There was a great demand for provisions in the West Indies. 7 Oct. 19, 1778, Society Coll., in Hist. Soc. Pa.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

I5I

in December to finance a speculation in goods for the Philadelphia market. 8 Tobacco continued to be an important item in business. F o r example, Levi Hollingsworth sold tobacco in Philadelphia in September, 1 7 7 8 , for the Baltimore merchant William Hammond. That same month Thomas FitzSimons wrote that though flour was the most desirable export commodity, many persons wanted to realize on paper currency by purchasing tobacco in Virginia f o r sale in E u r o p e ; that some early speculators in the weed wished to sell because they were alarmed by the prospects of peace and the number of captures of American vessels. 9 B y J u l y , 1 7 7 9 , Chaloner and White estimated that 1 2 1 vessels of 3 6 3 2 tons burden had sailed from Philadelphia in the year following the British evacuation. 10 This is not much, compared with pre-war shipping; but, combined with the enlarged land transportation encouraged by water shipment risks, it is impressive for that unsettled year. It is also necessary to take into account another fact, appearing in the letters of this firm, which indicates the unreliability of such estimates: merchants of Philadelphia repeatedly evaded state regulations, especially in the sale of flour. Similarly, in Maryland f o r bidden flour shipments were made under the guise of tobacco cargoes. 1 1 Certainly by October, 1 7 7 9 , Philadelphia's commerce was really reviving and the city receiving much needed stores. 1 2 8 Letter Books, under Dec. 12, 15, 1778. 9 To ? Sept. 8, 1778, Letters of Members of the Federal Convention, in Hist. Soc. Pa. 10 T o Gouverneur Morris, July, 1779, Chaloner and White Letter Books. Their argument was to show the necessity of removing embargo restrictions. They estimated that about 363 vessels would sail from Philadelphia in 1779 with wheat, flour, pork, corn, etc., about one-half as many as in 1771. 11 T o Blaine, May 6, and to Wadsworth, Aug. 22, 1779, ibid., the first citing Hollingsworth as a violator who pleaded employer's instructions as an excuse. On Maryland's troubles, c f . below, also Burnett, Letters, III, 407. 40912 " . . . as our trade is again r e v i v i n g . . . " T o Wadsworth, Oct. 8, 1779,

152

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

On March 3, 1780, twenty sail f r o m Europe and the West Indies were waiting for the harbor to clear. 13 Special interest continued to be taken in tobacco; probably the " m a n y " Frenchmen who arrived in Philadelphia with sugar, in J u l y , 1780, sought the weed. In both J u l y and December of that year goods were again plentiful, and a year later European goods were dull in price, 14 showing that they continued to be available in quantities. A generally prosperous condition of business in Philadelphia in 1 7 8 0 is, moreover, suggested in the fifty to seventy-five per cent increase over former times in specie values of house rents. Buildings had almost double rental value if they stood on good trading sites. 15 T o w a r d the end of the war, however, Philadelphia's foreign commerce was frequently disturbed by British depredations. These doubtless encouraged an adventure of John Chaloner and Thomas L o w r y in 1 7 8 1 ; they purchased some £ 1 6 , 0 0 0 worth of merchandise from the Boston clothiers Otis and Henly and brought the goods to Philadelphia overland. Philadelphia's trade in flour and grain was seriously retarded f o r a time. Military events and threats of capture on the B a y were probably the reasons f o r J o h n Chaloner lamenting in M a y , 1 7 7 9 , that the Quaker City's pre-war monopoly as an outlet f o r the grain and flour of Pennsylvania, Delaware, and West New Jersey had been sadly interfered with and that it would be some time before such trade returned to its old channels. 18 Indeed, wheat and flour sometimes had to be brought to Philadelphia from Baltimore. Chaloner and White, Assistibid. There had been many arrivals even in Dec., 1778, Thomas Hollingsworth wrote Levi, Dec. 7, 1778, Hollingsworth Papers. 13 Chaloner and White to Wadsworth, March 3, 1780, Wadsworth Corresp. 14 Ibid., letters of Dec. 12, 1780, Nov. 26, 1781; Chaloner and White to Wadsworth, July 25, 1780, Chaloner and White Letter Books. Aug. 7, 1781, they write of the new ship Franklin sailing for France. 15 T o George Anderson, Dec. 12, 1780, Hollingsworth Letter Book, 17801782. 16 To Royal Flint, May 8, 1779, Chaloner and White Letter Books.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

153

ant Commissaries of Purchases f o r the army, informed Ephraim Blaine in November, 1 7 7 8 , that army needs required assistance from purchasing commissaries in Baltimore and to the south. 17 This, however, is also evidence that all the flour available at Philadelphia a f t e r 1 7 7 8 was in general demand because of extraordinary military requirements in addition to shipments made to N e w England and the West Indies. It is significant in this connection that new flour casking regulations were put into effect in Philadelphia in 1 7 8 1 . 1 8 T h e amount of flour required by the forces alone was considerable. Some idea of it is gained by the estimate Chaloner and White made on M a y 22, 1 7 7 9 , that the United States troops, the Marine Committee, and the French fleet (which purchased from them through John H o l k e r ) would consume 4 5 , 8 1 0 barrels in the following five months. 19 Their letter books f o r 1 7 7 8 and 1 7 7 9 are filled with commands and entreaties to their numerous purchasing agents to secure flour f r o m the mills on the Brandywine and E l k Rivers. It was then to be collected at Y o r k , Carlisle, and Christiana, to be f o r warded to the army at once or gathered into a magazine of supplies at New Windsor. Some was made under their supervision into bread and biscuit at Philadelphia or Wilmington bakeries. Chaloner and White also purchased other things f o r the troops, such as salt pork and beef, or vinegar and pork barrels f o r which they advertised in 1778. 2 0 It was the J o h n Chaloner of this firm who, becoming acquainted with Jeremiah Wadsworth of Connecticut in such public service, acted as the Philadelphia representative of Wadsworth and Carter in the French contracting business a f t e r 1780. 17 Ibid., Nov. 24, 1778; also Chaloner to Mcllwaine and Co., March 23, 1779, acknowledging receipt of wheat apparently from Baltimore. Some flour came from Alexandria, Va. 18 James Mease, Picture of Phila. (Phila., 1811), p. 57. 19 T o a Committee of Congress, Chaloner and White Letter Books. 20 Perma. Packet, July 30, 1778. Chaloner and White to Marine Committee, Aug. 11, 1780, mention 2000 bbl. of biscuit and 1000 bbls. of pork as ready for the French fleet.

154

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

T h e flour trade is further illustrated by the war-time activities of Levi Hollingsworth, a Philadelphia factor and a brother of the many Baltimore Hollingsworths who milled and traded in flour. His ledger f o r 1 7 7 7 - 1 7 8 1 contains flour accounts with over 600 different persons. A journal shows that he handled the sale of an incredible number of barrels of that article. 21 Several of his largest customers were Robert Morris and Ephraim Blaine, whose purchases possibly went to the army. A brother of L e v i , Henry Hollingsworth, was an army flour purchasing commissary at the " Head of E l k " throughout the war, as well as a trader or miller pursuing private ends. 22 Levi's importance is shown by his being placed in charge by Morris in 1 7 8 2 of the government's flour exports from Philadelphia; 2 3 he also sold flour to John Ross, then contracting with the Financier. In 1 7 8 1 Levi Hollingsworth took part in the lucrative flour trade with Cuba, besides shipping it to other West India islands. It throws some light on his multitudinous war-time activities to find his pious brother Jesse writing him in 1 7 7 8 to remind him of religious thoughts which, Jesse feared, would be driven from him by such a busy life. Perhaps as a result of such war opportunities Levi could boast in 1 7 8 7 that he had the disposal of " a great Proportion of the Flower coming to this Marget " ; 2 4 small wonder, too, that in those later years he had the means for speculating in Virginia military land patents, and for getting interested in James Rumsey's steam engines. Other facts also contribute to an understanding of the general economic situation in Philadelphia. W a r financing activi21 Flour Ledger B, 1777-1781; Journal, 1777-1781, in Morris-Hollingsworth Coll. It would take several days with an adding machine to compute the total number of barrels handled. 22 Henry to Levi Hollingsworth, Nov. 23, 1778, mentions being busy on " m y o w n " and the public's business. Hollingsworth Misc. Papers. 23 T o an assistant, Feb. 26, 1782, Hollingsworth Letter Book, 1780-1782; he also handled salt beef for Morris, April, 1782. 24 March 24, 1787, Hollingsworth Letter Book, 1786-1791.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

155

ties gave many Philadelphia merchants a new kind of business experience, as in handling large quantities of Continental Loan Office certificates. Morris received the latter in 1 7 7 7 and 1 7 7 8 to the amount of tens of thousands of dollars. Other early recipients, of smaller amounts, included Nesbitt, Mease, McClenachan, Matthew Irwin, Robert Lettis Hooper, John Nixon, a n d the Caldwells. 2 5 It is obvious that these certificates were issued largely to pay f o r supplies sold to or purchased f o r the public. H a d they represented money loans, a considerable liquidation of the property holdings of the merchants would necessarily have taken place, which certainly did not occur. McClenachan, f o r example, frequently sold large amounts of powder and lead, usually imported f r o m St. Eustatius, to the Commissaries of Military Stores. F o r some of these supplies he was paid 1 7 5 7 specie dollars in J u l y , 1 7 8 1 . 2 6 That these were private transactions, not made with government credit, is seen in the refusal on one occasion of McClenachan and J o h n Holker, whom Congress already owed f o r clothing, to deliver a cargo of lead until it was paid for. Apparently this was done by Robert M o r r i s out of his own pocket, for the lead was urgently needed. 27 There is abundant evidence of public services by Philadelphians in official capacities. Matthew Irwin was a Deputy Commissary of Issues for Congress in 1 7 7 7 and became a Quartermaster General f o r Pennsylvania in 1778. 2 8 The Irish merchant Meases and Caldwells were great clothing suppliers 25 Nos. 1, 2, of the twenty limp rag books constituting a Register of Loan Office Certificates of Penna. This is a copy made in 1784 by Thomas Smith, now in the Treasury Dept. 26Rec. Book no. 144, p. 39; also no. 92, p. 2, no. I IS, p. 1, no. 132, p. 47, and doc. 22915, Div. of Old Recs. 27 Anecdote of Richard Peters, in T. Westcott, Historic Phila., p. 389.

Mansions

of

28 Burnett, Letters, II, 408 n.; Penna. Archives, 1778, p. 166; he and McClenachan were also Penna. agents for privateering and prizes: Penna. Archives, 1779, p. 768, Col. Recs. Penna., XI. 724.

156

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

28

for Congress and the state, Samuel Caldwell and James Mease being Clothiers General of the Continental forces after 1777, handling vast sums of money; one commissary alone drew 486,176 dollars worth of supplies from them in 1777. 3 0 They also sold in a private capacity to such officials as the Commissary General of Military Stores, and to the Medical Department. 31 That they were eager for gain is clearly shown by the participation of James Mease in the profiteering scheme of Benedict Arnold and merchant William West in 1778. European contacts were also had by the Caldwells during the war; in 1783 they paid George Cabot of Beverly, Massachusetts, a sum on account of a correspondent in Bilbao. 32 Another merchant who sold goods to the public on occasion was John Donaldson, 33 probably of the firm of Donaldson and Coxe. It should also be noted that Thomas Mifflin, partner of a merchant brother in Philadelphia,34 was twice Quartermaster General of the Continental forces. Though he had been a wellto-do Quaker before the war, Centinel attacked him in 1788 for alleged irregularities in his public accounts 35 — a charge almost inevitably lodged against anyone holding public office in those suspicious days. A lesser figure in the Continental service was the merchant Richard Bache, inspector of flour and meat for the army in 1778 and Postmaster General from 1776 to 1782. 3 6 He was the son-in-law of Benjamin Franklin and brother of a loyalist merchant, Theophylact Bache of New York. 29 Campbell, Friendly

Sons of St. Patrick,

pp. 102, 103, 121, 122.

30 Doc. 14668, Div. of Old Recs.; cf. also Pcnna. Archives,

1777, p. 187.

31 E. g., sale of tea and duck by James and Andrew Caldwell, Nov., 1780, Rec. Book no. 114, pp. 24, 27, also no. 132, p. 350, no. 133, p. 41, Div. of Old Recs. 32 Receipt dated Aug. 2, 1783, in Brown' and Thorndike Papers, in E s s e x Institute. 3 3 R e c . Books no. 113, p. n , no. 122, p. 159, Div. of Old Recs. 34 Cf. Henry Simpson, Eminent Philadelphians, p. 693. 35 Independent

Gazette, May 24, 1788.

36 Campbell, op. cit., p. 140; Pcnna.

Archives,

V I , 234.

PENNSYLVANIA

The

post-war

persons

may

TO

business

be

largely

NORTHERN

VIRGINIA

importance

of

several

explained

by

the

157

other

such

extraordinary

e x p e r i e n c e they gained in such public w o r k . T y p i c a l cases are t h o s e o f y o u n g Israel W h e l e n a n d R o b e r t L e t t i s H o o p e r , both Congressional interesting.

A

commissaries.

Hooper's

former western

career

land s u r v e y o r

is

particularly

w h o had

lost

h e a v i l y in mercantile ventures, he became a Continental D e p u t y Q u a r t e r m a s t e r in 1 7 7 6 , then a Superintendent o f the C o n t i nental m a g a z i n e in eastern P e n n s y l v a n i a , a n d finally an A s s i s t ant Commissary of

P u r c h a s e s in those parts. H e w a s

once

c o u r t - m a r t i a l e d on the c h a r g e o f u s i n g public g o o d s f o r priv a t e ends ( b e i n g acquitted in w h a t President R e e d said w a s a p o o r trial, a f t e r w h i c h H o o p e r " beat u p " the a t t o r n e y w h o opposed h i m ) . O n another occasion he w a s temporarily

sus-

pended f r o m office together w i t h N a t h a n i e l F a l c o n e r , later a c o m m e r c i a l a g e n t o f R o b e r t M o r r i s , a n d w i t h Jonathan Mifflin, Jr., a n e p h e w o f the Q u a r t e r m a s t e r General, f o r p u r c h a s i n g at e x c e s s i v e prices. H o o p e r w a s eventually recommended

for a

second court-martial in 1 7 8 0 ( w h i c h never came o f f ) , but in 1 7 8 1 he finally established himself by m a r r i a g e w i t h a w i d o w " blessed withal w i t h a plentiful F o r t u n e " as he s a i d . "

Tak-

i n g o v e r the m a n a g e m e n t o f the w i d o w ' s i r o n w o r k s , he stood prepared,

by

reason o f

army

experience a n d his

fortunate

marital alliance, to e n g a g e in p r o m i s i n g p o s t - w a r speculations. A m o r e important type o f business f a v o r e d by conditions in Philadelphia is illustrated by the career o f H a y m Salomon. 3 8 This

trader, w h o sought permission

to sell supplies to the

A m e r i c a n troops in 1 7 7 5 , w a s f o r c e d to flee f r o m N e w

York

37 Cf. excellent article on Hooper by C. H. Hart, in Penna. Mag. Hist. Biog., X X X V I , pp. 58-89. 38 M. C. Peters, " Haym Salomon, Financier of the Revolution," in Jews Who Stood by Washington, has considerable to say about his work; Charles E . Russell, Haym Solomon and the American Revolution, is very

uncritical and is severely taken to task by Max Kohler, Haym Salomon, pp. &-14, but some of Kohler's statements are but inferences. Suffice it here to state, as seen in Chapter Six, that Salomon's work for Morris was desired by others, which would indicate that it was profitable.

158

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

in 1 7 7 7 , arriving in Philadelphia that year apparently in a destitute condition. Possibly aided by generous relatives, he became a commission agent in an exchange brokerage business and soon began to handle bills on France for J o h n Holker and Robert Morris. He also negotiated public securities and bills of exchange for local merchants, probably converted a " Gentlemans B o n d " held by Philemon Dickinson in 1 7 8 1 into " Certificates bearing French interest," handled claims for furnishing supplies to the army, and became a foremost financial figure of Philadelphia. In June, 1 7 8 3 , he could write that his business was so extensive that he was " generally known to the Mercantile part of North America." Salomon seems also to have negotiated bills for the captured officers of Cornwallis who were held in Lancaster in 1 7 8 2 . Joshua Isaacs notified him of this opportunity, " could you fix upon Some method how to get the Money out of N e w Y o r k — a n d this I think Y o u can easily do from the connections which I am informed you have at Philadelphia." Salomon replied that he could do so f o r the entire captured force, and profitably, if the bills were drawn right. Isaacs replied warning him to hurry as other persons were after the business. Though Salomon denied to a relative in 1 7 8 1 that he was rich, he was a powerful figure by the end of the war when he sold gin in the N e w Y o r k market through the loyalist trader Daniel McCormick. 3 * There he returned in 1 7 8 5 , only to have his successful career cut short by death. Not all Philadelphia merchants were so largely concerned with public business. Stephen Girard was an enterprising young man who supplied the needs of the civilian population. A wholesale dealer in salt, rum, wine, and coffee (and some munitions), he only arrived in Philadelphia late in 1 7 7 6 but entered upon an active career at once. Writing his father in 1 7 7 8 to send a shipload of commodities f r o m France, Girard 39 Haym Salomon Letter Book, 1781-1783, passim. The bills of Cornwallis' officers were given at 20% discount.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

159

declared that " It is impossible to lose on such a venture. I believe, that, barring accidents, there ought to be a big profit in view of the high prices of every kind of merchandize in this market." His brother in the West Indies was to send salt or syrup to Philadelphia " where you will make a big profit on your cargo after deducting the insurance premium." By 1779 Girard had increased his working capital more than 10,000 livres since the evacuation of the city by the British, though they had caused him heavy losses.40 The strenuous Charles Biddle was another successful captain and merchant in these years, running cargoes between Philadelphia and the Carolinas, St. Kitts, St. Eustatius, and L'Orient, France. In 1782 he took a ship out of Baltimore intending to export tobacco from Virginia for John Ross and John Holker, but sold the ship for 50,000 dollars cash at Cape François. B y such ventures, and particularly by the profitable sale of wine in Philadelphia, Biddle could admit in 1782 that he " h a d at this time acquired some property. . . ." 41 The privateering game in Philadelphia had its ups and downs. Its larger significance here is in the associations it promoted rather than in its net profits, which still remain conjectural. A self-confessed successful trader and privateer owner, however, was young Thomas Learning, Jr., who stated that he was " very lucky in Arrivals, and also in Privateering (which I considered the most beneficial W a y , in which I could serve Myself and the Publick)." This offset his losses in currency and securities. 42 Robert Morris was also said by a contemporary to have gained greatly from privateering. 45 A m o n g the Morris associates in this field Blair McClenachan was particularly active, being also a state agent for handling and out4 0 J . B . McMaster, Stephen privateering.

Girard,

41 Charles Biddle, Autobiography,

pp.

16-19;

he also engaged

in

passim.

42 Penna. Mag. Hist. Biog., X X X V I I I , 116 ff. 43 T h e translator of Chastellux, Travels, American Revolution, p. 104.

I, 199-201 n. ; cf. also Jameson,

l6o

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

fitting privateers and prizes in 1779, just as John M. Nesbitt and John Nixon were Congressional prize agents a year later. McClenachan and Nesbitt were foremost among the many privateer owners in the generally successful year of 1776, Nesbitt frequently acting with his trading associates, Morris, John Ross, and Stephen Stewart of Baltimore. Morris himself was connected with innumerable such persons, sometimes from other states, in financing privateers. Bingham was one of these. Merchant Michael Gratz became associated with Morris and Carter Braxton in the Shippen, prizes of which were sold at Martinique in 1 7 7 7 for small profits. This same group, together with Ephraim Blaine and Matthew Irwin, was also concerned in the famous General Mercer in 1 7 8 0 - 1 7 8 1 ; ownership was divided among as many as fifteen persons to offset possible losses." T w o privateers with unusual success in the latter part of the war were the Hyder Ally and the Holker, Nesbitt and Conyngham and John Wilcocks being original owners of the former. 1 ' 1 The latter, belonging to McClenachan, Morris, John Holker and others, was most active until sunk in the West Indies in 1783. She took sixteen prizes in three weeks in these waters. 46 In August a Philadelphian wrote, " McClenachan is principal owner of all the prizes, he fits out the Enemy's vessels as he takes them " ; 4 7 but in April, 1782, Morris wrote McClenachan that he was sorry to hear that he was pressed for money, adding, " I don't approve of your ideas on money received from Holker's prizes. I never thought I got my share 44 Charles H. Lincoln, Naval Records of the American Revolution, passim ; Scharf and Westcott, Phila., I, 326; Byars, B. and M. Grate, Preface, p. 21, also pp. 192, 197 n., 229. 45 Conyngham, " Reminiscences," loc. cit., p. 234. 46 Amer. Cath. Hist. Soc. Researches, Phila., I, 423, 4*6-

X X V , 8 ; Scharf and Westcott,

47 John Walker to General Weedon, Aug. 15, 1780, in Thomas Balch, ed., Papers Relating to the Maryland Line, p. 115; " innumerable " prizes were being brought into Phila. at this time.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

l6l

of that fast enough." 48 Although still another contemporary called McClenachan a successful speculator in privateers, 49 it is obviously difficult to generalize about the gains of even that outstanding figure to say nothing of the countless others. It should be added that certain lawyers, like James Wilson, had a considerable practice from privateering cases. Because of enemy privateering, insurance rates on Philadelphia ships rose to great heights. T h e extent to which this stimulated the formation of marine insurance underwriting groups is beyond computation, but even Baltimore merchants were eager to invest in Philadelphia marine policies during the war. Some of the promoters of the later Insurance Company of North America participated in the war-time underwriting of the Donaldson and Coxe associates. From the few policies now available it appears that the enterprising McClenachan was likewise active in marine insurance. In March, 1776, he and others underwrote a venture of William Bell from St. Eustatius at forty per cent, half to be returned to Bell if the schooner arrived safely. 50 Through the office of Benjamin Fuller two other Philadelphians insured an adventure to Havana in 1 7 8 1 ; but if they did this alone it was certainly unusual, for high rates demanded large groups and rates had probably not fallen much by that date. Even in 1783, with rates presumably lower, ten and fifteen persons were associated in single underwritings.' 1 Philadelphia was an important center for the sale of bills of exchange and foreign drafts. Their value fluctuated with their scarcity and with news of the quotations in Boston. W h e n Morris became Financier he complained of the habit of dis48 Morris to McClenachan, April 22, 1782, Morris Papers in N e w Y o r k Public Library. 40 Conyngham, " Reminiscences," loc. cit., p. 245; cf. similar statement in Westcott, Historic Mansions of Phila., pp. 245, 246. 50 J. A . Fowler, Insurance in North Amcrica,

p. 29.

51 Ibid., p. 34; Gillingham, Insurance in Phila., p. 8 6 ; policy on sloop Betsy, Aug., 1783, Misc. M S " Ships," in N e w Y o r k Hist. Soc.

162

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

counting government bills at exorbitant rates. Bills on France, he wrote in August, 1 7 8 1 , realized but one-half or two-thirds of their European values, whereas they should have realized at least eighty per cent. A merchant, sensible of fluctuation in exchange, would rather " wait, with his money in his chest, the event of public necessity, than invest money in bills, which may shortly after be bought on better terms by his more cautious neighbor." 52 T h e bills were also depressed because of the " concourse of vendors." 53 Merchants of distant places—perhaps also of New Y o r k M —negotiated bills in Philadelphia when rates were favorable. Josiah Hewes acted as the Philadelphia bill agent of Aaron Lopez of Rhode Island, and Meade and Company as the agent of Codman and Smith of Boston. 5 5 The greatest bill negotiators in Philadelphia, however, were the French agents Wadsworth and Carter, who employed John Chaloner. He wrote Wadsworth on J u l y 25, 1780, that exchange was at sixty per cent on specie and forty-five per cent on thirty-day bills; that " The necessity of the French f o r money will oblige them to draw frequently & lower E x c h a n g e with you, this may a f f o r d a Speculation worth attending to. . . ." 56 A t one time in 1 7 8 1 Chaloner received from Carter 484,260 livres in seventy-three sets of bills to negotiate. They were " quick " in Philadelphia on J u l y 25, 1 7 8 1 , according to Carter, who accordingly stopped his agent Halsey in Boston f r o m selling at large discounts." On March 5, 1 7 8 3 , Carter acknowledged having received 52 Sparks, Diplomatic

Corresp.,

53 Sumner, Financier,

I, 257, shows h o w the government lost thereby.

X I , 419, 420, 424, 431.

54 On A u g . 5, 1780, the D a y Book of Glassford, Gordon and Monteath mentions cash paid f o r their N e w Y o r k agent to merchant H e n r y W h i t e of N e w York, for bills negotiated in Philadelphia. 55 T o George Meade, July 28, 1780, Codman and Smith Letter Book, cancels buying orders since bills have arrived at Boston from the Southward and are now selling for same rates as in Philadelphia. 56 W a d s w o r t h Corresp. 57 Carter to Chaloner, Dec. 12, 1781, Chaloner-White Papers; Carter to Wadsworth, July 6, 25, 1781, W a d s w o r t h Corresp.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

163

£ 1 2 9 , 5 7 0 f o r bills sold in Philadelphia at various times f o r the partnership. Between June 2 6 and October 4, 1782, at least £36,410 of bills were sold on its account there to some thirty persons including Mordecai L e w i s , L u k e K e a t i n g and C o m pany ( a brokerage firm), Josiah H e w e s , W i l l i a m and Joseph Gibbs, and John M . Nesbitt. 5 8 Professional brokers were established in Philadelphia at least by 1 7 8 2 , " probably as a result of such extraordinary war-time activity. Certain manufactures of

Philadelphia and its countryside

were also stimulated by the war. T h o m a s Leiper, tobacconist and tobacco purchasing associate of L e v i Hollingsworth, gained at the expense of the principal snuff m a n u f a c t u r i n g concern of the city, which was owned by loyalists. 60 M a r k W i l l c o x was a paper manufacturer w h o sold to Congress, the states, and R o b e r t Morris. T h e unusual demand f o r his product f o r making paper money, paid for by Congress on one occasion in gold, gave him unexcelled opportunities. 8 1

Samuel

managed an unsuccessful textile manufacture

Wetherill

in 1 7 7 5 ,

during the war he continued a private interest in this

and field—

probably with Congressional e n c o u r a g e m e n t — a n d also tried to make dyes. 62 In the neighborhood of Philadelphia a number of the pre-war iron bloomeries were confiscated because of British ownership, and at A n d o v e r , N e w Jersey, Congressional contracts were filled by a Philadelphian, Whitehead

Humph-

reys. Merchant Joseph Ball o f Philadelphia was also interested 58 W a d s worth and Carter W a s t e Book, 1783-1784; also sales of under Jan. 1, 1782, W a d s w o r t h Corresp.

bills

59 On July 1, 1782, Levi Hollingsworth Letter Book, 1780-1782, mention is made of exchange sold by a broker. It has been noted that this was also true in Boston. 60 F. W . Leach, " O l d Street, p. 142.

Phila.

Families,"

"Leiper";

Jackson,

Market

61 Leach, op. cit., " W i l l c o x " ; cf. remarks on great stimulus to papermilling industry in Penna. in Pcnna. Mag. Hist. Biog., L, 19, 20. 62 Scharf and Westcott, Phila., chants, pp. 138, 139.

I l l , 2272; S. N . Winslow, Phila.

Mer-

164

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

in an iron-works in 1 7 8 1 . 6 3 However, there is no evidence that Philadelphia merchants invested heavily in manufacturing of any kind during the busy war years. The Revolution acted as even more of a commercial stimulus to parts of the upper South, especially to Baltimore, M a r y land, and Alexandria, Virginia. These places benefited to an unusual extent from the wheat and flour trade, f o r the war encouraged the raising of wheat in place of tobacco in both states. 8 * The tobacco trade continued to be important, however, and, though considerably interrupted by war-time circumstances, likewise benefited certain American merchants, particularly by reason of the withdrawal of British factors from the tobacco country. The unanimous testimony of both contemporary and secondary writers is that Baltimore expanded in every way during the conflict. Protected from British sea raids, developing into a leading port f o r the West India trade, freed f r o m British control of the tobacco trade and Annapolis' colonial customs monopoly as the official port of entry, the town rapidly outgrew its provincial character. 65 Except f o r short periods, its bay was never completely closed by enemy cruisers prior to 1 7 8 1 ; but on several of the earlier occasions, goods f o r Baltimore could only be unloaded at Edenton or several other places in North Carolina. Baltimore also served as a depot f o r Congressional supplies of flour, iron, and salt. 68 Since 63 On Humphreys, cf. J. L. Bishop, American Manufactures, I, 544; on Ball, Penna. Mag. Hist. Biog., X L V I I , 187. R. L. Hooper claimed to have established in 1779 a large shoe factory in Northampton Co. for the Board of W a r ; Samuel Hodgdon of Philadelphia and William Alexander of N e w York were interested in the Hibernia furnace at Mount Hope. 64 Cf. L. C. Gray, Agriculture

in Southern

U. S., II, 607, 608.

65 C. Hall, ed., History of Baltimore, I, 39, 455, 506; Johann Schopf, Travels, I, 326, 327; Brissot de Warville, New Travels (1794 ed.), II, 3 6 5 ; Scharf, Chronicles of Baltimore, p. 231, quoting a contemporary. 66 Robert Purviance, A Narrative of Baltimore, passim; L. C. Gray, op. cit., II, 582, 583, on the wheat supply, and p. 595 on Maryland's freedom from raids, as also C. Hall, op. cit., I, 455.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

165

Maryland's customs duties were generally suspended in 1777, and since the embargo on the shipment of grain from 1778 to 1780 was so frequently lifted to permit trade with New England, Virginia, and the French fleet, and so attended by fraudulent practice, Baltimore must have enjoyed virtually free trade.67 A customs house was established here in 1780. A N e w Y o r k merchant, Cornelius Ray, found the place in 1782 more advantageously situated for commerce than Philadelphia itself. 68 Its prosperity is further suggested in the amount of building a French commissary noticed there that year—such as the " elegant" inn Daniel Grant had just completed. 69 A n enterprising business spirit was evident around Baltimore. John Adams caustically observed in 1777 that the " men of property" were intent upon making money; that speculation abounded, attended by little public spirit. 70 There was, however, conservative feeling among the older merchants if it is true that they, almost to a man, refused to take advantage of a state law to pay off British debts in depreciated currency. 71 But new merchants largely controlled Baltimore's war-time trade. Such prominent persons as Englehart Yeiser, William Wilson, and James Clarke came there only a few years before the w a r ; and around 1775 merchants from foreign countries and from other parts of America crowded into the town. Before 1783 these arrivals included the subsequently important Christopher Johnston, William Patterson, George Salmon, and Robert Gilmor. S i x French commercial houses were also founded in Baltimore during or soon after the war. 72 The rea67 J. W . Griffith, Annals of Baltimore, p. 7 5 ; Beverly Bond, Jr., " State Government in Maryland, 1777-1781," in Johns Hopkins Studies, X X I I I , 87-912. 6 8 R a y to Philip V a n Rensselaer, Dec. 2, 1782, doc. 11275, Emmet Coll.; he had just returned f r o m France and the W e s t Indies, apparently on business. 69 Journal of Claude Blanchard, p. 206. 70 Adams, Works,

p. 169; Scharf, Chronicles

II, 436.

71 Griffith, Annals of Baltimore,

p. 86.

72 Ibid., pp. 64, 65, 81, 82, 102; Scharf. op. cit., pp. 71, 139.

of

Baltimore,

166

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

sons f o r all this are evident in the writings of George Woolsey of Woolsey and S a l m o n : on April 15, 1778, for example, he assured an Irish merchant that " since the Commencement of the W a r r numbers have made astonishing sums in this country— among the rest we have no reason to complain. . . . " 73 T h e lawyer Ridsell thought that same year that in Baltimore " distant Prospects " appeared " lucrative," though he complained of business being bad at that particular date. 74 T h e place advanced in other ways. In 1 7 8 1 much marsh land, reclaimed through the efforts of Englehart Yeiser, was added to the town. Linen, woolen, paper, card, and nail manufactories were established. 75 Merchants revealed new cooperative business powers when they floated a loan to purchase clothing f o r L a F a y e t t e ' s soldiers in 1 7 8 1 , much as Philadelphia merchants had done in establishing a " bank " for a similar purpose some months before. They could do so since some, like Jeremiah Yellott, had been successful .in privateering, and others, like William Patterson and George Woolsey, had been successful in the West India trade. 76 The career of R o b ert Gilmor is particularly impressive. H e only came to Baltimore in 1 7 7 8 f r o m a village on the eastern shore of M a r y l a n d ; later went to Holland as partner and correspondent in the tobacco trade f o r Bingham and Inglis of Philadelphia; then returned home a f t e r the war to replace Samuel Inglis who had died at Baltimore while busily concerned in their work and that of Willing and Morris. 7 7 Gilmor's connection, however, 73 T o Waddell Cunningham, Woolsey and Salmon Letter Book, 1774-1784. 74 Doc. 1037, Emmet Coll. 75 Scharf, Hist, of Baltimore pp. 8o, 81.

City and County, p. 61; Griffith,

Annals,

76 Griffith, Annals, p. 78; Sioussat, Old Baltimore, p. 154. There is a good letter on war and trade by Patterson, from St. Eustatius, Jan. 16, 1777, in Deane Papers (Conn. Hist. Soc. Coll.), p. 63. H e shortly after came to Baltimore. 77 Robert Gilmor (a son), "Recollections," in Md. Hist. Mag., VII, esp. p. 236; C. Hall, Baltimore, III, 624, 625; Morris to Gilmor, Feb. 14, 1784, Morris Papers in New York Public Library; cf. also, Margaret L. Brown,

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

l6j

indicates that Baltimore continued to be somewhat of an economic appendage, as well as a rival, of Philadelphia. Just as soon as the British had evacuated Philadelphia in 1778 plans were laid to re-establish regular water transportation facilities between the two places. Flour and tobacco were principal exports of these Baltimore merchants. The State of Maryland needed the first for purchasing military goods in Havana in 1780; it was also so used by Congress in 1781 to exchange for gold and silver in the West Indies where flour was always badly needed and specie plentiful. 78 The demand for flour was such that, in spite of the risk involved, Baltimore merchants are said to have grown rich selling a barrel costing four Spanish dollars at home for thirty-six such dollars at Havana. 7 9 Despite occasional state laws limiting profits on wholesale and retail sales in Maryland, flour-milling and the flour trade certainly expanded. That Baltimore exported quantities of the article to the Continental troops, has been noted, and John Holker secured a supply there for the French fleet on one occasion through merchant William Smith. 80 T h e Ellicott brothers, who had come from Bucks County, Pennsylvania, and established themselves as millers at Baltimore in 1774, had such an increased business by 1783 that they went into the foreign flour trade on their own account. The Maryland Hollingsworth family was especially prominent in milling during the war, Jesse Hollingsworth carrying on the Baltimore end of the business. 81 Indeed, a few years later rival merchants of A l e x " W i l l i a m Bingham, Eighteenth Century Magnate," Penna. Mag. Hist. L X I , 396.

Biog.

78 Burnett, Letters, V I , 88, 89, 97; Bond, " State Government in Maryland," p. 81. 79 Kuhlmann, Flour Milling Industry, p. 39. H e makes some interesting remarks on the resulting independence of Baltimore f r o m the influence of Philadelphia, as capital accumulated, etc. 80 May 19, 1779, Chaloner and W h i t e Letter Books. 81 On the Ellicotts, cf. Scharf, Baltimore City and County, pp. 374, 375 ; W . B. Hollingsworth, Hollingsworth Genealogical Memoranda (Baltimore, 1884), pp. 8-10, and above on Levi H o l l i n g s w o r t h .

l68

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

andria could point out enviously that Baltimore, though young in the flour shipment trade, had adopted all the ways of Philadelphia in the foreign business. 82 The importance of the war f o r such later developments is readily seen in the work of the house of Woolsey and Salmon, established in Baltimore in 1 7 7 4 . Though business was occasionally dull f o r them in 1 7 7 6 because of a shortage of ships and flour (which, when available in September was recklessly shipped regardless of quality), 8 3 it soon picked up with successful voyages to the West Indies. They participated with Thomas Russell and others in very profitable voyages to St. Eustatius that year, jointly financed even with Philadelphians." Such ventures actually resulted in an occasional excess of West India products, as in J u l y , 1 7 7 8 ; and in large quantities of European goods, as in September, 1 7 7 9 , when Salmon wrote that there were 75,000 bushels of salt in Baltimore but still commanding a good price. 85 Such surpluses occasionally confounded the speculators, though there usually was demand for European goods especially. In April, 1 7 7 8 , Woolsey and Salmon sought to interest an Irish merchant in shipping linens and woolens, suggesting that ship's papers be secured in France to make them look like French property; if necessary, English and Irish goods might be purchased in France at but little higher prices. The firm 82 Petition to Va. House of Delegates, William and Mary College Quart., 2nd ser., II, 289. 83 To John Pringle, April, Aug., Sept., passim, Woolsey and Salmon Letter Book. 84 Woolsey to Salmon, June 18, 1776; Woolsey to Benjamin Titcomb, Dec. 20, 1776, ibid. Woolsey cleared £75 on a ¿50 investment in one of Russell's voyages. He had a one-twenty-fourth interest in another return cargo worth £14,000. He had gone into retailing and had done very well in that, also. 85 Letter Book, passim. Thomas to Levi Hollingsworth, Baltimore, Dec. 7, 1778, mentions the many arrivals lately and more expected daily: Hollingsworth Misc. Papers. In Aug., 1778, Chaloner and White heard that Baltimore was deluged with importations of rum, etc., and that prices were falling: Chaloner and White Letter Books.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

169

assured him that " our Captains that can run into our Capes at night & that knows the most of the Inlets, seldom meets with any accident"; if worst came to worst, goods could always be landed in North Carolina and sold there; tobacco offered a lucrative return voyage. 86 Woolsey and Salmon seem to have had an increased interest in European goods after 1778, though the trade in West India products continued. Possibly the latter was less profitable than formerly, as William Patterson suggested on leaving St. Eustatius for Baltimore in 1778 and William Bingham on leaving Martinique for Philadelphia in 1780. Certainly after 1778 Woolsey and Salmon were greatly interested in tobacco shipments, the principal return item to Europe, which probably encouraged direct voyages abroad because the West Indies had become glutted.87 B y 1780 this firm was planning direct shipments of tobacco to France in care of the Americans James Cumming, James Moore, the Nesbitts at L'Orient, and the Johnsons at Nantes. Possibly to this end they were interested in the construction of three brigs in 1780. The shipments of Woolsey and Salmon also included flour and wheat, especially in the early and closing war years. In 1776, together with John Pringle of Philadelphia, they sold flour and bread to the Maryland Council of Safety for a St. Eustatius shipment in which they also had a private interest. Exporting flour to the islands continued for several years, though Boston and New England generally took much of the supply of the Chesapeake region. In 1780 Woolsey and Salmon also shipped flour to Havana and New Orleans, and at the end of the war the demand for wheat in France and Ireland began to " tempt " them. In all such business Woolsey and Salmon cooperated with 86 T o Waddell Cunningham, April 15, 1778, Woolsey and Salmon Letter Book. Woolsey had suggested that Salmon do the same thing when he urged him to come to America from Ireland in 1777. 87 Letters of July 30, Aug. 26, 1778, ibid. Trade with the Dutch and French islands was undesirable then because tobacco prices were so low there.

I70

BUSINESS ENTERPRISE: REVOLUTIONARY

other individuals, especially with

ERA

Pringle, possibly a

member of the house. T h e Moores and Caldwells of

silent Phila-

delphia also occasionally participated in their W e s t India v o y ages and managed the sale of their merchandise at Philadelphia. W o o l s e y and Salmon traded in tobacco with Stephen S t e w a r t of Baltimore, and had occasional dealings w i t h other townsmen like James Dunlap and L u x and B o w l y .

fellow

William

Patterson was their correspondent at St. Eustatius until 1 7 7 8 ; a f t e r that, the Blairs of Boston, Samuel Curson, and one of the Sterretts of Baltimore acted for them on the islands. In the early profitable years of the war, y o u n g W i l l i a m T a y l o r g o t his start in business by m a n a g i n g the a f f a i r s of the firm at Baltimore, for one-third of the profits, when G e o r g e W o o l sey was ill. W o o l s e y said at the time that T a y l o r would undoubtedly make out well by the arrangement. Usually such persons formed the popular share-and-interest groups f o r commercial or privateering ventures, some of the latter also very profitable. Doubtless many local merchants also had a common interest in underwriting marine insurance, even at Philadelphia. Salmon and W o o l s e y wrote to Pringle, January 3, 1 7 7 9 , f o r example, instructing him to put them d o w n f o r £200 to £400 on all good Philadelphia marine risks, inf o r m i n g him that they had underwritten some £3000 in his name at Baltimore. T h e y also invested in this fashion f o r the Caldwells, which again points to the common

interests

of

Baltimore and P h i l a d e l p h i a — a n interdependence shattered by the approach of peace, as shown in the letters of Salmon in 1783 and 1784, emphasizing the cheaper produce and shipping advantages which he claimed Baltimore had over its rival. Baltimore's war-time tobacco trade is well illustrated in the correspondence of Wallace, Johnson and M u i r of and Nantes, since such Baltimore merchants as

Annapolis Christopher

Johnston, Robert Gilmor, the Sterretts and B o w l y s were occasionally concerned with them. 88 L a t e in 1781 this Nantes firm 88 Wallace, Johnson and Muir Letter Book, passim.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

171

shipped a cargo of goods to fifteen Baltimore and Philadelphia merchants, apparently in return for a load of tobacco which these persons had jointly exported to France from Alexandria. A m o n g the fifteen were such other Baltimore business men as Abraham V a n Bibber, William Naill, and Buchanan and Blaine. 89 A similar group there had considered organizing in 1 7 7 7 a company to trade with France and Holland, to be composed of twenty or twenty-five partners, each putting up £5000 of capital. 80 Public supplies were handled in Baltimore by a number of persons. Henry Hollingsworth, the flour-milling commissary on the Elk River, has been mentioned; in the first half of 1778 his brother, Jesse Hollingsworth, sold Elias Boudinot, Continental Commissary of Prisoners, more flour than any other person." 1 T h e Purviance brothers were also very active handling public supplies, but require only passing attention since they were of little importance after the war. L u x and Bowly sold the Virginia Commissary General all sorts of stores, such as 500 pairs of shoes in 1777. They also financed the military purchasing that year by Abraham V a n Bibber of Baltimore, and Richard Harrison of Alexandria, at St. Eustatius and Martinique. 82 V a n Bibber and Harrison, who worked in turn for the Virginia Commissary, speedily grew sick of their public activity there though it was conducted on the usual commission basis; they suspected " abuses carried on much against the Publicks Interest" on the islands.' 3 Both Samuel Smith and Stephen Stewart at one time held the important Continental Marine purchasing agency at Baltimore, and W i l liam Smith sold wheat and flour to the French in 1780, though this was strictly private business whereby he got into trouble 89 Ibid., letter of Dec. 16, 1781, to such merchants. 90 William Smith wrote James Wilson of Philadelphia, June 7, 1777, about the plan, asking if he or Donaldson wanted shares. Gratz Coll. 91 Elias Boudinot Ledger, p. 69. 92 " Correspondence of Aylett," Tyler's Quart. Mag., I, 88, 146 et passim. 93 Ibid., p. 101.

172

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

with commissioners who wanted the provisions f o r the Continental troops. 94 R u m was taken to the American force at Y o r k t o w n in 1 7 8 1 by various sutlers f r o m Baltimore, who also carried provisions to the Continental headquarters at the head of the Elk. 0 5 The same year, Robert Smith, trading at Havana, was made Continental agent there by Robert Morris, on a commission basis. It was an office, said Morris, which would also bring Smith private business. 08 Since privateering out of Baltimore was frequently successful it is important to note its prominent participants. They were probably most active in 1 7 8 0 and 1 7 8 1 , indicating a long period of interest. Richard Curson was among the leaders; others of post-war importance included Jesse Hollingsworth, John Sterrett, Daniel Bowly, George Salmon, the M c K i m s and Smiths. These worked as members of groups, of course. Bowly, f o r example, owned privateers together with any number of persons. David Stewart was also a pivotal figure, having ownership relations principally with Bowly, L u x , and Salmon. Still another important privateering group was headed by the Pattersons. Merchants f r o m other states sometimes owned privateers together with these Marylanders, as did Robert Morris and the Nesbitts of Philadelphia and Charles Simms and William Hunter of Alexandria. 8 7 Baltimore was intimate with Alexandria in the commercial line during the war. Between them, on the principal road south, tri-weekly service had developed by 1 7 8 3 , f o r Alexandria was the natural depot f o r Virginia state supplies imported during the war f r o m Maryland and the North. 88 A s the two places 94 Cf. Md. Hist. Mag., IX, 242-244, 246, 248. 951. J. Greenleaf, Jr., " Provisioning the Continental Army," in Md. Mag., I l l , 125. 96 Morris to Smith, July 17, 1781, in Sparks, Diplomatic

Corresp.,

Hist. XI,

390, 39197 B. C. Steiner, " Maryland Privateers in the Revolution," Md. Hist. Mag., I l l , 100; c f . also Scharf, Baltimore City and County, p. 60; Hall, Baltimore, I, 455. 98 Cf. Letters

of Governors

of Virginia,

II, 161, 389.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

173

developed, however, a certain rivalry continued, especially in the grain-carrying trade. 91 ' Alexandria's

salvation during the Revolution lay in her

g r o w i n g interest in grain, and in the possession of enterprising local merchants. Such things distinguished her f r o m D u m f r i e s , her principal colonial rival, which had a more specialized interest in tobacco and whose traders, more of whom perhaps w e r e loyalists, apparently

failed to g r a s p the opportunities

o f f e r e d by the withdrawal of British factors in 1 7 7 6 . In A l e x andria, by 1 7 7 5 , such merchants as J e n i f e r and Hooe, F i t z gerald and Reis, and H a r p e r and Hartshorne were already active in wheat purchases. J o s i a h W a t s o n , who, like the H a r t s hornes and Herberts, had wealthy Quaker connections in Philadelphia, w a s interested in both wheat and tobacco. W i l l i a m W i l s o n handled tobacco and British goods, while Carlyle and Dalton specialized in W e s t India produce. 1 0 0 T h e outbreak of hostilities gave these merchants new opportunities since there was a scarcity of manufactured goods in V i r g i n i a . I t is true that these could only be purchased at an " amazeing pitch " in the N o r t h , 1 0 1 but the price of V i r g i n i a ' s staples had also risen considerably by the spring of 1 7 7 7 .

The

latter rise was due in part to the activities of speculators, including a partner of

Robert M o r r i s . 1 0 2

In March,

Richard

A d a m s , w h o w a s trying to purchase 2000 barrels of flour f o r the V i r g i n i a C o m m i s s a r y General, wrote that " the prices of all O u r Commoditys seems to be R i s i n g here fast, Particularly H e m p and T o b o ; large S u m s of M o n e y being I am i n f o r m e d L o d g e d on the different parts of this R i v e r f o r that purpose. . . . "

103

99 Fairfax Harrison, Old Prince William, II, 417, gives this as one explanation of the rise of Virginia tariff rates after 1781. 100 Ibid., II, 389, 417. 101 According to William Aylett, in Tyler's 102 According to Patrick Henry, in Letters I, 129. 103 Tyler's

Quart. Mag., I, 96, 97.

Quart. Mag., I, 92. of Governors

of

Virginio,

174

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

Flour needs of the state and of Congress helped make A l e x andria an important center f o r collecting articles of public use. Virginia required flour in 1 7 7 6 and 1 7 7 7 , for example, to send to Richard Harrison at Martinique to enable him to make his military purchases. Certainly by 1 7 8 2 , because of both public and private demands, Alexandria was one of the important wheat export centers of Virginia. 1 0 * The year before, eightyone Alexandria merchants had asked f o r a state flour inspection there, arguing that " the Manufacturing of Wheat has been f o r some years past carried to such an extent by the Inhabitants of the Western Counties as to render Flour and Bread Staple Commodities of the State. . . . " 1 0 5 Alexandria's interest in the tobacco trade was likewise stimulated by state activities: a public commissary was stationed there to collect tobacco for French shipments. Private purchasers were of course numerous, John Fitzgerald, Richard Conway, and Robert Adam being Alexandrians who occasionally had dealings in tobacco with Wallace, Johnson and M u i r of Nantes. Hooe and Harrison's business was also largely in the weed which they shipped to the West Indies on many occasions for the State of Maryland, and to Cadiz a f t e r 1 7 7 9 when Richard Harrison established a branch of this house there. 10 ® Hooe and Harrison also traded in tobacco with the V a n Bibbers and M c K i m s of Baltimore. In addition to this work they shipped flour in 1 7 7 9 for Robert Morris, by order of William Smith of that place, and they frequently disposed of goods for William Bingham who in turn did work f o r them in the West Indies. Other goods came to them from abroad, as f r o m 104 Cf. items relating to the collection of wheat and forage in Va., often at Alexandria, in Journal of the Council of Virginia, I, 158, 159, 281, II, 338; Letters of the Go^^ernors, III, 62, 68; Continental Congress Papers, 192, no. 429; Tyler's Quart. Mag., I, 154, II, 77; Sumner, Financier, I, 152. 105 William and Mary College Quart., 2nd ser., II, 288; cf. also Kuhlmann, Flour Milling Industry, p. 32. 106 Hooe and Harrison Invoice Book, 1770-1784, passim. This firm was known as Hooe, Stone and Co. to 1774, as Jenifer and Hooe to 1778, and as Hooe and Harrison to about 1792.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

I75

the de Neufvilles of Amsterdam, and they also imported f r o m Holland on behalf of Patterson of Baltimore. 1 0 7 F r o m all such facts it seems plausible to argue that A l e x andria experienced a " war boom " of some duration. E v e n in 1 7 8 0 certain goods could still be sold at wholesale there f o r 1 0 0 % advance. 1 0 8 A year later several Alexandrians, including William Hartshorne, had the excellent opportunity of selling f o r a g e and provisions f o r the Y o r k t o w n campaign to the French contractors, for whom J o h n Fitzgerald acted as settlement agent. 109 The prosperity of the place probably explains the arrival of new merchants, such as John Harper from Philadelphia, and the Scot, James Wilson. It may also have encouraged the town's incorporation in 1 7 7 9 . 1 1 0 That same year, Virginia " Merchants & Adventurers to S e a " requested a naval station at Alexandria to facilitate commerce, since " A l e x andria, D u m f r i e s & Colchester own almost all the Vessells on this River, and their is scarcely a foreign Vessell but what comes addressed to some Merchant in one part of these towns." 1 1 1 That merchants of the rival places should have agreed upon Alexandria as the most suitable location f o r the station was, indeed, significant. A traveler might well call it " a flourishing commercial t o w n " in 1 7 8 1 . 1 1 2 A re-established trader described it in 1 7 8 2 as " a considerable Port with not less than 3 0 or 40 men, some of large capital, owning & sending out vessels to almost every part of the world, others pursuing plans of Speculation in every species of Merchandise, 107 H 0 0 c and Harrison Journal, 1779-1783, passim; Wallace, Johnson and Muir Letter Book, under Dec. 20, 1782; Edward Channing, in Mass. H i s t . Soc. Proc., X L I V , 371. 108 Byars, B. and M. Gratz, p. 193. 109 Agreement with Braxton under N o v . 2, 1781, Wadsworth Corresp. The Chaloner-White Papers for 1782 contain Fitzgerald's settlement papers. 110 Mary G. Powell, Old Alexandria, pp. 163, 313; F. L. Brockett, Lodge of Washington, pp. 105, 127; persecuted Quakers f r o m Philadelphia were an important addition to the town. 111 William

and Mary

College

112 A . J. Morrison, ed., Travels

Quart., 2nd ser., II, 292. in Virginia

in Revolutionary

Times, p. 32.

176

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

watching closely the fluctuations of trade & always ready to make advantages therebye." 1 1 3 In all parts of Virginia a war-time business feature was the arrival of Northern merchants to participate in the tobacco trade. The weed was invaluable for foreign remittances, being, for example, the one product of the continent which could command cash at St. Eustatius in April, 1 7 7 7 ; 1 1 1 and its price abroad mounted steadily, remaining high in France in October, 1782. 1 1 5 Among such newcomers were the Jewish Cohens and Isaacs, who established themselves in Richmond in 1780 or 1 7 8 1 . 1 1 6 The international partnership of Isaac Moses of New York, Marcus Elcan of Richmond, and Samuel and Moses Myers of Amsterdam was also still active for a short time after the peace. 117 Tn 1778 the Adams brothers of Williamsburg had contemplated forming a company, including Robert Morris, to export tobacco, wheat, and flour. They had planned to have " some Capitol Stores at the Heads of the Rivers " ; goods had recently arrived from France in a ship with " about £50,000 Sterlings worth, & two other vessels, a Brigg & Schooner all private property." 1 1 9 Another Philadelphian similarly interested in Virginia was Michael Gratz, who secured on one occasion four-fifths of one-fifteenth share in the General Mercer, a tobacco vessel; he had dealings with such important Virginians as Norton and Beall and Carter Braxton. 1 1 9 Simeon Deane of Connecticut, it will be recalled, 113 William Browne to Andrew Craigie, Feb. 15, 1782, Craigie Papers. 114 Cf. Tyler's

Quart. Mag.,

I, 100.

115 It sold there for 118% advance, Oct. 4, 1782, possibly because of increasing difficulty in shipping it from the States: Wallace, Johnson and Muir Letter Book. 116 Samuel Mordecai, Richmond Jcivish Year Book, X X V I I I , 218.

in By-gone

( i 8 6 0 ) , p. 121;

Amer.

117 Announcement of the firm's dissolution in supplement to New Journal, June 23, 1785.

York

118Richard Adams to "Brother," June 1, 1778, in Va. Mag. V, 293, 294.

Biog.,

119 Byars, B. and M. Gratz, pp. 186, 171.

Days

Hist.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

I77

set up a tobacco house in Virginia in 1 7 7 8 , being a partner of the Adams brothers mentioned above; in September of that year he had bills of exchange on France to sell to Alexandria merchants. 120 George Champlin of Newport had a ship in the tobacco trade at the end of the war, as did Codman and Smith, Caleb Davis, and " Mr. B o w d o i n , " of Boston, all of whom were principally interested in exporting to Amsterdam. A s has been frequently noted, tobacco was exchanged f o r foreign manufactures largely through voyages by way of neutral ports in the Windward and L e e w a r d Islands. Dutch St. Eustatius was notoriously open to American commerce until captured by Rodney in 1 7 8 1 , when Danish St. T h o m a s took its place. Rodney found over two thousand American merchants and seamen at St. Eustatius, and, moreover, seized quantities of goods belonging to British merchants since there was a surprising amount of American tobacco especially which found its way to England through such collusion. 1 2 1 E v e n in Bermuda, an English merchant complained to a N e w Y o r k correspondent in June, 1 7 8 1 : " W e have very f e w Privateers here lately, and those in power here, encouraging the trade to the Rebel Country, by entering their Vessells as f r o m the Cacuses in Ballast, after they have taken out their Cargoes f r o m the Rebel Colonies, gives us a glut of every kind of American Produce. Indeed this Post may be truly said to be laid open to that kind of Trade, and the f a i r Trader & L o y a l Subject has not an equal Chance with these Supporters of R e bellion." 1 2 2 120 Advertisement in Maryland

Journal,

Sept. 29, 1778. Deane made out

poorly in the end. 121 F. Edler, " Dutch Republic and American Revolution," Johns Hopkins Studies, X X I X , 62, 182, 189; J. F. Jameson, " St. Eustatius and American Revolution," Amer. Hist. Rev., V I I I , 686, 700; MacPherson, Annals of Commerce, III, 658, 697, 720; A s a E. Martin, ed., "American Privateers and the W e s t India Trade, 1776-1777," Amer. Hist. Rev., X X X I X , 700-709. 122 Andrew Miller to Jones and Ross, June 13, 1780, in S t e w a r t and Jones Letters.

178

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

T h e interest of Americans in this indirect traffic with Europe is indicated by the number of agents they had on the islands. In addition to all those persons from the middle states already noted, such New England commercial families as those of Jones, Cordis, and Pierce had agents at St. Eustatius or elsewhere. Such traders sometimes enjoyed exceptional opportunities f o r profit, as did Robert Smith of Baltimore who secured a contract at Cape François in 1 7 8 2 to supply Spanish troops with flour at twenty dollars a barrel, though it was said to cost only seven or eight dollars a barrel even at the Cape. 1 2 3 Rumor had it that he split the profits with the Spanish Consul General. Most American merchants must have participated in the West India trade through such agents at o n e time or another. It w a s irresistible w h e n such n e w s

came

as to the Gratz brothers from Dutch Curaçao in October, 1 7 8 0 , that " all kinds of produce " f r o m America were in demand. 1 2 4 A n adverse comment as to the profits in the island trade should be noted. Robert Morris gave an estimate in July, 1 7 7 9 , apparently in answer to some public inquiry, of expenses and sales f r o m a supposedly typical voyage to St. Eustatius, " not disadvantageously considered." A n outward cargo of tobacco costing £ 1 5 , 0 0 0 could be exchanged on the island for seventyeight hogsheads of rum which would sell on return for £ 5 1 , 1 8 7 . Insurance each way at thirty-five per cent on ship and cargo would amount to £23,804, however, which, together with various other expenses, would leave scarcely any profit. Morris' deduction from this example was that money might even be lost on such a voyage, as on a similar one bringing back tea. 125 But this certainly had not been true in the earlier years of the w a r when the traffic was so heavy, and the trade at least en123 Biddle, Autobiography,

pp. 176, 186.

124 T. Webb and Co. to Michael Gratz, Oct. 7, 1780, B. and M. p. 203.

Gratz,

125 T o Timothy Matlack, July 7, 1779, Morris Papers in N e w York Public Library.

PENNSYLVANIA

TO

NORTHERN

VIRGINIA

1JÇ

abled American merchants to extend greatly their commercial relations with the French and Dutch. There can be no doubt, in summary, that the Revolution was far f r o m destructive to Philadelphia business; that it greatly stimulated both Baltimore and Alexandria ; that certain individuals in all three places were accordingly advanced to positions of new importance in the business world. It may confidently be stated that such developments as those recorded above contributed greatly to the emergence of advanced business ideas and associations in the middle states during the following decade.

CHAPTER V i l i A C T I V I T I E S UNDER TWO F L A G S T H E war also gave business opportunities to some of the loyalists. T h e inhabitants of New Y o r k City were the most conspicuous of these traders but even on the fringes of empire in the west there were persons who gained by the unusual demands of the British forces. Military needs, some foreign commerce, and privateering were royal roads to profit f o r certain avowed loyalists, and a very considerable illicit trade gave other opportunities to many Tories within the American lines. Much of this illicit trade was with England proper, by way of H a l i f a x or the West Indies. It also included domestic trade with cities held by the British, sometimes through pre-arranged " f r i e n d l y " captures; the subsequent sale of goods thus secured was said to be excellent if risky business. 1 A n Hessian officer in New Y o r k observed in 1 7 8 0 : " A l m o s t open Trade is carried on from here with the rebels; at least both sides close an eye. Passionately anxious f o r gold and silver, they constantly brought us cattle and other provisions from the outset; but to hold back the money one prefers now to let them have tea, linen, cloth, etc., in exchange." 2 B y August, 1 7 8 2 , Hamilton estimated that New Y o r k City sold goods upstate to the amount of £30,000 a year. S o great was the desire f o r English manufactures that the interior was said to be drained of gold f o r payments. Washington complained bitterly of his inability to prevent it. 3 1 MacPherson, Annals of Commerce, I I I , 720; cf. also the bragging statements of Lord Sheffield, Observations on American Commerce (1784), pp. 202, 203. 2 R. W . Pettingiii, trans., Letters from America, 1776-17/9, p. 232; cf. also Oscar Barck, New York City during the War for Independence, p. 99. 3 Hamilton, Works, Federal ed., I X , 272 ; Wilder Spaulding, New York in the Critical Period, p. 141. Once again Washington is found complaining of the " avidity " among " our People to make money." 180

ACTIVITIES

UNDER

TWO

FLAGS

l8l

New York City had similar relations with New Jersey, so considerable in 1777, according to Governor Livingston, that people actually set up shops with British goods secured in exchange for provisions. 4 Illicit trade extended to Philadelphia. On January 20, 1779, the Philadelphia merchant Thomas FitzSimons complained that " for some time past the intercourse with N. York has been difficult & the Militia who are upon duty in Jersey seize every thing they find coming from there." 8 In 1780 the Philadelphia authorities arrested a number of persons charged with enemy trading, particularly in lumber— an amazing fact when its bulky character is considered. Rumor accused Major David Lennox in 1 7 8 1 of secretly receiving goods from his uncle, the British Commissary of Prisoners at New York, but Lennox forcefully denied such reports." B y 1 7 8 2 illicit trade between the two cities was said to involve goods to the value of £ 1 0 0 0 a week, though this could hardly have been more than a conjecture. 7 The occupation of Philadelphia by Howe in 1777 and 1 7 7 8 gave brief trading opportunities to outsiders as well as to citizens who remained there. The actions of William Constable at that time are suggestive as to the attitude of some merchants. Constable, originally of Schenectady, New York, was in England when war was declared. In 1777 he sailed for America with a cargo for which he found no market in New Y o r k ; so he went on to Philadelphia, also then held by the British. 4 E. F. Hatfield, History

of Elizabeth,

N. / . , pp. 465, 466.

5 T o Robert Christie, Federal Convention, Misc. Papers, in Hist. Soc. Penna.; cf. also W . H. Siebert, " Loyalists of Pennsylvania," Ohio State Univ. Bul., X X I V , p. 78. There are several items for Sept., 1778, in the D a y Book of Glassford, Gordon and Monteath, indicating that wine especially was shipped to Philadelphia from New York after the British evacuation of the former place. 6 Cf. the controversy between Lennox and Francis Lewis in Penna. April 17, 24, 1781.

Packet,

7 T. Westcott, in Phila. Sunday Dispatch, Aug. 25, 1872; cf. also statements of John Gilman in Burnett, Letters, VI, 374, about the trade being " s o g r e a t " ; also Sparks, Diplomatic Corresp., X I , 130, 131, 143, on the Jersey illicit trade.

l82

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

W h e n the latter place w a s about to be evacuated he loaded one or t w o ships w i t h salt and clothing and sent them into W i l m i n g t o n , held by the patriots, and secreted at Philadelphia o t h e r g o o d s , including medicines w h i c h he had heard w e r e needed b y the A m e r i c a n s . T h o u g h Constable declared his sentiment f o r " the cause o f L i b e r t y & m y C o u n t r y , " and later had a b r i e f m i l i t a r y career as some sort o f a c o m m i s s a r y under L a F a y e t t e , his actions plainly s h o w h o w political divisions were sometimes d i s r e g a r d e d w h e n merchants w e r e in search o f a market. 8

It

is w o r t h n o t i n g that Constable turned to his old acquaintance W i l l i a m D u e r , then in C o n g r e s s , to get h i m out o f the j a m in which

he w a s c a u g h t

in

1778

by reason

of

these

devious

activities. A n o t h e r c h a n n e l f o r the illicit or " L o n d o n " trade w a s L o n g I s l a n d S o u n d and the Connecticut coast. T h i s business g r e w v e r y profitable there, seemingly carried on by " e v e r y b o d y " a c c o r d i n g to a competent recent writer. 8 B r i t i s h g o o d s and prov i s i o n s were e x c h a n g e d on L o n g Island or by " r e n d e v o u x " of whaleboats. B r i t i s h g o o d s apparently reached even C o n n e c t i c u t , in 1780, under c o v e r o f d a r k night.

Hartford, The

trade

a f f e c t e d S t a m f o r d and N o r w i c h , c o r r u p t i n g m a n y y o u n g men with "thirst

f o r plunder a n d m o n e y . " I n July,

1782,

John

C h e s t e r o f W e t h e r s f i e l d w r o t e o f the " C u r s e d illicit trade " w h i c h " o u r o w n people b e g i n to get into " and " some

few

o f us " to j u s t i f y openly. 1 0 R u m o r s ran to the s a m e e f f e c t in R h o d e I s l a n d : C l a r k and N i g h t i n g a l e o f P r o v i d e n c e w e r e acc u s e d but cleared o f such c h a r g e s . 1 1 T h e trade w a s c o n d o n e d by m a n y persons. In A p r i l , 1780, Jeremiah W a d s w o r t h

himself

h a d a share in the vessel o f a " M r . S h a w " w h i c h a r r i v e d in 8 Constable to Duer, June 13, 1778, Duer Papers, I. 9 F . G . M a t h e r , Refugees

of 1776 from

Long

Island,

pp. 209-214.

10 Barck, op. cit., pp. 133, 134; William Hart to Wadsworth, May 25, 1780 W a d s w o r t h Corresp.; C. S. Hall, General Samuel H. Parsons, pp. 344, 347 Huntington 11 Records

Papers,

p. 160.

of State

of Rhode

Island,

I X , 592, 595.

ACTIVITIES

UNDER

TWO

FLAGS

183

N e w York. 1 2 A s the war drew to a close trade naturally flowed more and more freely out of New Y o r k . Nicholas Low, in Philadelphia in July, 1783, apparently had carried on business for some time with Jones and Ross of New York. 1 3 " The City of New Y o r k , " said Governor Tryon in March, 1779, " is become an immense magazine of all Kinds of Supplies for a very extensive Commerce." 14 T o what extent profits on that commerce were actually realized by loyalists there, nevertheless remains a question. 15 Y e t this group of merchants enjoyed certain advantages, though working under the most confusing conditions. 16 Commodity prices rose to three hundred per cent over the pre-war level, in terms of a fairly stable currency, 17 promoting a rapid turnover of goods; a Brooklyn merchant declared in 1778 that business was " founded upon such extravagant Principles." 1 8 Moreover, there was little difficulty despite American privateers in getting English goods into the place. A London house even refused to ship to New Y o r k in 1778, saying that the place must be glutted with g o o d s ; 1 8 yet the city's English importations grew most rapidly after that date, reaching the second highest value 12 John Lawrence to Wadsworth, April 13, 1780, Wadsworth Corresp. 13 Barck, op. cit., p. 135; Jones and Ross to Nicholas Low, July 30, 1783, Stewart and Jones Letters. Nathaniel Shaler had written Wadsworth, Feb. 15, 1782, about taking care of French officers' orders. 14 Quoted in John A. Stevens, Colonial Commerce of New York, p. 339.

Records

of

the Chamber

of

15 The British apparently destroyed all official commercial records before leaving the city: cf. Historical Commission, Report on American Manuscripts, IV, 457, 458. 16 There is a memorandum in the D a y Book of Glassford, Gordon and Monteath, in which their agent laments the " hurry and Confusion attending the Conducting of business in N Yk." 1 7 H . M. Stoker, "Wholesale Prices at N e w York Citj, 1720-1800," in Cornell Univ. Agricultural Experiment Station, Memoirs, no. 142, p. 202. 18 Daniel Tyler to Samuel Nightingale, Jr., Jan. 19, 1778, NightingaleJenckes Papers. 19 Fowler, Insurance in North America, p. 31.

184

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

in its history in 1 7 8 1 . 2 0 These were largely military goods from British contractors, it is true, but the local merchants sometimes imported on their own account, occasionally under protection of the British navy. Foreign remittances must have been made principally with a r m y gold and silver, since the city lacked unrestricted access to the Hudson hinterland. However, its merchants petitioned in 1 7 7 8 against an army order prohibiting the shipment of flaxseed and lumber f r o m New Y o r k , and one merchant shipped a cargo of lumber and bricks to St. Kitts in 1 7 7 7 or 1 7 7 8 . 2 1 These facts suggest that such products were sometimes available. The illicit trade must have helped out in this respect. According to a recent writer the largest profits made in the city during the war were derived f r o m shipping, 22 though exports were theoretically forbidden until 1 7 7 8 when merchants secured modifications in the Prohibitory Act. T h e local Chamber of Commerce was doubtless influential in obtaining such concessions since it displayed an intensely loyalist spirit. 23 A f t e r 1 7 7 9 commerce tended to spread out in its normally complicated fashion though supplies probably continued to come largely f r o m England, as did those imported by Moses L e v y , one of whose ships arrived in N e w Y o r k f r o m London in 1780. 2 * A n d some commerce was possibly carried on by stealth with France. 2 5 Thomas Buchanan and Company engaged in a number of voyages out of the city, receiving ship chandlery supplies from Jones and R o s s in 1 7 8 0 f o r at least twelve 20 MacPherson, Annals of Commerce, for pre-war trade.

III, passim; compare with figures

21 Report on American Manuscripts, I, 364; Glass ford, Gordon' and Monteath Day Book, no date. MacPherson, op. cit., gives the value of New York's exports to England as about £15,000 annually, 1778-1780, but with a drop to almost nothing in 1781. 22 Barck, op. cit., p. 120. 23 A. C. Flick, Loyalism 24 Arbitration

in New York, p. 100.

Records of the New York Chamber of Commerce, p. 28.

25 Glassford, Gordon and Monteath mention a ship stopping at Bordeaux, probably in 1778. H. and A. Wallace were interested in this venture with them.

ACTIVITIES

UNDER

TWO

FLAGS

185

sloop and ship ventures. 28 Another firm earlier cleared £1080 N e w Y o r k currency on one adventure in rum from Jamaica, and £349 on another. 27 That New Y o r k merchants enjoyed some coastal trade also, is revealed by the insurance book of William and Jacob Walton. They followed the British army with their goods, as such notations as " T o the A r m y up the N o . River," " With the Expedition," and " T o Headquarters," suggest. The British occupation of Savannah probably explains the Waltons' four voyages to or from Georgia in 1779 and 1780. Perhaps British conquest of Newport also helps explain their numerous ventures to Rhode Island and return, from December, 1777, to May, 1780, though many of these were directly to or from Providence which the British never held, and the British evacuated Newport in October, 1778. This was partly illegal trade; so was a voyage to Boston in October, 1778. The Waltons sent many ships to Jamaica and other West India ports, and at least one to London. Insurance rates varied greatly in such cases, reaching a peak for the Providence ventures of thirty-five per cent in December, 1779, and for the Georgia trips of thirty-three per cent, probably in the fall of the same year. Rates for the coastal voyages had declined considerably by the opening of 1781. 28 The greatest market for the loyalist merchants was of course with the British forces in N e w York. In considering this the indignant charges of Judge Jones should be recalled: that a general spirit of peculation prevailed, with British commissary and supply agents making fortunes of incredible amounts. 28 The traffic in military goods was certainly tremendous. In August, 1778, the British Commissary General had fifty-three 26 Stewart and Jones Accounts, April 1, 1780, to Jan. 16, 1781. 27 Glassford, Gordon and Monteath Day Book, no date. 28 W a l t o n Insurance Book, passim. Rates on the voyages to Rhode Island in 1777 and 1778 were surprisingly l o w : 5%, 7 % , 9%. 29 Thomas Jones, History of New York, I, Chap. X V I , et passim. Jones was very bitter and biased. Cf. also, E. E. Curtis, Organization of British Army in American Revolution ( N e w Haven, 1926), pp. 98-100.

l86

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

vessels, mostly sloops, employed in furnishing provisions and forage at New Y o r k and Philadelphia; his expenditures averaged around £29,000 a month from February, 1 7 7 9 , to May, 1780. 3 0 It is obvious that local merchants enjoyed some of this extraordinary business. The Hessian officer, already quoted, remarked in September, 1 7 8 0 : " The war has made the inhabitants of this city and the neighborhood rich. . . . The sums which the army consumes here are incredible." 31 The local merchants were even accused of profiteering at the army's expense, of " peculation in every profitable branch of the service," particularly in groceries. 32 In October, 1778, Winthrop, Kemble and Company secured a contract from the British Commissary General to import 100,000 gallons of rum from Antigua, Barbadoes and St. Christopher, for use of the army, at three shillings, six pence sterling a gallon. 33 One of the M c Y i c k a r s sold rum to the troops. 34 In 1 7 8 1 the Victualler of the Fleet drew bills of exchange in f a v o r of William Hill for £ 1 0 0 0 ; in f a v o r of Robert and George Service (including a bill of May, 1 7 8 2 ) for £ 3 0 0 0 ; in f a v o r of Murray, Sansom and Company for at least £ 2 7 , 0 0 0 ; in f a v o r of Thomas Buchanan and Company f o r £6000. Thomas Randall, " Master of the William Victualler," also had some sort of an account with the fleet.35 Such merchants, however, had no such opportunity f o r profit by receiving bills at huge discounts, as did Americans who negotiated depreciated exchange on the French government. F i v e per cent discount was the depreciation rate in New Y o r k on June 29, 1 7 8 1 . 3 0 30 Daniel W e i r Letter Book, 31 Pettingill, Letters

from

passim.

America,

p. 232.

32 Barck, op. ext., p. 122, quoting a contemporary. 33 Daniel W e i r Letter Book, under date. 34 Arbitration

Cases of Chamber

35 Letter Book of Henry Davies,

of Commerce,

pp. 12, 13.

passim.

36 Ibid., p. 33. Glassford, Gordon and Monteath have a number of entries in their D a y Book regarding the negotiation of bills of exchange, frequently drawn on the British forces. Some were negotiated in Philadelphia. One w a s drawn by Thomas Russell, probably the Boston merchant.

ACTIVITIES

UNDER

TWO

FLAGS

187

Buchanan and Company, particularly interested in groceries, also received money from the British f o r " expenses of shipping stores " during the siege of Charleston. 37 Their agents, like those of the Waltons, apparently followed the royal troops f r o m place to place. S o did also Neil Jamieson, agent of a Glasgow firm and an exiled Virginia loyalist, who set up stores in Philadelphia, Savannah, and N o r f o l k successively, 38 while Jones and R o s s of New Y o r k , who commissioned an agent in June, 1780, to engage in the ship chandlery business at Charleston, were selling goods, especially " spirits," in Yorktown a year later. 39 Robert Henderson, a Scot who arrived in New Y o r k in the spring of 1 7 8 1 , is a particularly good example of such itinerant traders, though his expectations of sharing in a lively trade speedily vanished. Trade was dull with him from the first and became worse, partly because the place was already overstocked with English goods. H e did sell some " britches " and coats at forty per cent advance, which gave a profit, since goods cost him but thirty per cent advance in March, 1 7 8 1 ; but in April only those importing goods with the fleet (thereby making certain savings) were able to break even on the usual twenty-five per cent advance sale price. All his " military shoes " were quickly sold, however, and by April 1 7 8 1 , he was shipping goods to Virginia, f o r which he secured a bill on the British Commissary. His experience in New Y o r k was on the whole most unsatisfactory, and he returned home, a disappointed man, before the war was concluded. 40 Shortly afterwards he returned to Philadelphia to enter business there, where he was equally unfortunate. Several N e w Y o r k merchants held influential positions under the British. William Seton, brother-in-law of Richard Curson 37 Report

on American

Manuscripts,

38 Glassford, Gordon and Monteath,

III, 319. passim.

39 Stewart and Jones Letters, under June I, 6, 21, 178o, Oct. 14, 1781. 40 Henderson Letter Book, passim ; as early as June, 1781, he wrote that goods were being disposed of at vendue; in Nov., that vendue prices were 25% and 30% lower than his.

l88

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

of Gouverneur and Curson (located at St. Eustatius during the w a r ) , transacted the w o r k of the shipping office of the city. 4 1 Although a family genealogist says that Seton's private business w a s ruined during the w a r , he w a s at least able to secure a small country place in 1 7 8 4 at Bloomingdale. 4 2 W i l l i a m and Robert B a y a r d apparently made a fortune handling prizes and provisions f o r the British, though the f o r m e r also lost heavily in the city fires of 1 7 7 6 and 1 7 7 8 . B u t in M a y , 1 7 8 4 , his son, William, J r . , w h o had remained in N e w Y o r k in trade, was able to send over twenty thousand pounds of " paper money " to London. 4 3 D a v i d Sproat, British C o m m i s s a r y of

Prisoners,

w a s accused of profiteering by charging f o r coffins which were never used. 44 H i s nephew, Robert L e n n o x ,

brother of

the

patriot M a j o r D a v i d L e n n o x of Philadelphia, assisted Sproat and then remained as a merchant in N e w Y o r k a f t e r the w a r . Occasional reminiscences o f f e r clues to the activities of other loyalists. A number of fortunate persons, including J o h n V a n derbilt, are mentioned by J u d g e Jones as having engaged in privateering, trade, and sale of goods to the army. 4 5 T h o m a s E d d y is said to have been impecunious when he arrived in N e w Y o r k in 1 7 7 9 , but to have improved his condition by f o u n d ing an importing firm in 1 7 8 0 , and then to have secured a profitable contract in handling the money of B r i t i s h prisoners at six per cent interest. 48 A son of Robert M u r r a y , the Quaker merchant, may have acquired a substantial fortune in the im41 Report on American

Manuscripts,

I V , 458.

42 Robert Seton, The Setons of Scotland pp. 255-272.

and America

( N . Y.,

1899),

43 H . E. Edgertoni, ed., Royal Commission on Losses and Services of American Loyalists, Intro., X L I X ; Bayard Accounts, in Bayard-PearsallCampbell Papers. 44 Typed M S life of Dr. John Rogers, p. 21, " Misc. M S ", in N e w Y o r k H i s t . Soc. 45 Thomas Jones, Neiv York, II, 306. 46 Hunt's Merchants Mag., I l l , 429.

ACTIVITIES

UNDER

TWO

FLAGS

189

portation of British g o o d s . " Several newcomers were certainly able to establish themselves permanently in trade in New Y o r k during the war years, among whom were Hugh Henderson f r o m Portsmouth, N e w Hampshire, who imported dry goods after 1778, and Bernard Hart, an Englishman, who engaged in the Canadian trade a f t e r 1 7 8 0 . " Little is known concerning privateering out of New Y o r k City beyond the information in Governor T r y o n ' s proclamation of March 8, 1 7 7 9 . H e stated that 1 2 1 commissions f o r privateers had been issued, and that the value of the prizes taken since the previous September 1 8 was approximately £600,000 lawful money of N e w Y o r k . 4 " In M a y , 1 7 7 9 , a writer in a local paper declared that " S o many privateers are fitted, and such a call f o r ropes, etc., that cordage will bring an advance of 40 per cent sterling on the invoice. . . . The people of N e w Y o r k have feathered their nests by the success of their privateers, but, having swept the seas, prizes drop in but slowly at present." 50 In spite of this, and of the generalizations of Joseph Galloway to the same effect, 5 1 it probably was true that N e w Y o r k privateers were relatively less successful than their Yankee opponents. 52 Y e t captures continued to be made by N e w Y o r k vessels f o r several years. There is no telling what wealth a few may have gained thereby. It seems that Daniel McCormick made a fortune, not by owning privateers, however, but in handling the sale of captured goods at vendue. 58 Such prize agents invariably prospered everywhere. 47 Joseph Scoville, Old Merchants reliable work.

of New

York

City, I, 297; not a

48 W. Cutler, Manasseh Cutler, I, 297 n.; Scoville, op. cit., II, 119, 120. 49 Quoted in Stevens, Colonial Records Chamber of Commerce, p. 342. 50 New York Evening Post, June 25-28, 1779, quoted in Stokes, Iconography oj Manhattan Island. 51 A Letter to the Right Honourable Lord Viscount H - E ... (2nd ed., London, 1781), p. 39 n. 52 See remarks by Channmg, in Mass. Hist. Soc. Proc., XLIV, 375, 376. 53 Stevens, op. cit.. Biographical Sketches, p. 148; cf. New York June 2, 1777, as to sale of goods at his house.

Gazette,

I90

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

T h e loyalist N e w Y o r k merchants were, with notable exceptions, representative of the most prominent mercantile families of the late colonial period. They included Theophylact Bache, Isaac L o w , Henry Remsen, Daniel C. Verplanck, Richard Yates, John I. Glover, Nicholas H o f f m a n , the Waltons, the Bayards, the Ludlows, the Laights, and the Wallaces. 1 ' 1 Since such persons had inherited the complex social organization of the colonial period and much of its wealth, and since the years of British occupation may even have augmented the fortunes of several of them, it was significant f o r the financial future of the city that they were not all expatriated at the conclusion of the war. Of the small minority of merchants who left the city in 1 7 7 6 , certain individuals doubtless suffered losses. John Alsop, Alexander Robertson, and Walter Rutherford, for example, are said to have retired to the country and to have given up all business, though Alsop did invest in a Virginia tobacco speculation in 1 7 7 7 . T h e sugar refiner and merchant, Isaac Roosevelt, was busily concerned in state legislation, serving on numerous committees f o r the assembly. A similar political career was had by Jonathan Lawrence, a retired merchant who served on state commissions to handle army supplies and to sell forfeited estates. H e privately contracted to furnish supplies to the army on one occasion, however, and is said to have speculated heavily in state lands whereby he repaired losses suffered by reason of the w a r . " On the other hand, Francis Lewis and Philip Livingston were able as private merchants to carry on considerable commerce f o r the Continental Congress. T h e patriotic C o m f o r t Sands, a state office-holder, likewise became active in the public supply business as a private contractor. It has been noted that Cornelius R a y did not retire to business 54 Stevens, op. cit., Biographical Sketches, passim; Henry Dawson, ed., New York City in the Revolution, p. 119 ff. for addressers of H o w e ; Barck, op. cit., pp. 55, 137 n. 55 Thomas Lawrence, History and Genealogy of Laivrence 1858), p. 95 ff.; Mather, Refugees of Long Island, p. 443.

Family

( N . Y.,

ACTIVITIES

UNDER

TWO

FLAGS

I9I

obscurity, but even engaged in mercantile activities in Baltimore before the end of the war. Samuel B r o o m was able to carry on his former New Y o r k business f r o m N e w Haven. T h o m a s Randall managed privateers, commissioned by the N e w Y o r k Congress, out of Elizabethtown, N e w Jersey, and Isaac Clason of New Y o r k engaged in the provisions trade on the Hudson River. The Pintards, L e w i s and nephew John, were able to stay on in New Y o r k f o r the purpose of supplying American prisoners there, but presumably did not carry on private trade. T h e greatest war-time opportunities which the British army offered to any firm of merchants were at the distant fur-trading post of Detroit, but the ultimate benefits were evident in the financial growth of New Y o r k City. F o r the course of financial empire, then as frequently in American history, took its way eastward. This is the story of two traders f r o m the north of Ireland, Alexander Macomb and William E d g a r . 5 9 Both went to the West in pre-Revolutionary years by way of Albany. There, unknown to each other, they made similar contacts. Macomb's father engaged in supplying the British army, setting an example which his sons, aided by marriage relationships, carried on at Detroit after about 1 7 6 9 . " E d g a r arrived in the West before the French and Indian w a r was over and set up as a private f u r trader at Detroit, seeking to supply British commissaries at the western posts, such as William M a x w e l l at Michilimackinac and Sampson Fleming at Detroit and Niagara. E d g a r ' s business acquaintances came to include the prominent Montreal f u r merchants, Isaac Todd and J a m e s McGill, and the Phyns, Ellices, and William Constable of Schenectady. 5 8 Both E d g a r and Macomb had prospered by 1 7 7 6 . The 56 This entire section was aided in many w a y s by the generous advice of Miss Josephine Mayer, w h o is preparing a l i f e of Edgar w i t h some help f r o m the author. 57 H . A. Macomb, Macomb

Family

Rccord

(Camden, N . J., 1917), pp. 1-10.

58 Edgar Papers, passim. On the Schenectady relations, c f . R . H . Fleming, in Toronto Univ. Contributions to Canadian Econs., I V , 25 ff.

192

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

former owned property of various kinds in Detroit, and the Macomb brothers purchased the whole of what is now Belle Isle, in the Detroit River, that year. T h e Macombs flourished particularly in supplying their friend, Lieutenant-Governor H e n r y Hamilton, " the hair buyer," with his lavish presents to the Indian tribes, receiving between December, 1 7 7 7 , and September, 1 7 7 8 , some £50,000 f o r such goods and for army provisions. 59 E d g a r , on the contrary, was not doing so well in 1 7 7 8 and wanted to leave the country. 60 He wras still well-to-do, however, for in June, 1779, Todd and McGill held some £8000 N e w Y o r k currency of his on which they offered to pay interest. 01 A t this critical period the Macombs seem to have offered E d g a r a partnership in their business. Against the advice of Todd and McGill, he accepted, and it proved a highly lucrative connection: in three years' time E d g a r ' s fortune was probably more than tripled. 62 T h e work of Macomb, E d g a r and Macomb was largely in supplying the Indian Department of the British army. Scalping knives, blankets, fishhooks, and even jewsharps were furnished to sooth the savage breast and, along with supplies for " Officers M a s s , " " Ordinance Dept.," and other army needs, ran up their accounts with the British into large figures. Between December, 1 7 7 9 , and May, 1780, their charges against the Indian Department alone amounted to £42,489. The work also included handing out supplies to frontier renegades, including the infamous Girty brothers, who were ravaging the American settlements. 83 News of the firm's great success even reached England. E d g a r continued anxious to leave Detroit, however; he wanted to enjoy the pleasures of civilized society with which 59 Hamilton Papers, in N e w York Hist. Soc.,

passim.

60 James Bannerman to Edgar, Oct. 4, 1779, Edgar Papers. 61 Todd and McGill to Edgar, June 2, 1779, ibid. 62 Claim of Macomb to Edgar, April 4, 1814, ibid. 63 Account Book "A" of Macomb, Edgar and Macomb,

passim.

ACTIVITIES

UNDER

TWO

FLAGS

I93

frontier conditions were in drab contrast. H i s friend Sampson Fleming, the former British commissary, also grown rich at the western posts, urged him to leave in 1781. Both men hoped to go to Ireland for a visit at least. Edgar finally did leave in the fall of 1783, having saved the Macomb firm, he later claimed, from excessive importations that year through his prudence, 64 lack of which wrecked so many other American houses. He entered the States with a bill of £27,000 on an English house, unencumbered by debts, unsalable goods, uncertain credit, or unreliable partners, when many American merchants were floundering in the morass of such post-war circumstances. W h y did Edgar and Fleming, followed a year later by A l e x ander Macomb, settle in the States in preference to England, Ireland, or Canada? They apparently foresaw the possibilities in places like N e w Y o r k and Philadelphia. Fleming, who went to Philadelphia to look around, rather enigmatically said (when they all seemed to be looked upon a little suspiciously by " government " in the States), " W e have not come into their Country as Spies, or Fortune Hunters, we wish to be the means of adding to their Greatness! " 65 Another reason for their decision was their friendship with William Constable who in 1783 succeeded to the New Y o r k business of the English house of Phyn and Ellice, also formerly of Schenectady, to one of whose members Constable was brother-in-law. Phyn and Ellice's regular N e w Y o r k agent had had to leave there with the British army. 8 * It is possible that Edgar became connected with this firm, or, like Robert Morris, with the house of Constable, Rucker and Company which was established soon after in New York. E d g a r married Constable's wife's sister in 1784 — a marriage which also connected him with the important Moore Furman of N e w Jersey. A t any rate Edgar and Fleming 64 Memorandum, April, 1812, Edgar Papers. 65 T o Edgar, Jan. 9, 1784, ibid. 66 Fleming, op. cit., p. 35.

194

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

readily plunged into " bank " matters with Constable's aid and advice. 67 The newcomers began to build homes on L o n g Island in the spring of 1 7 8 4 and to think of employing " gardiners." They had come back to " civilization " to stay, and N e w Y o r k ' s financial future was to bear the impress of E d g a r ' s influence f o r several decades. Subsequent activities of E d g a r , and of Macomb who secured a " mansion " f o r himself on Broadway around 1 7 8 5 , will be discussed below. 67 Fleming to Edgar, March 21, 1784, Edgar Papers.

CHAPTER IX THE QUESTION OF BUSINESS FREEDOM AMONG the underlying factors responsible for the A m e r i c a n Revolution w a s the irritation produced by a new series of commercial

regulations

which

further

limited

the

business

freedom of the colonial merchants. A s the quarrel with Great Britain developed, however, the increasing violence of " mechanics and artisans " turned many of the merchants into " conservatives," especially on the question of independence. In this attitude they w e r e supported b y other men of means and sobriety. M a n y o f them remained loyal to the revolutionary cause, but within the patriotic g r o u p they were opposed by a radical faction, some o f whose members believed that social re-organization w a s the objective o f the war. It is the purpose of this chapter to s h o w

that the conservatives, having received

a

political w o r s t i n g f o r several years, gradually regained control of many national and state affairs by 1781 and, among other things, pointed the ship of state back on the course of business " freedom." In the light of new materials it is now possible to re-interpret Continental C o n g r e s s politics, partly on economic grounds. 1 T h e two

schools

of

Congressional

political

thought

which

Dr.

Francis W h a r t o n labeled the " liberative " or " expulsive " as against

the

" constructive "

or

" remedial "

school, 2

might

better be termed " radical " and " conservative " respectively. T h e y frequently struggled over the right of the merchant to seek his private ends under war-time conditions, the division being widened further over the question of land speculators' 1 T h e reference, of course, is to Edmund C. Burnett, ed., Letters of Members of the Continental Congress. The introductory remarks by Dr. Burnett at the beginning of each volume constitute the only up-to-date reflections upon the politics of the Congress, though he does not make an economic interpretation. 2 In his Revolutionary Diplomatic Correspondence of the U. S., I, 252; cf. Sumner, Financier, I, 218, on Congressional alignments after 1776.

195

I96

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

rights in western land companies. A s early a s 1 7 7 5 certain members of Congress insisted that retaliation against E n g l a n d depended upon the merchants being f r e e to make exports, which alone would pay f o r necessary w a r supplies. Silas Deane of course appreciated this point, and wealthy, conservative J o h n J a y bluntly said, " W e have more to expect f r o m the enterprise, activity and industry of private adventurers, than f r o m the lukewarmness of assemblies."

3

A s the w a r progressed and living expenses rose the feeling g r e w that merchants were too successfully fishing in troubled waters. A N e w Hampshire delegate to C o n g r e s s gave expression to this feeling in 1 7 7 9 when he wrote, " H e w h o increases in wealth in such times as the present, must be an enemy to his Country, be his pretensions what they m a y . " I l c n r y L a u r e n s of South Carolina argued fiercely, " Reduce us all to poverty and cut off or wisely restrict that bane of patriotism, C o m merce, and we shall soon become Patriots, but how hard is it f o r a rich or covetous M a n to enter heartily into the K i n g d o m of P a t r i o t i s m ? " 4 T h i s w a s the attitude of the L e e - A d a m s faction, which headed the radical Congressional

group

on

political questions generally and on the case of Silas Deane particularly. T h e case f o r Deane w a s , in essence, that f o r unlimited commercial opportunity, and in d e f e n s e of him a n d of that principle the conservative faction first rallied under the leadership of Robert M o r r i s . In 1 7 7 6 the home of M o r r i s had been a meeting place f o r " a set of people w h o think and act alike " — t h o s e opposed to a declaration of independence.® A s chairman of the Secret C o m mittee on commerce, M o r r i s soon a f t e r had to assume responsibility f o r g i v i n g Congressional contracts f o r w a r supplies to various individuals, such as himself, and f o r the activities of 3 Cf. notes of debates on proposed non-exportation agreement, in of the Continental Congress, III, 476, 477, 495. 4 Burnett, Letters, IV, 223, 163. 5 Quoted in W. T. Read, George Read, p. 161.

Journals

THE

QUESTION

OF

BUSINESS

FREEDOM

I97

the envoy to France, Deane. A s already noted, Morris and Deane had private concerns together when the latter went abroad in 1776. Rumors about these activities seeped out, and the Congresses of 1778 and 1779 were bedeviled with accusations of self-seeking through use of public office, against Morris, Deane, and their commercial and land-speculating associates. T h o u g h these suspicions were partly justified, Morris and his kind sincerely identified their private actions with the public good. Congressmen like William Duer, who understood such reasoning, as the Lees and Adamses could not, defended them valiantly. The extreme opposition even believed, in the frenzied words of Arthur Lee in May, 1779, that the attitude of the conservatives indicated " some deep design against our independence at the bottom. Many of the faction are, I know, actuated by the desire of getting or retaining the public plunder. . . ." 8 Such language partially indicated that the agrarian Lees and Puritanical Samuel A d a m s were unappreciative of the individualistic philosophy which was spreading over the Western world; but it also revealed all too clearly an understanding of the profiteering spirit of the times which marked the actions of many " conservatives." When Deane returned from France in the fall of 1778 the Lees held that his Congressional party was " composed of the Tories, all those who have rob'd the public, are now doing it, and those who wish to do it, with many others . . . " ; that it had its " dependencies thro' the Continent by means of their new formed Commercial Establishments." 7 The bitter strife 6 Wharton, Rev. Diplomatic Corresfi., I, 534. There is an impressive amount of other such accusations in the literature of the period. Henry Laurens was one of the most bitter critics of the business element. H e wrote Washington, Nov. 20, 1778, of how " almost every Man has turned his thoughts and attention to gain and pleasures, practicing every artifice of Change Alley or Jonathan's"; how even members of Congress neglected their duties for attorney's fees, used House secrets for monopolizing purposes, and accumulated the " Public debt for their private emoluments," etc. Burnett, Letters, III, 500. 7 F. L. Lee to Arthur Lee, Dec. 10, 1778, ibid., I l l , 530.

198

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

o v e r the case o f D e a n e w a s made public k n o w l e d g e by

Tom

P a i n e in D e c e m b e r , 1 7 7 8 — a n d P a i n e ' s w r i t i n g s w e r e as leaven in the political f e r m e n t o f turbulent P e n n s y l v a n i a . T h e r e followed in the spring and s u m m e r o f 1 7 7 9 a most virulent P h i l a delphia newspaper

war.

Dark

insinuations

were

made

that

D e a n e a n d M o r r i s had e n g a g e d in public peculation. W i l l i a m D u e r , G o u v e r n e u r M o r r i s , J o h n N i x o n , and J a m e s W i l s o n w e r e criticized f o r c o m i n g to their defense. 8 F e e l i n g also ran h i g h o v e r western land speculators' claims and f r o m r u m o r s of corruption in the a r m y c o m m i s s a r i a t , W i l l i a m Shippen w r o t e o f an a r m y agent in June, 1 7 7 9 , " o n l y think o f a T w o penny Jack w h o never in his life w a s capable by a n y business he had been e n g a g e d in . . . but in a v e r y so so manner

shall

n o w be m a k i n g 40 or 50,000 pr. a n n u m and that by l o w r i n g the value o f our M o n e y and raising the prices o f every article he purchases."

8

S u c h a devil's b r e w o f suspicions filled the

Congressional

inquiry pot in 1 7 7 9 , in w h i c h D e a n e w a s t h o r o u g h l y c o o k e d up. A f t e r this season o f bitter speeches and publications D e a n e disgustedly g a v e up h i s c o u n t r y as lost, returned to E u r o p e w h e r e he attempted t o continue his business speculations, and turned apostate. M o r r i s , meantime, w a s replaced in C o n g r e s s by P e n n s y l v a n i a n s o f a d i f f e r e n t stripe. H e did not return to the national scene until called back as F i n a n c i e r . F o r a time radicalism continued m o r e or less dominant, to the general confusion of

all concerned w i t h the direction o f

the war.

The

m o r a s s o f despair into w h i c h C o n g r e s s ran in 1 7 7 9 and 1780, h o w e v e r , discredited that attitude and s o w e d m o r e w i d e l y the seeds o f conservative reaction. M e a n t i m e , the extent to w h i c h bitter f e e l i n g over economic questions could be expressed in the early w a r y e a r s is f u r t h e r illustrated by developments in several localities. O c c u r r e n c e s in Philadelphia in 1 7 7 9 , f o r example, revealed those persons w h o , 8 B u r n e t t , Letters, 9 Ibid., p. 282.

I V , 97 n. et

passim.

THE

QUESTION

OF

BUSINESS

FREEDOM

I99

in popular opinion, had successfully pursued some ways of individual gain to the public detriment. The Revolutionary politics of Philadelphia should be viewed in the light of a serious pre-war antagonism between import merchants and consumers. A similar division was revealed in the struggle over the " levelling " constitution adopted by Pennsylvania in 1776. Many constitutional supporters were dubbed " men of desperate fortunes." Anti-Constitutionalists, on the other hand, included such merchants as Robert Morris, George Clymer, Samuel Meredith, and James Wilson's wealthy brother-in-law, Mark Bird, the iron-master from Reading. 10 Years later, Alexander Graydon wrote that the Anti-Constitutionalists were " the disaffected, and those who had played a safe and calculating game. But they were rewarded for it: pelf, it appeared, was a better goal than liberty; and at no period in my recollection, was the worship of Mammon more widely spread, more sordid and disgusting. . . ." This was but an echo of popular criticism during the war. Public feeling was intensified by certain developments connected with the British occupation of Philadelphia. Some merchants then utilized the opportunity to obtain hard money from the army trade. The attitude of Thomas Willing, shown in his attempted negotiations with the British, was long remembered by radical Whigs. 1 2 People complained that the agreement by General Howe to recognize the colonial money of the province gave opportunities for gain to those with hard money, through manipulation of Continental currency. A wag thus described the situation: they 10 B. A. Konkle, Thomas Smith, p. 104; cf. also C. H. Lincoln, Revolutionary Movement in Penna., Chaps. XII, X I I I ; also W . R. Smith, " Sectionalism in Pennsylvania during the Revolution," Pol. Sci. Quart., X X I V , 226 ff. Daniel Roberdeau, one of the radical leaders, was a bankrupt merchant. 11 Graydon, Memoirs, p. 333. For a contemporary (1777) blast against the " boundless avarice " of the Philadelphia merchants, " whose gain is the Summum Bonum," see Burnett, Letters, II, 401. 12 Cf. Penna. Archives, 1777, p. 30.

200

B U S I N E S S E N T E R P R I S E : REVOLUTIONARY

ERA

Sold each half-joe for twelve pounds Congress Trash Which purchased six pounds of this legal cash; Wherebye they have, if you will bar the bubble, Instead of losing, made their money double! " 1 3 T h e smouldering fires of popular discontent were further stirred a f t e r the British evacuation in 1 7 7 8 by the extraordinary conduct of General Arnold, whose severe rule of Philadelphia was popularly held to be a part of some subtle scheme to restrict trade f o r the benefit of a monopoly—an accusation since proved to have been based upon an agreement made by A r n o l d with the Continental Clothier and another merchant. Popular discontent was increasingly demonstrated in attempts to control prices in Philadelphia, and in accusations against Robert M o r r i s and Blair McClenachan in M a y , 1779, f o r alleged profiteering in flour; also against Morris and J o h n Holker, in June, f o r alleged purchases of flour in contravention of price regulations f o r sale to the French fleet.14 A prelude to radical action was staged on M a y 24, 1779, by a Philadelphia mob whose animosity was particularly directed against B l a i r McClenachan. T h e mob's activities were satirized by a loyalist in this f a s h i o n : The great McClenachan bestrode His prancing horse, and fiercely rode, And faith, he had good reason— For he was told, that to his sorrow, He with a number more, to-morrow Should be confined in prison. 13 Quoted in Scharf and Westcott, Phila., I, 367. 14 Ibid., pp. 398-400. Benedict Arnold was attacked on the streets only two days after the " Fort Wilson " incident. Whitehead Humphreys, who had participated in the newspaper war, was attacked at his home in July. Levi Hollingsworth, the flour factor, is said to have been assaulted by a Philadelphia mob this same year, because he would not give to it flour he held for the troops. On the other hand, Tom Paine was kicked into the gutter one night by James Mease and several other inebriated persons of the opposite political persuasion.

THE

QUESTION

OF

BUSINESS

FREEDOM

201

'Twas said some speculating job Of his had so inflamed the mob, That they were grown unruly;— And swearing by the ' Eternal God ' Such fellows now should feel the rod, Resolved to ' come on coolly ! ' 1 5 The extreme act of such Philadelphia radicals, the storming of lawyer James Wilson's home in October, was explained by one leader of the mob as due to the fact that the " laboring part of the city had become desperate from the high price of the necessaries of life." 16 The people were also influenced by the events recorded above and by Wilson's legal activities on behalf of Tories and of merchants opposed to price regulation. Among those in the beleaguered house were Wilson, Robert Morris, George and Daniel Clymer, David Solesbury Franks (an aide-de-camp of Arnold), Matthew McConnell, and Generals William Thompson and Thomas Mifflin. The representative character of the besieged is apparent; prominent merchants, lawyers, and commissary officers were present. Their rescue, moreover, was achieved by members of the Philadelphia First Troop Cavalry, the " silk stocking " militia whose formation at the beginning of the war showed, according to Graydon, how the" canker worm, jealousy, already tainted the infantile purety of our patriotism." 1 7 Massachusetts is an example of those states in which economic and social radicalism never got so f a r out of hand, the conservatives being better organized to strike back. This is the significance of the political " Federalism " which raised its head in 1778. It was born at a meeting at Ipswich of delegates from commercially conscious Essex County in April, 1778, when the views of conservatives, opposed to the constitution drafted for 15 Joseph Stansbury, Loyal

Verses,

16 T. Westcott, in Phila. Sunday

p. 40.

Dispatch,

May 19, 1872.

17 Scharf and Westcott, Phila., I, 4 0 1 ; Conyngham, " Reminiscences," p. 2 1 3 ; Graydon, Memoirs, p. 123. W . R. Smith, op. cit., pp. 230-234, says that economic problems were the eventual undoing of the radicals.

202

BUSINESS E N T E R P R I S E : REVOLUTIONARY

Massachusetts, were bluntly stated.

18

ERA

T h e y expressed a political

philosophy which reveals h o w economic interests had become intwined with orthodox Puritan social theory. T h e y paid homage to ancient b e l i e f s : they damned any man so presumptuous as to claim that " the voice of the people . . .

is the voice of

G o d , " and they held that wisdom was a prerogative of the chosen f e w — b u t the f e w were not necessarily clergymen and men of education, but also those of fortune and leisure. 1 9 Such fortunes w e r e doubtless meant as those represented at the convention by the merchant delegates Jonathan Jackson, T r i s t r a m Dalton, and J o n a t h a n G r e e n l e a f , or perhaps such as those of the Gloucester merchant brothers of young l a w y e r P a r s o n s who d r a f t e d the E s s e x " R e s u l t . " T h e implication of social antagonisms is readily evident in this conservative document. Jonathan Jackson had been a w a r e a year b e f o r e of the " Jealousies between C o u n t r y & C i t y . " Shortly a f t e r the Convention adjourned he w a s driven to think that " the people at large deserve to be conjoled—at least that they do not k n o w w h a t their L i b e r t y is worth, or how to preserve it. . . . "

20

T h e subsequent overwhelming defeat of the

proposed constitution against which the E s s e x men had protested is evidence that conservative political forces were early in the ascendency in the B a y State. It is further evident in the w o r k of a new constitutional convention called in 1 7 7 9 , attended by such merchants as George Cabot, Nathaniel G o r ham, and Nathaniel T r a c y , and by such lawyers as J o h n Lowell. T h e resulting constitution, adopted in 1 7 8 0 , w a s

decidedly

partial to commercial interests. 2 1 Paralleling such disputes and contributing to them was the 18 A. E. Morse, Federalist

Party in Mass., p. 17.

19 (Theophilus Parsons), Result of a Convention at Essex, pp. 17, 18. The people were said to have good intentions but little wisdom. 20 T o Oliver Wendell, May 8, 1777, May 28, 1778, Jackson Letters of Mr. Austin Clark. 21 Allan Nevins, American of Mass., p. 28.

States,

p. 211; S. E. Morison, Maritime

Hist,

THE

QUESTION

OF

BUSINESS

FREEDOM

203

strife in all of the northern states over financial problems, the radical element generally (but not including men like J o h n A d a m s ) favoring policies which restricted business enterprise. F o r paper money, legal tender laws, and price-fixing were designed in the best colonial tradition not only as financial expedients to lighten the war burden on the people, but also as checks upon commercial coercion. Christopher Marshall of Pennsylvania expressed this idea in 1 7 7 7 when he wrote that price-fixing protected the poor f r o m the " oppression of R i c h merchants." 22 Connecticut enacted such laws in 1 7 7 6 , arguing that the rise in cost of the necessities of life was " chiefly occasioned by Monopolizers, that great pest of Society, who prefer their own private Gain to the interest and safety of their country. . . ." 23 Numerous such regulatory acts were passed in Massachusetts also, to check rising prices due largely to currency depreciation attributed to those public enemies everyone was sure existed, but whose identity was difficult to establish. T h e merchants were of course suspected as a group. In 1 7 7 7 the women of Beverly raided merchants' storehouses and compelled the proprietors, temporarily at least, to sell goods at state-fixed prices. Abigail A d a m s wrote f r o m Boston in A p r i l of that year of " a great cry against the merchants, against monopolizers, etc., who, 'tis said, have created a partial scarcity." 2* With Congressional encouragement f o r stringent control of retail trade, price-fixing and legal tender laws became the weapons of state and town against the alleged profiteers. All the other N e w England states went in f o r regulation of prices early in the war, as did also N e w Y o r k , Pennsylvania, 22Penna. Mag. Hist. Biog., X X V I I I , 76. Nathanael Greene bitterly wrote in July, 1777, that such price-fixing was " founded in public covetousness, a desire to have the property of a few at a less value than the demand will warrant to the owner." Rhode Island Hist. Soc. Coll., VI, 194. 23 Quoted by Simeon Baldwin, " T h e New Haven Convention of 1778," in N e w Haven Col. Hist. Soc. Papers, III, 41. 24 Familiar Letters of John and Abigail Harlow, in Col. Soc. Mass. Pub., X X , 175.

Adams,

p. 26; c f . also R. V.

204

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

a n d N e w Jersey in 1 7 7 8 . M o s t states also passed legal tender a c t s in 1 7 7 6 a n d

1777."

D e s p i t e the early popular enthusiasm

for

such

measures,

t h e y failed utterly to achieve their purpose. I t w a s impossible to e n f o r c e them f o r a number o f o b v i o u s reasons,

including

the

mastered

f a c t that c o n s e r v a t i v e

political

feeling

slowly

radical opposition in most places. C o n s i d e r , f o r example, the h i s t o r y o f r e g u l a t o r y e f f o r t s in B o s t o n . B y the end o f there had been a g r o w i n g

f e e l i n g there that public

1776

control

o v e r the sale o f the necessities o f l i f e should be set up, a n d d u r i n g the n e x t three y e a r s there w e r e m a n y complaints a g a i n s t alleged

" forestallers"

and

" monopolizers,"

especially

f o o d s t u f f s . 2 6 T h o s e persons actually accused, h o w e v e r , invariably

of

little

importance

in the business

community;

the g r e a t merchants w e r e seldom i n t e r f e r e d w i t h . t h o u g h certain

flour

and W e s t

accused of monopolizing

Moreover,

I n d i a g o o d s importers

in M a r c h ,

in

were

were

1777, and subjected

to

state regulations, 2 7 the system o f price limitations w a s soon a b a n d o n e d except f o r sporadic acts in relation to provisions. B o s t o n a n d other t o w n s renewed e f f o r t s in 1 7 7 9 to control sales, but a g a i n the g r e a t m e r c h a n t s g e n e r a l l y escaped attention ; w h e n several o f them w e r e finally i n v e s t i g a t e d they w e r e defiant or v a g u e on the question o f cooperating. O n 1 9 a committee o f

merchants

was

appointed

October

in B o s t o n

to

" a f f i x the price o f E u r o p e a n G o o d s , W i n e & c . " ; but it reported several d a y s later that this plan w a s simply

impracticable. 2 8

F r o m then on B o s t o n business m e n h a d little to w o r r y about from

such public

control.

The

collapse o f

the

Continental

c u r r e n c y m a d e it clear that price r e g u l a t i o n s in terms o f such c u r r e n c y w e r e u n j u s t , and in k e e p i n g w i t h the c o n s e r v a t i v e 25 R. V . H a r l o w , " S o m e Aspects of Hist.

Rev.,

26A.

M.

R e v o l u t i o n a r y F i n a n c e , " in

X X X V , 55, 58; cf. a l s o S u m n e r , Financier, Davis,

"Limitation

in C o l . S o c . M a s s . Pub.,

of

Prices

Atner.

I, Chap. I V .

in M a s s a c h u s e t t s ,

1776-1779,"

X , 119-132.

2 7 R e c o r d s C o m m i s s i o n e r s , Reports

of City

of Boston,

2 8 Ibid., X X V I , 80, 98, 100; cf. also, IVarren-Adanus

X X V I I I , 262-264.

Letters,

I, 305, 330, 334.

THE

QUESTION

OF

BUSINESS

FREEDOM

205

political reaction in M a s s a c h u s e t t s business w a s soon f r o m legal tender laws. I n M a y ,

1781, Timothy

freed

Pickering

c o u l d r e j o i c e that there w e r e none in all N e w E n g l a n d ; that in M a s s a c h u s e t t s the state currency passed at t w o f o r one f o r h a r d m o n e y , because the state had repealed such laws, established " honest " principles relative t o the currency, a n d levied heavy taxes." E l s e w h e r e the same g e n e r a l trend o f events m a y be observed, since strong opposition to such social legislation w a s

every-

w h e r e immediately raised a n d persevered in. T h e C o n n e c t i c u t r e g u l a t i n g act o f M a r c h , 1 7 7 8 , a r o u s e d a m o n g the people m o s t hearty c o n t e m p t , " a c c o r d i n g t o a

trader. 3 0

Such

"a

laws,

O l i v e r W o l c o t t said, w e r e a g a i n s t all c o m m o n sense. 3 1 In P e n n s y l v a n i a , R o b e r t M o r r i s and others protested v i g o r o u s l y a g a i n s t legal

tender

proposals

in

1777,

doubtless

feeling

on

that

o c c a s i o n as they did in 1 7 8 1 w h e n they declared that " i t

is

inconsistent w i t h the principles o f liberty to prevent a m a n f r o m the f r e e disposal o f his property on such terms a n d f o r s u c h considerations as he m a y think fit."

32

Charles

Carroll

similarly f o u g h t against legal tender l a w s in M a r y l a n d . Such

opposition

was

gradually

successful.

An

interstate

c o n v e n t i o n held at N e w H a v e n in J a n u a r y , 1 7 7 8 , still a d v o cated a price control system o f seventy-five per cent a d v a n c e o v e r the prices o f 1 7 7 4 , but C o n g r e s s w a s b r o u g h t to reverse its earlier r e c o m m e n d a t i o n

of

such regulations as early

as

June, 1 7 7 8 . T h i s w a s done on a d v i c e o f J e r e m i a h W a d s w o r t h , because o f

" a c h a n g e o f circumstances in the c o m m e r c e

these states." A Morris,

C o n g r e s s i o n a l committee, headed by

subsequently

d i s a g r e e d emphatically

with

of

Robert

the

New

H a v e n resolutions, t h o u g h C o n g r e s s itself w a s still to shillyshally on the issue. T h e states w e r e disheartened by the situ29 Rec. Book no. 127, pp. 3, 40, Div. of Old Recs. 30 Herrry Livingston to " Father," March 13, 1778, Redmond Coll. 31 Burnett, Letters, III, 167; no regard was paid to the law, he said. 32 Quoted in Scharf and Westcott, Phila., I, 417.

206

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

ation and though another convention, meeting on the initiative of Massachusetts at H a r t f o r d in 1 7 7 9 , advocated a new price system, it was of little avail. 33 The tide of opposition came to full flow in 1 7 8 0 when regulatory acts were generally repealed. A nationwide convention called to discuss the matter at Philadelphia in January, 1780, was a complete failure. 3 4 The end of all legal tender acts in the North was delayed a year longer. Massachusetts, however, as noted above, withdrew such laws in 1 7 8 0 and permitted a return to hard values. N o r was Connecticut's issue of that year made a legal tender. In Maryland a broad rescinding act withdrew such legislation, though there was a reversal on several issues in both 1 7 8 0 and 1 7 8 1 . Pennsylvania also lagged in the matter, as was to be e x p c c t e d , v o t i n g a l a r g e issue of tender c u r r e n c y in 1 7 8 1

(only

a fraction of which was actually put into circulation), but it collapsed as speedily as did that of M a r y l a n d ; and this w a s the end of the legal tender question during the war. 3 5 Though several more state conventions were held, their resolutions were now for a relaxation of inter-state trade embargoes, f o r " sinking " currency issues, f o r a national impost, and for a stronger central government. Merchants and lawyers such as those attending the Boston meeting in August, 1 7 8 0 — T h o m a s Crushing, Nathaniel Gorham, John Lowell of Massachusetts, Jesse 33 Baldwin, " New H a v e n Convention," loc. cit., pp. 52, 59, 61; cf. Philadelphia merchants' petition against price regulating, Sept., 1779, ' n Scharf and Westcott, Phila., I, 399 n. T h e N e w England states temporarily abandoned price-fixing in 1777, on recommendation of the Springfield convention. 34 H . C. Cabot, George Cabot, p. 15; H a r l o w , " R e v o l u t i o n a r y Finance," loc. cit., p. 59; Oliver Ellsworth to Samuel Lyman, Jan. 25, 1780, in Burnett, Letters, V, 16. Congress had weakened on its resolution of June, 1778, but to no avail. 35 A. M. Davis, " L a w f u l Money, 1778 and 1779," in New Eng. H i s t . Genealog. Soc. Reg., L V I I , 165; George B a n c r o f t , Hist, of the Constitution, I, 229-235; Bond, " State Government in M a r y l a n d , " p. 61 ; Webster, Political Essays, p. 197 n . ; Scharf and Westcott, Phila., I, 417; H a r l o w , " Revolutionary Finance," loc. cit., p. 62; Nevins, American States, pp. 488-492. On J u n e 15, 1781, however, M o r r i s was still writing of the necessity of repealing state legal tender laws, so some must have remained unrepealed at that date.

THE

QUESTION

OF

BUSINESS

20J

FREEDOM

R o o t o f Connecticut, and John L a n g d o n of N e w H a m p s h i r e — w e r e insisting that these were the important problems. 38 The

lesser question of

merely excessive

issues of

paper

m o n e y — a g a i n s t which there also had been vigorous protest even early in the war, by persons like merchant Pelatiah W e b s t e r — w a s naturally rendered less important by the trend of events regarding price-fixing and legal tender laws in 1780 and 1 7 8 1 . It is, of course, true that the problem was aggravated by the partial bankruptcy action of Congress on the Continental currency in 1 7 8 0 — f u r t h e r recognition of the failure of radical

policies—since

the

financial

burden w a s

henceforth

t h r o w n more heavily upon the states. M a n y of them had to yield temporarily to large issues of currency or treasury notes in 1 7 8 0 or 1 7 8 1 , but they now also turned for the first time to improved taxation policies to meet the situation. 37 H o w e v e r undesirable in theory the repudiation of the old currencies a f t e r 1780 m a y have been, such business liberating developments were clearly victories f o r the rising conservative movement

in which the merchant and his lawyer

associate

played so important a part. It is perhaps not insignificant in this connection to note that the winter of 1780-1781 also witnessed the success o f political centralists w h o made possible the

final

ratification

of

the Articles

of

Confederation,

an

improvement upon the previous federal organization. T h e Congress itself w a s somewhat changed in 1 7 8 1 . Samuel A d a m s went out and James W i l s o n came in. P a r t y spirit had died down 36 Baldwin, op. cit., p. 43; cf. " Minutes of the Hartford Convention," in Mag. Amer. Hist., V I I I , 694 ff.; also F . B. Hough, ed., Proceedings of a Convention held at Boston, 1780, passim. 37 Harlow, " Revolutionary Finance," loc. cit., p. 67, notices a number of state laws for the collection of taxes before 1781, but says, " There is nothing available to show that the returns from taxation were appreciable anywhere before 1781." Jeremiah Wadsworth wrote Silas Deane, Nov., 1781, saying that the northern states especially were improving in the management of their finances: Wadsworth Corresp. See also Nevins, American States, pp. 488-492, who shows the weakened character of the 1780-1781 paper money drive.

208

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

there, Joseph Jones assured Washington in October, 1 7 8 0 ; " and two months later A r t h u r Lee wrote in bitter confirmation of the strange mood which had come over C o n g r e s s : " T o r y i s m is trumphant here. T h e y have displaced every W h i g but the President." 39 T h e appointment of Robert and Gouverneur Morris, Robert R . Livingston, and Philip Schuyler to important federal positions in 1 7 8 1 aroused President Reed of Pennsylvania to exclaim that the situation had all the appearance of a cabal.'*0 Samuel A d a m s insinuated in J a n u a r y , 1 7 8 1 , that self-seeking, luke-warm men would soon be high in national councils. 41 B u t his was a voice f r o m the past. In keeping with all such changes the merchants were now organizing, f o r the first time on a large scale, concerted plans f o r the support of a government the very establishment of which some of them had deemed undesirable five years before. Time and circumstance had required a change in tactics. Perhaps they saw the whole financial and social structure collapsing unless they took charge. T h e evidence on this point is extensive. Merchants of Philadelphia agreed in March, 1780, to receive the " n e w emission money " as equivalent to gold and silver. 42 A " bank " was established there a little later to purchase provisions f o r the army, many members of the Morris group being among its subscribers. A similar group supported the Bank of North America a year later, partly to assist M o r r i s in his financing f o r Congress. Boston business men raised subscriptions in June, 1780, to purchase supplies f o r the army, leaders being Isaac Smith, Stephen Higginson, Tuthill Hubbart, John Codman, and Russell Sturgis. 4 3 In Boston, Salem, Newburyport, and 38 Burnett, Letters,

V, 396.

3!) T o Elbridge Gerry, N o v . 26, 1780, ibid., p. 439 n. 40 Quoted in Sumner, Financier, 41 C f . R. H . Lee, Memoir

42 Scharf and Westcott, Phila., 43 Bostonian Soc. Pub.,

II, 20.

of R. H. Lee, II, 126, 127. I, 408 n.

XI, 114-117.

THE

QUESTION

OF

BUSINESS

FREEDOM

20g

Marblehead merchants determined to raise a loan of £30,000 in specie f o r similar purposes two months later. 44 Connecticut traders, including Jeremiah W a d s w o r t h , B a r n a b a s Deane and their associates, addressed their assembly in A p r i l , 1780, declaring that they were even willing to sell g o o d s at prices

fixed

b y Congress, and to receive the national currency. T h e y added, " W e desire y o u r purchasing C o m m i s s a r y m a y be immediately ordered to make his purchases of such articles as are in our w a y that w e may have an opportunity to show h o w much in earnest w e are in this our declaration."

45

L a F a y e t t e received money

raised by Baltimore merchants f o r the purchase of clothing

in

the

spring

of

1781,

and

business

soldiers'

men

there

appointed a committee to assist M a j o r M c H e n r y to the same purpose. 46 V i r g i n i a merchants offered money in A p r i l ,

1781,

to purchase arms f o r public use. 47 Sound business ideas were v i g o r o u s l y e n f o r c e d w h e n M o r r i s became the all-powerful Congressional Financier early in 1 7 8 1 — t h e capping conservative triumph. P e r f e c t l y free trade and the sanctity of private property w e r e his g u i d i n g principles, and political and economic freedom were closely associated in his mind. T h e latter M o r r i s revealed w h e n d e m a n d i n g the establishment of the Bank of N o r t h A m e r i c a , " to g i v e a n e w spring to commerce in the moment when, on the removal o f all its restrictions, the citizens of A m e r i c a shall e n j o y and possess that freedom f o r which they c o n t e n d . " H e continued, as always, strictly opposed to tender l a w s and trade embargoes and expedited their removal. 4 8 44 Otis and H e n l y to T . Pickering, A u g . 28, 1780, doc. 264441, Div. of Old Recs. 45 Copy of address under April 21, 1780, W a d s w o r t h Corresp. 46 Griffith, Annals of Baltimore, p. 93; B. Steiner, James McHenry, S c h a r f , Chronicles 0} Baltimore, p. 414. 47 Cf. Burnett, Letters,

p. 36;

V I , 69.

48 Cf. Morris to Washington, July 2, 1781, in N e w Y o r k Hist. Soc. Coll., I I , 465; Sparks, ed., Letters to Washington, I I I , 341. On the hard money and free trade resolutions adopted b y Congress under Morris, cf. Sumner, Financier, I, 94, 271, 272; on delight of the conservatives w i t h the n e w

2IO

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

The public debt was another matter which Morris requested Congress to regard with special interest, else " those who are now most rich, may become poor, and those who are poor, may become rich." He argued the necessity for doing justice to the public creditors, " for a public debt, supported by public revenue, will prove the strongest cement to keep the Confederacy together." He thought that it was " an advantage peculiar to domestic loans, that they give stability to Government by combining together the interests of moneyed men f o r its support. . . . " T o those complaining about the state of the public debt—he received letters f r o m such persons as Shee and Y o u n g of Philadelphia, Isaac Smith of Boston, and Charles Pettit of New J e r s e y — M o r r i s extended the deepest sympathy. Yet it is significant that he was nn foe to speculation in T.oan Office certificates: " . . . even if it were possible to prevent speculation, it is precisely the thing which ought not to be prevented, because he who wants money to commense pursue or extend his business is more benefited by selling stock of any kind (even at a considerable discount) than he could be by the rise of it at a future period," he assured Congress. 48 L i k e Hamilton, Morris believed that taxes were necessary and would stimulate industry. Like Hamilton, too, he probably wondered how the farmers could be made to bear their share. In evaluating Morris' record as Financier, it should be pointed out that the groundwork for his performance had been cleared by the sound money developments of 1 7 8 0 - 1 7 8 1 . T h e amount of specie in the country in 1 7 8 1 also made his work easier than that of earlier Congressional committees on finance. S o plentiful was hard money, said an inhabitant of Lancaster, Pennsylvania, in July, 1 7 8 1 , that he had not seen a shilling of paper money since recently leaving Virginia. 5 0 In October no order, cf. Burnett, Letters, V , 551, 579; f o r an example of the increased freedom of trade, cf. E s s e x Instit. Coll., X I I I , 228. 49 Si>arks, Diplomatic Corresp., X I , 454, X I I , 1 3 2 ; Morris to C o n g r e s s , A u g . 5, 1782, Journals of Congress, X X I I , 432, 444. 50 Cf. Tylers

Quart. Mag.,

I l l , 33.

THE

QUESTION

OF

BUSINESS

FREEDOM

211 51

money but gold and silver was in circulation in Boston. Specie came from the spending by the foreign troops, from Burgoyne's convention army (which seems to have been held as long as possible to that e n d ) , " from French loans, and f r o m the Spanish islands' trade. A s late as March, 1 7 8 3 , there was a superfluity of both specie and bills of exchange on Europe, 5 3 though this happy condition was speedily dissipated. Under such conditions Morris turned to the supplying of the troops, with confidence in a new and individualistic system— private contracting. The plan in use, of purchasing commissaries, he held wasteful. When he came into office, he said, the salaries of the commissaries in the middle and eastern states would have bought 3 2 7 8 soldier's rations a day. 54 Contracts, however, had been anathema in 1 7 7 6 . When Elbridge Gerry heard of a rumor then that the troops were to be thus supplied, he laid it to T o r y influence. 55 The history of profiteering in such ways was all too well known. M o r r i s now declared, however, that contracts would best husband the country's resources. He set forth his beliefs to Oliver Phelps, the beef contractor: " . . . in all countries engaged in war, experience has sooner or later pointed out contracts with private men of substance and talents equal to the understanding as the cheapest, most certain, and consequently the best mode of obtaining those articles, which are necessary f o r the subsistence, covering, clothing, and moving of an a r m y . " T h e only thing that could save America, he added, was perfectly free trade, the free sale and purchase of every article, every person judging f o r himself 51 According to Jonathan Amory, Meredith, Atnory, p. 227. A s to economic resources of the country in 1760, 1781, cf. Burnett, Letters, V , 137, 548, and Sumner, Financier, I, 272, quoting contemporaries. 52 Cf. S. F. Batchelder, Bits of Cambridge History, 53 Cf. Webster, Political

pp. 99, 106.

Essays, p. 267 n.

54 Sumner, Financier, I, 290; cf. also Morris' claim of improvement in this line, in Sparks, Diplomatic Corresp., XII, 117. 55 Burnett, Letters, II, 120, 121.

212

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

58

in business. One of the first persons Morris called upon to advance supplies was Philip Schuyler: " . . . if you are not fully employed otherwise you might start some worthy man under your patronage that might render essential Service to the Public with proper advantage to himself & connections in this line." 57 M o r r i s was but following the development of the army contrast system in European countries in the foregoing century and a half, which had advanced capitalism there. 58 T h e significance of Morris' ideas was in the opportunities they gave to men like Duer, Wadsworth, and Sands, who were to be so active in promoting new capitalist enterprise in the following decade. In such ways, together with the liberation of business activities f r o m public restraints, the political events of 1 7 8 0 and 1 7 8 1 eventually brought forth new economic fruits. 56 Sparks, Diplomatic Corresp., XI, 499, XII, 127; dividing up contracts, he argued, would be consistent with " democratic Ideas." 57 May 9, 1781, Schuyler Papers. 58 Cf. F. J. Nussbaum, Historic

Economic

Institutions

of Europe,

p. 193.

CHAPTER X SOME ECONOMIC CONSEQUENCES OF THE WAR IT is now necessary to survey broadly the changes made by the war in the economic status of individuals and groups, momentarily ignoring, in so far as possible, that second set of changes more clearly due to post-war business conditions. Far-reaching as the former were, they did not completely alter the social structure. Though the conflict destroyed many outward signs of aristocracy, colonial class distinctions continued along generally similar lines after the cessation of hostilities. This continuation is partly explained by the kind of personnel introduced into the upper social levels, it seldom being from the extreme nouveaux riches. Many war-time successful merchants had been small but well-established business men in colonial days. Above all, more wealthy colonials survived the war than recent writers suppose, the loyalist wealth-alienation theme having been over-emphasized. Let us now deal, however, with what evidence of change there was, as manifested in the war-time decline, preservation, or increase of the wealth of certain persons, and the resulting conditions of town and regional economy. Of course many persons were alarmed by what seemed at the time to be significant social alterations. Robert Treat Paine wrote from Boston in 1777, " The course of the war has thrown property into channels, where before it never was, and has increased little streams to over-flowing rivers: and what is worse, in some respects by a method that has drained the sources of some as much as it has replenished others. Rich & numerous prizes, and the putting six or seven hundred per cent, on goods bought in peace time, are the grand engines. Moneys in large sums, thrown into their hands by these means, enables them to roll the snow ball of monopoly and forestall213

214

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

ing. . . ." Traders and privateer owners, he continued, escaped the taxation that hit men with fixed property. Samuel Curwen, embittered loyalist, declared, " Those who five years ago were the ' meaner people,' are now, by a strange revolution, become almost the only men of power, riches and influence. . . . " 1 Society in Salem, Massachusetts, was apparently greatly altered. " The men that had no money hardly, is now got the money, and when the publick calls thay with a hard heart & never used to pay Taxes find fait & Dam all in public places . . . the new Fangled Gentlemen as they are called. . . ." Dr. Joseph Orne of that place wrote two years later, " I am weary to death of this dreadful war. It is attended with such irregular distribution of property . . . " ; ". . . people have been raised by the war from the lowest indigence to affluence." From Boston, James Bowdoin wrote in 1783, " When you come you will scarcely see any other than new faces . . . the change wch in that respect has happened within the few years since the revolution is as remarkable as the revolution itself." Stephen Higginson, who profited by the changes, declared in 1787, " I sometimes almost lament that the Aristocracy in 1 7 8 3 was suppressed. . . ." In New York, John J a y had been told, " Y o u can have no idea of the sufferings of many who from affluence are reduced to the most abject poverty. . . ." Pelatiah Webster wrote from Philadelphia, ". . . we have reason to lament with tears of the deepest regret the most pernicious shift of property which the above irregularities of our finances introduced, and the many thousands of fortunes which were ruined." " The estates of those who are not in business, are crumbling to pieces," a Philadelphia lawyer declared in 1778. In Charleston, David Ramsay asserted, new, bold traders replaced the old and " rapidly advanced their own interests," though some of these lost out at the end of the war. 2 1 Paine to Gerry, April 12, 1777, Austin, Elbridge Curwen, Journal and Letters, p. 256.

Gerry,

I, 220; Samuel

2 George Williams to Timothy Pickering, July 2, 1780, in E s s e x Instit. Coll., X L V , 120; Orne to Pickering, June, 1782, in Pickering, Pickering,

S O M E E C O N O M I C C O N S E Q U E N C E S OF T H E W A R

215

However, such broad statements, usually made during the heat of conflict, must be accepted with reservations. It is not even clear how heavily people suffered through depreciated currency, which debtors are commonly said to have utilized at the expense of creditors. 3 M a n y loans were called early in the war, before the currency fell greatly; contracts in kind frequently replaced those in currency; debt settlement a f t e r 1 7 8 0 was largely in state-fixed depreciation values. 4 Specific, detailed accounts of any such losses are virtually non-existent. Indeed, Charles Biddle said, in his frank manner, " I have heard of a great many people losing by the Continental money but knew of but f e w . " He, a merchant-captain, never lost thereby but on a single keg of rum. 5 Jefferson's comment, that commercial bankrupts often falsely claimed losses f r o m depreciated currency as an excuse, is enlightening.® Of course merchant-capitalists with sums invested at interest had feared dire results—as did Moses Brown, f o r example; but, considered in their trading capacity, it may be argued also that they stood to gain through depreciation. What merchants really feared were legal tender and price-fixing acts—speedily I, 365, 366; Bowdoin to Thomas Pownall, Nov. 20, 1783, 7 Coll. Mass. Hist. Soc., VI, 22; to Samuel Osgood, Feb. 21, 1787, Osgood Papers, I . ; Sumner, Financier, II, 180; Webster, Political Essays, 94 n ; Diary of James Allen, July, 1778, in Penna. Mag. Hist. Biog., IX, 440, 441; Ramsay, Hist. South Carolina (1809), II, 235, 238. 3 Samuel Dexter wrote James Bowdoin, Jan. 26, 1779, of how the currency had "made a sacrifice of all the moneyed men" (Mass. Hist. Soc. Proc., VI, 360) ; Pelatiah Webster said that " thousands" of families of fortune were ruined by legal tender and price fixing laws (Political Essays, 129 a ) ; but names and figures are always lacking. 4 This generalization ignores the question of southern debts. James Wilson said, Feb., 1777, that Pennsylvania " usurers " had called in their money (Burnett, Letters, II, 24s) ; Jonathan Amory of Boston apparently did the same, but at a loss (Meredith, Amory, p. 244). Franklin thought that depreciation acted as an equitable tax, according to ability to pay. 5 Biddle, Autobiography,

p. 237.

6 Writings, Ford, ed., IV, 155.

2IÓ

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

recognized as useless as we have seen 7 —rather than depreciation itself. They could rapidly pass on the currency in business, and if there was a fairly consistent rise in prices, they could gain simply by keeping the time period between investment in, and the sale o f , one set of goods greater than the period between that sale and a re-investment of funds. Small wonder that store houses were attacked by mobs on several occasions and public wrath raised against " f o r e s t a l l i n g " f o r higher prices. A a r o n Lopez expressed the merchant's point of view in August, 1 7 7 9 , when he advised a partner to charge four to six times as much for goods as previously to avoid losses f r o m changes in currency values.® Moreover, many merchants themselves probably never paid war-time interest on debts owed abroad, as was true of Comfort Sands a f t e r the New Y o r k court decision in his f a v o r in 1786. Some merchants did suffer heavily f r o m other causes. There is no doubt but that the New England fisheries were temporarily destroyed, along with their foreign markets. The whale oil and candle business was ruined along with Nantucket's warehouses. 9 Merchants sustaining heavy losses included W i l liam Greenleaf of Boston and Jonathan Jackson of Newburyport. The latter declared that he lost £6000 sterling in vessels in 1 7 8 1 and probably £2000 or £ 3 0 0 0 more in 1 7 8 2 . 1 0 William Vernon of Newport is said to have suffered a loss of £ 1 2 , 0 0 0 sterling by reason of the British occupation, in addition to real estate destroyed by fire.11 T h e business of Jewish merchants in that place largely disappeared, f o r similar reasons. Patriot merchants of New Y o r k City, such as the Blackwells 7 Abigail Adams said that the Massachusetts price law of 1777 was absolutely ignored: Familiar Letters, p. 261. 8 Commerce

of Rhode Island, II, 66.

9 Morison, Maritime Finance, I, 9.

Hist.

Mass.,

p. 156; State

Papers,

Commerce

10 Jackson to Oliver Wendell, March 28, 1782, Jackson Papers. 11 Stone, Our French Allies,

pp. 229, 230.

and

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

217

and Daniel Phoenix, also suffered, we are told. 12 M a n y Philadelphians sustained property damages during the British occupation,

though

the list

of

claimants has

surprisingly

few

names of the great merchants. 1 3 It is obvious, however, that such losses as these were largely the result of accidents and depredations — not of

a

lack

of

commercial

opportunities.

Ships had not frequently rotted at w h a r v e s during the w a r , though they occasionally m a y have done so several years later. T h o u g h all war-time commerce was a gambling proposition in which many persons naturally lost, it is difficult to substantiate the statement by Gouverneur M o r r i s in 1785 that the A m e r i c a n merchants, taken collectively, were " poorer by milions " as a result of the war. 1 4 ( I t is not difficult to criticize his remarks on the grounds that they were intended to influence public opinion on a heated issue in Pennsylvania politics, and because he may have taken into account the post-war depression changes.)

While

he properly

called the

successful

war-time merchants a minority, it does not follow that the wealth of the mercantile class had been greatly depleted.

But—

and this is the important thing — only a minority is necessary

for

aggressive

business

leadership.

Members

of

that

minority were certainly to be found in Baltimore. In Connecticut the post-war

figures

of W a d s w o r t h and his associates

may be contrasted w i t h those of little traders in pre-war years when the colony, as a contemporary remarked, had no man of

considerable property. 1 5 A

competent recent student

has

spoken of the " new race of merchants " produced in R h o d e Island during the war. 1 6 Philadelphia received a group of professed W h i g s a f t e r the British left in 1778, many of

whom

12 Scoville, Old Merchants, II, 132, 133; Stevens, Colonial Chamber of Commerce, Biographical Sketches, pp. 154, 155.

Records

13 T h e list is in Scharf and Westcott, Phila., II, 386 n. 14 "Address on the Bank of N o r t h America," in Sparks, Morris,

III, 445.

15 Cf. 2 Proc. N e w Jersey Hist. Soc., I, 178. 16 F. G. Bates, Rhode be an over-statement.

Island and the Union, p. 88. This seems to me t o

218

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

17

made sudden riches, though they were relatively unimportant compared with the wealthy merchants surviving from colonial times, or with the newly developed Morris associates. Another assertion of Gouverneur Morris, that the war had ruined or frightened money-lenders until, in 1785, none remained, 18 was more correct. Though there is some evidence to the contrary, this opinion is substantially in agreement with Robert Morris' statement in 1782, that the few men who had money were now so reluctant to lend that usury was being practiced. " The Jew Brokers and others have informed me in the course of my inqueries that Sub Rosa they frequently get 5 per Ct. p. month from good Substantial men for the use of Money with pledges lodged for the repayment, they add that before the establishment of the Bank they frequently got ten pr ct & upwards." 19 If it were true that moneyed men had lost faith in personal loans, it follows that they were now forced to seek investment opportunities elsewhere. This is obviously of the greatest importance in explaining the subsequent evolution of new investment mechanisms. More sweeping social changes probably resulted from the alienation of loyalists and the confiscation of their fixed real property. It is important to know to what extent such persecution was carried out, for the property of many pre-war capitalists was threatened by such procedure. The names of wealthy loyalist De Lanceys, Wallaces, and Philipses of New York, of Hutchinsons, Borlands, and Taylors of Boston, of Aliens, Galloways, and Shoemakers of Philadelphia, suggest that wealth and loyalist principles frequently went hand-inhand. 17 Statement by Jeremiah Wadsworth, in Papers of George Clinton, I V , 303; cf. also S. N. Winslow, Phila. Merchants, p. 167, who overstates the case for the newcomers. 18 Sparks, Morris,

III, 445; cf. also Webster, Political

Essays,

p. 442.

19 T o Richard Butler, Aug. 26, 1782, Morris Papers in New York Public Library. He, also, was promoting the Bank of North America.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

2ig

F o r t u n a t e l y f o r the financial future, persecution of loyalists w a s relatively mild compared to what it well m i g h t have been. M a n y survived and retained their property. T h u s the wealthy T o r y , John W o r t h i n g t o n of Springfield, Massachusetts, even became moderator of the town meeting once a g a i n a f t e r 1778. 2 0 F r o m A l b a n y , N e w Y o r k , wealthy G o l d s b r o w

Banyar,

for-

merly secretary of the province, simply retired to Rhinebeck, w a s popularly called an enemy to his country, but judiciously r e f u s e d to commit himself and thus preserved his property. 2 1 Southwestern Connecticut, especially the t o w n s of

Stratford

a n d N e w H a v e n , were hotbeds of loyalism. In the f o r m e r a prominent l a w y e r , W i l l i a m Samuel Johnson, could successfully r e f u s e to commit himself on the b u r n i n g issue and yet retain the friendship of outstanding W h i g s . 2 2 A n important minority o f business men in N e w H a v e n were T o r i e s . S o m e of them, f o r example, remained in the town w h e n the British raided it in 1 7 7 9 ; but most merely suffered the reprimand of a t o w n investigation. 2 3 In several places outstanding citizens acquired the title of T o r y by remaining in E n g l a n d d u r i n g the w a r , as did one of the Boston A m o r y s , w h o nevertheless returned home shortly a f t e r the peace and suffered no serious disabilities. A survey of the merchant-capitalist class in particular reveals m a n y similar examples. T h e alienation of loyalists plainly altered the personnel of the merchants of B o s t o n and

New

Y o r k f a r more than it did that of Philadelphia. Boston s u f f e r e d the most, yet only a small m i n o r i t y of her merchants w a s exiled f o r loyalist principles, 24 and not all of these were 2 0 C / . M a s o n Green, "Springfield," Valley H i s t . Soc. Papers, II, 298, 301. 21 Munsell, Annals

pp. 286, 309; H . A . B o o t h in Conn.

of Albany, V , 278 ff.

22 E. B. Greene, " W i l l i a m Samuel Johnson and the American Revolution," in Col. Univ. Quart., X X I I , 174-176. 23 F . B. Dexter, " Notes on N e w H a v e n Loyalists," in N e w Col. H i s t . Soc. Papers, I X , 44; C. H . Levermore, Republic of New p. 221; E. E. Atwater, Hist. New Haven, p. 63.

Haven Haven,

24 146 Boston merchants had formed a society in 1763 (Col. H i s t . Soc. Pub., X I X , 163). T h e r e were only 27 merchants and 36 traders among the

220

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

important. Some, however, were very wealthy—the E r v i n g s , Winslows, Clarkes, and Lloyds — and their departure must have had pronounced social consequences, as did the elimination of such distillers as the Coffins and Brinleys. The merchant class of Philadelphia in no wise suffered in numbers as compared with Boston, or in importance as compared with Boston and New Y o r k , of individuals exiled and deprived of their property. The evidence on this point is largely negative. 25 John Parrock, Isaac Wharton, E d w a r d Pennington, and Benjamin Gibbs were among the few expelled merchants of some previous importance. T h e most liberal estimate of their kind constitutes but a fraction of the great commercial group of Philadelphia which, in 1 7 6 5 , numbered around four hundred merchants and traders. 26 War-time proscription of loyalists of all kinds was relatively mild there. 27 There was a considerable T o r y group in Philadelphia, however, identified with the addressers of General Howe and with the signers of a currency petition in connection with British army purchasing, which included not only long wealthy Quaker merchants, such as Samuel Powel, William Fisher, and the Whartons, but also prominent non-Quaker merchants such as Thomas Willing and Archibald McCall. 2 8 Such persons had 123 addressers of Gov. Hutchinson' in 1774 ( M a s s . H i s t . Soc. Proc., X I , 392-394). 46 Boston merchants were named in the Banishment A c t of 1778 ( S t a r k , Loyalists of Mass., pp. 1 3 7 - 1 3 9 ) . It is difficult to identify merchants in the names of loyalists given by J o n e s and Stark, but they certainly do not enlarge the above figures. 25 Sabine mentions only about 30 Philadelphia merchant loyalists. S c h a r f and Westcott, Phila., I, 386, 387, mention about the same number attainted as traitors in 1778, the biggest year ( S i e b e r t , " L o y a l i s t s of Penna.," p. 58). T h e names given in Col. Rees. Penna., X I , X I I , passim, are not very enlightening, failing to g i v e professions in all cases, but, so f a r as I can determine, they support the above generalizations. L i s t s of confiscated property owners in Philadelphia are given in S c h a r f and Westcott, op. cit., I, 397 n., 411 it, 419 n„ 424 n. 26 C f . signers of S t a m p A c t trade resolutions, in S c h a r f and Westcott, op. cit., I, 272. 27 Siebert, op. cit., pp. 58, 59. 28 S c h a r f and Westcott, op. cit., I, 365 n.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

221

to endure public criticism after the British departed, but most of them suffered no serious disabilities of an economic nature. In New Y o r k the greatest sufferers from confiscation were the large land-owning families, which included, however, merchant Crugers, Wallaces, Bayards, and Whites. It is true that of the 104 members of the Chamber of Commerce, fifty-seven merchants were out-and-out loyalists and twenty-one decidedly "neutral " ; 2 9 yet many of these continued in business in the city after the war, or quietly returned there after short absences. Notable among those persons the bulk of whose property was saved from confiscation were Theophylact Bache, Thomas Buchanan, William Laight, Daniel McCormick, Thomas Marston, William Seton, Richard Yates, John McVickar, Gulian C. Verplanck, John Vanderbilt, and Daniel Ludlow, and non-merchants such as the brewer Joshua Waddington and the lawyer Richard Harison. 30 It is significant in this connection that John Rogers, Jr., originally of Boston, could trade in New Y o r k City during the war, make a trip to England and return in June, 1783, bringing back a quantity of English goods, part of which he sold to the British army; and then, in spite of a " little uneasiness " on the part of the New Y o r k populace, that he could continue in trade there with no action apparently taken against his property. 31 The truth is that thorough-going persecution would have decimated the merchant class: the majority of persons in southern New Y o r k had been loyalists and they simply could not be eliminated outright, though they were made to endure vindictive taxes.* 2 29 Cf. V . D. Harrington, New York Merchant,

pp. 348-351.

30 Stevens, Colonial Rees. Chamber of Commerce, Biographical Sketches, passim. F o r the New Y o r k property confiscations, 1784-1789, cf. Flick, Loyalism in Nezv York, appendix, which apparently is complete so f a r a9 names of original possessors of confiscated property in New Y o r k City are concerned. The m a j o r i t y of the merchants of the city obviously escaped the process; only a handful of them, though the most important, w a s named in the great f o r f e i t u r e act of 1779 (ibid., p. 1 4 7 ) . 31 J o h n Rogers' Letters, passim, in H u d s o n - R o g e r s Papers, B o x II. 3 2 Flick, op. cit., pp. 165, 166.

222

BUSINESS E N T E R P R I S E : REVOLUTIONARY

ERA

It is true that returning patriotic merchants of New Y o r k City demanded reparations for their suffering, from the property of those who " by their wicked devices, had prolonged the war and multiplied distress." 33 It is also true that the reorganized Chamber of Commerce kept out loyalists until February 1 7 , 1 7 8 7 , though it was headed by John Alsop who had been " neutral " himself. 3 4 E v e n a Clinton legislature, however, passed an act as early as May, 1 7 8 4 , permitting certain loyalists to remain in the state. A n d doubtless the Chamber of Commerce was merely sailing with canvass prudently reefed to the winds of popular feeling, for some patriots did feel, like Ralph Izard of Charleston, that " The British merchants and the Tories who lost little or nothing by the war, are in possession uf the greatest part of the spccic of the country. . . . " " It is difficult to answer the bitter question of Judge Jones, why some loyalists were generously overlooked while others were stripped of all their property. 36 Probably the nepotism of relatives and friends, a prime factor in worldly a f f a i r s , protected the fortunate ones. Trader Daniel McCormick of N e w York, himself a loyalist, wrote on May 1 2 , 1 7 8 3 , f o r a list of confiscated estates, " to serve some of our friends who may be taken in if not properly I n f o r m e d . " 37 Friends and relatives saved the bulk of Theophylact Bache's property. 38 T h e peace treaty, moreover, was the salvation of many of the disaffected, as the New Y o r k loyalist H e n r y V a n Schaack had hoped it would be.39 Indeed, the careers of several members of the V a n 33 Petition to Assembly, Feb. 13, 1784, in Stokes,

Iconography.

34 MS Minutes. 35 To Jefferson, July 1, 1786, in South II, 19936 Jones, Hist, of New

Carolina

Hist. Gcncalog.

Mag.,

York, II, 305.

37 To John McKesson, McKesson Papers, Box I, no. 77, in New York Hist. Soc. 38 Flick, op. cit., p. 159. 39 H. C. Van Schaack, Memoirs of Henry

Van Schaack, p. 94. Jefferson

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

22T,

Schaack family are most revealing on the above questions. In spite of their known loyalist attitude, such persons as Oliver Wendell of Boston, Theodore Sedgwick of Great Barrington, and Gouverneur Morris of Philadelphia had sympathized with them. The war over, the removal of political disabilities from Peter Van Schaack was secured by J o h n J a y and Jeremiah V a n Rensselaer. Henry V a n Schaack was able to leave New Y o r k City at the time of the evacuation and to receive protection and citizenship in Massachusetts. The V a n Schaacks were certainly not ruined by the war. In 1 7 8 4 and 1 7 8 5 they went about collecting f r o m debtors, and investing in real estate mortgages and in bonds of the town of Stockbridge. 4 0 In such ways considerable colonial capital, together with a portion of the old society of N e w Y o r k as of other places, was preserved f o r reconstruction years. Representatives of such famous colonial groups as the Lispenard-Bleecker-Ludlow, the Gouverneur-Curson-Seton, the Ludlow-CrommelinVerplanck, the Low-Gouverneur-Cuyler, continued to be important in New Y o r k ' s post-war business. Upon such social foundations did the commercial house of Bache arise; upon them was such a famous commercial company as L e R o y , B a y ard and McEvers erected. The marriages of young Daniel Crommelin Verplanck, Thomas Pearsall, and the younger Roosevelts and Goelets also helped to perpetuate parts of the better class of colonial society. Newcomers to the city immediately after the war—especially young men with military careers, such as A b i j a h Hammond, Richard Piatt, Robert Troup, Richard Varick, and, of course, Alexander Hamilton—• invariably became connected with the old families by marriage and contributed to the carryover of economic and social influences from earlier times. declared that, to his knowledge, not a single confiscation act was passed by any state after notification of the peace settlement (Writings, Ford, ed., VI, 28). 40Van Schaack, Henry Van Schaack, pp. 85, 108, 113-115, 188; idem., Life of Peter Van Schaack, pp. 355, 380, 381. Henry had had a store at Kinderhook during the conflict, and apparently sold to both sndes.

224

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

The alienation of some long-established merchants, however, everywhere permitted the entrance of new figures and increased the relative importance of those who survived. Such fortunate persons profited in one way by purchasing confiscated estates cheap. Even in North Carolina, a member of Congress declared, the rich made a monopoly of confiscated lands. 41 In Boston the merchant Caleb Davis was state agent in the influential role of disposing "Absentee Estates." It was doubtless confiscated property which Samuel Breck, the French navy provisioner, purchased for 1 2 0 0 gold guineas in 1780. 4 2 E l bridge Gerry of Marblehead, who had carried on a vigorous commerce during the war, secured a loyalist's estate in Cambridge. 43 The rich merchant Thomas Lee of Pomfret, Connecticut, did likewise in 1779. The Cabots of Beverly purchased in 1 7 8 1 a great New Hampshire estate of the former Governor Wentworth f o r depreciated Continental Currency. Andrew Cabot of Salem bought the Lechmere and Oliver estates in Cambridge, as did Nathaniel T r a c y of Newburyport part of the Vassall estate, which, however, he was shortly after obliged to sell.44 Another part of the Vassall lands went to merchant Pascal N . Smith, son-in-law of " K i n g " Sears of the " Liberty B o y s , " at alleged half value. 45 Isaiah Doane, Joseph B a r rell, Thomas Russell, James S w a n , Thomas Walley, Samuel A . Otis, John Coffin Jones, and John Codman, J r . were other wartime Boston merchants who took advantage of such opportunities. 48 Andrew Craigie, the Apothecary General of the 41 T h o m a s Burke, to Arthur Middleton, July 6, 1782, in South Hist.

Gencalog.

Mag.,

Carolina

X X V I , 203.

42 Samuel Breck, Recollections, 4 3 " Elbridge Gerry," in Diet.

p. 37. Amcr.

Biog.

44 L. Paige, Hist, of Cambridge, p. 170; C r a w f o r d , Famous Families Mass., I, 166, 167; Batchelder, Bits of Cambridge Hist., pp. 192-194. 45 C f . complaints of W i l l i a m V a s s a l l , in 7 Coll.

of

M a s s . Hist. Soc., V I , 69.

46 John T . H a s s a m , " Confiscated Estates of B o s t o n Loyalists," in 2 Mass. H i s t . Soc., X , 162-185.

Proc.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

225

Continental forces, secured part of the Vassall estate for depreciated currency—" the house that jack built." 47 T h e New Y o r k situation was even more complicated. Payment for confiscated estates could be made in various kinds of public paper or in specie, which would seem to have made it possible for numerous persons to secure such property. Certain patriotic merchants, however, were again the foremost purchasers. The Sands brothers secured much of the Rapalje estate in Brooklyn in soldiers' pay certificates which they bought up in large quantities at a very low rate.48 Isaac Roosevelt bought at least fifty-nine lots and several very valuable city locations on Manhattan Island. Isaac Gouverneur, Jonathan Lawrence, Cornelius Ray, and Henry Ten Broeck, all merchants, each secured many lots there. In amount of money expended Isaac Roosevelt, Philip Livingston, Daniel Phoenix, Henry Tiebout, Melancton Smith, Dominick Lynch, Nicholas Low, Cornelius Ray, the Gouverneurs, and the Sandses were the leaders. Newcomers such as John Delafield, A b i j a h Hammond, and Benjamin Walker were also very active. S o were General Alexander McDougall, and the wartraders Morgan Lewis and Melancton Smith, all of whom purchased on Long Island. 48 John Carter, the French agent, had been eager to invest in this fashion as early as 1779. 50 There can be no doubt that the W h i g merchants skimmed off the cream in buying confiscated estates of southern New Y o r k . 47 Cf. Col. Soc. Mass. Pub., V I I , 40411. 48 H . R. Stiles, County of Kings and City of Brooklyn,

I, 119.

49 T h e s e statements are based on A . C. Flick, Loyalism in New York, appendix, and on an Abstract of Sales of Loyalists' Estates f o r Southern Department, in N e w York Hist. Soc., p. 67 et passim. Mr. H a r r y Yoshpe, a student at Columbia Univ., w h o has done much work on the actual deeds of sale, assures me that the above sources are misleading—that the deeds do not always jibe with these records. I understand him t o agree, however, that the immediate effect of the sales was to turn over the best confiscated property t o a relatively small group, in which the above mentioned persons were prominent. 50 Jan. 29, 1779, Schuyler Papers.

226

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

There is no evidence that the merchants of Philadelphia engaged so extensively in this business since the property confiscated there was of little value compared with that in Boston and New Y o r k . A little merchant, James Budden, purchased frequently, however, and James Mease and Samuel Caldwell obtained some of Joseph Galloway's lands. Matthew McConnell and several others also secured some Philadelphia real estate in this fashion; but a lawyer, Daniel Clymer, and Hugh Shiell, a wealthy doctor lately arrived from Europe, were even more extensively engaged than were such merchants. 61 It has been pointed out that Robert Morris became interested with William Duer in confiscated New Y o r k lands, though he said that he was not fond of so doing because it might appear that s u c h h a d b e e n h i s m o t i v e in s u p p o r t i n g the r e b e l l i o n .

An

inci-

dent in the sale of confiscated lands near Philadelphia in 1 7 8 0 throws light on the interests of another member of the Morris group, John Maxwell Nesbitt. He was on the state committee which prosecuted John Roberts, whose mills were sold in 1 7 7 9 to a person who immediately re-conveyed them to Nesbitt and others. 62 In the light of these facts it is important f o r an understanding of post-war investment activities to consider specific examples of favorable change in personal fortune during the conflict. These largely concern merchants and their lawyer associates. Complaints about such growth numerous, but they should not be Virginia there was the notion that becoming opulent. 53 A " radical " 51 Co!. Rcc.

Penna.,

XI, XII,

of private fortunes were accepted at face value. In merchants elsewhere were member of Congress de-

passim.

52 Cf. Penna. Mag. Hist. Biog., L, 5 ; Nesbitt secured other " f o r f e i t e d " lands: c f . Conyngham, " Reminiscences," pp. 189, 190. 53 E. g., Benjamin Harrison to Robert Morris, March 28, 1782, in Morris Papers in N e w York Public Library; c f . also, Thomas Burke's charge, in 1777> of the " practice of speculative monopoly " prevailing in all northern states: Burnett, Letters, II, 258.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

227

clared in 1 7 7 7 that opportunities f o r laying out money improved every day, and even a " conservative " member said that the pursuit of private interest would surely result in making a fortune in Philadelphia. 54 James Warren asserted in 1 7 7 9 that in Boston, " fellows who would have cleaned my shoes five years ago, have amassed fortunes, and are riding in chariots." 55 Accusations that public commissaries and merchants who sold supplies to the army profited thereby, were especially common. The testimony of a clerk of Blair McClenachan, as to his (the clerk's) profit of £700 Continental currency, made in six months in 1 7 7 6 - 1 7 7 7 , " chiefly by buying up Liquors and selling them to the Commissaries of the A r m y , " is a valuable piece of evidence." Daniel Parker, army contractor under Morris, addressed his partner Duer on October 26, 1 7 8 2 , saying, " i t will be advisiable ( I think) to prove the profits that were really made on the 3 first months of the Contract & Charge the Same profits on all the Rations that would have been issued until the 1st of J a n y . . . . " 57 Examples of merchants whom the war favored include J o h n Langdon of Portsmouth, N e w Hampshire. Fond of money and with a positive genius f o r obtaining it, he invested in privateers and carried on trade and ship building. He thus added to an already considerable fortune, so that in 1 7 8 6 he could a f f o r d to build a bridge and present it to the town. 58 54 Burke, Feb. 8, 1777, in Burnett, Letters, 1779, 1bid., I V , 390. 55 Ibid., I V , 269 n. On cf. translator's remarks say, however, that this money was by no means

II, 242; John Jay, April 27,

fortunes said to have been made in paper money, in Chastellux, Travels, I, 330 n.; he goes on to making and breaking of fortunes through paper so common as represented in Europe.

06 Penna. Mag. Hist. Biog., X I X , 399; Chaloner and W h i t e complained of this clerk's activities. For another example of enormous profits, c f . Sumner, Financier, I, 304. 57 Duer Corresp. 58 Cf. E. S. Stackpole, Hist, of New Hampshire, II, 281, 283; also Plumer's M S Biog., in New Hampshire State Papers, X X I , 805; Nathaniel Adams, Annals of Portsmouth, p. 286. There is the usual story that he lost by the war, but Stackpole is the latest authority.

228

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

It is significant, moreover, that Langdon did not belong to the governing class of pre-war days. In Newburyport the successful privateering of Thomas Thomas helped him to purchase the estate of the formerly wealthy Jonathan Jackson. 5 9 T h e wealth of Captain Richard Stacey of Marblehead was similarly augmented by war opportunities, though he was affected by the post-war depression. 60 " The Cabots of Beverly," a loyalist wrote in 1780, " who, you know, had but five years ago a very moderate share of property, are now said to be by f a r the most wealthy in N e w England. Hasket Derby claims the second place on the list. . . . " 61 During the war young Israel Thorndike, also of Beverly, got his business start. " Some Brackets at Braintree & some other men along the S o u t h e r n S h o r e "

were said b y

a

contemporary to have made fortunes during the conflict. 62 In Boston itself merchant David Sears must have gained, else how explain his standing in 1 7 8 5 compared with his fortuneseeking arrival there in 1 7 7 0 ? 8 3 Merchant Joseph Cutts, a former clerk of S i r William Pepperrell, could buy up much of the latter's confiscated property at the end of the war. Surely the activities already noted of merchants Thomas Russell, Joseph Barrel], Samuel Breck, John Codman, Caleb Davis, and others produced their relatively more important economic position there, especially with many wealthy loyalists removed. In Providence Welcome Arnold became a trustee of Rhode Island College in 1 7 8 3 , suggesting a changed status, since he had entered trade only a f e w years before the war. He also remodeled an excellent residence f o r himself in 1 7 8 5 and was 59 J. S. Currier, " Ould Newbury ", pp. 569, 570. 60 Harriet S. Tapley, " Captain Richard Stacy of Marblehead," in Essex Instit. Coll., LVI, 85. 61 Quoted in Lodge, George Cabot, p. 13 n.; cf. also L. V. Briggs, Cabot Family, I, 100. 62 Jonathan Jackson, Feb. 23, 1782, Jackson Letters. 63 Cf. Crawford, Famous Families of Mass., II, 365, 366; he is said to have been a successful merchant when he married a Winthrop in 1785.

SOME

ECONOMIC

CONSEQUENCES

OF T H E

WAR

229

one of those creditors w h o subsequently had to dodge debtors in the troubled years of R h o d e Island's " s t a y " laws. 6 4 T h o m a s L l o y d H a l s e y enjoyed a similar rise in fortune.

Nathanael

Greene is said to have once raged at John B r o w n of

Provi-

dence, accusing him and others of making fortunes while a r m y officers sacrificed themselves. 6 5 In N o r w i c h , Connecticut, merchant Daniel L . C o i t w a s able to build a beautiful home in 1784. 6 8 A t A l b a n y Jacob Vanderheyden bought his " p a l a c e " in 1778, and John Stevenson built his famous mansion there between 1 7 7 5 and 1 7 8 0 ; 6 7 but these t w o cases merely indicate strength in w a r d i n g off economic disaster since both men had been wealthy before the war. T h e career of T h o m a s L o w r e y of Flemington, N e w Jersey, plainly shows success in milling and land-purchasing activities which enabled him to set up in business in Philadelphia about 1782. a 8 Blair McClenachan of Philadelphia could purchase in 1 7 7 9 the elaborate country estate of B e n j a m i n C h e w , and Robert Lettis Hooper secured a similar " elegant s e a t " at the falls of the Delaware that same year. 69 D u r i n g the w a r Stephen Girard undoubtedly laid the foundations of his great mercantile career. Thomas

Learning

found privateering

so profitable that

abandoned the law and w o n a fortune o f

fifty

prizes. 70

he The

Markoe brothers, political " neutrals," did well enough in the W e s t India rum and sugar trade to patent two-thirds of an important business block in Philadelphia in 1 7 8 2 - 1 7 8 3 . 7 1 6 4 R . A . Guild, Brown Providence,

University,

p. 549; M e r c h a n t s N a t i o n a l B a n k ,

65 F. V . G r e e n e , General

Greene,

Island,

p. 122. In 1786, J o h n B r o w n o w n e d real

67 M u n s e l l , Annals

Lowrey,

Councillors

Merchants,

71 J a c k s o n , Market

Street,

pp. 69-72.

p. 147.

passim.

of Penna.,

X X X V I , 89.

7 0 W i n s l o w , Phila.

Chap. X I X .

I, 278, 283.

of Thomas

P . K e i t h , Provincial

Biog.,

of Norwich,

of Albany,

6 8 H e n r y R a c e , Sketch Hist.

interests:

p. 126.

6 6 M a r y P e r k i n s , Old Houses

69 C

Old

p. 13; T r i s t r a m B u r g e s , " M e m o i r of W e l c o m e A r n o l d . "

estate in 12 d i f f e r e n t t o w n s , in addition t o his g r e a t m e r c a n t i l e Bates, Rhode

The

p. 330; Penna.

Mag.

23O

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

recovery of H a y m Salomon from economic destitution to his condition in 1784, when he returned to New Y o r k and is said to have purchased a $6000 property, 72 speaks for extraordinary opportunities. The rise of William Bingham to independent fortune is scarcely paralleled by the increased business importance of Robert Morris himself. 73 The war-time success of several Baltimore merchants has already been pointed out. In Alexandria, Virginia, John Dalton, Thomas Herbert, and Philip Fendali could build spacious homes shortly after the war, and William Herbert was congratulated in 1 7 8 4 by a Philadelphian who had heard of his success in trade. 74 There are similar cases in New Y o r k City. Comfort Sands, henceforth a prominent merchant, had not even been a member of the Chamber of Commerce before the war, though his youthfulness may have explained that in part. His brother Joshua built a gracious residence in Brooklyn in 1786. J o h n R . Livingston first set up in business in New Y o r k about 1 7 8 4 a f t e r varied war activities which started him on a considerable commercial career. Business newcomers in New Y o r k City in 1 7 8 4 included Andrew Craigie, William Duer, William E d g a r , and Alexander Macomb who had had profitable experience in army-supply work. The first vice-president of the reorganized Chamber of Commerce was none other than " K i n g " Sears, who was certainly not prominent in business in colonial times. T h e first president of the city's first commercial banking institution, founded in 1 7 8 4 , was General McDougall, formerly a privateer commander and storekeeper; but both he and Sears 72 Cf. Pub. Amer. Jewish Hist. Soc., X X V I I , 227. 73 A broadside of Willing and Morris in 1770, which now hangs on the wall of the Manuscript Room of the Harvard Business School Library, gives some idea of their provincial reputation, which they were trying to overcome for a new scheme of West India trade. A contemporary comment on the increased fortunes of Morris, Bingham, and John Ross is found in Warren-Adams Letters, II, 184. 74 Benj amin Fuller to William Herbert, Aug. 2, 1784, Fuller Letter Book, 1784-1787, in Hist. Soc. Penna.

S O M E E C O N O M I C C O N S E Q U E N C E S OF T H E W A R

23I

were doubtless helped to such positions by their W h i g political records. The emergence of a new group of lawyers, many of whom got off to a successful practice during the war, was another change of first importance. T h e loyalist attitude of some of the older men gave the young their chance, and fortunes could be made in the law during the war, especially if one stayed out of politics. 75 Land speculation and loyalists' claims cases continued the lawyer's good fortune after 1783. The list of these rising young lawyers is long. Jared Ingersoll, Jr., and A l e x ander Wilcocks established their practice in Philadelphia during the war. A t its conclusion ex-army men such as Richard Varick, John Laurance, Robert Troup, Alexander Hamilton, and Aaron Burr put new life into the New Y o r k courts. The office of John Lowell of Newburyport and Boston trained an enterprising group around 1780, including R u f u s Greene A m o r y , Christopher Gore, and Harrison Gray Otis. Judge Lowell and Gore, the latter the son of a loyalist, handled many loyalists' cases. Theophilus Parsons was just getting his start at Newburyport during the Revolution. R u f u s K i n g was then trained by him and soon acquired a successful practice of his own. Other successful young Boston barristers included W i l liam Tudor (like John Laurance, a Judge Advocate for the Continental army), Perez Morton, and Thomas Dawes. In N e w Haven thirty-six year old Pierpont Edwards led his profession in 1784. B y the end of the war it was also apparent that " metropolitan e c o n o m y " was increasing: the gravitation of capital and business men to certain centers showed that discriminating centralization movements were under way. Naturally, these were in the direction of the better seaports, especially those which had been fortunate in war-time trade. 75 On a certain Baltimore lawyer, c f . B. Steiner, James McHenry, p. 45. John Adams states in 1777 that privateering cases made the lawyer's profession more lucrative than ever before: Works, C. F. Adams, ed., I l l , 89.

232

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

Portsmouth, N e w Hampshire, emerged f r o m the w a r in a strong position, though she was to suffer like all other places f r o m the subsequent post-war commercial depression. If there w a s no astonishing prosperity there, trade had not fallen a w a y , and beautiful houses were erected late in the war

years. 7 4

Salem, Massachusetts, like Boston, gained somewhat at the expense of smaller neighboring places. T h o u g h her shipping tonnage did not reach its 1 7 7 1

total

f o r another

decade, 77

Salem had built larger ships and had given daring opportunities during the war to a brood of seamen which shortly a f t e r made her great in a far-flung world trade. T h e metropolitan economy of Boston continued to be retarded through lack of water connections with her back country, but the Revolutionary era as a whole saw the development of her marketing area in certain parts of shire. 78

Massachusetts,

V e r m o n t , and N e w

Hamp-

T h e r e was, moreover, a significant movement to Bos-

ton during and immediately a f t e r the war, made up largely of merchants f r o m the N o r t h Shore with a sprinkling of country squires. Stephen H i g g i n s o n of Salem led the procession; the Cabots,

Lees,

Jacksons,

Lowells,

Grays,

and

Elbridge

Gerry, f r o m Beverly, Salem, Marblehead, and N e w b u r y p o r t , followed. M a n y of the newcomers picked up confiscated estates cheap. 79 T h e merchant and broker Moses Michael H a y s

of

Newport, the merchant W i l l i a m H u b b a r d of N o r w i c h , and the lawyer James Sullivan of Maine made the same change. T h e result w a s the i n j u r y of some of the smaller towns, it being a complaint in Beverly in 1780 that money w a s being lost because citizens were purchasing estates in Boston. 9 0 76 Ralph May, Early Portsmouth

Hist., p. 252.

77 Cf. Osgood, Sketch of Salem, p. 130. There are conflicting figures, h o w ever, some more favorable than these. 78 Cf. Nathaniel Gorham's statement in 1791, in Arthur Cole, ed., ton's Industrial and Commercial Corresp., p. 65.

Hamil-

79 H . C. Lodge, in Memorial pp. 161, 162.

Boston,

Hist. Boston,

III, 191; cf. also his

80 Cf. O. T. H o w e , in Col. Soc. Mass. Pub., X X I V , 378.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

233

Providence had similarly gained but to a lesser degree. T h e Arnolds, Olneys, and Smiths of Smithfield continued to drift within the sphere of the town's influence. The merchant A n drew Dexter settled there in 1785, and the Newport merchant Griffin Greene continued to be associated with Providence interests, as during the Revolution. While Newport was left in a sorry state, Providence had so developed that her coasters were three times as many in 1786 as in 1764. Her leading merchant, John Brown, was able to set up in trade by himself in 1782 and to begin the development of a new wharf district; in 1783 his brother Moses promoted important new road construction. 81 In Connecticut, Norwich prospered in many ways after 1780. 82 H a r t f o r d was the outstanding place, however, since N e w Haven had lost ground through activities of British cruisers. Prodigious war-time activities attracted to Hartford such merchants as John Morgan and Jacob Ogden. In 1784 General LaFayette could sincerely congratulate the " rising city of Hartford ", attended by "general blessings and private a d v a n t a g e s " which were the " reward of virtuous efforts in the noblest cause." 83 Almost identical circumstances had laid the foundations for the greater business future of Albany. There were many merchant arrivals in Philadelphia during or immediately after the Revolution. A m o n g them were the Frenchmen, Stephen Girard and John Holker; the Irishmen, Hugh Moore, John Barclay, and Alexander H e n r y ; the Scot, James McAlpin. Possibly because of his broadening commissariat experience, young Israel Whelen, son of a Chester County innkeeper, could settle in Philadelphia at the end of the war and secure an extensive shipping business. The flour traders there were joined in 1782 by enterprising Timothy 81 Bates, Rhode Island, p. 78; W . F. Crawford, in Rhode Island Hist. Soc. Coll., X I V , 107; H . C. Dorr, in Rhode Island Hist. Tracts, no. 15, p. 223. 82 Cf. F. M. Caulkins, Norwich 83 Connecticut

(1866), pp. 391, 397, 408.

Courant, Oct. 26, 1784.

234

BUSINESS ENTERPRISE: REVOLUTIONARY

EKA

P a x s o n . L o u i s Crousillat, a Frenchman w h o came to A m e r ica during the war and who is said to have made a tidy sum as purchasing agent f o r Rochambeau's troops, settled in Philadelphia as a successful dealer in French goods. T h e

Perot

brothers f r o m Bermuda set up in business there about 1 7 8 1 a f t e r trading during the earlier w a r years with Dominica and St. Eustatius. 8 4 It is equally significant that outside capital sought investment opportunities in Philadelphia at the end of the war, as illustrated by the careers of H u g h Shiell

from

abroad and of Nalbro F r a z i e r f r o m Boston. F r a z i e r ' s commercial house, newly organized in 1 7 8 3 , represented the union of a recently risen N e w E n g l a n d f a m i l y with a member of the old commercial society of Philadelphia. Tench C o x e was the partner of F r a z i e r and put up three-fifths of the £ 5 0 0 0 sterling or more of capital, and had, according to his partner, " acquaintances with the trading people both of T o w n C o u n t r y " and " established Connections a b r o a d . "

85

and

T h e plan

of J a m e s W i l s o n in 1 7 8 3 to bridge the Delaware at Trenton acknowledged

88

Philadelphia's g r o w i n g business influence, at-

tended by this enlarged commercial population. D u r i n g the w a r Baltimore had continued to gain at the expense of

Annapolis, and she, too, had received many

new-

comers, some f r o m abroad and some f r o m other parts M a r y l a n d , and they continued to arrive a f t e r 1 7 8 3 .

of

General

Greene remarked that year, " Baltimore is a most thriving place. T r a d e flourishes and the spirit of building exceeds belief. N o t less than 3 0 0 houses are put up in a year. Ground rents are little short of what they are in London. T h e inhabitants 8 4 J . H. Campbell, Friendly Sons of St. Patrick, passim; F. W . Leach, " Whelen," in "Old Phila. F a m i l i e s " ; Scharf and Westcott, Phila., I l l , 2212, 2213, 2223; Winslow, Phila. Merchants, p. 230; Jackson, Market Street, p. 128. 85 Frazier to Thomas Dickason, Jr., Nov. 15, 1783, Frazier Letter Book. In Sept., 1784, merchant Christian Febiger wrote that Philadelphia " in fact governs the whole Markets of this Extensive Continent": Mag. Amer. Hist., V I I I , 352. 86 Notice reprinted in Salem Gazette, Nov. 27, 1783.

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

235

are men of business." About 1783 Robert Morris set up a business partner, Tench Tilghman, in Baltimore, just as he then became involved with other merchants in other promising business centers.87 Alexandria, Virginia, also received new merchants soon after the war, such as the Englishman William Hodgson, and the Americans Philip Marsteller of Pennsylvania, John Craik, Jr., partner of Andrew Craigie, and Thomas Porter, friend of Craigie and war-time agent of Daniel Parker. Having triumphed over her rivals in northern Virginia, A l e x andria now stood prepared to prosper by the growing trade of the Potomac Valley, from which both Jefferson and W a s h ington expected great things at this time. Since the Virginia Port bill of 1784 made Alexandria the sole port of official entry for foreign ships on the Potomac, a concentration of trade and capital developed there as never before. Jefferson encouraged Alexandria because it was " a rival in the very bosom of Baltimore." 88 New York City was crowded in the spring of 1783 with speculators of every kind, as Charles Biddle found when he went there to charter English ships for the W e s t India trade. 8 " The natural advantages of the city and the prospect of the withdrawal of many loyalists suggested unlimited opportunities which newcomers, especially from N e w England, were eager to seize.80 T w o former clerks of Clark and Nightingale of Providence organized in 1784 the house of Murray, M u m f o r d and Bowen, together with an associate w h o had been four years in N e w York. 8 1 Andrew Craigie set up his drug house there 87 C. Hall, Baltimore, I, 72, 506, 507; S c h a r f , Chronicles of Baltimore, pp. 209, 236; O. Tilghman, Tench Tilghman, pp. 50-52; Griffith, Annals of Baltimore, pp. 102-104; Charles C. W h i t e t o D a v i d D a g g e t , Oct. 13, 1786, in Amer. Antiq. Soc. Proc., n. s., I V , 367. 88 Harrison, Old Prince William, II, 408, 410; G. T . Starnes, Sixty Years of Banking in Va., pp. 14, 15; Jefferson, Writings, Ford, ed., I V , 19, V I I I , 261; Brissot de Warville, New Travels (1794), II, 368. 89 Biddle, Autobiography,

p. 185.

90 John F. Stevens, Progress 91 Scoville, Old Merchants,

of New York,

V , 190.

p. 37.

236

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

in the summer of the same y e a r : " I am told you make a great show," a friend wrote him. 92 The former Providence merchant Ebenezer Stevens, who had fought during the war under Philip Schuyler, now established a lumber commission business in New Y o r k and was employed by Schuyler and others. 93 Thomas M u m f o r d of Groton backed two young relatives in business in New Y o r k in I783. 9 ' 1 F r o m the army came such o f ficers as Benjamin Walker and Samuel B. Webb, also J a m e s Watson, fresh from his contracting work under Wadsworth. Both Walker and Watson engaged in brokerage activities and were immediately taken into the Chamber of Commerce, as was also Melancton Smith, another war-trader. A notable lawyer f r o m New England was R u f u s K i n g who in 1 7 8 6 married the beautiful heiress daughter of merchant John Alsop. New Y o r k also received many newcomers from Europe at this time. The Scot Archibald Gracie, who saw the opportunities in America while engaged in Liverpool during the war, emigrated to New Y o r k in 1 7 8 4 ; his marriage soon a f t e r to the sister of Moses Rogers helped to get him nicely established. 95 John Delafield, an Englishman with property of his own, arrived in New Y o r k in 1 7 8 3 , married an heiress of the merchant Joseph Hallett, and became known as a broker in securities. 96 Other Englishmen—Dominick Lynch, John Stoughton, and the Wilkes brothers, the latter proteges of William Seton—settled in New Y o r k in 1 7 8 4 and 1 7 8 5 . George Scriba was a German arrival whose career was developed by w a r opportunities. He was trained in the Dutch house of Willink, and then employed by Potthoff of Amsterdam until 1 7 8 0 when he left f o r Philadelphia where he became a business partner 9 2 N e w York Gaseleer, Dec. 17, 1784, carries their advertisement; David Jackson to Craigie, Oct. 2, 1784, Craigie Papers. 9 3 J . A. Stevens, "Ebenezer Stevens," in Mag. Amer. 94 Deane Papers (Conn. Hist. Soc. Coll.), 95 G. A. Morrison, Hist. St. Andrews

Hist., I, 588-610.

p. 189.

Soc., p. 91.

96William Hall, "John Delafield, the Genealog. Biog. Soc. Bui., X V I I , 245 ff.

Englishman,"

in

New

York

SOME ECONOMIC

CONSEQUENCES

OF T H E

WAR

237

of George Schroeppel. M a k i n g a short trip to Holland at the end of the war he returned to N e w Y o r k to enter upon a career of commercial activity and land speculation with f a r reaching consequences. 87 A n o t h e r new firm was that of C o n stable, Rucker and Company, organized in 1784. Constable's w a r career has already been mentioned; Rucker was a G e r m a n with English commercial experience and with credit backing by L e Conteulx of Paris. Robert M o r r i s became a partner in this house in the spring of 1 7 8 4 : " . . . it is the last that I shall be connected with h a v i n g now completed the plan which I had long had in Contemplation," he wrote.' 8 Practically all these newcomers, native and foreign born, were speedily taken into the reorganized Chamber of

Com-

merce, thus securing f o r themselves a voice in the direction of the city's trade. Another newcomer, voted into the C h a m ber on March 1, 1785, was the army contractor W i l l i a m Duer. H i s entrance was an unfortunate sign that the immediate business of many N e w Y o r k merchants w a s not to be confined to needful constructive post-war policies, but that excessive speculation, which he personified, w a s to influence them f r o m the first years of peace. T o sum up the economic consequences of the Revolution, it may at least be called questionable to what extent the w a r had injured the old colonial moneyed class; certainly it was

far

f r o m being destroyed. A n d offsetting this w a s the transfer of some wealth into the hands o f a small but vigorous set of newcomers, invariably y o u n g in years but national in v i e w point, w h o were prepared to take the business bit in their teeth and set a faster pace f o r the future. T h e i r efforts were to be expedited not only by the group discipline they had experienced 97 I n f o r m a t i o n kindly supplied by M r . Otto S a l z m a n n ; until 1786, Scriba w a s a partner of one Starman. 9S T o Tilghman, June 22, 1784, Morris P a p e r s in N e w Y o r k Public Library; its primary interest was in tobacco. R u c k e r w a s to g o to Europe immediately.

238

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

during the war but also by the steady concentration of business power in the greater commercial centers. It cannot be too strongly emphasized, in conclusion, that the country was not left in the deplorable economic state frequently attributed to it. 98 Even the plethora of paper money had h a d its constructive side in loosening the economic structure of colonial society. T h e growth of manufactures, while not striking ( f o r men of wealth had not greatly enlarged their investments in the industrial field, there being too much opportunity in commerce), was at least noticeable. In the long run industry also gained slightly f r o m prisoners and deserters f r o m the British a r m y who had known manufacturing at home. 100 I n many lines, but in commerce especially, many Americans h a d i n d e e d been g i v e n the opportunity to e x p a n d their e c o n o m i c

life and to acquire new wealth. 101 99 C f . the affirmation of this point in Sumner, Financier,

II, Chap. X X I V .

100 C f . C. F . W a r e , Early New England Cotton Manufacture, p. 9 ; Cole, Hamilton's Corresp., pp. 8, 31 ; Adams, Familiar Letters, p. 313, for stimulus to Mass. industries, and Caulkins, Norwich, pp. 606-610, for stimulus t o Conn.; also Penna. May. Hist. Biog., X X X V I , 82, and Griffith, Annals of Baltimore, p. 80. J. T . A d a m s , New England in the Republic, p. SI, overdoes it, h o w e v e r : " In many ways the war immediately stimulated manufacturing, the capital c o m i n g f r o m the mercantile class." N o reference given. If it is based on the idea that commerce afforded little opportunity for t h e investment of capital during the war, it is of course misleading. 101 C f . remarks by Channing, in Mass. Hist. Soc. Proc., also M a c P h e r s o n , Annals of Commerce, I I I , 719.

X L I V , p. 368 ;

CHAPTER XI ECONOMIC DEVELOPMENTS IN THE 1780's BEFORE

concluding this s t u d y w i t h a n a n a l y s i s o f b i g busi-

ness enterprises undertaken

between

1781

and

1 7 9 2 , in the

l i g h t o f the circumstances a n d personalities c o n s i d e r e d in the p r e c e d i n g chapters, it is desirable t o consider certain g e n e r a l e c o n o m i c developments a f t e r the w a r w h i c h prepared the w a y f o r the H a m i l t o n i a n era. S o m e o f the c o n s t r u c t i v e

war-time

c h a n g e s w e r e advanced by the c o n d i t i o n s o f peace. T h i s is not to deny that there w a s a n a t i o n - w i d e c o m m e r c i a l depression a f t e r the peace settlement. It is t o deny, h o w e v e r , that all economic life w a s at a s t a n d s t i l l ; that depression w o r k e d disaster

f o r all merchants alike. T h e v e r y

f a c t that it w a s

n a t i o n - w i d e possibly s h o w s h o w the c o u n t r y h a d become economically unified, and, consequently, h o w readily the situation w o u l d lend itself to r e - a d j u s t m e n t . A b o v e all, a m i n o r i t y

of

business men could then, as n o w , g a i n at the e x p e n s e o f the m a j o r i t y at a time o f economic consolidation. W i t h the approach o f peace the t h o u g h t s o f m a n y persons, especially those w h o had g i v e n o f their time f o r m i l i t a r y service, w e r e turned in an intensive w a y to the pursuit o f private profit. " Get as large a f o r t u n e a s y o u c a n , " G e n e r a l N a t h a n a e l G r e e n e advised a friend. " . . . it is h i g h t i m e f o r y o u a n d I to set about in g o o d earnest, d o i n g s o m e t h i n g f o r o u r s e l v e s , " James

McHenry

told his

former

fellow

officer,

Alexander

H a m i l t o n . T h e astute J e f f e r s o n noted that " all the w o r l d is becoming

commercial,"

1

for

merchants

were

grasping

new

opportunities to sell, i m p o r t i n g g r e a t quantities o f g o o d s f r o m E n g l a n d , especially in 1783 a n d 1 7 8 4 . 2 N o r w e r e the people so impoverished that they could not p u r c h a s e these. 1 W . B. Reed, Joseph Reed, II, 474; Steiner, McHenry, Writings, Ford, ed., I l l , 422.

Samuel

p. 44; Jefferson,

2 Cf. MacPherson, Annals of Commerce, IV, 40, 68. 239

240

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

A d a m s w r o t e f r o m Massachusetts in 1785, " Y o u would be surprized to see the Equipage, the Furniture & L u x u r i o u s L i v ing of too m a n y , the P r i d e and V a n i t y so deep which pervades thro every Class. . . . " Similar conditions were observed there a year later, when the commercial depression w a s at its height. 3 L u x u r i o u s and dissipated living were observed even in troubled S o u t h Carolina in 1786. 4 A v i g o r o u s spirit of business enterprise w a s at least hopefully expressed in a variety of Period."

w a y s during the " Critical

S o u t h C a r o l i n a planters sought capital a f t e r

1784

to finance new methods of irrigating rice fields.5 In V i r g i n i a , N o r f o l k w a s being rebuilt, A l e x a n d r i a w a s adding to her places of business, and trade sites were in great demand in V i r g i n i a and M a r y l a n d

appropriated

1785.

m o n e y t h a t year t o

im-

prove a road west o f the P o t o m a c navigation. In these t w o states a g r o u p of

towns subscribed

to a total of

£40,300

sterling to a P o t o m a c navigation improvement company, and V i r g i n i a passed an act to lay out a turnpike f r o m A l e x a n d r i a to the lower Shenandoah Valley. 8 M a n y there were dreaming o f canals to the W e s t ; W a s h i n g t o n discussed such a project w i t h E l k a n a h W a t s o n in 1785. 7 P e n n s y l v a n i a also sought to improve her roads and by 1787 the commercial influence of both Philadelphia and Baltimore w a s considerably extended both south and west. 8 M o r e than 3 T o John Adams, July, 1785, in Samuel A d a m s Papers; Stephen H i g g i n son, quoted in H i g g i n s o n , Higginson, p. 8 4 ; Minot, Insurrection in Mass., p. 12. 4 C f . D i a r y of T i m o t h y Ford, in South X I I I , 204. 5 C f . Mrs. St. J. Ravenel, William

Carolina

Lowndes,

Hist.

Gcncalog.

Mag.,

pp. 22, 23.

6 C. Bacon-Foster, Potozvmack Company, pp. 57, 6 2 ; Mary P o w e l l , Old Alexandria, p. 224; Harrison, Old Prince William, II, 542; a contemporary quoted in Va. Mag. Hist. Biog., X X I I I , 407, 408, 413. 7 Elkanah Watson, Hist,

of the Western

Canals,

p. 8.

8 C f . Penna. Mag. Hist. Biog., X L V I I I , 6 9 ; Pcnna. Archives, X , 128-130; Scharf and Westcott, Phila., I, 431; Gray, Agriculture in Southern U. S., II, 613.

ECONOMIC DEVELOPMENTS

IN

THE

1780's

24I

6 5 0 houses were constructed in Philadelphia between 1 7 8 3 and 1790, and a company of prominent citizens was formed to consider bridging the Schuylkill R i v e r in 1786." In N e w Y o r k City a new public market was erected in 1 7 8 6 and still another two years later, 10 war-time fires having made necessary much building construction. The considerable demand f o r window glass that year is especially significant; on September 5, Stewart and Jones of N e w Y o r k doubled their English order for that commodity. In these " critical " years the city of T r o y was born of westward migration, part of which stopped at the Hudson River, and the war growth of Albany was soon resumed. 11 In New England flat-boat navigation of the upper Connecticut began about 1 7 8 5 and grew rapidly, to the special benefit of Hartford. Taverns went up in Litchfield, Connecticut, in 1 7 8 2 and 1 7 8 7 . 1 2 In Massachusetts the important E s s e x bridge plan, to connect Salem and Beverly, was promoted in 1787. It offered a better route to Boston f r o m the north, though at the expense of local interests in several northern towns. Possibly because the Cabot-Lee interests were now strong in Boston did they and their relatives in the North Shore towns fight vigorously for the plan. 13 With the contemporaneous construction of the Charles R i v e r bridge, connecting Boston with Charlestown and Cambridge (pushed by Thomas Russell, a Cambridge merchant who had developed into an 9 Watson, Annals of Phila., I l l , 2 3 8 ; Scharf and Westcott, Phila., I l l , 2 1 4 1 . Between 1 7 8 s and 1 7 9 1 , seven buildings were erected on one side of one block on Market St. Jackson, Market St., p. 1 3 6 . 10 T. F. Devoe, The Market

Book, pp. 3 4 1 , 3 7 0 .

11 Cf. statement by a contemporary, in Howell and Tenney, County of Albany, p. 6 0 9 ; cf. Annals of Albany, X, 2 0 0 , on the Yankee group led there by Elkanah Watson. 12 W. D. Love, " Navigation of the Ginn. River," in Amer. Antiq. Soc. Proc. ( 1 9 0 2 - 3 ) , p. 4 0 2 ; idem, Colonial Hartford, pp. 1 7 7 , 3 5 6 ; White, Litchfield, pp. 9 6 , 1 0 2 . 13 Robert Rantoul, " T h e Building of Essex Bridge," in Coll., X X X , 6 8 - 7 6 .

Essex Instit.

242

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

important B o s t o n business m a n ) , and of the Maiden bridge o v e r the M y s t i c k , B o s t o n ' s regional economy w a s soon to be enlarged. H i g h rentals, building activity, and l u x u r i o u s living actually impressed F r a n k l i n on his return to A m e r i c a in 1 7 8 5 . 1 4 S t a g e coach routes and

facilities were steadily being increased

in

v a r i o u s regions. T h e paper industry continued to g r o w , 1 1 and important

companies

were

organized

for

iron

and

woolen

m a n u f a c t u r e s in 1 7 8 6 and 1 7 8 8 . A b o v e all, it is significant that capital w a s much sought a f t e r e v e r y w h e r e during

the

" critical " years. Interest rates were high in 1 7 8 4 . 1 6 N e w Y o r k merchant-capitalists w e r e even invited to N e w J e r s e y and Connecticut, being promised liberal treatment. B r o o m e and Piatt of N e w Y o r k did r e m o v e to H a r t f o r d in 1784» availing themselves of " the g e n e r o u s laws and invitation of the legislature of this s t a t e . "

17

A n d if it be argued that all this merely empha-

sized a great lack of capital, rather than a general demand f o r it, it can be pointed out in reply that there w a s no difficulty in securing subscriptions of specie value f o r large amounts of bank stock in 1 7 8 4 in Philadelphia, Boston, and N e w Y o r k . If

economic

conditions,

however,

are

to

be

interpreted

through the eyes of the merchant—the business m a n — i t

is

quite true that he w a s complaining bitterly until 1 7 8 7 or 1 7 8 8 . Y e t the v e r y conditions he bemoaned aided in the establishment of better financial instruments f o r his use, and promoted his

commercial

independence.

The

enormous

premium

on

E n g l i s h bills of e x c h a n g e in 1 7 8 5 made invaluable the discounting

service of

America, New 14 Works,

the newly established banks of

North

Y o r k , and Massachusetts, and doubtless

ex-

Sparks, ed., II, 462.

15 Cf. Pcnna. Mag. Hist. Biog., L, 20. 16 Cf. J. D . Schopf, Travels in the Confederation, I. 1 1 8 ; also advertisement in Maryland Journal, Dec. 20, 1785, requesting a loan at 10% on good security. 17 Cf. letter of John Rutherford, May, 1783, in N e w Jersey Hist. Soc. Proc., 2nd ser., I, 180, 181 ; Connecticut Courant, Aug. 3 1 , 1784.

ECONOMIC D E V E L O P M E N T S

IN T H E

1780'S

243

plains their extraordinary success in these years (except f o r the Massachusetts Bank in 1 7 8 5 ) , when they became firmly established. The bankruptcies of small American merchants in 1 7 8 4 and 1 7 8 5 must have checked the too liberal credit policy of British houses and promoted a diversified American commerce. 18 The latter condition was also encouraged by the fact that at least some of the American w a r trade with France now continued, giving America a heavy favorable trade balance in the 'eighties. 19 The eagerness of the Dutch to extend commercial credit to support their trade with America—which grew rapidly, especially a f t e r 1 7 8 6 2 0 —also promoted freedom from British commercial domination. However, in the V i r ginia tobacco trade, pre-war British supremacy tended to be renewed, though Madison's complaints to that effect in 1 7 8 5 2 1 did not take into account the extensive work which Robert Morris carried on there f o r several years on behalf of the French Farmers General. The commercial conditions of which the merchants rightly complained—possibly worse at first in N e w England than elsewhere 2 2 —originally centered around the import and not the export business. Though American exports to England were below the average of the immediate pre-war years, they in18 Lord John Sheffield, Observations on Commerce of U. S., passim, had pointed to and argued for less liberal credit methods in 1783. Caleb Davis of Boston had to write to John Johnson and Co. of London, Jan. 2, 1786, reminding them of the 12 months credit they had agreed to: Davis Papers, 21. 19 Cf. statistics quoted by E. Buron, in / . of Econ. Bus. Hist., IV, 571580; also figures in Pitkin, Statistical Review (1835), P- 2 1 31 M. de Calonne to LaFayette, Jan. 9, 1784, in Sparks, Diplomatic Corresp., XI, 177. There can be no doubt, however, that this declined greatly, relative to war years. 20 A. L. Kohlmeier, " Commerce Between U. S. and Netherlands, 17831789," loc. cit., esp. pp. 11, 47. 21 Cf. Guy S. Callender, " Early Transportation and Banking Enterprises of the States," in Quart. J. of Econs., XVII, 137, 138. 22 June 15, 1785, Christian Febiger wrote that New England ports had a greater superfluity of goods than did Philadelphia or New York, because they lacked a back country to sell to. Mag. Amer. Hist., VIII, 352.

244

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

creased steadily f r o m 1 7 8 4 to 1788, with a small letdown in 1786. 2 3 Considering the new French and Dutch trade, the difference in pre- and post-war export totals could not have been great. B y 1 7 8 7 - 8 9 the Dutch trade had become more than fifty per cent as important as that of America with England, and its " balance " was probably in f a v o r of the Americans. 2 4 Prices of American produce f o r foreign shipment, moreover, remained high at home until late 1 7 8 4 or early 1785, 2 5 and, therefore, presumably in the foreign market, indicating that they were not the prime factors in causing the depression. Wheat brought a high price in Philadelphia in J u l y , I783. 2 S Robert M o r r i s complained of its high price in 1 7 8 4 and of that of tobacco early in 1 7 8 5 . American produce used in the English trade remained High in July, 1 7 8 4 . " Wheat was scarce and high in N e w Y o r k in May, 1 7 8 5 , and lumber sold there in J u l y , 1 7 8 5 , f o r about the pre-war price, both lumber and corn then being used in trade with the Madeira Islands. 28 However, by J u n e of that year most American produce was selling at a low level in London, and many staples had fallen heavily at home by 1 7 8 6 , including lumber, flour, and to23 MacPherson, Annals of Commerce, IV, 68, 99, 120, 137, 182. Henry B. D a w s o n figured that in 1784-1788 the exports to England and Scotland averaged nearly two-thirds of the 1770-1775 average. Hist. Mag., 2nd ser., I X , 163. 24 Kohlmeier, op. cit., esp. pp. 25, 26, 46. Trade with Spain also continued: John Codman of Boston wrote Thomas FitzSimons, June 7, 1784, to load a ship with flour for Cadiz, since " both Spain & Portugal are apprehensive of a great want of Wheat, Corn & Flour even for themselves & the Spanish W e s t Indies receiving their supply thro that Channel will increase it. . . ." Codman Letter Book. 25 Benjamin Fuller wrote from Philadelphia, July 17, 1784, " in short every Article of Commerce [i.e., native produce] is so high at this Markett, that there is little or no prospect to any Port." Fuller Letter Book. 26 T o William Price and Co., London, July 10, 1783, Frazier Letter Book. 27 Joy and Hopkins of London wrote Wadsworth, July 21, 1784, that " the produce of America [is] extravagently high." Wadsworth Corresp. 28 Stewart and Jones Letter Book, under Feb. 12, May 19, July 19, 1785.

ECONOMIC DEVELOPMENTS

IN

THE

1780's

245

bacco. 2 ' This was of course particularly unfortunate for the American farmer whose previous condition had not been serious, but who now had reason to join in the chorus of complaint. The merchant had suffered even earlier from the condition of the import business. Though a letdown in importations of English goods did not seriously begin until the end of 1 7 8 4 — in August five large London houses in the American trade had to close their doors and by November the stoppage of good remittances from America began to check exports 3 0 — this does not mean that American importers were making money until that date. On the contrary, Robert Morris spoke of the hard times as beginning in 1 7 8 1 , attributing them to excessive imports and an unfavorable trade balance. 81 Dutch goods sold poorly in Boston in October, 1782. 3 2 Many merchants had keenly watched the approach of peace, anticipating a difficult aftermath. Some, like William Cheever, had unsuccessfully tried to dispose of goods on hand in order to secure bills on Europe to clean up debts.83 Import prices really began to fall seriously in the spring of 1783, for both West India and European goods. 34 In July 29 Phyn and Ellice to Edgar, June 15, 1785, Edgar Papers; Spaulding, New York in Critical Period, pp. 18, 19. Anne Bezanson, Wholesale Prices in Phila., 1784-1861 (Phila., 1926), pp. 96, 97, and chart on p. 98, shows that farm crops made price comebacks in late 1785, declined again, recovered again in late 1786, and then went into serious decline in 1787. This was not true for lumber products, etc., which failed to come back to such an extent. This work, unfortunately for our purposes, gives no information on 1783 prices. 30 H. A. Hill, in Hist. Suffolk County, II, 75; John Rogers, Jr. to John Rogers, from London, Nov. 28, 1784, Hudson-Rogers Papers, Box III. 31 Carey, ed., Debates in Penna. Assembly, p. 82; cf. also Weeden, Early Rhode Island, p. 351, on difficulties of the Browns with goods after 1781. 32 Davis Papers, 23, Oct. 29, 1782. This may have been seasonable. 33 Will to W. D. Cheever, from Virginia, March 17, 1783, ibid., 10. 34 W . D. to W. Cheever, Feb. 8, 1783, ibid., 26: sugar and coffee are falling, and " more money will be lost than has been gained since the War "; W. D. Cheever to John Van der Funk, May 3, 1783, ibid., 2 3 : goods will

246

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

of that year, W . D. Cheever of Boston was reminded of the South Sea Bubble. He found everyone eager to trade; enough goods had been secured to last seven years and there was no adequate means of remittance. Articles were soon being sacrificed at half the war cost, the best European goods going at vendue. 35 In Philadelphia in November, 1 7 8 3 , Nalbro Frazier actually sold English goods at less than cost; and few brought cash, being disposed of by a new credit custom established during the war. 3 6 In short, the merchants were in difficulty from 1 7 8 2 on, not because the country was economically prostrate or unproductive or even without foreign markets, but simply because they over-reached themselves in the way of importations. The same thing had occurred over and over again in colonial times as the trade figures show. A factor modifying the severity of the depression was the American trade with the West Indies, which was not as hard hit as was once thought. The British navigation act of 1 7 8 3 is usually held to have greatly reduced exports to those islands, but half of the shipments to the West Indies from the United States in 1 7 8 4 went to British Jamaica alone. 37 British governors frequently threw open their island ports to American shipping to avoid starvation, 38 and Americans constantly got around the laws. F o r example, Stewart and Jones of New Y o r k chartered a ship and captain in 1 7 8 5 " f o r St. Kitts and St. Eustatia. In this Rout we hope he will be able to get a not bring more than sterling cost plus freight; in Dcaw Papers (Conn. Hist. Soc. Coll.), p. 180, " European goods are falling Every Day here." 35 Cheever to John Hodshon, July 4, 1783, Davis Papers, 26. 36 T o F. W. Geyer, Sept. 25, 1783, Frazier Letter Book. 37 Cf. Tench Coxe, Brief Examination of p. 16; but Wadsworth received a letter from that British warships kept Americans from Indies," though all were confused as to the Wadsworth Corresp. 38 Bezanson, Phila. 320, 321.

Prices,

Lord Sheffield's Observations, St. Kitts, Feb. 5, 1785, saying ports " throughout the West permanency of this situation:

p. 95; Henry Adams, Hist,

of

U. S.,

II,

ECONOMIC

DEVELOPMENTS

IN

THE

1780's

247

British Register—when we expect he will make something." 39 L e R o y and B a y a r d of New Y o r k invested through English relatives in similar ventures in 1787. It would be difficult to over-estimate the importance of such clandestine trade. 40 It is a mistake, moreover, to emphasize American commerce with the British islands to the exclusion of that with the French, Spanish, Swedish, and Dutch colonies. French governors also frequently opened their ports in spite of royal restrictions, and by 1 7 8 5 the colonial laws of all these nations were sufficiently liberalized to admit some legal trade with Americans. 4 1 T h e market at Martinique particularly appealed to Yankees in the fish trade, as to Lee and Cabot of Beverly who completed four voyages between J u l y , 1 7 8 3 and February, 1786. The H a v a n a trade was re-opened to Americans in 1 7 8 5 , and at this same time one American secured contracts f o r supplying Spanish army rations at St. Augustine, while another made considerable profits contracting with planters in Trinidad. 42 There, too, laws were constantly violated, as V a n Berckel wrote concerning the Dutch islands in 1 7 8 4 , and as one infers f r o m the smuggling activities of a Newport merchant with French Hispaniola in 1786. In the latter year a Connecticut captain took out Danish citizenship to secure trade with St. Thomas. 4 3 The result was that America secured con39 T o William Stewart, April 15, 1785, Stewart and Jones Letter Book. 40 T o Col. William Bayard, May 3, 1787, Bayard Corresp.; cf. also adequate treatment of this point in Channing, Hist, of U. S., I l l , 417-422; also Porter, Jacksons and Lees, I, 421, 429. 41 Cf. testimony of George Cabot, quoted in Lodge, Cabot, pp. 49, 50; c f . also Henry See's comments, in Amer. Hist. Rev., X X X I , 736; also Channing, op. cit., I l l , 412. 42 Porter, op. cit., pp. 419, 420; Claude Guillard to Wadsworth, March 20, 1785, Wadsworth Corresp.; from William Stewart, April 6, 1785, Stewart and Jones Letter Book. 43 Cf. letter of April 6, 1784, in Bancroft, Hist, of Constitution, I, 352; also Edler, " D u t c h Republic and Amer. Rev.," p. 2 3 2 n ; Mason, Newport, p. 225; Howard, Seth Harding, p. 173 ff.

248

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

siderable quantities of specie in 1 7 8 6 and 1787. 4 4 All-in-all, in the two especially bad years of 1 7 8 5 and 1786, such trade was probably the salvation of many Americans. This was natural, if, as Robert Morris had asserted, the West Indies could be supplied twenty per cent cheaper in American ships than in those of France or Great Britain. 4 5 Ignoring f o r the moment the effects of the depression on individuals, let us consider when trade began to revive and what new commercial routes were opened. B y J u l y , 1786, William D. Cheever could see a new spirit of economy and industry overtaking the people and giving impetus to commerce, which had been previously filled with " new Faces " and extravagant ideas. 46 In the preceding November, Stewart and Jones of New Y o r k had sent an order f o r English goods, their first since the peace, 47 apparently because the quantities of goods left in the city in 1 7 8 3 had been depleted. A New Y o r k merchant's venture to Dublin, with timbers and barrel staves, turned out very well in February, 1786. That same month Stewart and Jones sent a second order f o r English goods, " to keep our assortment in store compleat." 48 B y May, 1787, L e R o y and B a y a r d of N e w Y o r k could write, " A s to dry goods their demand is very great and advantageous to the present importers, as all Credits in Europe seem to be at a Stake. . . . " 49 F o r Boston a local historian places the improvement in commerce in the spring of 1788, though two years before a contemporary had recognized at least the trend 44 Phineas Bond to Lord Carmenthen, July 2, 1787, in J. F. Jameson, ed., "Letters of Phineas Bond," in Amer. Hist. Assoc. Rep., I, pp. 541, 542; Porter, op. cit., pp. 420, 427. 45 Morris to Franklin, Sept. 30, 1783, in Sparks, Diplomatic

Corresp.,

XI.

46 D a v i s Papers, 26. H e attributed much of this to changes in the political situation in Massachusetts, Bowdoin replacing " his Weakness." 47 T o Thomas Powell, Letter Book. 48 Ibid., letters of Sept. 3, 1785, Feb. 2, 13, Aug. 20, 1786. 49 T o William Bayard, May 3, 1787, Bayard Corresp.

ECONOMIC

DEVELOPMENTS

IN

THE

1780'S

249

toward a wider commerce. 50 Philadelphia probably received more ships in 1788 than in 1 7 8 5 , an indication of partial commercial revival supported by some contemporary testimony. 61 American trade with England and Scotland, both imports to and exports from, increased in 1 7 8 7 over the preceding year, the former falling off slightly in 1788, the latter increasing fourteen per cent. In short, commercial recovery was under w a y in both 1 7 8 7 and 1 7 8 8 but was not consummated until 1789." N o r was the process greatly retarded by inter-state jealousy and cut-throat commercial laws. It has been recently pointed out that such discriminating duties were " really " exceptional a f t e r 1 7 8 3 , since it was then usual to exempt produce of the growth of the United States f r o m state import duties, and since American-owned vessels of sister states were frequently given preferential tonnage rates over foreign ships. 53 In such cases as Connecticut's commercial legislation of 1784, merchants could also connive at fine distinctions to defeat enforcement. Peter Colt pointed out to Jeremiah Wadsworth that foreign goods could come in free by way of other states, " where it appears the goods are the property of persons 50 H. A . Hill, in Hist. Suffolk County, II, 84. The Boston Gazette, June 26, 1786 (quoted in R. V. Harlow, Samuel Adams, p. 307), said, "Trade has in a degree shifted its channel by finding a passage up the Baltic and around the Cape of Good Hope "; it would soon acquire regularity. 51 Channing, op. cit., I l l , 414 n. However, Mease, Picture of Phila., p. 52, gives number of vessels entering Phila. in 1771 as 752; in 1786 as 9 1 0 ; in 1787 as 870; in 1788 as 854; in 1789 as 1261. On April 21, 1788, Levi H o l lingsworth wrote, " The Commerce of this City seems to revive a little this Spring, great Quantities of Wheat are shipping off for Portugal & flour for Spain. . . ." Letter Book. William Bel! wrote from Baltimore, Dec. 11, 1788, that the dry goods business was very good, that woolens were scarce. Society Coll. in Hist. Soc. Penna. 52 Henry B. Dawson, in Hist. Mag., 2nd ser., I X , 168, i69n. MacPherson, Annals of Commerce, IV, 120, 137, 182. Bezanson, Phila. Prices, pp. 103, 104, shows that general price recovery was delayed until 1789. 53 Giesecke, American Commercial Legislation, pp. 134, 139. It was the unusual side of state tariffs which was emphasized by some persons, as by Tench Coxe at the Annapolis Convention.

250

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

belonging to this State & that they were originally intended for this State." 54 Nathaniel Shaler of New York proposed evading the Connecticut law by false entry certificates, not that he approved of wrong-doing but because the law was obviously unjust! He sent goods to John Caldwell of Hartford and to Colt in some such fashion. At the same time he was petitioning the New York Assembly for relief, " and Col. Hamilton is using his influence in its support." 55 The depression compelled merchants either to develop old trading routes or to blaze new ones, the former method appealing to the conservative element which was especially strong in Boston. Massachusetts ships returned to triangular trade and coastal peddling methods; it was said in 1785 that on the Carolina coast, " where f o r m e r l y One A m e r i c a n Vessell f r e -

quented that or any of the American Ports, there is now Ten." 56 A less praiseworthy renewal was the Guinea, or slave, trade. Between 1783 and 1785, 7000 negroes are said to have been imported into South Carolina, and this was not due to British traders alone. In June, 1785, the Maryland Journal carried a news item from A f r i c a that American vessels, " mostly from Boston," abounded on its coast, carrying New England rum to be exchanged for slave cargoes. In the fall of 1783 the Boston firm of John Codman, J r . sold its fast ship Commerce to Winthrop, Todd and Winthrop who intended to settle in Charleston to engage in the Guinea trade. Insurance was secured in Boston, from Charleston to the Guinea coast and back, for seven per cent. The affair was to be paid for, apparently, from proceeds of the first voyage. 57 54 July 14, 1784, W a d s w o r t h Corresp. T h i s is a long letter on business conditions generally. N e w Haven and N e w London, moreover, were declared free ports, to encourage propertied persons to settle. 55 T o Wadsworth, Oct. 12, 21, 29, N o v . 18, 1784, ibid. " I say D a m all Laws that reduce a man of Integrity to Ambiguity and evasion." 56 Morison, Maritime Hist. Mass., pp. 32-34; to W i l l i a m Stewart, April 15, 1785, Stewart and Jones Letter Book. T h e Codman Letter Book mentions ships bought for the coastal trade in 1783 and 1784. 57 Codman Letter Book, Aug. 2, N o v . 12, Dec. 9, 1783. Morison, op.

cit.,

ECONOMIC

DEVELOPMENTS

IN

THE

1780's

251

A commercial outlet enlarged f o r American merchants by the war and sought a f t e r by them during the depression was the tobacco trade, its importance being due in part to the high price the staple commanded f o r several years after the war. T h i s fact also attracted numerous European traders in 1784. T h e weed even became in that year " an Article of considerable Consequence " in the trade of Charleston. 58 Though its price was falling in England as early as September, 1 7 8 4 , Robert Morris still had to fight to lower the domestic price in 1785. 5 9 T w o years later Philadelphia enjoyed a considerable illicit tobacco trade with the British, all of which in turn contributed to the remarkable surplus revenues which Virginia enjoyed in these " critical " years. 6 0 T h i s activity of M o r r i s deserves emphasis. He secured monopoly contracts f r o m the French Farmers in 1 7 8 5 , 1786, and 1 7 8 7 , to supply 20,000 hogsheads of tobacco a year. Important political consequences were the anti-monopoly championing of the small tobacco merchants by Jefferson in France, and the continued southern animosity toward Morris, as in the years when Financier. 6 1 T h e latter was natural, f o r Morris' policy was, as he advised Tench Tilghman in 1 7 8 4 , " to keep the price of the Produce of this Country at a moderate Standard, it is the duty of every Merchant to aim at that point because it is the interest of Commerce & the interest of the PP- 3 2 - 3 4 possibly minimizes the extent to which Boston merchants returned to this practice. On its general revival after the Revolution, cf. Elizabeth Donnan, ed., Documents Illustrative of Hist, of Slave Trade to America (Washington, 1930-35), 11, ss7n.

58 Advertisement of Papers, 10.

a

Charleston firm,, under April

15, 1784,

Davis

59 T o Tench Tilghman and Co., March 16, 1785, Morris Papers in New York Public Library. 60 Cf. W . F . Dodd, " Virginia Finances," in Va. Mag. Hist. Biog., 366 ff.

X,

61 F . L. Nussbaum, " American Tobacco and French Politics," in Pol. Sci. Quart., X L , 497-516. Jefferson, Writings, Ford, ed., IV, 20; Benjamin Harrison to Nathanael Greene, Aug. 30, 1782, in Tyler's Quart. Mag., IV, 424; Sumner, Financier, II, Chap. X X I .

252

B U S I N E S S E N T E R P R I S E : R E V O L U T I O N A R Y ERA

Country that it should be so." T o achieve this in Virginia in 1 7 8 5 and 1 7 8 6 he developed an elaborate scheme to reduce prices by controlling foreign exchange through the issue of large quantities of his personal notes, such as he had circulated while Financier. 6 2 Though a stop was put to this later by a Virginia law, favoring circumstances (including the stoppage of discount by the Bank of North America, in which Morris was then a heavy stockholder) apparently brought about the desired result. In October, 1 7 8 7 , however, Morris congratulated a firm on being well out of the " t o b a c c o scrape " ; 6 S so it is impossible to ascribe success to the work toward the last. It is said, however, that Gouverneur Morris, the associate of Robert, laid the foundations of a fortune by tobacco shipments in 1 7 8 6 and 1 7 8 7 ; 64 and this business probably carried Robert Morris through the worst years of the depression. It certainly strengthened the economic bonds binding his many associates and continued to inspire them with his big business attitude. These included Constable, Rucker and Company of N e w Y o r k , his partners; probably William Bingham of Philadelphia; and Tench Tilghman and Robert Gilmor of Baltimore, the first also his partner. In Virginia, Josiah W a t son and John Fitzgerald of Alexandria did tobacco purchasing f o r him. Most important of all, the more enterprising American merchants now won new far-flung markets, a constructive policy encouraged by depression conditions. Such efforts were feasible 62 The details are in a letter to Tilghman, April 19, 1785, and one of Jan. 19, 1786; cf. also Sumner, Financier, II, 159. 63 To Constable, Rucker and Co., Oct. 31, 1787, in Morris MS, in Library of Congress. Tobacco probably staged price comebacks on several later occasions. 64 Anne Morris, Gouverneur Morris, I, 17. Though Morris survived, John Rucker, on whom he drew bills, went to the wall in April, 1787, when Le Conteulx of Paris, Morris' backers, closed down on him. Rucker died soon after. Le Conteulx to Rucker, April 23, 1787, in Penna. MS—Add'l Misc., in Hist. Soc. Penna.

ECONOMIC DEVELOPMENTS IN T H E

1780's

253

with ships of enlarged tonnage built during the war, such as the former privateer Grand Turk of Elias Hasket Derby. They were encouraged by commercial treaties made by 1785 with four European states. The spirit of a new patriotism burned in the letter Joseph Barrell of Boston addressed to Jeremiah Wadsworth in January, 1785, urging formation of a jointstock adventure to the " Pacifick Ocean & China," because " tis for Americans to find out new Traits and for such Public Spirited Men as you to engage in them. . . ." 85 The trade of Caleb Davis of Boston was gradually enlarged from its pre-war West India markets to those of Lisbon, Amsterdam, Nantes, Rotterdam, and St. Petersburg.88 There was contemporaneous tapping of the Orient by merchants of many northern American ports, for which dummy sales under British registry were sometimes used.87 The importance of it all was not only in the fortunes occasionally won, but also in the frequent concentration of capital under large group management. Moreover, the large profits of the early far eastern trade permitted Americans to finance it without the old reliance on foreign credit.88 Many individuals were responsible for this development in overseas trade. The Cabots led the way in 1780 to Gotenburg, Sweden, to which much tobacco was shipped after the war. A Hamburg merchant informed Americans in 1782 as to trade opportunities at his port. The Cabots and Elias Hasket Derby sent ships directly to Russia as early as 1784, and Thomas Russell of Boston addressed his first cargo there in 1786.80 In 1785 a group of New York merchants planned a voyage to Russia to secure duck and tallow of £4000 sterling 65 Jan. 12, 1785, Wadsworth Corresp. 66 Cf. Mass. Hist. Soc. Proc., LV, 324, 325. 67E.g., cf. Commerce of Rhode Island, II, 202, 358. 68 According to M. G. Myers, New York Money Market, I, 59. 69 O. T. Howe, in Col. Soc. Mass. Pub., XXIV, 377; Ebenezer Thomas, Reminiscences, I, 17; Almon's Remembrancer, 1784, Part I, p. 169; Peabody, Merchant Venturers, p. S3; Currier, " Ould Newbury," p. 558.

254

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

70

value. LeRoy and Bayard of New York wrote in 1787, " The Russian trade likewise bids very fair, as only such houses who are possessed of sufficiant [capital?] and which are few in numbers, have till thus far carried it on to very great advantage. . . ." 71 A firm at Petersburg declared a year later that traffic with America increased annually." 72 The far eastern trade was greatly encouraged by the French ruling of 1784 which permitted American ships to use islands in the Indian Ocean as ports of call. Thomas Russell of Boston took advantage of this offer in 1788 (though Boston merchants generally neglected the eastern market until several years later), by which date Americans from other ports already had 3000 tons of shipping engaged in direct trade with Isle de France, where meat, fish, tobacco, and naval stores were disposed of. 73 Even more important was the China trade, which had been contemplated by Morris and Duer as early as 1780. Credit for the first voyage there goes to Parker, Duer and Company, that concern of many interests and partners. A s early as August, 1783, these men had several such schemes afoot, one of which materialized in the well-known voyage of the Empress of China out of New Y o r k early in 1784. Its promoters were a significantly national group formed by wartime contracting activities: Parker, Duer, Morris, John Holker, the creditors of Parker and Company and possibly other merchants, were all interested. It was a troublesome venture because of the financial difficulties of Parker and Company, and to relieve the firm John Holker apparently sold the company's shares before the ship returned. (Some shareholders were frightened and wanted to sell out in January, 1785.) M But 70 Jan. 6, 1785, Stewart and Jones Letter Book. 71 T o William Bayard, May 3, 1787, Bayard Corresp. 72 Bulkly and Co. to W . D. Cheever, Jan. 7, 1788, Davis Papers, 14. 73 Hist. Suffolk

County, II, 85; Weeden, New England,

II, 827.

74 FitzSimons to Duer, April 13, 1784, Jan. 25, 1785; Holker to Duer, June 4, 1784, Jan. 22, 1785, Duer Corresp. Holker mentions " B a n c r o f t " settling affairs of the Empress with Le Conteulx in Paris.

ECONOMIC D E V E L O P M E N T S IN T H E

1780'S

255

the twenty or twenty-five per cent profit realized was incentive for similar ventures from other ports soon after. Duer also planned to trade directly with India and to that end made an agreement with a Calcutta merchant in January, 1786/* Constable wrote Jeremiah Wadsworth of prospects there in 1788. The China trade, however, continued to interest more people. Richard Piatt of New York requested credit from Wadsworth in 1785 to finance his one-eighth portion of the China voyage of Isaac Sears; 7 6 and Constable, Rucker and Company fitted out a ship for China that year, costing $100,000 in $1000 shares, in which Morris and probably Tench Tilghman were also interested.77 The new capitalist, William Edgar of New York, possibly helped to finance this; some months later he was in the East India trade " in a big way." 78 The second New York venture to China, however, is usually called that of the Hudson River sloop Experiment in 1785, captained by a former privateer master. At least fifteen firms or persons held one or two shares each at £500 a share. Thirty-six per cent annual interest for two years was expected on the investment. Though the voyage failed, with a pay-off of only about forty-five pounds a share in May, 1787, these things should be noted: the number of persons necessarily involved, and the fact that an attempt to finance a second Experiment voyage in 1787 called for double the capital in the first.78 75 J. Popham of Madras to Duer, Oct. 9, 1787; Peter Leyns of Calcutta to Duer, Nov. 17, 1788, Duer Corresp. The latter gives information about various American ships in the East. 76 Piatt to Wadsworth, Dec. 7, 1785, Misc. MS "Piatt", in New York Hist. Soc. 77 Morris to Tilghman, July 5, 1785, Morris Papers in New York Public Library. 78 Alexander Henry to Edgar, March 5, 1786, Edgar Papers. Henry had a scheme for the Northwest coast, sea otter trade. 79 Stewart and Jones Letter Book, passim. In Misc. MS " Ships ", " Experiment ", in New York Hist. Soc., are all the original papers. Spears, Amer. Merchant Marine, p. 107, gives a different account.

256

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

Even larger groups and greater sums were frequently required for such work. Morris and associates also sent the Alliance to China in 1787, probably the venture for which Philadelphians subscribed over $100,000 that year. In Baltimore, Richard Tilghman began in 1785 an East India trade which eventually won him a fortune, though John O'Donnell was the first captain to make the trip successfully from that port. Boston is said to have sent out a China-bound sloop as early as 1783, though a similar £300 share joint-stock proposal failed to materialize there two years later. 80 To the Revolutionary privateer owner, Elias Hasket Derby of Salem, however, goes credit for financing, possibly single-handed, the Grand Turk to Canton in 1 7 8 5 ; but even he had to invest half his fortune to make possible another venture there in 1790, so great was the initial investment. 81 Similarly, only wealthy John Brown of Providence, with some help from Welcome Arnold and possibly others, could have raised over $26,000 in 1787 to finance a Chinese voyage which happily had a return cargo worth nearly $IOO,OOO.82 Boston was the pioneer American port for the Northwest Coast-China trade. The first venture took place in 1787 on a joint-stock plan financed by fourteen shares costing $3500 each. The participants, forming a group with more than local interests, included the Boston merchants Joseph Barrell, Samuel Brown, and Crowell Hatch; John Derby of Salem, John M. Pintard of New York, and Charles Bulfinch of Boston. The last was not a merchant but, like Pintard, a young man of inherited wealth and social position. 83 The most important result of such new and usually profitable 8 0 M o r i s o n , Maritime June 23, 1785.

Hist.

Mass.,

p. 4 4 ; Boston Independent

Chronicle,

81 Spears, op. cit., p. 109; Morison, op. cit., p. 48. 82 G. S. Kimball, " East India Trade of Providence," Hist. Sem. Brown Univ. Papers, 6, pp. 4-10; Burges, " Memoir of W e l c o m e Arnold." 83 Ellen Bulfinch, Charles

Bulfinch,

p. 65.

ECONOMIC DEVELOPMENTS

IN T H E

1780'S

257

world-wide commerce was, in the words of a contemporary, " that the means of investment were facilitated so as to secure the future extension of the trade." 84 In doing this, it also laid the basis for the establishment of other business enterprises of the era. (Such had been the story of expanding English capitalism for two centuries.) In addition to developing new trade routes the general effect of the commercial depression was to benefit and consolidate the interests of the surviving merchants. Although most merchants suffered at least three years of bad business, some, fortunately situated, were directly benefited. They secured " goods below purchase-price " and sold " at a great profit." 90 The larger merchants also gained relatively because bankruptcies were largely confined to their less important associates. In Philadelphia the latter included certain war-time " successful but ignorant adventurers who did not understand commerce." 86 " Many of our new merchants and shop keepers set up since the war have failed," a New Yorker observed in 1 7 8 5 . " Hamilton later wrote of the " number of adventurers without capital, and, in many instances without information, who at that epoch rushed into trade, and were obliged to make any sacrifices to support a transient credit." 88 Such were marginal merchants and brokers, all little known figures, who were ruined in Philadelphia by June, 1784. 88 Unfortunately, so unimportant were the numerous smaller merchants who failed that their names have been ignored and the emphasis placed on the really important firms which went under. Yet relatively few of the latter can be named for all of the northern American ports. The firm of Jackson and 84 Phineas Bond, " Letters," loc. cit., p. 540. 85 Schopf, Travels, I, 116. 86 According to George Bryan, quoted in Konkle, Bryan, p. 301. 87 Quoted in T. E. V. Smith, New York in 1789, p. 5. 88 State Papers, Finance, I, 71. 89 To Thomas Dickason, Jr., June 29, 1784, Frazier Letter Book.

258

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

H i g g i n s o n of Boston w a s involved in 1787, but this w a s largely due to the activities of a rascally agent. 9 0 G e o r g e Meade of Philadelphia is another example in 1785, but he had been speculating in land. 91 H o w e v e r , the most successful of the w a r brokers, H a y m

Salomon, left an involved estate that

after

mercantile

suffering

Clement

failures

Biddle and Company

of

a

few

weeks

Baltimore

year

before. 9 2

also failed

in

March, 1785, and the Purviance brothers of that place became involved some months later, but the latter had become important largely because of patriotic activity during the w a r and cannot be called one of

the great houses. T h e

earlier

failure of Samuel A . O t i s of Boston was not due to commercial conditions alone, but also to the peculiar nature of his w a r work, which w a s incompatible with peace-time business. 9 3 I f still other important merchants, like Robert Morris, 9 4 were in difficulty at times, they usually did weather the storm in some fashion. H o w e v e r , an occasional firm, such as that of Boston, 9 5

W e l s h of

John

voluntarily concluded its affairs because

of discouraging conditions. T h e greater merchants were fortunate not only in this respect, but they and their lawyer associates now secured even additional property f r o m bankrupts. S t e w a r t and Jones and W i l l i a m Constable were a m o n g the executors and apparently the creditors of Salomon. 9 6 P a r t of a " M r . H u d s o n ' s " estate was purchased in 1785 by a creditor, Robert M o r r i s , w h o also 90 Proc.

Mass. Hist. Soc., X L I V ,

565-567; Porter, Jacksons 91 Chaloner

and Lees,

to Wadsworth,

Cath. Hist. Soc. Res.,

Currier,

" Ould

Newbury,"

pp.

Dec. 4, 1784, W a d s w o r t h

Corresp.;

Amer.

I l l , 211, 212.

92 Cf. A m e r . Jewish Hist. Soc. Pub., 93 Morison, Otis,

84;

I, 373, 374.

I I , 14.

I, 27n.

94 Undated letters, March or April, 1784, Frazier Letter Book, about his protested bills. Morris wrote in July, 1785, that he had ten times as many lawsuits on hand as in his entire career before the depression. 95 T o A b r a m Eustis, March 17, 1785, W e l s h Letter Book. 96 T o Joseph Carson, July 20, 1785, and to FitzSimons, June 27, 1785, Stewart and Jones Letter Book.

ECONOMIC

DEVELOPMENTS

IN

THE

I 780's

259

bought up part of the Purviances' debt; and since Morris preferred landed security to personal bonds he could say in November, 1784, that he had secured some valuable estates." Jeremiah Wadsworth began to put pressure upon his debtors in July, 1784, also securing a number of lots in Hartford sold him in 1786 by a person in hard financial straits. Barnabas Deane of Hartford threatened to sue his debtors in January, 1784, as did Wadsworth and Carter the next month.88 Merchant William Patterson of Baltimore advertised to the same effect a year later. William Edgar of New York pressed his debtors in 1786. Much of the property of the Newburyport Tracys was secured by Thomas Russell of Boston. 88 Comfort Sands of New York exacted due payment of the trader Daniel Carthy of North Carolina in 1787, Carthy complaining that money values had appreciated since his debt was incurred in 1 7 8 4 ; that one of Sands' maxims was, " no poor man can be honest." 100 Another circumstance possibly favoring the greater merchants was the alleged partiality of the first commercial banks, a practice which, if true, had good historical precedent. 101 Such partiality was suggested by the charge against the Bank of North America in 1785 : that it hurried some traders into bankruptcy while it favored its friends, thus making the mercantile interests " entirely subservient to the views of the well-bom junto." A contemporary said that the bank ruined many en97 Morris to Tilghman, April 30, Aug. 31, Nov. 15, 1784, April 12, 1785, Morris Papers in New York Public Library. 98 Colt to Wadsworth, July 14, 1784, Wadsworth Corresp.; Love, nial Hartford, p. 177; Connecticut Courant, Jan. 13, Feb. 10, 1784.

Colo-

99 Maryland Journal, Jan. 14, 1785; Edgar Papers, V, 1087, 1088, 1141; Currier, op. cit., pp. 37, 38, 156. 100 Carthy to Duer, July 2, 1787, Duer Papers, II. This same situation! is seen in James McDonald's laments to William Taylor of Baltimore, July 11, 1783, about good but temporarily frozen securities. Taylor Papers, I r in Library of Congress. 101 Cf. Lipson, Econ. Hist. England,

III, 246.

260

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

dorsers of notes in a new and then little understood fashion. 1 0 2 Similarly, the credit restricting policy of the Bank of New Y o r k was criticized as working in the interests of " British " capitalists. 103 T h e consolidating influence of the hard times is further revealed in other ways, as in the public securities situation to be discussed below. A significant bit of such evidence is the changed condition of stockholding in the Bank of N e w Y o r k in 1 7 9 1 , compared with 1784. Whereas at the earlier date 2 2 7 subscribers held 5 3 6 shares, by 1 7 9 1 the shareholders had decreased to 1 9 3 , holding the increased total of 723 shares. 104 T h e number of stockholders in the Massachusetts Bank was even more drastically reduced because of the commercial and d i s c o u n t c r i s i s in 1 7 8 5 ,

a n d p o s s i b l y also b y r e a s o n o f a d i f -

ference of opinion as to what constituted sound banking policy, or as to the domination of a certain clique of investors. The number of shares then fell f r o m 5 1 1 to 200 and shareholders f r o m 1 0 0 to fifty. This left William Phillips and son with f o r t y - f o u r shares, Thomas Russell with fourteen, and, among others, Jonathan Mason, Francis Cabot, John Langdon, Ezekiel Price, and Thomas Walley with four to six each. The result was decidedly beneficial f o r them since the bank now had a prosperous career. In 1 7 9 0 and 1 7 9 1 alone, dividends totaling f o r t y per cent were declared. 105 Indeed, there was clearly a 102 Carey, ed., Debates in Penna. Assembly, passim; Centinel Letters, N o v . 13, 1788, in M c M a s t e r and Stone, Penna. and Federal Constitution, p. 677; Charles Biddle, Autobiography, p. 190. G o u v e r n e u r M o r r i s even adm i t t e d something like t h i s : S p a r k s , Morris, I I I , 463. 103 Cf. W . T . H a r d e n b r o o k , Financial New York, p. 87. N . S. B. Gras, Massachusetts Bank, p. 22, speaks of the partiality f o r the l a r g e r business element shown also in b a n k i n g policy in Boston. 104 Based on unpublished 1784 stockholders' list, herein published as A p p e n d i x A . T h e 1791 list is in D o m e t t ' s history of the bank. 105 F i g u r e s taken f r o m Mass. B a n k Recs., Dividend Book, X I X ; c f . also J . S. Davis, Essays on American Corporations, I I , 66. Gras, op. cit., pp. 26, 52, 53, ascribes the w i t h d r a w a l of stock in 1785 to other t h a n depression r e a s o n s alone, as to the f a c t t h a t the eliminated element wished to use the b a n k too largely f o r personal loans.

ECONOMIC

DEVELOPMENTS

IN

THE

1780's

2ÓI

tendency to concentration of ownership in many of the business corporations founded in America to the year i8oo. 1 0 S In somewhat similar fashion the better organization of business was encouraged by falling commodity prices, as in the N e w Y o r k lumber trade. Stevens and Hubbell, a prominent commission firm, wrote on October 9, 1786, to Philip Schuyler, a leading up-river lumber exporter, with this proposal: The very low price of Albany boards & plank this last season being highly Injurious to the Interest of the proprietors and the very small prospect of their appreciating for some years to come unless the present mode of disposing of them is altered gave rise to the following proposals which are submitted to the consideration of all the Gentlemen who are concerned in sending lumber to New York for Sale. 1st It is proposed to have all the boards & plank sent this market put into the hands of an Agent who shall provide convenient deposits for the same, this agent to have the sole disposal of the lumber. 2nd The proprietors or their Committee to fix the price of the boards & plank by which the Agent shall dispose of them (& from which there should be no deviation) from time to time as Circumstances should require. 107 Although this scheme may never have materialized, it clearly points to one effect of the depression: to lay the groundwork for the cooperation and concentration of interests essential to the success of capitalist enterprises in the following decade. W e may sum up the economic situation in the 'eighties as follows: The Revolution was immediately followed by several years of confused readjustment; but some economic life was vigorous, at least until a sharp decline in prices f o r American produce took place in 1 7 8 5 ; and even then it did not cease, though agriculture was particularly hard hit. Commerce had 106 Davis, op. cit., II, 30. For comment on self-favoring policy of early bank directors, cf. A. C. Bryan, " State Banking in Maryland," Johns Hopkins Studies, X V I I , 35, 36, as well as Gras as cited above in footnote 103. 107 Letters to Commission Merchants, Schuyler Papers.

262

BUSINESS ENTERPRISE:

REVOLUTIONARY

ERA

suffered even earlier, however, simply because the merchants had long been indulging in excessive importations at falling prices, and they thus helped to pave their own w a y to hard times. Their recovery led to the development of a new worldwide commerce which the Revolution had legalized, and this frequently promoted longer, cooperatively financed voyages. The tendency of the hard times was to weed out the smaller business men to the eventual benefit of the larger, and to evolve more highly organized business communities; all of which cleared the way f o r greater business activity in the later years.

CHAPTER XII A COUNTER-REVOLUTION AND ITS BENEFITS POLITICAL

developments in the 1780's ensured the perman-

ency of that economic individualism promoted by the war. One evidence o f the greatness of A l e x a n d e r Hamilton consists of his having appreciated this trend of events. Standing on the brink of an era of a new social philosophy, he had the astuteness to feel the new currents and to swim boldly with them in political life. A l t h o u g h full of the mercantilist notion of

a

strong state, Hamilton conceived of that strength as derived f r o m individuals whom the state should help but in no wise restrain. S u c h ideas had long been held b y Robert M o r r i s ; with this aid and that of his kind, Hamilton did not fail. T h o u g h our concern is with the economic consequences of the political " counter-revolution " which the Hamiltonians led, these are to some extent explained by the nature of the revolt. It w a s at least partly motivated by commercial, financial, and industrial desires in the N o r t h , and largely realized by the work of " a consolidated group whose interests knew no state boundaries and were truly national in their scope "

1

in much the same

w a y that some post-war business enterprise in the North, beginning with the B a n k of N o r t h A m e r i c a , w a s promoted by a similarly nationally minded group. T h e constructive purposes of this g r o u p g r e w until, with irresistible force, they swept all b e f o r e them. T h e Hamiltonians were thus the aggressors, forcing long maturing political and economic changes, though they seem to have firmly believed that they also acted defensively in face o f threatening social chaos. 1 Beard, An Economic Interpretation of the Constitution, p. 325 et passim. The origins of a national business group lay, in part, in important interprovincial marriages in colonial times. These increased after the war when, for example, Elbridge Gerry, Rufus King, and Samuel Osgood of Massachusetts made brilliant marriages in New York City.

263

264

BUSINESS ENTERPRISE : REVOLUTIONARY

ERA

But it is now evident that there was relatively little danger of such social collapse, though many serious-minded persons feared such a result. T h e " conservatives " were f a r stronger than they themselves knew. A s a similarly purposeful group in many states they continued their triumphs of 1 7 8 0 and 1 7 8 1 by defeating most legal tender, paper money demands in the northern states in those troubled years f r o m 1 7 8 4 to 1787, and by usually meeting defiant rural debtors and democratic levelers with sturdy opposition. Of course there is nothing particularly surprising about the demand f o r paper money after the w a r : it was the time-honored American remedy f o r economic ills, acquiesced in by some wise leaders in colonial days. 2 W h a t is startling is the unprecedented vigor with which such agrarian demands were combated in the 'eighties. Consider, f o r example, with what difficulty the demand f o r a public " bank " was suppressed in Massachusetts in the i74o's, and then only with imperial intervention; but how effectually Massachusetts resisted all paper money demands in the " Critical Period." Surely the speed with which the merchants subscribed and organized in 1 7 8 6 to help put down the agrarian riots which culminated in the brief but serious crisis called Shays' " R e bellion," is additional proof that a powerful conservative group had been evolved. 3 F r o m this point of view, it is the frequent successes of conservatives in many states which really call f o r emphasis in an analysis of the strength of the contending factions. The radical financial actions of little Rhode Island and New Jersey were in fact decidedly exceptional in the North, however great the fear that such excesses might spread.* 2 Cf. the summary in Carl Russell Fish, The Development Nationality (1913 ed.), p. 27.

of

American

3 Cf. Morse, Federalist Party in Mass., p. 26, and Minot, Insurrection in Mass., p. 9. The force led against Shays was paid for largely by merchants like the Cabots, Higginsons, and Russells, who subscribed to a list circulated by Edward Payne, the insurance man: Doc. 2822, Mass. Hist. Soc. 4 There is no adequate study of this problem. From an historical approach, the general defeat of the legal tender, paper money factions in Mass., N . H.,

A COUNTER-REVOLUTION

AND ITS BENEFITS

265

It is even more important to note that the " conservatives " had positive economic objectives of their own in pursuit of which they were, on the whole, surprisingly successful in these same years. They sought bank charters in several states, to the scandal of country folk and others with the old colonial viewpoint. They fought to preserve the wealth of former loyalists, to the anger of a certain type of patriot. Their views on the latter question were well revealed in N e w Haven in 1 7 8 3 and 1 7 8 4 when such business men and lawyers as David Austin, D a v i d Atwater, Pierpont Edwards, and James Hillhouse vigorously opposed T o r y baiting measures as against the economic w e l f a r e of the town, since the wealthy would be frightened a w a y and a sound commercial policy consequently injured. 5 T h i s is likewise one logical explanation of Hamilton's peace treaty observance program in New Y o r k . Another objective of merchants was to free commerce by shifting the burden of taxation upon the landowner, especially upon the farmer, and they probably had the best of it, though Hamilton complained that in New Y o r k the country made the city bear too great a share of taxation, and argued that any notion of " equality of Conn., Md., Del., and Va. is most significant. Nor were the issues in New York and Penna. disastrous; in the former, for example, where conservatives like Schuyler, Duer, and McDougall fought bitterly against paper money bills, the legal tender issues of 1786 were so conservative as to depreciate but 6% in two years. {Cf. J. Lansing to L. Gansevoort, Feb. 19, 1786, Federal Convention Letters, Hist. Soc. Penna.; Spaulding, Critical Period in New York, p. 149.) On Penna., cf. Scharf and Westcott, Phila., I, 438 et circa. For general information on all the states, Bancroft, History of the Constitution, I, 230 ff. is still valuable, though he prefaces his facts with exceedingly broad statements. Nevins, The American States, pp. 515-543, takes substantially the view given above. Of course business men remained nervous. Robert Morris, for example, complained to Constable, Rucker and Co., Aug. 20, 1786 (Morris MS, in Library of Congress), that "this damned Paper Money does more mischief"; but it should be remembered that he was trying mightily to reduce prices, to expedite his shipments abroad, at this very time. 5 Cf. Almon's Remembrancer, 1784, Part I, p. 325; F. B. Dexter, " N e w Haven in 1784," in New Haven Col. Hist. Soc. Papers, IV, 325; C. H. Livermore, Republic of New Haven, pp. 222, 224.

266

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

sacrifice " w a s absurd.* A taxation policy quite favorable to mercantile interests w a s successfully inaugurated in Massachusetts in 1780, so that it was a true grievance which was voiced in 1786 at the Hatfield convention over " the present mode of taxation, as it operates unequally between the polls and estates, and between land and mercantile interests."

In

7

Connecticut the old war-time complaint that taxation favored the rich against the poor, " one main part of that against which the present w a r was undertaken,"

8

slavery

w a s repeated

in 1784, when it w a s argued in even a " conservative " newspaper that traders and money lenders paid relatively but onetenth or one-fifteenth as much taxes as the farmers.® A n article in a M a r y l a n d journal in 1785, addressed " p a r t i c u l a r l y to the F a r m e r s and Planters," merchants

already

protested against poll taxes,

forced

producers

to

pay

since

indirectly

for

tariffs. 1 0 Merchants and wealthy landowners were " notoriously " favored by the N o r t h Carolina t a x law of 1784, according to a critical modern scholar. 1 1 " Conservatives " were also largely behind a p o w e r f u l movement in the 1780's f o r the incorporation of

municipalities.

T h o u g h the " r a d i c a l " Smilie insisted in the

Pennsylvania

Assembly that the only historical reason f o r municipal incorporation was to protect the " natural rights " of the people, 12 the arguments n o w generally used by the " conservatives " were largely for achieving business ends. T h e tendency w a s very prevalent in Connecticut. H a r t f o r d , N e w H a v e n , Middletown, N e w London, and N o r w i c h all became chartered corporations shortly a f t e r the Revolution, and f o r these reasons: the com6 Cf. S u m n e r , Financier,

I I , 73, 74.

7 Q u o t e d in N . B. S y l v e s t e r , Hist, of the Conn. Valley in Mass., I, 76. 8 Q u o t e d by L . H . Gipson, Jared Ingersoll, 9 A r t i c l e in Connecticut

p. 361.

Courant, J a n . 6, 1784.

10 Maryland Journal, F e b . 8, 1785. 11 T . P . A b e r n e t h y , Frontier

to Plantation

12 Q u o t e d by W i l l i a m Gouge, Short p. 239-

in Tenn., p. 60.

History

of Paper Money,

Part

II,

A COUNTER-REVOLUTION

AND ITS B E N E F I T S

267

mercial elements demanded a more effective local government than the town meeting; agrarian political opposition had to be segregated because trading privileges were needed. The Wadsworth-Deane group was behind the movement in Hartford, its publicly stated objectives being the lengthening of a pier, the improvement of the harbor, the cutting of a canal to aid the lumber trade. Commercial reasons also lay behind New Haven's incorporation. 13 Such economic arguments were ably set forth by Noah Webster in several articles in the Connecticut Courant in May, 1784. Merchants Joseph Barrell and Stephen Higginson were on a committee to consider doing the same even for Boston that year, though it failed, as did a similar movement in Trenton, New Jersey. But Charleston, South Carolina, was incorporated in 1783, and Alexandria, Virginia, had been during the war. A re-charter movement was also under way in Philadelphia, though not successful until 1789 when such a commercially minded individual as Tench Coxe wrote Alexander Hamilton for advice on the subject. 14 Many merchant " conservatives" also came to support a national impost policy, a restraint on free trade, partly because they had other interests, as in the public debt, which would be indirectly benefited. William Bingham asserted the rights of public creditors in a threatening fashion as early as October, 1783. If justice were not done them, a "violent Convulsion must take place," he predicted. 15 The Rhode Island commercial group did not fully endorse the national impost policy until 1786, but even there it was whispered in 1785, when a state tariff was considered, that its purpose was " to pay the Interest of J n B ne [John B r o w n ' s ] Certificates." 1 8 Boston, which had warned her representatives in 1 7 8 3 to remember 13 Love, Colonial Hartford,

pp. 343-343; notice in Penna. Packet, Feb. 17,

1784; Dexter, op. cit., p. 133. 14 Under Jan. 23, 1789, New York State—Misc. MS, in Tomlinson Coll. 15 Bingham to ?, Oct. 14, 1783, Society Coll, in Hist. Soc. Penna. 16 Bates, Rhode Island, p. 150; Gerry to King, May 14, 1785, in C. R. King, Rufus King,

I, 74.

268

BUSINESS ENTERPRISE: REVOLUTIONARY

ERA

always that they spoke f o r a trading town, called for a " N a t i o n a l Establishment" in 1 7 8 5 in order to discharge the public debt. 17 Merchants there and elsewhere had not only acquired national securities but had invested also in the three newly formed commercial banks whose work was national in scope, and bank stockholders were said to have been among the staunchest supporters of the subsequent Federal movement. 18 One thing which helped make the Counter-Revolution a success, in short, was that so many merchants, lawyers, and gentlemen had secured a number of interests in a creditor capacity which called f o r an all-embracing economic policy, and not one relating to commerce alone. It is not our purpose to go through the steps whereby a militant minority, whose northern members frequently had common economic interests, cooperated in state affairs and then finally backed the national government movement in 1787. It is worth notice, however, that at the earlier Mt. Vernon commercial conference such an important matter f o r the development of a sound business economy as making foreign bills of exchange of equal legal rank with domestic debts in writing, was there discussed and recommended f o r favorable action to V i r g i n i a and Maryland. 1 9 Some support f o r the national movement also came f r o m those desiring the protection of small American manufacturers. 2 0 W h a t " Federalism " meant to a business man with constructive ideas is forcefully summed up in a few lines f r o m the merchant Joseph Barrell to his brother: " Y o u will find inclosed a Medal which was struck to commemorate the first American Enterprize to the Pacific Ocean. If you are a Federalist you will be pleased, but to the antifederalist, the 17 Boston Records Commissioners, Reports,

X X V I , 314, X X X I , 77, 78.

18 George Bryan, quoted in Konkle, Bryan,

pp. 303, 323.

19 Cf. K. M. Rowland, in Penna.

Mag. Hist. Biog.,

X I , 419.

20 Cf. demands of rope-makers, sugar refiners, etc., desiring protection, in Scharf and Westcott, Phila., I, 43. cit., p. 142 ff.

48 Such is the defense of A . B. Hulbert, in Records pany, I, Intro., L I X . 49 See the elaborate account in Davis, Essays, 5 0 Hulbert, Ohio Company,

II, 235

ff.

of the Ohio

I, 124 ff.

Com-

OTHER

NEW

ENTERPRISES:

CONCLUSION

3I9

ing before such winds of new interest, for he was a big business " undertaker " such as the age demanded. 51 Revolutionary circumstances had helped to develop the similar company of the Miami Reserved Lands Associates, which was purchasing Ohio territory f r o m Congress at this same time. The prime mover in this affair, John Cleves Symmes of New Jersey, had made valuable contacts through his political activities during the war and was of some social importance. 52 Second only to him among the proprietors of the Miami Company was Elias Boudinot, of a " remarkable matrimonial network " in New Jersey. The capitalist leanings in Boudinot's nature were evident even in colonial times and he readily fell in with various enterprises of the new era. 53 Jonathan Dayton, also a Miami proprietor and the brother of a New Jersey merchant, had, like Symmes and Boudinot, a Revolutionary W h i g career, and shortly a f t e r also became a heavy speculator in public securities. Dayton was a brother-in-law of General Matthias Ogden, a Miami proprietor who was in turn the brother of a war commissary. Still another proprietor was Daniel Marsh, Revolutionary quartermaster and commissioner of forfeited estates in New Jersey. 5 1 These men did not contribute the entire capital for their enterprise, since individuals f r o m even Rhode Island and Massachusetts (the latter representing a " number of gentlemen " ) paid in large amounts of depreci51 Cutler, Cutler, passim, reveals a person of versatile talents and with an insatiable eagerness for new interests. 52 B. W. Bond, Jr., ed., Corresp. of J. C. Sytiimcs, Intro, and notes. In the Elias Boudinot Ledger, p. 102, is a list of names attached to a " Copy of the original Account between the proprietors of the Miami Reserved Township, as settled by me by Virtue of a Power of Attorney for that purpose from John Cleve Symmes, Esqr." In this are sixteen persons, plus a private company, the latter made up by certain persons among the sixteen. They held in all twenty-three shares. These men were also among the twenty-four proprietors of the company. 5 3 " Elias Boudinot," in Diet. interested in the " S.U.M." 54 W . O. Wheeler, Ogden of Moore Fwman, p. I3n.

Atner.

Family

Biog.

in America,

Boudinot was also heavily pp. 131, 132, 137;

Letters

320

BUSINESS

e n t e r p r i s e :

r e v o l u t i o n a r y

e r a 55

ated securities wherewith the purchase was made. Moore Furman, Revolutionary commissary of N e w Jersey and brother-in-law of E d g a r and Constable of New Y o r k , became another investor in this company a f t e r the failure of George Morgan, Royal Flint, and Daniel Parker to secure lands from Congress in 1788. 5 6 New capitalists were equally conspicuous among the associates of Oliver Phelps and Nathaniel Gorham in their company purchase of New Y o r k territory f r o m the State of Massachusetts in 1788. Gorham, merchant and rope-walk owner originally of Charlestown, was especially prominent in Boston after the war, being interested in such other things as the Charlestown Bridge corporation. 57 Phelps was more distinctly a war product, a previously little known western Massachusetts trader whose commissariat and beef-selling activities during the war apparently won him a fortune and valuable acquaintances. A m o n g these was his principal war-time assistant, Israel Chapin of Hatfield, who was associated in the purchase with Gorham and who had been speculating in Vermont lands since 1781.58 Also connected with Gorham and Phelps was " Livingston & Co.," or " L i v i n g s t o n and Gilbert," of New York. 5 9 The company shares were sold to many other persons. R u f u s K i n g 55 Bond, Symmes,

p. 45.

56 F u r m a n to Edgar, M a y 20, June 10, Oct. 10, 1788, E d g a r D a y t o n to S y m m e s , Sept. 12, 1788, in Bond, Symmes, p. 201.

Papers;

57 T. B. W y m a n , Genealogy and Estates of Charlestown, II, 4 2 4 ; N e w Eng. Hist. Gencalog. Soc. Reg., V I I , 303, 3 0 6 ; " N a t h a n i e l Gorham," in Diet. Amcr. Biog. 58 O'Reilly Docs., V, nos. 32, 33, 83 ; Orsamus Turner, Phelps Purchase, pp. 135, 136, 292.

and

Corham's

59 Phelps to W a d s w o r t h , April 14, 1788, VVadsworth Corresp., about a meeting with the company at H u d s o n . Phelps to Gorham, April 4, 1788 ( P h e l p s Papers in N e w Y o r k S t a t e L i b r a r y ) , said that Livingston and Gilbert and N e w Y o r k City associates would take 30 shares, which, plus 20 proposed to be given for native rights, l e f t 70 to be disposed o f . T h i s reference and others below to the Phelps P a p e r s ' w e r e given me through the courtesy of Edna L. Jacobsen, of the N e w Y o r k S t a t e Library.

OTHER

NEW

ENTERPRISES:

CONCLUSION

¿21

was approached, but refused to participate. Thomas Russell of Boston probably became concerned, and lawyer James Sullivan of that town had a small part of the purchase. Robert Morris may have invested, and Jeremiah VVadsworth certainly took at least two shares. Oliver Ellsworth was also said to be interested. 90 Phelps' idea of the kind of shareholders he desired is revealed in a letter to James Wadsworth, of April 5, 1 7 8 8 : " There is but a few of us that are yet concerned in this purchase. Neither is it our wish to have more than 40 or fifty austensiable persons—and those of the most respectable carracters in the states of Connecticut, N Y o r k & Penna. [ ?] inclosed is a list of these that are now concerned—exclusive a number of gent'm f r o m Penna. [ ? ] — w h i c h have wrote to M r . Gorham—wishing to be concerned—for some particular reasons we conclude to divide it into 1 2 0 shairs tho, we hope to have the whole held by 40 or 50 persons. . . . " So, when less important persons f r o m Hampshire and Berkshire Counties, Massachusetts, wanted at least ten shares between them, Phelps did not approve. 61 H e evidently wanted the company to be owned by the larger capitalists. T h e followers of Jeremiah Wadsworth of Connecticut were as eager to participate in land speculation as in the other new business enterprise. There is strong similarity, for example, between founders of the H a r t f o r d Bank and of the Connecticut L a n d Company. 6 2 W a d s w o r t h himself acquired wild lands, though less frequently through the company method. A s early as 1 7 8 1 he and Daniel P a r k e r had contemplated a " Location Scheme which is certainly the greatest Speculation that has been made since the W a r . " T h i s was a plan to purchase New Y o r k lands by hurriedly buying up " N e w Money " f o r payment before a " Company with pretty powerful Purses " beat 60 King, King, I, 325; Cutler, Cutler, I, 459; Amory, Sullivan, I, 172; Phelps to Sullivan and Samuel Parkman, Jan. 23, 1788, and to Gorham, April 14, 1788, Phelps Papers. 61 To Gorham, April 22, 1788, ibid. 62 Cf. names and remarks in Woodward, Hartford

Bank, pp. 70-73.

322

BUSINESS

ENTERPRISE:

REVOLUTIONARY

ERA

83

them to it. Wadsworth purchased f o r himself and relatives f r o m Phelps and Gorham in 1 7 8 9 or 1790, and probably became interested in Vermont lands in the 'nineties. 64 In 1 7 9 1 , when Robert Morris, together with William Constable and Gouverneur Morris (and in spite of rival efforts of John L i v ingston and Andrew C r a i g i e ) " 5 bought up the Massachusetts holdings relinquished by Phelps, Wadsworth possibly helped him to finance the transaction; he endorsed a note of Morris f o r $20,000 on December 1 3 , 1 7 9 1 . 6 6 H e and Morris also had an agreement of October 3 1 to purchase lands together in the Genesee country, but it is said never to have gone into effect. 67 *

*

*

A t this point we may conclude our study of how the Revolutionary economic forces promoted business " freedom " and opportunity, and thus forged out of the colonial materials the stuff and personalities which made inevitable a more modern business age. The transition in system was most pronounced in the partial change from the personally supervised investments in pre-war years to many with institutional management in 1 7 9 2 . Though individuals continued to lend money on personal or real security, or to invest in the simple trading and manufacturing partnerships, new mechanisms were now in operation to facilitate the investment process. Such was the government debt. Such were numerous joint-stock companies, including commercial 63 Chaloner to Wadsworth, A u g . 11, 1781, W a d s w o r t h Corresp. Robert Morris was also interested. 64 Cf. Josiah Burr to Wadsworth, N o v . 23, 1789, about coming to a " determination " with Phelps, W a d s w o r t h Corresp.; cf. also H . G. Pearson, James S. Wadszvorth of Gencseo, pp. 6, 7. 65 Morris to Ogden, O'Reilly Docs., X V , nos. 18, 19. 66 Morris to Wadsworth, June 24, 1792, W a d s w o r t h Corresp., enclosing endorsed note. May 27, 1791, Morris wrote W a d s w o r t h that he enclosed a draft on Constable and Co. for 50,000 silver dollars, payable in 1793 at 6%. Many other letters to W a d s w o r t h in 1791. 67 Agreement under date, ibid., but note on back says that it never went into effect.

OTHER

NEW

ENTERPRISES:

CONCLUSION

323

banks, would-be factory textile manufactures, new land speculating associations, and many internal communication projects. Development w a s thus in the direction of impersonal and specialized capitalism, though it w a s to be several decades before the merchant-capitalist

would be removed

f r o m his central

position in the investment system. Contributing to the transition w a s a change in the psychological tempo of the people. T h e w a r had altered habits and suppressed that " great reluctance to innovation, so remarkable in old communities."

68

It had made people think, speak, and

act " in a line f a r beyond that to w h i c h they had been accustomed."

69

A n " epidemic rage f o r S t o c k s & funds " in Boston

in 1791

70

expressed a speculative interest in securities which

w a s little k n o w n in earlier A m e r i c a , but which is quite familiar in the modern economy. Behind a change in system lies a change in the affairs of individuals. D u r i n g the w a r a minority o f business men, usually y o u n g in years, had benefited by unusual opportunities and had developed national interests. A f t e r the w a r another minority, not necessarily identical in personnel, gained by the consolidating economic influences of the 'eighties and by the unequal benefits conferred by the Hamiltonian measures.

These fortunate

groups furnished most of the leaders and some of the capital f o r the new enterprises. But the w o r k of such leaders w h o were spurred on by the speculative temper w a s only made possible by the additional support which older individuals, still wealthy

f r o m colonial

times, gave them. M o r e o v e r , it is incorrect to think of these leaders as giants of enterprise w h o moulded the opinions of their fellows. O n the contrary, if the above chapters show anything it is that the social forces of the generation had taught many persons to think alike. Sole credit, f o r example, can 110 68" Centinel," O c t . 5, 1785, in M c M a s t e r stitution, p. 567.

and

Con-

70 S t e p h e n H i g g i n s o n t o L e R o y and B a y a r d , A u g . 13, 1791, G r a t z

Coll.

6 9 D a v i d R a m s a y , American

Revolution

and

S t o n e , Penna.

(1789), I I , 600-602.

324

BUSINESS

ENTERPRISE:

REVOLUTIONARY

longer be given Robert M o r r i s f o r planning the

ERA

first

great

A m e r i c a n business corporation, the Bank of N o r t h A m e r i c a . T h e thoughts of others had been turned in that direction. 7 1 T h e new capitalists of 1792 did not include all merchants. S o m e of them, for example, were not interested in the advancement of manufactures. T h e r e was a natural rub between home production and foreign importation; indeed, critics occasionally denounced merchants' banks which they said f a v o r e d importers w h e n local industries needed capital and credit. 72 T h e author of " Reflections on the State of the U n i o n , " a series of newspaper articles in 1792, advocating domestic manufactures for nationalistic reasons, w a s at pains to assure importers that they were w r o n g in denying that they would benefit thereby. 7 3 It is more correct to say that only certain merchants, frequently retired, w i t h large surplus capitals and possessed of the " promoting " spirit, were greatly interested in large scale Similarly,

Gouverneur

Morris

pointed

out

manufacturing. in

1785

that

some of the chief subscribers to the Bank o f N o r t h A m e r i c a w e r e no longer active in business. 74 Such persons were of a different economic caliber f r o m those still concerned with commerce as a w a y of life. Exceptions should be made also f o r certain wealthy gentlemen. Charles Carroll of Carrollton, a gentleman capitalist even in colonial times, w a s not too keen about bank proposals. H e replied to T h o m a s F i t z S i m o n s , w h o w a s u r g i n g him to subscribe a large sum to a new bank scheme in 1783, that while he preferred bank bills to state bills of credit, he was not sure that paper money of any kind w a s not an evil, " to j u d g e of the effects f r o m the example of Great Britain." In spite

of—or

71 Including Hamilton, Gouverneur Morris, Pelatiah Webster, and

James

Wilson. 72 C f . Carey, Sketches

of

the

Hamilton

King

Debates

in

Penna.

History

of

America,

of

the Feds,

7 3 B o s t o n Columbian 7 4 S p a r k s , Morris,

Assembly, p.

p. 27.

Ccntinel, I I I , 444.

p.

185; T o m

J u l y 7, 1792.

127;

J.

T.

Callender,

Callender, Letters

to

OTHER

NEW

ENTERPRISES:

CONCLUSION

325

perhaps more truly because of — his having " considerable sums " out at interest at that very t i m e , " Carroll was clearly not of the stuff of the Morrises and Duers. In truth, the period was one of flux in ideas and interests; many men were aware of a new " climate of opinion " in business, but few were certain of the outcome. If most capitalists did not resemble a clear-cut new type—were still personally supervising simple local investments—that was characteristic of a generation in transition. But this should not obscure the progress which had been made in the development of investment and banking technique as a result of the Revolutionary upheaval. 75 Carroll to FitzSimons, April 28, 1783, Gratz Coll.

APPENDIX A N E W YORK BANK STOCKHOLDERS, 1784 OR 1785* Name Thomas B. Atwood Thomas & J. Arden Philip Arcularius Francis Atkinson John Alsop Thomas Buchanon Thomas Blane Robert Bruce James Buchanon Broome & Piatt Samuel Broome Buchanon, Hunter & Co. Thomas Bowne Abraham Breevort Robert Bowne John Byvanck Will Backhouse Peter Byvank Corns J. Bogert Berrien & Hunt Abraham Bond Anthony L. Bleecker John Broome Theop Bache John Berry Samuel Bard James Beekman Samuel Bayard, Jun Albion Cox Isaac Cox Cornelius Clopper John Charlton John B. Coles Joseph Clement

Shares 4 2 5 2 4 6 2 1 4 2 1 4 1 2 4 1 1 1 1 1 1 2 1 2 4 2 1 5 2 1 1 1 2 1

Name Matthew Cooper Stephen Crosfield Peter Clopper Isaac Cock Elijah Cock Ambrose Copland Bryan Conner George Douglass Robert Dunbar William Depeyster Thomas Duggan John Delancey John Delafield Richard Deane Gesar Duyckinck William Dealing Nicholas Delaplaine George Embree Elting & Varick John Franklin Samuel Franklin John Fisher George Fisher James Farquhar Lewis Faugeres Isaac Gouverneur Archibald Gamble Galbreath & Thomson Thomas Goadsby John Gasner John A. Graham Guyon, Carthy & Co. Robert Gault Peter Goelet

Shares 2 4 2 1 1 1 2 4 2 1 1 1 1 1 1 2 X 1 1 10 10 1 1 1 6 4 2 4 2 3 4 1 1 1

* This list is undated, but internal evidence indicates that it was the original stockholders' list. It is in the vaults of the Bank of New York and Trust Co., and is furnished through the courtesy of that institution. 327

328 Hugh Game John Glover William Hill 4 Co. Alexander Hosiack John Hone Daniel Hartung Lion Hart Alexander Hamilton Joseph Hallet Daniel Hitchcock John Henry Thomas Haviland Hugh Henderson Henry Haydock Ebenezer Haviland Benjamin Haviland Uriah Hendricks John Jones Joshua Jones Johnson & Ogden Thomas F. Jackson Peter Keteltas Nicholas Lowe John Lawrence Abraham P. Lott William Livingston Nicholas Lowe p P N . Ludlow & Goold Thomas Lawrence Lyde & Rogers Hayman Levy Gabriel H. Ludlow W. H. Ludlow Daniel Le Roy John Peter Le Mayour Christopher L. Lente Jonathan Lawrence Tom & Laurence John Laurence Abraham Lott Joseph Lawrence Daniel McCormick Jacob Morris John Miller David Mitchelson

APPENDIX

3 1 2 2 1 1 1 1 1 1 1 1 2 2 1 1 2 3 2 4 1 1 4 1 1 1 16 4 1 2 1 1 1 1 2 2 4 2 2 12 2 3 4 2 4

A

Robert McWilliams 2 John Murray 6 John Murray, Jun 5 Robert Murray 6 Nathan McVicar 1 Peter McDougall & Co. 2 Lindley Murray 5 William Maxwell 8 Isaac Moses & Co. 4 Isaac Moses for M. Josephson 1 Isaac Moses for I. Nathan 1 David Masterton 1 Christopher Miller 1 John Mowatt 1 Alexander McDougall Mangle Minthome 1 Her Mulligan 1 Thomas Maule Jacob Mott, Jun 1 Jacob Morrell 1 Henry Nash & Co. Elias Nexon 1 Henry Newton 4 William Neilson 2 Robert Pemberton 1 Pearsall & Embree 2 Sarah Pell 3 Evelyn Pierpont 6 John Price 2 John Porteous 2 Daniel Phoenix 1 William Patrick 2 Lewis Pintard 6 Daniel Parker 4 W7illiam Post 1 Thomas Pearsall 4 Edmund Prior 1 James Parsons 1 Stephen Rapalje 1 Alexander Robertson 10 Moses Rogers 5 Edward K. Roston 1 Cornelius C. Roosevelt 1 Thomas Randall 2 Alexander Robertson for W. Leslie 1

APPENDIX Isaac Roosevelt John J. Roosevelt Alexander Robertson for I. Smith Henry Remsen John Rogers Nicholas Romayne Cornelius Ray John Remsen Christopher Robert Thomas Roach Ezekiel Robins Riddell, Colquhoun & Co. Hecter St. John Thomas Stoughton John Stites Robert and G. Service John Shaw Bernard Swarthout Peter Stuyvesant James & A. Stewart Comfort Sands Joseph Stringham James Scott & Co. Chua & R. Stewart Josiah Shippey Edmund Seaman John Staples Robert Smyth William Shedden Richard Sharp John Staples p W. Maxwell Jacob Sarly William Shotwell, Jun George Scriba

3 1 2 1 4 1 1 2 3 2 1 2 6 6 2 2 2 1 2 1 6 2 2 1 1 2 1 1 4 2 1 4 1 1

A

329

Peter Schermerhorn 1 Willet Seaman 1 William Talman 1 Joseph Taylor 2 Thomas Ten Eyck 2 William Thomson