,
Travels through the Middle Settlements in North America (London,
1775), PP- 15-I7, 26-30; American Husbandry (London, 1775), vol.
Travels through the Middle Settlements in North America (London,
1775), PP- 15-I7, 26-30; American Husbandry (London, 1775), vol.
Arthur Schlesinger - Colonial Merchants and the American Revolution
39015011480665 Public Domain, Google-digitized / http://www.
hathitrust.
org/access_use#pd-google
? 2g THE COLONIAL MERCHANTS: 1763-1776
than seven thousand people. ' In each center, wealthy
merchant families had come into existence. Who were
better or more favorably known than the Whartons,
Pembertons, Willings and Morrises of Philadelphia; the
Amorys and Faneuils, the Hancocks and Boylstons of
Boston; the Livingstons and Lows, Crugers and Wai-
tons of New York; the Wantons and Lopezes of New-
port, or the Browns,--"Nicky, Josey, John and Mosey,"
--of Providence?
Dependent upon the merchants for a livelihood were
great _numbers of petty shopkeepers 'frpgd11p-tT1astprg.
ropemakers, sailmakers, sailors, coopers, caulkers, smiths,
carpenters ana tne n1ce. TheSe men " were^rhat numer-
ous portion of the community in republics, styled the
People; in monarchies, The Populace, or still more irre-
verently The Rabble, or Canaille," as a contemporary
said; * and they were, for the most part, unenfranchised,
unorganized, and unaware that in their numerical super-
iority they possessed a vast potential power in the com-
munity.
At Philadelphia, the merchant-aristocracy ruled the
city with a rod of iron; their methods of harrying the
price-cutting vendue-masters and of discouraging coun-
iry peddling were similar in kind to those which modern
business integration has rendered familiar. 3 The same
was true, in lesser degree perhaps, at New York, Boston
and Newport.
In their business activities, the merchants showed a
capacity for joint undertakings that revealed their kin-
ship with the race that had built up the great East India
1 A Century of Population Growth (Washington, 1909), pp. 11-15.
1 Graydon, A. , Memoirs of His Own Time (Philadelphia, 1846), p. 122,
2 Lincoln, C. H. , Revolutionary Movement in Pennsylvania (U. of Pa.
Pubs, in Hist. , no. l), pp. 80-89.
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? THE OLD ORDER CHANGETH 2g
Company and the Hudson's Bay Company. The New
York company "for Settling a Fishery in these parts,"
established in 1675, the Free Society of Traders, a Penn-
sylvania corporation founded in 1682, and the Philadelphia
Contributionship for the Insuring of Houses from Loss
by Fire were a few instances of their aptitude for organiz-
ation. 1 The New-London Society United for Trade and
Commerce, formed in 1732, was an example of a promis-
ing enterprise that was soon wrecked through the op-
position of a farmer-controlled legislature to its plan to
issue bills of credit. 3 Mercantile organizations some-
times crossed provincial boundaries and it is not alto-
gether improbable that the historian of the future will
cite such an enterprise as the spermaceti candle combine
of 1761-1769 as revealing an interprovincial solidarity of
interest perhaps as great as the more pretentious New
England Confederation of earlier times. 3
[Less intent on politics than business, the merchants
as a class did not ordinarily concern themselves with
political questions. But when their interests were jeop-
ardized, they entered politics with a vim, and might be
expected to carry things their own way. Thus, the
merchants of Boston contributed powerfully toward de-
feating the land bank project of Ifr46, which was being
pushed by the farmers aHfl aeotor class generally in the
province. 4
'Baldwin, S. E. , "American Business Corporations before 1789,"
Am. Hist. Assn. Reps. (1902), vol. i, pp. 253-274; Clark, V. S. , History
of Manufactures in United States (Washington, 1916), pp. 182-185.
1 Col. Soc. Mass. Pubs. , vol. v, pp. 96-111; vol. vi, pp. 6-11.
2 R. I. Commerce, vol. i, pp. 88-92, 97-100; Mason, G. C, "The
United Company of Spermaceti Chandlers, 1761," Mag. N. Engl. Hist. ,
vol. ii, pp. 165-169; Weeden, Early Rhode Island, pp. 328-329; Hunt's
Merchants' Magazine, vol. xxxii, pp. 386-387.
* Davis, Currency and Banking in Mass. Bay, vol. i, pp. 406-412; vol
.
ii, pp. 130-235.
? ? Generated for (University of Chicago) on 2014-08-19 01:35 GMT / http://hdl. handle. net/2027/mdp. 39015011480665 Public Domain, Google-digitized / http://www. hathitrust. org/access_use#pd-google
? THE COLONIAL MERCHANTS: 1763-1776
No one understood better than th>>> rpprrhanrg th^t the
rock of their prosper1ty was me maintenance of the
British empire. The system of parliamentary regulations
had yielded benefits without great corresponding disad-
vantages in actual practice. Furthermore, American
commerce had prospered under the protection of the
British flag and British navy,1 and colonial merchants
saw their potential world market widening with each
new conquest. These were advantages that the colonial
merchant received in common with his brother at home
and to an extent at the latter's expense. Of great im-
portance, also, were the liberal credits which the English
merchants extended to the colonial merchants. The
Americans could not have secured such favorable terms
from foreign houses; and without such indulgence they
would have found difficulty in financing their under-
takings. '
1 For example, there were the advantages which came to American
merchants from the presents of Great Britain to the Barbary States,
amounting to nearly $300,000 annually. At the outbreak of the War
for Independence, it was estimated that one-sixth of the wheat and
flour exported from British America, and one-fourth of the dried and
pickled fish, and a quantity of rice, found their best market in the ports
of the Mediterranean. In this commerce, there were employed eighty
to one hundred ships. Moore, J. B. , American Diplomacy (New York,
1905), p. 65.
1 The slow development of Canada and Grenada before they came
under British control was attributed to the short credits granted by the
merchants in France. The Int. of Merchants and Mfrs. , pp. 32-36.
The British merchant usually granted twelve months' credit without
interest and thereafter made an annual charge of 5%. Collins, Stephen,
Letters (L. C. Mss. ), vol. xvii, Feb. 18, 1774; Stevens, Facsimiles, vol.
xxiv, no. 2037, pp. 11-12, 17. As late as 1810, Gallatin spoke of "the
vastly superiour capital of the first manufacturing nation of Europe
which enables her merchants to give very long credits, to sell on small
profits, and to make occasional sacrifices. " Am. St. Papers, Finance,
vol. ii, pp. 425-426.
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? THE OLD ORDER CHANGETH 31
This business entente between the mother country and
the merchant class in the colonies was a centripetal force
of great importance in the last century of colonial history,
making for imperial stability and union when other in-
fluences were tending toward disruption. It was with a
fine appreciation of these impalpable, but sinewy, bonds
that the Committee of Merchants of Philadelphia wrote
to the Committee of Merchants of London at a critical
juncture of the revolutionary movement: "We consider
the Merchants here and in England as the Links of the
Chain that binds both Countries together. They are
deeply concerned in preserving the Union and Connec-
tion. Whatever tends to alienate the Affections of the
Colonies or to make them averse to the Customs, Fash-
ions and Manufactures of Great Britain, hurts their In-
terests. While some, therefore, from ambitious Views
and sinister Motives, are labouring to widen the Breach,
we whose private Interest is happily connected with the
Union or, which is the same, the Peace and Prosperity
of both Countries, may be allowed to plead for an End
to these unhappy Disputes . . . by a Repeal of the offen-
sive Acts . . . '"
On the other hand, the merchants were sensitive and
articulate with regard to their interests as members of
the British empire. They were ever on the alert to
obtain the best terms possible from the home govern-
ment. Thus, the merchants of Boston and Portsmouth
endeavored in 1710 to introduce improvement into the
administration of the bounty on naval stores; * and in
1731 the Philadelphia merchants and many others re-
1 Letter of Nov. 25, 1769, Lon. Chron. , Mch. 3, 1770; also Pa. Gaz. ,
May 10.
2 Lord, E. , Industrial Experiments in the British Colonies (J. H. U.
Studies, extra vol. , 1898), pp. 69-70.
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? 32 THE COLONIAL MERCHANTS: 1763-1776
monstrated against the passage of the proposed molasses
act. 1 They also knew the passages to governmental
favor in Great Britain, as Bellomont testified when he
wrote in 1698 that twenty-eight merchants of New York
had contributed one hundred pounds for use in obtain-
ing royal approval for an indemnity bill. '
To understand rightly the agitation against Parliament
after 1763, it is important to note that a century of ex-
ceptional opportunities had given to the colonial mer-
chants a sense of power in dealing with Parliament and
had developed between the chief trading towns in America
a consciousness of a fundamental identity of interests.
Therefore, when Parliament in 1764 began to pass legis-
lation injurious to their commerce, the merchants of
Boston, New York and Philadelphia undertook to create
a public opinion favorable to preserving the conditions
that had brought them prosperity. Their object was
reform, not rebellion; their motives were those of a
group of loyal subjects in any country intent upon
securing remedial legislation.
The plantation provinces, stretching from Maryland
to Georgia, had an industrial and mercantile system in
sharp contrast with that of the northern provinces.
Virginia and Maryland, almost from their first settlement
and under persistent encouragement by Great Britain,
had made tobacco their staple; and it long continued to
constitute the most valuable export not only of these
1Channing, E. , History of United States (New York, 1909 in prog-
ress), vol. ii, pp. 517-518.
* Later, Bello-mont informed the British authorities that, on the third
reading of a bill before the New York Council, a member declared
that there would be ? 40,000 available "to stop the King's approbation in
England. " Russell, E. B. , Review of American Colonial Legislation by
the King in Council, p. 220.
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? THE OLD ORDER C HAN GET H
33
provinces but of all the continental colonies as well. 1
The exportation of tobacco was confined by law to Great
Britain; and by the middle of the eighteenth century,
two hundred sail of ships were employed in the trade,
most of them owned in England. Sweet-scented tobacco
from the region of the York River was highly esteemed
by English epicures, and thus only the inferior varieties,
like the "Oronoac," were re-exported to Holland, Ger-
many and Sweden. The planters invested their capital
solely in the growing of the weed; and on man's weak-
ness for smoking and snuffing was built up a great
agricultural and social system.
In South Carolina and Georgia, almost as great atten-
tion was devoted to the culture of rice, although Georgia,
as a newer settlement, was backward agriculturally as
compared with South Carolina. ' Not of indigenous
growth, the plant nevertheless became the staple of these
provinces in the eighteenth century; and American rice
1 This statement of conditions in the tobacco provinces is based
largely upon the following materials: Postlethwayt, Diet, of Com. , vol.
i, p. 364; Macpherson, Annals of Com. , vol. iii, p. 569; Buvnaby, A.
,
Travels through the Middle Settlements in North America (London,
1775), PP- 15-I7, 26-30; American Husbandry (London, 1775), vol. i, pp.
225-231, 237-238, 244-245; report of Lt. Gov. Sharpe, Md. Hist. Mag. ,
vol. ii, pp. 354-362; article on Md. commerce in Pa. Chron. , Feb. 5, 1770;
Morriss, M. S. , Colonial Trade of Maryland, 1689-1715 (J. H. U.
Studies, vol. xxxii, no. 3); Bruce, P. A. , Economic History of Va. in
the Seventeenth Century (New York, 1896) ; report of Gov. Fauquier
of Va. , British Papers ("Sparks Mss. "), vol. iii, p. 212.
1 This statement of conditions in the rice provinces is based very
largely upon the following materials: Political Magazine (1780), p. 172;
Macpherson, Annals of Com. , vol. iii, pp. 570-572; table of rice and
indigo exports from Charleston, 1748-1773, 5, C. Gas. , June 21, 1773;
McCrady, E. , 5. C. under the Royal Government (New York, 1901),
pp. 262-271, 388-398; report of Gov. Wright of Ga. , Go. Hist. Soc. Colls. ,
vol. iii, pp. 164-167; Brit. Mus. Addl. Mss. , no. 81338 (L. C. Tran-
scripts), pp. 164-165.
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? 34
THE COLONIAL MERCHANTS: 1763-1776
had the reputation of being the best in the world. Al-
though an "enumerated" article, it monopolized the
Dutch, German and Portuguese markets and had gained
a foothold in Spain. Near the middle of the eighteenth
century, another plant was introduced, which quickly
gave promise of pushing rice for pre-eminence. This
was indigo, the production of which was greatly stimu-
lated by parliamentary bounties. Though its exportation
was confined to the mother country, many of the indigo
planters, it was said, were able to double their capital
every three or four years.
North Carolina, by virtue of her midway geographical
position, displayed some characteristics of both adjoining
provinces, growing tobacco in her northerly parts and
indigo and rice in the southern counties. 1 Her chief
articles of export, however, were the products and by-
products of her forested areas--tar, pitch, turpentine
and many varieties of lumber. In 1767, there were on
the Cape Fear River and its tributaries fifty saw-mills,
cutting annually a total of seven and one-half million
feet of boards.
The most striking feature of the southern economy
was the fact that native capital, in its larger aspects, was
invested almost exclusively in plantation production.
Out of these large landed estates there grew up a great
social and political system, with its aristocracy of birth
and leadership and its vital distinction between slave
labor and gentlemanly leisure. Towns in the plantation
provinces were neither large nor numerous. Charleston,
possessing a population of almost eleven thousand in
1770, was the chief port of the South and the fourth city
in British America. Each province had some place of
1 American Husbandry, vol. i, pp. 331-351; report of Gov. Tryon, N.
C. Col. Recz. , vol. vii, pp. 429-430.
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? THE OLD ORDER CHANGETH
35
which it could be said that " trade is more collected here
than in any other place . . . "; 1 thus, Baltimore in
Maryland, Norfolk in Virginia, Wilmington in North
Carolina and Savannah in Georgia.
Native Americans did not ordinarily become merchants,
and commerce was handled in British bottoms in one of
two ways, each of which was uneconomical for the
planter. 2 The wealthy planter employed the London or
Bristol or Glasgow merchant as a sort of commission
merchant, to dispose of his tobacco or rice and to lay
out the probable proceeds in goods of one kind or an-
other, to be delivered at the planter's wharf in the fol-
lowing season. This system resulted in careless and
wasteful management on the part of the merchant in
England, high commissions and freight rates, and
chronic overbuying on the part of the colonist.
For ordinary trading purposes, the British merchant
maintained an agent or "factor" in the colonies, who
kept up a stock of merchandise the year round, worked
up business, and acted as financial agent and confidential
adviser of his employer. The factors were almost alto-
gether "foreigners," as the local vernacular termed
them--that is, natives of Scotland. They had the repu-
tation of being shrewd, hard business men, veritable
Shylocks; and from the point of view of their patrons
they undoubtedly were, for they demanded, from as
wasteful a race of gentlemen-farmers as ever lived,
punctual payment for goods sold or money loaned. 8
1 4 Am. Arch. , vol. i, pp. 371-372.
1 Bassett, J. S. , "The Relation between the Virginia Planter and the
London Merchant," Am. Hist. Assn. Reps. (1901), vol. i, pp. 551-575;
Schapcr, W. A. , "Sectionalism in S. C," ibid. (1900), vol. i, pp. 287-
288, 297; Sioussat, St. G. L. , "Virginia and the English Commercial
System," ibid. (1905), vol. i, pp. 71-97.
8 For an able defense of the Scotch merchants, vide "A Scotchman"
in Pinkney's Va. Gas. , Mch. 23, 1775.
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? 36 THE COLONIAL MERCHANTS: 1763-1776
Here again, there were large profits for the British
dealers and shipowners, and lavish buying on the part of
the colonist.
The British capitalist advanced money and gave gen-
erous credit to the planter, but this merely served to
complicate matters; the planter continually operated on
borrowed capital and found his next crop mortgaged
before 1t was planted. For more than a quarter of a
century7 Colonel iJyrd of Virginia, struggled to repay
indebtedness contracted with a London firm for the sake
of enlarging his plantations. In 1736, he was "selling
off land and negroes to stay the stomach" of his hungry
creditors; and he asserted that they allowed him twenty-
five per cent less for tobacco than they gave to other
people, knowing that they had him for a customer until
the debt was discharged. "
The result of this financial system, in its various ram-
ifications, was the economic bondage 61 tr1e planting
class to the British merchants. "The planter, Thomas
Jefferson, declared iMai 111 Vllglllia "these debts had be-
come hereditary from father to son, for many genera-
tions, so that the planters were a species of property,
annexed to certain mercantile houses in London. "'
Whgp-th,*>> statute of 17^2 was enacted by Parliament to
protect the debts of British creditors in the, rmnn1es1 the
Virginia Assembly drew UP a memorial t thy "jyhplp aim
and interjt" "f which, says Professor Sioussat, was "ex-
pressive of a revolt against the domineering and 'graft-
ing-' rule nf th^ combination of merchant^ crecf1tors,~ in
its various manifestations. From time to time, the
1 Bassett, J. S. , Writings of Colonel William Syrd (New York, 1901),
pp. li, Ixxjciv.
1 Jefferson, Writings (Ford, P. L. , ed,), vol. iv, p. 153. Vide also "A
Planter" in D1xon & Hunter's Va. Gas. , Apr. 13, 1774-
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? THE OLD ORDER CHANGETH 37
colonists tried to improve their situation by passing lax
bankruptcy laws and other legislation prejudicial to non-
resident creditors; but their efforts were usually blocked
by the royal veto. 1 Toward the close of the colonial era,
their condition was becoming well-nigh insupportable.
The situation was especially acute in Virginia. 2 In
1748, the Virginia Assembly provided that, in actions
for the recovery of sterling debts, the amount adjudged
could be settled in currency at twenty-five per cent ad-
vance, notwithstanding the fact that exchange fluctuated
and was at times as high as forty per cent. Seven years
later, the Assembly was induced to modify the law to
the extent that the Virginia courts should be empowered
to fix the rate of exchange. This law was hardly more
satisfactory to the British merchants than the earlier one;
and their dissatisfaction was sharpened by the fact that,
about this time, Virginia began to issue legal-tender
paper money. This money depreciated steadily; and, as
a large portion of the debts of the British merchants was
in paper, the action of Virginia had the effect of partial
repudiation.
But the resourcefulness of Virginia was not yet ex-
hausted. In 1758, a law was passed, permitting persons,
who owed tobacco for debts, contracts, fees or salaries,
to discharge their obligations during the following year
in money at the rate of twopence a pound. This "Two-
Penny Act" was passed because of a sharp rise in the
price of tobacco: and it aroused the bitter opposition,
1 The plantation provinces displayed much greater activity along these
lines than the commercial provinces. This legislation is conveniently
summarized in Dr. Russell's Review of American Colonial Legislation,
pp. 125-136.
1Beer, G. L. , British Colonial Policy, 1754-1763 (New York, 1907). ,
pp. 179-188.
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? 38 THE COLONIAL MERCHANTS: 1763-1776
not only of British creditors, but also of the Virginia
clergy. In 1759, the merchants of London interested in
Virginia trade presented a memorial against the act,
showing that large quantities of tobacco were owing to
them in Virginia, and that under this law the debts could
be commuted in money at the rate of twopence per
pound notwithstanding that at the time the market price
of tobacco was considerably higher. The act thus had
the effect of annulling contracts that had turned out un-
favorably to the planters; and in August, 1759, an order
in council disallowed it, as well as others of a similar
nature enacted prior to 1758.
The local clergy were in a similar dilemma, since an
earlier law had established their salary at a fixed quantity
of tobacco. They believed that they should reap the
benefit of any advance in the price inasmuch as they had
always suffered by its decline. One of the suits, brought
by the "parsons" to recover the full market price of the
tobacco, gave opportunity for the first grandiose decla-
ration of the rights of the colonists in the matter.
? 2g THE COLONIAL MERCHANTS: 1763-1776
than seven thousand people. ' In each center, wealthy
merchant families had come into existence. Who were
better or more favorably known than the Whartons,
Pembertons, Willings and Morrises of Philadelphia; the
Amorys and Faneuils, the Hancocks and Boylstons of
Boston; the Livingstons and Lows, Crugers and Wai-
tons of New York; the Wantons and Lopezes of New-
port, or the Browns,--"Nicky, Josey, John and Mosey,"
--of Providence?
Dependent upon the merchants for a livelihood were
great _numbers of petty shopkeepers 'frpgd11p-tT1astprg.
ropemakers, sailmakers, sailors, coopers, caulkers, smiths,
carpenters ana tne n1ce. TheSe men " were^rhat numer-
ous portion of the community in republics, styled the
People; in monarchies, The Populace, or still more irre-
verently The Rabble, or Canaille," as a contemporary
said; * and they were, for the most part, unenfranchised,
unorganized, and unaware that in their numerical super-
iority they possessed a vast potential power in the com-
munity.
At Philadelphia, the merchant-aristocracy ruled the
city with a rod of iron; their methods of harrying the
price-cutting vendue-masters and of discouraging coun-
iry peddling were similar in kind to those which modern
business integration has rendered familiar. 3 The same
was true, in lesser degree perhaps, at New York, Boston
and Newport.
In their business activities, the merchants showed a
capacity for joint undertakings that revealed their kin-
ship with the race that had built up the great East India
1 A Century of Population Growth (Washington, 1909), pp. 11-15.
1 Graydon, A. , Memoirs of His Own Time (Philadelphia, 1846), p. 122,
2 Lincoln, C. H. , Revolutionary Movement in Pennsylvania (U. of Pa.
Pubs, in Hist. , no. l), pp. 80-89.
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? THE OLD ORDER CHANGETH 2g
Company and the Hudson's Bay Company. The New
York company "for Settling a Fishery in these parts,"
established in 1675, the Free Society of Traders, a Penn-
sylvania corporation founded in 1682, and the Philadelphia
Contributionship for the Insuring of Houses from Loss
by Fire were a few instances of their aptitude for organiz-
ation. 1 The New-London Society United for Trade and
Commerce, formed in 1732, was an example of a promis-
ing enterprise that was soon wrecked through the op-
position of a farmer-controlled legislature to its plan to
issue bills of credit. 3 Mercantile organizations some-
times crossed provincial boundaries and it is not alto-
gether improbable that the historian of the future will
cite such an enterprise as the spermaceti candle combine
of 1761-1769 as revealing an interprovincial solidarity of
interest perhaps as great as the more pretentious New
England Confederation of earlier times. 3
[Less intent on politics than business, the merchants
as a class did not ordinarily concern themselves with
political questions. But when their interests were jeop-
ardized, they entered politics with a vim, and might be
expected to carry things their own way. Thus, the
merchants of Boston contributed powerfully toward de-
feating the land bank project of Ifr46, which was being
pushed by the farmers aHfl aeotor class generally in the
province. 4
'Baldwin, S. E. , "American Business Corporations before 1789,"
Am. Hist. Assn. Reps. (1902), vol. i, pp. 253-274; Clark, V. S. , History
of Manufactures in United States (Washington, 1916), pp. 182-185.
1 Col. Soc. Mass. Pubs. , vol. v, pp. 96-111; vol. vi, pp. 6-11.
2 R. I. Commerce, vol. i, pp. 88-92, 97-100; Mason, G. C, "The
United Company of Spermaceti Chandlers, 1761," Mag. N. Engl. Hist. ,
vol. ii, pp. 165-169; Weeden, Early Rhode Island, pp. 328-329; Hunt's
Merchants' Magazine, vol. xxxii, pp. 386-387.
* Davis, Currency and Banking in Mass. Bay, vol. i, pp. 406-412; vol
.
ii, pp. 130-235.
? ? Generated for (University of Chicago) on 2014-08-19 01:35 GMT / http://hdl. handle. net/2027/mdp. 39015011480665 Public Domain, Google-digitized / http://www. hathitrust. org/access_use#pd-google
? THE COLONIAL MERCHANTS: 1763-1776
No one understood better than th>>> rpprrhanrg th^t the
rock of their prosper1ty was me maintenance of the
British empire. The system of parliamentary regulations
had yielded benefits without great corresponding disad-
vantages in actual practice. Furthermore, American
commerce had prospered under the protection of the
British flag and British navy,1 and colonial merchants
saw their potential world market widening with each
new conquest. These were advantages that the colonial
merchant received in common with his brother at home
and to an extent at the latter's expense. Of great im-
portance, also, were the liberal credits which the English
merchants extended to the colonial merchants. The
Americans could not have secured such favorable terms
from foreign houses; and without such indulgence they
would have found difficulty in financing their under-
takings. '
1 For example, there were the advantages which came to American
merchants from the presents of Great Britain to the Barbary States,
amounting to nearly $300,000 annually. At the outbreak of the War
for Independence, it was estimated that one-sixth of the wheat and
flour exported from British America, and one-fourth of the dried and
pickled fish, and a quantity of rice, found their best market in the ports
of the Mediterranean. In this commerce, there were employed eighty
to one hundred ships. Moore, J. B. , American Diplomacy (New York,
1905), p. 65.
1 The slow development of Canada and Grenada before they came
under British control was attributed to the short credits granted by the
merchants in France. The Int. of Merchants and Mfrs. , pp. 32-36.
The British merchant usually granted twelve months' credit without
interest and thereafter made an annual charge of 5%. Collins, Stephen,
Letters (L. C. Mss. ), vol. xvii, Feb. 18, 1774; Stevens, Facsimiles, vol.
xxiv, no. 2037, pp. 11-12, 17. As late as 1810, Gallatin spoke of "the
vastly superiour capital of the first manufacturing nation of Europe
which enables her merchants to give very long credits, to sell on small
profits, and to make occasional sacrifices. " Am. St. Papers, Finance,
vol. ii, pp. 425-426.
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? THE OLD ORDER CHANGETH 31
This business entente between the mother country and
the merchant class in the colonies was a centripetal force
of great importance in the last century of colonial history,
making for imperial stability and union when other in-
fluences were tending toward disruption. It was with a
fine appreciation of these impalpable, but sinewy, bonds
that the Committee of Merchants of Philadelphia wrote
to the Committee of Merchants of London at a critical
juncture of the revolutionary movement: "We consider
the Merchants here and in England as the Links of the
Chain that binds both Countries together. They are
deeply concerned in preserving the Union and Connec-
tion. Whatever tends to alienate the Affections of the
Colonies or to make them averse to the Customs, Fash-
ions and Manufactures of Great Britain, hurts their In-
terests. While some, therefore, from ambitious Views
and sinister Motives, are labouring to widen the Breach,
we whose private Interest is happily connected with the
Union or, which is the same, the Peace and Prosperity
of both Countries, may be allowed to plead for an End
to these unhappy Disputes . . . by a Repeal of the offen-
sive Acts . . . '"
On the other hand, the merchants were sensitive and
articulate with regard to their interests as members of
the British empire. They were ever on the alert to
obtain the best terms possible from the home govern-
ment. Thus, the merchants of Boston and Portsmouth
endeavored in 1710 to introduce improvement into the
administration of the bounty on naval stores; * and in
1731 the Philadelphia merchants and many others re-
1 Letter of Nov. 25, 1769, Lon. Chron. , Mch. 3, 1770; also Pa. Gaz. ,
May 10.
2 Lord, E. , Industrial Experiments in the British Colonies (J. H. U.
Studies, extra vol. , 1898), pp. 69-70.
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? 32 THE COLONIAL MERCHANTS: 1763-1776
monstrated against the passage of the proposed molasses
act. 1 They also knew the passages to governmental
favor in Great Britain, as Bellomont testified when he
wrote in 1698 that twenty-eight merchants of New York
had contributed one hundred pounds for use in obtain-
ing royal approval for an indemnity bill. '
To understand rightly the agitation against Parliament
after 1763, it is important to note that a century of ex-
ceptional opportunities had given to the colonial mer-
chants a sense of power in dealing with Parliament and
had developed between the chief trading towns in America
a consciousness of a fundamental identity of interests.
Therefore, when Parliament in 1764 began to pass legis-
lation injurious to their commerce, the merchants of
Boston, New York and Philadelphia undertook to create
a public opinion favorable to preserving the conditions
that had brought them prosperity. Their object was
reform, not rebellion; their motives were those of a
group of loyal subjects in any country intent upon
securing remedial legislation.
The plantation provinces, stretching from Maryland
to Georgia, had an industrial and mercantile system in
sharp contrast with that of the northern provinces.
Virginia and Maryland, almost from their first settlement
and under persistent encouragement by Great Britain,
had made tobacco their staple; and it long continued to
constitute the most valuable export not only of these
1Channing, E. , History of United States (New York, 1909 in prog-
ress), vol. ii, pp. 517-518.
* Later, Bello-mont informed the British authorities that, on the third
reading of a bill before the New York Council, a member declared
that there would be ? 40,000 available "to stop the King's approbation in
England. " Russell, E. B. , Review of American Colonial Legislation by
the King in Council, p. 220.
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? THE OLD ORDER C HAN GET H
33
provinces but of all the continental colonies as well. 1
The exportation of tobacco was confined by law to Great
Britain; and by the middle of the eighteenth century,
two hundred sail of ships were employed in the trade,
most of them owned in England. Sweet-scented tobacco
from the region of the York River was highly esteemed
by English epicures, and thus only the inferior varieties,
like the "Oronoac," were re-exported to Holland, Ger-
many and Sweden. The planters invested their capital
solely in the growing of the weed; and on man's weak-
ness for smoking and snuffing was built up a great
agricultural and social system.
In South Carolina and Georgia, almost as great atten-
tion was devoted to the culture of rice, although Georgia,
as a newer settlement, was backward agriculturally as
compared with South Carolina. ' Not of indigenous
growth, the plant nevertheless became the staple of these
provinces in the eighteenth century; and American rice
1 This statement of conditions in the tobacco provinces is based
largely upon the following materials: Postlethwayt, Diet, of Com. , vol.
i, p. 364; Macpherson, Annals of Com. , vol. iii, p. 569; Buvnaby, A.
,
Travels through the Middle Settlements in North America (London,
1775), PP- 15-I7, 26-30; American Husbandry (London, 1775), vol. i, pp.
225-231, 237-238, 244-245; report of Lt. Gov. Sharpe, Md. Hist. Mag. ,
vol. ii, pp. 354-362; article on Md. commerce in Pa. Chron. , Feb. 5, 1770;
Morriss, M. S. , Colonial Trade of Maryland, 1689-1715 (J. H. U.
Studies, vol. xxxii, no. 3); Bruce, P. A. , Economic History of Va. in
the Seventeenth Century (New York, 1896) ; report of Gov. Fauquier
of Va. , British Papers ("Sparks Mss. "), vol. iii, p. 212.
1 This statement of conditions in the rice provinces is based very
largely upon the following materials: Political Magazine (1780), p. 172;
Macpherson, Annals of Com. , vol. iii, pp. 570-572; table of rice and
indigo exports from Charleston, 1748-1773, 5, C. Gas. , June 21, 1773;
McCrady, E. , 5. C. under the Royal Government (New York, 1901),
pp. 262-271, 388-398; report of Gov. Wright of Ga. , Go. Hist. Soc. Colls. ,
vol. iii, pp. 164-167; Brit. Mus. Addl. Mss. , no. 81338 (L. C. Tran-
scripts), pp. 164-165.
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? 34
THE COLONIAL MERCHANTS: 1763-1776
had the reputation of being the best in the world. Al-
though an "enumerated" article, it monopolized the
Dutch, German and Portuguese markets and had gained
a foothold in Spain. Near the middle of the eighteenth
century, another plant was introduced, which quickly
gave promise of pushing rice for pre-eminence. This
was indigo, the production of which was greatly stimu-
lated by parliamentary bounties. Though its exportation
was confined to the mother country, many of the indigo
planters, it was said, were able to double their capital
every three or four years.
North Carolina, by virtue of her midway geographical
position, displayed some characteristics of both adjoining
provinces, growing tobacco in her northerly parts and
indigo and rice in the southern counties. 1 Her chief
articles of export, however, were the products and by-
products of her forested areas--tar, pitch, turpentine
and many varieties of lumber. In 1767, there were on
the Cape Fear River and its tributaries fifty saw-mills,
cutting annually a total of seven and one-half million
feet of boards.
The most striking feature of the southern economy
was the fact that native capital, in its larger aspects, was
invested almost exclusively in plantation production.
Out of these large landed estates there grew up a great
social and political system, with its aristocracy of birth
and leadership and its vital distinction between slave
labor and gentlemanly leisure. Towns in the plantation
provinces were neither large nor numerous. Charleston,
possessing a population of almost eleven thousand in
1770, was the chief port of the South and the fourth city
in British America. Each province had some place of
1 American Husbandry, vol. i, pp. 331-351; report of Gov. Tryon, N.
C. Col. Recz. , vol. vii, pp. 429-430.
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? THE OLD ORDER CHANGETH
35
which it could be said that " trade is more collected here
than in any other place . . . "; 1 thus, Baltimore in
Maryland, Norfolk in Virginia, Wilmington in North
Carolina and Savannah in Georgia.
Native Americans did not ordinarily become merchants,
and commerce was handled in British bottoms in one of
two ways, each of which was uneconomical for the
planter. 2 The wealthy planter employed the London or
Bristol or Glasgow merchant as a sort of commission
merchant, to dispose of his tobacco or rice and to lay
out the probable proceeds in goods of one kind or an-
other, to be delivered at the planter's wharf in the fol-
lowing season. This system resulted in careless and
wasteful management on the part of the merchant in
England, high commissions and freight rates, and
chronic overbuying on the part of the colonist.
For ordinary trading purposes, the British merchant
maintained an agent or "factor" in the colonies, who
kept up a stock of merchandise the year round, worked
up business, and acted as financial agent and confidential
adviser of his employer. The factors were almost alto-
gether "foreigners," as the local vernacular termed
them--that is, natives of Scotland. They had the repu-
tation of being shrewd, hard business men, veritable
Shylocks; and from the point of view of their patrons
they undoubtedly were, for they demanded, from as
wasteful a race of gentlemen-farmers as ever lived,
punctual payment for goods sold or money loaned. 8
1 4 Am. Arch. , vol. i, pp. 371-372.
1 Bassett, J. S. , "The Relation between the Virginia Planter and the
London Merchant," Am. Hist. Assn. Reps. (1901), vol. i, pp. 551-575;
Schapcr, W. A. , "Sectionalism in S. C," ibid. (1900), vol. i, pp. 287-
288, 297; Sioussat, St. G. L. , "Virginia and the English Commercial
System," ibid. (1905), vol. i, pp. 71-97.
8 For an able defense of the Scotch merchants, vide "A Scotchman"
in Pinkney's Va. Gas. , Mch. 23, 1775.
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? 36 THE COLONIAL MERCHANTS: 1763-1776
Here again, there were large profits for the British
dealers and shipowners, and lavish buying on the part of
the colonist.
The British capitalist advanced money and gave gen-
erous credit to the planter, but this merely served to
complicate matters; the planter continually operated on
borrowed capital and found his next crop mortgaged
before 1t was planted. For more than a quarter of a
century7 Colonel iJyrd of Virginia, struggled to repay
indebtedness contracted with a London firm for the sake
of enlarging his plantations. In 1736, he was "selling
off land and negroes to stay the stomach" of his hungry
creditors; and he asserted that they allowed him twenty-
five per cent less for tobacco than they gave to other
people, knowing that they had him for a customer until
the debt was discharged. "
The result of this financial system, in its various ram-
ifications, was the economic bondage 61 tr1e planting
class to the British merchants. "The planter, Thomas
Jefferson, declared iMai 111 Vllglllia "these debts had be-
come hereditary from father to son, for many genera-
tions, so that the planters were a species of property,
annexed to certain mercantile houses in London. "'
Whgp-th,*>> statute of 17^2 was enacted by Parliament to
protect the debts of British creditors in the, rmnn1es1 the
Virginia Assembly drew UP a memorial t thy "jyhplp aim
and interjt" "f which, says Professor Sioussat, was "ex-
pressive of a revolt against the domineering and 'graft-
ing-' rule nf th^ combination of merchant^ crecf1tors,~ in
its various manifestations. From time to time, the
1 Bassett, J. S. , Writings of Colonel William Syrd (New York, 1901),
pp. li, Ixxjciv.
1 Jefferson, Writings (Ford, P. L. , ed,), vol. iv, p. 153. Vide also "A
Planter" in D1xon & Hunter's Va. Gas. , Apr. 13, 1774-
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? THE OLD ORDER CHANGETH 37
colonists tried to improve their situation by passing lax
bankruptcy laws and other legislation prejudicial to non-
resident creditors; but their efforts were usually blocked
by the royal veto. 1 Toward the close of the colonial era,
their condition was becoming well-nigh insupportable.
The situation was especially acute in Virginia. 2 In
1748, the Virginia Assembly provided that, in actions
for the recovery of sterling debts, the amount adjudged
could be settled in currency at twenty-five per cent ad-
vance, notwithstanding the fact that exchange fluctuated
and was at times as high as forty per cent. Seven years
later, the Assembly was induced to modify the law to
the extent that the Virginia courts should be empowered
to fix the rate of exchange. This law was hardly more
satisfactory to the British merchants than the earlier one;
and their dissatisfaction was sharpened by the fact that,
about this time, Virginia began to issue legal-tender
paper money. This money depreciated steadily; and, as
a large portion of the debts of the British merchants was
in paper, the action of Virginia had the effect of partial
repudiation.
But the resourcefulness of Virginia was not yet ex-
hausted. In 1758, a law was passed, permitting persons,
who owed tobacco for debts, contracts, fees or salaries,
to discharge their obligations during the following year
in money at the rate of twopence a pound. This "Two-
Penny Act" was passed because of a sharp rise in the
price of tobacco: and it aroused the bitter opposition,
1 The plantation provinces displayed much greater activity along these
lines than the commercial provinces. This legislation is conveniently
summarized in Dr. Russell's Review of American Colonial Legislation,
pp. 125-136.
1Beer, G. L. , British Colonial Policy, 1754-1763 (New York, 1907). ,
pp. 179-188.
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? 38 THE COLONIAL MERCHANTS: 1763-1776
not only of British creditors, but also of the Virginia
clergy. In 1759, the merchants of London interested in
Virginia trade presented a memorial against the act,
showing that large quantities of tobacco were owing to
them in Virginia, and that under this law the debts could
be commuted in money at the rate of twopence per
pound notwithstanding that at the time the market price
of tobacco was considerably higher. The act thus had
the effect of annulling contracts that had turned out un-
favorably to the planters; and in August, 1759, an order
in council disallowed it, as well as others of a similar
nature enacted prior to 1758.
The local clergy were in a similar dilemma, since an
earlier law had established their salary at a fixed quantity
of tobacco. They believed that they should reap the
benefit of any advance in the price inasmuch as they had
always suffered by its decline. One of the suits, brought
by the "parsons" to recover the full market price of the
tobacco, gave opportunity for the first grandiose decla-
ration of the rights of the colonists in the matter.
