Other
colonies
followed the example of
Massachusetts, with varying degrees of good faith.
Massachusetts, with varying degrees of good faith.
Arthur Schlesinger - Colonial Merchants and the American Revolution
Under these favoring circumstances,
the colonists acquiesced without serious complaint in the
British commercial system, and found the burdens which
it imposed counterbalanced by corresponding benefits. 1
The foundation stone of the commercial system was
1 The summary of the effects of the British commercial policy, which
follows, is based principally upon the anonymous pamphlet, The In-
terest of the Merchants and Manufacturers of Great Britain in the
Present Contest with the Colonies Stated and Considered (London,
1774); and upon the following monographic studies: Ashley, W. J. ,
"The Commercial Legislation of England and the American Colonies,
1660-1760," in Surveys Historic and Economic (New York, 1900), and
Beer, G. L. , The Commercial Policy of England toward the American
Colonies (Col. U. Studies, vol. iii, no. 2).
IS
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? Ig THE COLONIAL MERCHANTS: 1763-1776
the navigation act of 1660. which confined the colonial
carrying trade wholly to English and colonial shipping.
Under operation of this monopoly, ship building had
become a lucrative source of wealth for colonial capital-
ists and of employment for colonial artisans and sailors.
The most comprehensive regulation affecting the dis-
tribution of goods was the requirement that European
commodities imported into the colonies mus,t be laden and
shipped in England. 1 The hardship which this restric-
tion imposed on the colonies was theoretical rather than
actual. For one thing the Americans generally found
it more profitable to buy British manufactures than for-
eign wares because of the superior quality and lower
price of the former. This position of superiority, en-
joyed by the English merchant and manufacturer inde-
pendent of any legal advantage, made it possible for them
to retain their American market even after the colonies
had established independence. 2 Furthermore, England
1There were a few exceptions; e. g. , wines from Madeira and the
Azores; salt from any port of Europe for the New England fisheries,
and, at a later time, for Pennsylvania and New York; provisions,
horses and servants from Ireland and Scotland; and later, linen from
Ireland.
1 Lord Sheffield, by comparing the prices of standard British manu-
factures with foreign-made wares, made it apparent that "the pre-
ference formerly given [by the American colonists] was not the effect
of our restrictions . . . " Observations on the Commerce of the
American States (London, 1783), p. 234. So; also, a 'London merchant
in the American trade testified before the House of Commons in
1775 that printed calicoes and other colored and striped goods, and
probably also muslins and silk handerchiefs, could be procured on
better terms in England than. in Holland. All these were important
articles of American consumption. Stevens, B. F. , Facsimiles of Mss.
in European Archives etc. (London, 1889-98), vol. xxiv, no. 2037, p.
16. Madison wrote in 1785 that "our trade was never more compleatly
monopolized by G. B. , when it was under the direction of the British
Parliament than it is at this moment. " Madison, James, Writings,
(Hunt, G. , ed. ), vol. ii, p. 147-
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? THE OLD ORDER CHANGETH 1j
was, by virtue of her geographical position with refe-
rence to continental Europe, the natural entrepot for
most of the outgoing European trade to the colonies.
In the case of non-English manufactures, usually the
the greater portion of the English import duty was re-
funded, or "drawnback. " upon re-shipment of the goods
to America, with the result that certain goods, such as
German linens, sold more cheaply in the colonies than
in the home country. ' If the parliamentary regulations
did sometimes tend to cramp American commercial op-
portunities, the colonists were apt to ignore the restric-
tions and, as Lord Sheffield says with a large measure of
truth, "it is well known that from the first they uni-
formly did evade them whenever they found it to their
interest. "2
As for the colonial export commerce, little or no re-
straint was imposed on the trade of the northern col-
onies with foreign countries, except in so far as the law
governing imports compelled the colonial shipmasters
to take their return cargoes back to America by way
of England. They might send their articles of commerce
the world over, wherever a market could be found, with
the exception during the eighteenth century of naval
stores, which, being confined to the English market,
were favored with governmental bounties. Only on their
trade with the mother country were the restrictions on
exports of any apparent importance. By the terms of
the so-called corn laws, English ports were closed,
either absolutely or by heavy duties, to colonial cereals
and meats; and a discriminatory duty was laid on oil and
blubber imported in colonial vessels. This deprived the
1 The drawback amounted to all but one-half of the "Old Subsidy"
of 1660, or about 2l/2%. Vide Va. Mag. Hist, and Biog. , vol. xi, p. 142.
'Op. cit. , p. 234.
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? 1g THE COLONIAL MERCHANTS: 1763-1776
northern colonists of convenient articles of exchange for
British manufactures and would have proved a serious
restraint had they not been free to seek elsewhere com-
modities that could be marketed in England.
Like naval stores, the staple of Virginia and Maryland
was an "enumerated" article, and thus the tobacco of
these colonies could be exported only to the home coun-
try; but careful provision was made that colonial to-
bacco should enjoy a monopoly of the home market even
at the expense of English farmers and foreign importers.
In the case of South Carolinia and Georgia, the ex-
portation of rice was early in the eighteenth century
confined to Great Britain where it also was given a
monopoly of the market. After 1730 this staple, upon
payment of one-half of the British duties, was admitted
directly to the southern countries of Europe, whither
nearly one-fourth of the exported crop went. North
Carolina was affected by the regulations as to tobacco
and rice and, more largely, by the restraint on the ex-
portation of naval supplies; but, as has been noted, this
last industry was subsidized by the British government,
and without such help it could not have maintained it-
self against the competition of Sweden.
Notwithstanding that colonial tobacco and rice could
under most circumstances be sent only to the home
country, these products enjoyed fairly free access to the
continental European market, for on re-exportation from
England the whole or the greater part of the import
duty, as the law at any given time provided, was re-
mitted as a " drawback. " Thus, toward the end of the
colonial era four-fifths of the tobacco carried to England
was re-shipped by British merchants to the continent,
and nearly three-fourths of the American rice was re-ex-
ported to the North German and Dutch manufacturing
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? THE OLD ORDER CHANGETH 19
towns. As England was on the direct route between
the colonies and the European ports north of Cape Fin-
isterre, the additional freight charge was not high.
Even if colonial vessels had gone directly to the conti-
nental ports and thus deprived the British middlemen of
their profits, they would have found it difficult to secure
return cargoes.
So far as the regulations of exports and imports were
concerned, the colonies north of Maryland were not ser-
iously affected; and the restraints on the southern col-
onies were balanced by governmental subsidies and vested
privileges in the English market. But other features of
the commercial system bore a somewhat closer relation
to the industrial life of the northern colonies. Most
notable in this connection was the Molasses Act of 1ffi^.
which was designed by means of prohibitive duties to
compel the rum distillers and dealers of New England
and elsewhere to buy molasses, sugar and rum of British,
instead of foreign, colonies in the West Indies. But, as
we shall see, this law, oppressive in intent but not in
execution, had its chief effect in increasing the volume
of colonial smuggling.
Restraints were also placed upon the exportation of
certain manufactures. If the British merchants and the
Board of Trade could have had their way, these restric-
tions would have been sweeping and effectual; but as it
was, no earnest effort was made either to prevent manu-
factures generally or to prohibit any manufacturing for pri-
vate consumption within a colony. In 16qQ it was enacted
that no woolen manufactures should be exported from
the colonies, transported from one colony to another or
from one place to another in the same colony. In 1732
the exportation of locally-made hats from a colony was
forbidden. In the middle of the century n rhl'H hiv f"--
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? 20 THE COLONIAL MERCHANTS: 1763-1776
bade the erection nf any new stye) furnaces or slitting
mills, although country forges where nails and farm im-
plements were wrought were not in any wise affected.
This last restriction worked some hardship on the col-
onies north of Maryland; but the ill wind blew favorably
for Virginia and Maryland, for these colonies profited
by the special encouragement which the act granted for
the American production of bar iron and pig iron.
The three laws against manufacturing may, in general,
be considered as having had little effect, for the reason
that even the northern colonies showed small promise
of developing important manufacturing interests. Causes
unconnected with the British commercial system oper-
ated against the establishment of manufacturing, except
for household purposes : the abundance of land in propor-
tion to the population; the resulting high price of labor;
and the want of sufficient capital. 1 The thousands of
British workingmen who migrated to America in the
last quarter-century of the colonial era found it more
profitable and congenial to become farmers or seafarers
than to labor at their old occupations. Colonial capital-
ists founH a hpf tpr investment for their capital in commerce
1 Gallatin assigned the same reasons for the natural industrial back-
wardness of the country in 1810 in his "Report on Manufactures. "
Am. St. Papers, Finance, vol. ii, pp. 425-426. Colonists' and Englishmen
at home widely appreciated that natural conditions in the colonies
were unfavorable to the development of manufacturing. E. g. , ride
"An Essay on the Trade of the Northern Colonies" in Bos. Eve. Post,
Jan. 30, Feb. 6, 1764; article by "A North American," copied into
N. Y. Merc. , June 10, 1765; article in Conn. Cour. , Aug. 17, 1767; the
pamphlet, The Int. of Merchants and Mfrs. , pp. 20-21; reports of
following governors to home government: Moore, of N. Y. , N. Y.
Col. Docs. , vol. vii, pp. 888-889; Wentworth, of N. H. , British Papers
("Sparks Mss. "), vol. i, p. 6; Sharpe, of Md. , Md. Arch. , vol. xiv, pp.
496-497; Franklin, of N. J. , / N. J. Arch. , vol. x, pp. 31-32; Macpherson,
D. , Annals of Commerce (London, 1805), vol. Hi, pp. 186-191; Franklin,
Benj. . Writings (Smyth, A. H. , ed. ), vol. v, p. 116.
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? THE OLD ORDER CHANGETH 2l
or agriculture and refused_tp_ hazard their resources in
manufactur1ng enterprises of any size, even in later times
when non-1mportat1on agreements were creating an arti-
ficial demand for colonial wares. 1
An act. of Parliament of 1732 sought to safeguard
British investments in colonial businesses by protecting
creditors at home against discriminatory colonial legis-
lation designed to impede the collection of their debts.
The act was passed upon petition of some London mer-
chants. It provided that the affidavit of a British sub-
ject at home should have the same force as evidence
given in open court in the colonies and that the lands,
tenements and negroes owned by the colonists should
be liable for the payment of debts in much the same
manner as real estate was in England. The undoubted
effect of the law was that colonial merchants and planters
of substance were enabled to secure a more generous
credit; the chief hardship of the regulation fell on the
unthrifty and unfortunate in the colonies.
Another regulation of Parliament, aimed solely at New
England, prohibited the issue of legal-tender paper
money after 1751. Beginning in 1090, Massachusetts
had been beguiled into the use of paper currency through
the heavy expenses entailed by the successive French
and Indian wars. Merchants of substance and the royal
officials in the colony viewed this deluge of paper money
with dismay.
Other colonies followed the example of
Massachusetts, with varying degrees of good faith. The
upshot was the act of 1751 directed against the New
England governments where the evil was worst. ' This
1" A. Z. " in Bos. Gas. , Feb. 20, 1769.
'Davis, A. McF. , Currency and Banking in Massachusetts Bay (3
Am. Econ. Assn. Pubs. ), vol. i, pp. 253-265; Russell, E. B. , The Re-
rieto of Amer1can Colonial Legislation by the King in Council (Col.
U. Studies, vol. Ixiv, no. 2), pp. 120-124.
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? 22 THE COLONIAL MERCHANTS: 1763-1776
law, though failing to meet the need which undoubtedly
existed for a more abundant circulating medium, insured
a safe currency and stabilized business conditions to the
satisfaction of the men of means and the creditor class
generally in New England.
It would appear, then, that the, frugi^pgg m^r) o{ the col-
onies north of Maryland had little
the_British commercial and f1nancial regulations as they
actually operated prior to the re1gn of George ill. In-
deed, under parliamentary supervision, the colomes had
made such progress in wealth and population as to at-
tract the attention of all Europe. There were besides, as
we shall see presently, other powerful ties of interest
that bound the colonial business and planting class to
the mother country. It was a perception of these facts
that prompted Franklin to say in 1754 of the restrictive
regulations of Parliament: "These kind of secondary
taxes, however, we do not complain of, though we have
no share in the laying or disposing of them;"1 and
caused James Otis to declare in 1764: "The act of navi-
gation is a good act, so are all that exclude foreign
manufactures from the plantations . anH pypry hnpest man
will readily subscribe to them. " *
From north to south, the colonial economy revealed
marked contrasts which were destined to have far-reach-
ing consequences. Fundamentally, the provinces fell
into two clearly differentiated groups. 3 North of Mary-
1 Franklin, Writings (Smyth), vol. iii, p. 236.
The Rights of the British Colonies Asserted and Proved (Boston,
1764), pp. 54-55-
? Viewing the matter from a somewhat different angle, Professor
C. M. Andrews has made this luminous remark: "The real difference
between the north and the south in colonial times lay not in politics,
law, religion, education, in manners, customs, or mental attitudes. It
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? THE OLD ORDER CHANGETH 23
land were the commercial provinces, regions in which
the economic life centered cmeny 1n marine activity, as
in New England, or else depended very largely upon
trading, with agriculture as an important local feeder, as
in the Middle Provinces. 1 In_the commercial provinces
the most influential men were merchants or lawyers
all1ed w1th them, and political life radiated from the
trading centers. South of this group lay the plantation
provinces, where the native economic interests were
almost exclusively agricultural along specialized lines
and the trading relations were managed by merchants
of the mother country or coastwise by northern mer-
chants. Here towns were small and for the most part
unimportant, and political leadership fell to the owners
of the great plantations.
Each group of provinces displayed a wide diversity of
industry and trade within itself. ' A facetious member
of the South Carolina Assembly was heard to remark
when a proposal^for a Stamp Act Congress was under
consideration :\" If you agree to the proposition of com-
is to be found in the fact that the southern colonies from the beginning
to the end of the colonial period represented a purely agricultural
form of life without towns, trading communities, variety of industrial
interests and competition, and consequently without that ingenuity and
scientific skill which is essential to the spread of democratic ideas and
the increase of wealth. " The Colonial Period (New York, 1912), pp.
105-106.
1 One New England writer said: ""Tis not difficult to prove clearly,
the whole Product of the Lands to the Northward of Maryland is not
equal in Value to the fourth Part of our Imports from Great Britain. "
Bos. Post-Boy, Nov. 28, 1763.
1The subject of colonial economic conditions had been treated in
innumerable places. For excellent general discussions, vide Ford, W.
C, "Colonial America," Col. Soc. Mass. Pubs. , vol. vi, pp. 340-370;
and Johnson, E. 'R. , History of Domestic and Foreign Commerce of
the United States (Washington, 1915). vol. i, pp. 3-121-
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? 24 THE COLONIAL MERCHANTS: 1763-1776
posing a Congress of deputies from the different British
colonies, what sort of a dish will you make? New-Eng-
land will throw in fish and onions. The middle states
flax-seed and flour. Maryland and Virginia will add
tobacco. North-Carolina, pitch, tar and turpentine.
South-Carolina, rice and indigo, and Georgia will sprinkle
the whole composition with saw-dust. Such an absurd
jumble will you make if you attempt to form a union
among such discordant materials as the thirteen British
provinces. "jj The ingredients of the continental dish
were even more variegated than the South Carolinian
asserted.
Of the commercial provinces, the enterprising mer-
chants of New England developed a network of trade
routes that covered well-nigh half the world. Possess-
ing within themselves no staple with which to make
returns for their vast consumption of English drygoods
and other wares, the main resources of trade of these
provinces were the fisheries, the molasses-rum trade, the
marketing of slaves and the coastwise traffic. " All these
sources were vigorously exploited in order to pile up a
favorable balance of specie to send as remittance to
England.
1 Ramsay, D. , History of the Revolution of South Carolina (Trenton,
1785), vol. i, pp. 12-13.
1 This statement of New England conditions is based largely upon the
following materials: representation of R. I. Assembly in R. I. Col.
Recs. . vol. vi, pp. 378-383; "Essay on Trade of Northern Colonies," in
Bos. Eve. Post, Jan. 30, Feb. 6, 1764; Postlethwayt, M. , The Universal
Dictionary of Trade and Commerce (London, 1751), vol. i, pp. 366-
367; Macpherson, Annals of Commerce, vol. iii, pp. 397-398, 570; Com-
merce of Rhode Island (7 M. H. S. Colls. , vols. ix and x); Weeden,
W. B. , Economic and Social History of New England (Boston, 1890),
and Early Rhode Island (New York. 1910) ; statistics of fisheries. / Af.
H. S. Colls. , vol. viii. pp. 202-203; examination of merchants before
Parliament, 4 American Archives (Force, P. , ed. ), vol. i, pp. 1638-1632,
1663-1670.
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? THE OLD ORDER CHANGETH 2$
In 1764 forty-five thousand tons of shipping and up-
wards of three thousand men were employed in the fish-
eries. After the fish had been caught and cured, the
merchants exported the "merchantable" variety to
Spain, Portugal and Italy, where it was sold for cash or
bills of exchange, save a small portion which was ex-
changed for salt, lemons and raisins for the return
voyage. Such fish as was unfit for the European market
was exported for slave consumption in the West Indies
in exchange for more cash and for molasses.
The circuit of trade based upon West Indian molasses
brought even more generous returns and indeed consti-
tuted the chief source of specie supply. The molasses
became marketable when it was distilled into rum, for
throughout British America it had great popularity as a
tipple and as an article in the Indian trade, and it also
played an important part in the African trade. Most of
the output of rum was carried by coasting vessels to
other provinces and exchanged for products which might
be used as remittances to England or as cargoes to the
West Indies. The remainder--about one-seventh in the
case of Rhode Island--was sent to Africa where it was
sold for slaves or for gold-dust and ivory. The last two
articles served directly as remittances to England; the
slaves were sold for hard money in the West Indies and
the proceeds used to pay English debts.
Under the stimulus of this ceaseless round of activity,
trading communities sprang up in many parts of New
England, with Boston and Newport as the chief centers.
Ship building leaped into prominence as a leading indus-
try, so that New England built annually twice as great
a tonnage of vessels as all the other continental prov-
inces. The rum industry grew apace, being represented
in Rhode Island in 1763 by nearly thirty distilleries
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? 26 THE COLONIAL MERCHANTS: 1763-1776
"erected at vast expense," with hundreds of persons de-
pendent upon them for subsistence, and in Massachusetts
in 1774 by sixty distilleries producing two million seven
hundred thousand gallons annually. "In short," de-
clared Macpherson, " their earnest application to fisheries
and the carrying trade, together with their unremitting
attention to the most minute article which could be
made to yield a profit, obtained them the appellation of
the Dutchmen of America" Connecticut alone seemed
to stand apart, possessing no first-rate ports, having re-
sources of grain and stock more like the Middle Prov-
inces, and confining its trading activities chiefly to
coasting voyages and West Indian trade. Its trans-
Atlantic trade was for many years handled through
Boston, but after the parliamentary act of 1751 prohibit-
ing the emission of legal-tender money in New England,
the merchants diverted their trade to New York. 1
The provinces next to the southward had the advan-
tage of possessing both staples of export and a mercan-
tile population equal to the opportunity. 2 The great
ports of New York and Philadelphia possessed a hinter-
land of large and small farms producing a wealth of grain
and livestock. New York was the commercial capital
1 Referring to this dominant position of New York, "A Connecticut
Farmer" expressed the pious wish that "the plumes of that domineer-
ing city may yet feather the nests of those whom they have long
plucked. " New London 'Gas. , Aug. 17, 1770. Vide also Conn. Journ. ,
Jan. 19, 1770.
1 This statement of conditions in the Middle Provinces is based
largely upon the following materials: petition of the New York mer-
chants to House of Commons, in Weyler's N. Y. Gas. , May 4, 1767;
Tryon's report to Board of Trade, N. Y. Col. Docs. , vol. viii, pp. 434-
457; Postlethwayt, Diet, of Com. , vol. i, p. 366; Kalm, P. , Travels into
North America (Warrington and London, 1770-1771), vol. i, pp. 31,
49-So, 253-258; reports of Gov. Franklin, / N. J. Arch.
the colonists acquiesced without serious complaint in the
British commercial system, and found the burdens which
it imposed counterbalanced by corresponding benefits. 1
The foundation stone of the commercial system was
1 The summary of the effects of the British commercial policy, which
follows, is based principally upon the anonymous pamphlet, The In-
terest of the Merchants and Manufacturers of Great Britain in the
Present Contest with the Colonies Stated and Considered (London,
1774); and upon the following monographic studies: Ashley, W. J. ,
"The Commercial Legislation of England and the American Colonies,
1660-1760," in Surveys Historic and Economic (New York, 1900), and
Beer, G. L. , The Commercial Policy of England toward the American
Colonies (Col. U. Studies, vol. iii, no. 2).
IS
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? Ig THE COLONIAL MERCHANTS: 1763-1776
the navigation act of 1660. which confined the colonial
carrying trade wholly to English and colonial shipping.
Under operation of this monopoly, ship building had
become a lucrative source of wealth for colonial capital-
ists and of employment for colonial artisans and sailors.
The most comprehensive regulation affecting the dis-
tribution of goods was the requirement that European
commodities imported into the colonies mus,t be laden and
shipped in England. 1 The hardship which this restric-
tion imposed on the colonies was theoretical rather than
actual. For one thing the Americans generally found
it more profitable to buy British manufactures than for-
eign wares because of the superior quality and lower
price of the former. This position of superiority, en-
joyed by the English merchant and manufacturer inde-
pendent of any legal advantage, made it possible for them
to retain their American market even after the colonies
had established independence. 2 Furthermore, England
1There were a few exceptions; e. g. , wines from Madeira and the
Azores; salt from any port of Europe for the New England fisheries,
and, at a later time, for Pennsylvania and New York; provisions,
horses and servants from Ireland and Scotland; and later, linen from
Ireland.
1 Lord Sheffield, by comparing the prices of standard British manu-
factures with foreign-made wares, made it apparent that "the pre-
ference formerly given [by the American colonists] was not the effect
of our restrictions . . . " Observations on the Commerce of the
American States (London, 1783), p. 234. So; also, a 'London merchant
in the American trade testified before the House of Commons in
1775 that printed calicoes and other colored and striped goods, and
probably also muslins and silk handerchiefs, could be procured on
better terms in England than. in Holland. All these were important
articles of American consumption. Stevens, B. F. , Facsimiles of Mss.
in European Archives etc. (London, 1889-98), vol. xxiv, no. 2037, p.
16. Madison wrote in 1785 that "our trade was never more compleatly
monopolized by G. B. , when it was under the direction of the British
Parliament than it is at this moment. " Madison, James, Writings,
(Hunt, G. , ed. ), vol. ii, p. 147-
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? THE OLD ORDER CHANGETH 1j
was, by virtue of her geographical position with refe-
rence to continental Europe, the natural entrepot for
most of the outgoing European trade to the colonies.
In the case of non-English manufactures, usually the
the greater portion of the English import duty was re-
funded, or "drawnback. " upon re-shipment of the goods
to America, with the result that certain goods, such as
German linens, sold more cheaply in the colonies than
in the home country. ' If the parliamentary regulations
did sometimes tend to cramp American commercial op-
portunities, the colonists were apt to ignore the restric-
tions and, as Lord Sheffield says with a large measure of
truth, "it is well known that from the first they uni-
formly did evade them whenever they found it to their
interest. "2
As for the colonial export commerce, little or no re-
straint was imposed on the trade of the northern col-
onies with foreign countries, except in so far as the law
governing imports compelled the colonial shipmasters
to take their return cargoes back to America by way
of England. They might send their articles of commerce
the world over, wherever a market could be found, with
the exception during the eighteenth century of naval
stores, which, being confined to the English market,
were favored with governmental bounties. Only on their
trade with the mother country were the restrictions on
exports of any apparent importance. By the terms of
the so-called corn laws, English ports were closed,
either absolutely or by heavy duties, to colonial cereals
and meats; and a discriminatory duty was laid on oil and
blubber imported in colonial vessels. This deprived the
1 The drawback amounted to all but one-half of the "Old Subsidy"
of 1660, or about 2l/2%. Vide Va. Mag. Hist, and Biog. , vol. xi, p. 142.
'Op. cit. , p. 234.
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? 1g THE COLONIAL MERCHANTS: 1763-1776
northern colonists of convenient articles of exchange for
British manufactures and would have proved a serious
restraint had they not been free to seek elsewhere com-
modities that could be marketed in England.
Like naval stores, the staple of Virginia and Maryland
was an "enumerated" article, and thus the tobacco of
these colonies could be exported only to the home coun-
try; but careful provision was made that colonial to-
bacco should enjoy a monopoly of the home market even
at the expense of English farmers and foreign importers.
In the case of South Carolinia and Georgia, the ex-
portation of rice was early in the eighteenth century
confined to Great Britain where it also was given a
monopoly of the market. After 1730 this staple, upon
payment of one-half of the British duties, was admitted
directly to the southern countries of Europe, whither
nearly one-fourth of the exported crop went. North
Carolina was affected by the regulations as to tobacco
and rice and, more largely, by the restraint on the ex-
portation of naval supplies; but, as has been noted, this
last industry was subsidized by the British government,
and without such help it could not have maintained it-
self against the competition of Sweden.
Notwithstanding that colonial tobacco and rice could
under most circumstances be sent only to the home
country, these products enjoyed fairly free access to the
continental European market, for on re-exportation from
England the whole or the greater part of the import
duty, as the law at any given time provided, was re-
mitted as a " drawback. " Thus, toward the end of the
colonial era four-fifths of the tobacco carried to England
was re-shipped by British merchants to the continent,
and nearly three-fourths of the American rice was re-ex-
ported to the North German and Dutch manufacturing
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? THE OLD ORDER CHANGETH 19
towns. As England was on the direct route between
the colonies and the European ports north of Cape Fin-
isterre, the additional freight charge was not high.
Even if colonial vessels had gone directly to the conti-
nental ports and thus deprived the British middlemen of
their profits, they would have found it difficult to secure
return cargoes.
So far as the regulations of exports and imports were
concerned, the colonies north of Maryland were not ser-
iously affected; and the restraints on the southern col-
onies were balanced by governmental subsidies and vested
privileges in the English market. But other features of
the commercial system bore a somewhat closer relation
to the industrial life of the northern colonies. Most
notable in this connection was the Molasses Act of 1ffi^.
which was designed by means of prohibitive duties to
compel the rum distillers and dealers of New England
and elsewhere to buy molasses, sugar and rum of British,
instead of foreign, colonies in the West Indies. But, as
we shall see, this law, oppressive in intent but not in
execution, had its chief effect in increasing the volume
of colonial smuggling.
Restraints were also placed upon the exportation of
certain manufactures. If the British merchants and the
Board of Trade could have had their way, these restric-
tions would have been sweeping and effectual; but as it
was, no earnest effort was made either to prevent manu-
factures generally or to prohibit any manufacturing for pri-
vate consumption within a colony. In 16qQ it was enacted
that no woolen manufactures should be exported from
the colonies, transported from one colony to another or
from one place to another in the same colony. In 1732
the exportation of locally-made hats from a colony was
forbidden. In the middle of the century n rhl'H hiv f"--
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? 20 THE COLONIAL MERCHANTS: 1763-1776
bade the erection nf any new stye) furnaces or slitting
mills, although country forges where nails and farm im-
plements were wrought were not in any wise affected.
This last restriction worked some hardship on the col-
onies north of Maryland; but the ill wind blew favorably
for Virginia and Maryland, for these colonies profited
by the special encouragement which the act granted for
the American production of bar iron and pig iron.
The three laws against manufacturing may, in general,
be considered as having had little effect, for the reason
that even the northern colonies showed small promise
of developing important manufacturing interests. Causes
unconnected with the British commercial system oper-
ated against the establishment of manufacturing, except
for household purposes : the abundance of land in propor-
tion to the population; the resulting high price of labor;
and the want of sufficient capital. 1 The thousands of
British workingmen who migrated to America in the
last quarter-century of the colonial era found it more
profitable and congenial to become farmers or seafarers
than to labor at their old occupations. Colonial capital-
ists founH a hpf tpr investment for their capital in commerce
1 Gallatin assigned the same reasons for the natural industrial back-
wardness of the country in 1810 in his "Report on Manufactures. "
Am. St. Papers, Finance, vol. ii, pp. 425-426. Colonists' and Englishmen
at home widely appreciated that natural conditions in the colonies
were unfavorable to the development of manufacturing. E. g. , ride
"An Essay on the Trade of the Northern Colonies" in Bos. Eve. Post,
Jan. 30, Feb. 6, 1764; article by "A North American," copied into
N. Y. Merc. , June 10, 1765; article in Conn. Cour. , Aug. 17, 1767; the
pamphlet, The Int. of Merchants and Mfrs. , pp. 20-21; reports of
following governors to home government: Moore, of N. Y. , N. Y.
Col. Docs. , vol. vii, pp. 888-889; Wentworth, of N. H. , British Papers
("Sparks Mss. "), vol. i, p. 6; Sharpe, of Md. , Md. Arch. , vol. xiv, pp.
496-497; Franklin, of N. J. , / N. J. Arch. , vol. x, pp. 31-32; Macpherson,
D. , Annals of Commerce (London, 1805), vol. Hi, pp. 186-191; Franklin,
Benj. . Writings (Smyth, A. H. , ed. ), vol. v, p. 116.
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? THE OLD ORDER CHANGETH 2l
or agriculture and refused_tp_ hazard their resources in
manufactur1ng enterprises of any size, even in later times
when non-1mportat1on agreements were creating an arti-
ficial demand for colonial wares. 1
An act. of Parliament of 1732 sought to safeguard
British investments in colonial businesses by protecting
creditors at home against discriminatory colonial legis-
lation designed to impede the collection of their debts.
The act was passed upon petition of some London mer-
chants. It provided that the affidavit of a British sub-
ject at home should have the same force as evidence
given in open court in the colonies and that the lands,
tenements and negroes owned by the colonists should
be liable for the payment of debts in much the same
manner as real estate was in England. The undoubted
effect of the law was that colonial merchants and planters
of substance were enabled to secure a more generous
credit; the chief hardship of the regulation fell on the
unthrifty and unfortunate in the colonies.
Another regulation of Parliament, aimed solely at New
England, prohibited the issue of legal-tender paper
money after 1751. Beginning in 1090, Massachusetts
had been beguiled into the use of paper currency through
the heavy expenses entailed by the successive French
and Indian wars. Merchants of substance and the royal
officials in the colony viewed this deluge of paper money
with dismay.
Other colonies followed the example of
Massachusetts, with varying degrees of good faith. The
upshot was the act of 1751 directed against the New
England governments where the evil was worst. ' This
1" A. Z. " in Bos. Gas. , Feb. 20, 1769.
'Davis, A. McF. , Currency and Banking in Massachusetts Bay (3
Am. Econ. Assn. Pubs. ), vol. i, pp. 253-265; Russell, E. B. , The Re-
rieto of Amer1can Colonial Legislation by the King in Council (Col.
U. Studies, vol. Ixiv, no. 2), pp. 120-124.
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? 22 THE COLONIAL MERCHANTS: 1763-1776
law, though failing to meet the need which undoubtedly
existed for a more abundant circulating medium, insured
a safe currency and stabilized business conditions to the
satisfaction of the men of means and the creditor class
generally in New England.
It would appear, then, that the, frugi^pgg m^r) o{ the col-
onies north of Maryland had little
the_British commercial and f1nancial regulations as they
actually operated prior to the re1gn of George ill. In-
deed, under parliamentary supervision, the colomes had
made such progress in wealth and population as to at-
tract the attention of all Europe. There were besides, as
we shall see presently, other powerful ties of interest
that bound the colonial business and planting class to
the mother country. It was a perception of these facts
that prompted Franklin to say in 1754 of the restrictive
regulations of Parliament: "These kind of secondary
taxes, however, we do not complain of, though we have
no share in the laying or disposing of them;"1 and
caused James Otis to declare in 1764: "The act of navi-
gation is a good act, so are all that exclude foreign
manufactures from the plantations . anH pypry hnpest man
will readily subscribe to them. " *
From north to south, the colonial economy revealed
marked contrasts which were destined to have far-reach-
ing consequences. Fundamentally, the provinces fell
into two clearly differentiated groups. 3 North of Mary-
1 Franklin, Writings (Smyth), vol. iii, p. 236.
The Rights of the British Colonies Asserted and Proved (Boston,
1764), pp. 54-55-
? Viewing the matter from a somewhat different angle, Professor
C. M. Andrews has made this luminous remark: "The real difference
between the north and the south in colonial times lay not in politics,
law, religion, education, in manners, customs, or mental attitudes. It
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? THE OLD ORDER CHANGETH 23
land were the commercial provinces, regions in which
the economic life centered cmeny 1n marine activity, as
in New England, or else depended very largely upon
trading, with agriculture as an important local feeder, as
in the Middle Provinces. 1 In_the commercial provinces
the most influential men were merchants or lawyers
all1ed w1th them, and political life radiated from the
trading centers. South of this group lay the plantation
provinces, where the native economic interests were
almost exclusively agricultural along specialized lines
and the trading relations were managed by merchants
of the mother country or coastwise by northern mer-
chants. Here towns were small and for the most part
unimportant, and political leadership fell to the owners
of the great plantations.
Each group of provinces displayed a wide diversity of
industry and trade within itself. ' A facetious member
of the South Carolina Assembly was heard to remark
when a proposal^for a Stamp Act Congress was under
consideration :\" If you agree to the proposition of com-
is to be found in the fact that the southern colonies from the beginning
to the end of the colonial period represented a purely agricultural
form of life without towns, trading communities, variety of industrial
interests and competition, and consequently without that ingenuity and
scientific skill which is essential to the spread of democratic ideas and
the increase of wealth. " The Colonial Period (New York, 1912), pp.
105-106.
1 One New England writer said: ""Tis not difficult to prove clearly,
the whole Product of the Lands to the Northward of Maryland is not
equal in Value to the fourth Part of our Imports from Great Britain. "
Bos. Post-Boy, Nov. 28, 1763.
1The subject of colonial economic conditions had been treated in
innumerable places. For excellent general discussions, vide Ford, W.
C, "Colonial America," Col. Soc. Mass. Pubs. , vol. vi, pp. 340-370;
and Johnson, E. 'R. , History of Domestic and Foreign Commerce of
the United States (Washington, 1915). vol. i, pp. 3-121-
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? 24 THE COLONIAL MERCHANTS: 1763-1776
posing a Congress of deputies from the different British
colonies, what sort of a dish will you make? New-Eng-
land will throw in fish and onions. The middle states
flax-seed and flour. Maryland and Virginia will add
tobacco. North-Carolina, pitch, tar and turpentine.
South-Carolina, rice and indigo, and Georgia will sprinkle
the whole composition with saw-dust. Such an absurd
jumble will you make if you attempt to form a union
among such discordant materials as the thirteen British
provinces. "jj The ingredients of the continental dish
were even more variegated than the South Carolinian
asserted.
Of the commercial provinces, the enterprising mer-
chants of New England developed a network of trade
routes that covered well-nigh half the world. Possess-
ing within themselves no staple with which to make
returns for their vast consumption of English drygoods
and other wares, the main resources of trade of these
provinces were the fisheries, the molasses-rum trade, the
marketing of slaves and the coastwise traffic. " All these
sources were vigorously exploited in order to pile up a
favorable balance of specie to send as remittance to
England.
1 Ramsay, D. , History of the Revolution of South Carolina (Trenton,
1785), vol. i, pp. 12-13.
1 This statement of New England conditions is based largely upon the
following materials: representation of R. I. Assembly in R. I. Col.
Recs. . vol. vi, pp. 378-383; "Essay on Trade of Northern Colonies," in
Bos. Eve. Post, Jan. 30, Feb. 6, 1764; Postlethwayt, M. , The Universal
Dictionary of Trade and Commerce (London, 1751), vol. i, pp. 366-
367; Macpherson, Annals of Commerce, vol. iii, pp. 397-398, 570; Com-
merce of Rhode Island (7 M. H. S. Colls. , vols. ix and x); Weeden,
W. B. , Economic and Social History of New England (Boston, 1890),
and Early Rhode Island (New York. 1910) ; statistics of fisheries. / Af.
H. S. Colls. , vol. viii. pp. 202-203; examination of merchants before
Parliament, 4 American Archives (Force, P. , ed. ), vol. i, pp. 1638-1632,
1663-1670.
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? THE OLD ORDER CHANGETH 2$
In 1764 forty-five thousand tons of shipping and up-
wards of three thousand men were employed in the fish-
eries. After the fish had been caught and cured, the
merchants exported the "merchantable" variety to
Spain, Portugal and Italy, where it was sold for cash or
bills of exchange, save a small portion which was ex-
changed for salt, lemons and raisins for the return
voyage. Such fish as was unfit for the European market
was exported for slave consumption in the West Indies
in exchange for more cash and for molasses.
The circuit of trade based upon West Indian molasses
brought even more generous returns and indeed consti-
tuted the chief source of specie supply. The molasses
became marketable when it was distilled into rum, for
throughout British America it had great popularity as a
tipple and as an article in the Indian trade, and it also
played an important part in the African trade. Most of
the output of rum was carried by coasting vessels to
other provinces and exchanged for products which might
be used as remittances to England or as cargoes to the
West Indies. The remainder--about one-seventh in the
case of Rhode Island--was sent to Africa where it was
sold for slaves or for gold-dust and ivory. The last two
articles served directly as remittances to England; the
slaves were sold for hard money in the West Indies and
the proceeds used to pay English debts.
Under the stimulus of this ceaseless round of activity,
trading communities sprang up in many parts of New
England, with Boston and Newport as the chief centers.
Ship building leaped into prominence as a leading indus-
try, so that New England built annually twice as great
a tonnage of vessels as all the other continental prov-
inces. The rum industry grew apace, being represented
in Rhode Island in 1763 by nearly thirty distilleries
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? 26 THE COLONIAL MERCHANTS: 1763-1776
"erected at vast expense," with hundreds of persons de-
pendent upon them for subsistence, and in Massachusetts
in 1774 by sixty distilleries producing two million seven
hundred thousand gallons annually. "In short," de-
clared Macpherson, " their earnest application to fisheries
and the carrying trade, together with their unremitting
attention to the most minute article which could be
made to yield a profit, obtained them the appellation of
the Dutchmen of America" Connecticut alone seemed
to stand apart, possessing no first-rate ports, having re-
sources of grain and stock more like the Middle Prov-
inces, and confining its trading activities chiefly to
coasting voyages and West Indian trade. Its trans-
Atlantic trade was for many years handled through
Boston, but after the parliamentary act of 1751 prohibit-
ing the emission of legal-tender money in New England,
the merchants diverted their trade to New York. 1
The provinces next to the southward had the advan-
tage of possessing both staples of export and a mercan-
tile population equal to the opportunity. 2 The great
ports of New York and Philadelphia possessed a hinter-
land of large and small farms producing a wealth of grain
and livestock. New York was the commercial capital
1 Referring to this dominant position of New York, "A Connecticut
Farmer" expressed the pious wish that "the plumes of that domineer-
ing city may yet feather the nests of those whom they have long
plucked. " New London 'Gas. , Aug. 17, 1770. Vide also Conn. Journ. ,
Jan. 19, 1770.
1 This statement of conditions in the Middle Provinces is based
largely upon the following materials: petition of the New York mer-
chants to House of Commons, in Weyler's N. Y. Gas. , May 4, 1767;
Tryon's report to Board of Trade, N. Y. Col. Docs. , vol. viii, pp. 434-
457; Postlethwayt, Diet, of Com. , vol. i, p. 366; Kalm, P. , Travels into
North America (Warrington and London, 1770-1771), vol. i, pp. 31,
49-So, 253-258; reports of Gov. Franklin, / N. J. Arch.
