ejb * THE
COLONIAL
MERCHANTS: 1763-1776
to every man in the least acquainted with it to be much
higher than that article can possibly bear and therefore must
operate as an absolute prohibition," declared Hopkins.
to every man in the least acquainted with it to be much
higher than that article can possibly bear and therefore must
operate as an absolute prohibition," declared Hopkins.
Arthur Schlesinger - Colonial Merchants and the American Revolution
handle.
net/2027/mdp.
39015011480665 Public Domain, Google-digitized / http://www.
hathitrust.
org/access_use#pd-google
? CHAPTER II
THE FIRST CONTEST FOR COMMERCIAL REFORM
(1764-1766)
EVENTS were shaping themselves in England to accen-
tuate the economic distress which the commercial provinces
had already begun to feel. The Peace of Paris of 1763
marked a turning point in the relations of Great Britain
to her colonies. The mother country faced the complex
task of recasting her imperial policy, of safeguarding her
newly-acquired world empire, of readjusting the acts of
trade to meet the new situation and of improving their ad-
ministration. 1 The particularistic course of the colonial
legislatures during the recent war had shown that the re-
quisition system could not be depended upon to furnish a
permanent revenue for a colonial military establishment;
and the lawlessness of the colonial merchants had revealed
the need for reforming the machinery of administering the
trade laws. Forced to action by these conditions, Parlia-
ment, under the leadership of George Grenville, proceeded
to adopt an imperial policy which in its main principles
conformed to the views long maintained by the British mer-
cantile interests and their apologist, the Board of Trade.
In the light of subsequent history, the most important
1 " The several changes of territories, which at the last Peace took
place in the Colonies of the European world, have given rise to A
NEW SYSTEM OF INTERESTS; have opened a new channel of business;
and brought into operation a new concatenation of powers, both com-
mercial and political. " Pownall, T. , The Administration of the British
Colonies (London, 1768), vol. i, p. I.
5O
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? FIRST CONTEST FOR REFORM 51
feature of the legislation of 1764 was the fact that, for the
first time, Parl1ament prov1ded^specifically for thp raising
of a revenue in America. But as watchful colonists at the
tTme. viewed the umvonTed legislative activity, they were im-
pressed almost solely with the idea that their business inter-
ests were being vitally affected. It goes without saying that
they did not perceive or appreciate the problem of imperial
reorganization with which Parliament was wrestling. They
stood for a Ptolemaic conception of the empire, with Eng-
land as the sun and America the earth about which the sun
revolved; while the statesmen at home justified their course
in the terms of the Copernican theory. 1
The program of Parliament, therefore, so far as the
colonists were concerned, had to stand or fall upon its merits
as legislation dealing solely with colonial interests. The
group of enactments thus readily divided itself into two
parts, those provisions favorable to American commerce
and industry, and those detrimental.
The beneficial portions were of minor importance and
affected chiefly the plantat1on--DrQvjpces where relief was
not particularly nefHpfl South Carolina and Georgia were
allowed, upon payment of a slight duty, to export rice to
any part of America to the southward of those provinces,
in order that they might continue to dominate the markets
which they had entered during British occupation of certain
West India islands in the recent war. 2 As a means of en-
couraging the indigo industry, a protective duty was placed
1 Vide Beer, British Colonial Policy, 1754-1765, pp. 193-251, 274-286,
for an excellent presentation of the imperialistic point of view. Vide
Macpherson, Annals of Commerce, vol. iii, pp. 395-399, for a well-
balanced statement of the colonial view; also Col. Soc. Mass. Pubs. ,
vol. xiii, pp. 431-433.
'4 George III, c. 27. This liberty was extended to North Carolina
in the following year. 5 George III, c. 45.
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? 52 THE COLONIAL MERCHANTS: 1763-1776
on foreign indigo imported into the provinces. 1 On the
other hand, New England fishermen received concessions in
England, by which American whale-fins succeeded in secur-
ing a practical monopoly of the home market ;2 and colonial
rum distillers were favored by an absolute prohibition of
the introduction of foreign rum. s
The detrimental features of the acts were far-reaching
and fundamental in their influence upon American pros-
perity. 4 ResQJuifljaeasures--mere taken against smuggling.
Customs officials were granted ampler author1ty, ami the
powers of the admiralty courts were enlarged. In order
to protect customs officials from damage suits in common
law courts, it was provided that, in cases where the court
held there had been a probable cause for making a seizure,
the officers should not be liable for damages. In addition,
the burden of proof was placed on the owner of the seized
goods or vessel; and all claimants of such goods had to
deposit security to cover the costs of the suit. Stricter
registration of vessels was required. Because of the amen-
ability of vice-admiralty courts to local opinion in the vari-
ous provinces, a vice-admiralty court for all America was
authorized, in which an informer or prosecutor might bring
his suit in preference to the local court, if he so chose.
Equally alarming to the commercial provinces was the
plan to make the old Mol^sse^ Act really productive through
a reduction of rates. The former duty on molasses im-
1 4 George III, c. 15.
14 George III, c. 29. Instead of employing eighty or ninety sloops
in the whale fishery as prior to this time, New Englanders were em-
ploying one hundred and sixty before 1775. Macpherson, op. cit. , vol.
iii, pp. 401, 567-568.
14 George III, c. 15.
4 4 George III, c. 15. Only the main provisions are noted here.
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? FIRST CONTEST FOR REFORM 53
ported from the foreign West Indies was reduced from six-
pence per gallon to threepence, with the understanding that
the new rate would be collected. The old duty on raw
sugar was continued; and an additional duty was levied on
foreign refined sugar.
Other changes were made, which affected colonial mer-
chants only in lesser degree. The purpose of certain of
these was to enlarge the market for British merchandise
in America by enhancing the price of foreign manufactures.
Thus, the amount of the duty withheld in England upon
reshipment of foreign goods to the colonies was doubled. 1
Import duties were placed, for the first time, upon certain
varieties of Oriental and French drygoods when they were
landed in America. Wines, which hitherto had been im-
ported directly from Madeira and the Azores without duty,
were now required to pay a high tariff, while Spanish and
Portuguese wines, which as before were to be imported by
way of Great Britain, were to pay only a low duty. 8 Im-
port duties were also imposed on foreign indigo and foreign
coffee brought into the colonies. The list of articles which
could be sent to Great Britain alone was increased by the
addition of iron, whale-fins, hides, raw silk, potashes and
pearlashes. Slight duties were placed on coffee and pimento
when shipped from one colony to another.
The only regulation that directly concerned the planta-
tion provinces in any unfavorable way was the prohibition
of further issues of legal-tender currency in the provinces
outside oi New ungland. IfllS feStfaint was imposed upon
the compla1nt ot some British merchants engaged in Vir-
1 Prior to this time, the amount had been about 2% per cent.
1 The colonists had desired to obtain permission to make direct im-
portations of wine, fruit and oil from Spain and Portugal. Pa. Journ. ,
June 7, 1764; Bos. Gas. , June 11.
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? 54
THE COLONIAL MERCHANTS: 1763-1776
ginia trade and was merely an extension of the principle
which had been applied in 1751 to New England. 1
Dissatisfaction with the acts of 1764 was thus largely
a sectional matter, affecting chiefly the commercial prov-
inces. It is not surprising that the chief polemic efforts of
the colonists came from provinces such as Massachusetts,
Rhode Island and Pennsylvania; or that, in the one instance,
the author was a lawyer, who time and again had been
employed by smugglers and who sympathized with them
temperamentally;2 in the next instance, a merchant, who
was largely concerned in illicit trade with the West Indies; *
in the third, a gentleman-farmer and lawyer, fully cognizant
14 George III, c. 34; Franklin, Writings (Smyth), vol. v, pp. 85-86,
187-189; Russell, Review of American Colonial Legislation, pp. 120-124.
* Otis, James, The Rights of the British Colonies Asserted and
Proved (Boston, 1764). This pamphlet, largely speculative, made the
novel assertion that the duties of 1764 were as truly a fiscal measure
as taxes on real estate would be. It should be remembered that Otis
had been retained by the merchants of Boston and Salem to attack the
legality of the writs of assistance in 1761. Otis, wrote Peter Oliver in
1781, "engrafted his self into the Body of Smugglers, and they em-
braced him so close, as a Lawyer and an usefull Pleader for them,
that he soon became incorporated with them. " Brit. Mus. Egerton
Mss. , no. 2671 (L. C. Transcripts). Leading merchants of Boston, like
Thomas Hancock and his nephew John, lost no opportunity to recom-
mend Otis as a lawyer to commercial houses in England. Brown, A. E. ,
John Hancock His Book (Boston, 1898), p. 33 et seq. Vide also Hutch-
inson, Mass. Bay, vol. iii, p. 201.
Closer to the economic roots of the troubles was the forceful pamph-
let. The Sentiments of a British American (Boston, 1764), written by
Oxenbridge Thacher, who had been Otis' colleague in the writs of
assistance case. Thacher died in 1765, before his usefulness to the
anti-parliamentary party had fully developed. For a characterization
of the two men, vide Adams, John, Works, vol. x, pp. 284-292.
1Hopkins, Stephen, The Rights of the Colonies Examined (Provi-
dence, 1764). Hopkins also had three sons and four nephews, all cap-
tains of vessels. Weeden, Econ. and Soc. Hist, of New Engl. , vol. ii,
pp. 584, 656, 658.
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? FIRST CONTEST FOR REFORM 55
of the sources from which the prosperity of his community
arose. 1
For the most part, this literature of protest contained a
cogent presentation of the economic springs of mercantile
prosperity. The prevailing note was sounded by a com-
ment in Thacher's pamphlet on the recent action of Parlia-
ment: "Does not this," he asked, "resemble the conduct
of the good wife in the fable who killed her hen that every
day laid her a Golden Egg? " The new measures for en-
forcing the acts of trade were roundly denounced, especially
the provisions for protecting customs officers from damage
suits in case of mistaken seizures, and the provisions grant-
ing to the informer or prosecutor the right to choose the
court in which he wished to sue. These regulations were
termed a denial of the common law and of trial by jury.
The new duties on foreign wines were complained of, on the
ground that wines had now to be brought to America by a
roundabout and expensive route. The restricting of iron
exports to Great Britain caused protest, especially in Penn-
sylvania, because cargoes of iron had always found a ready
market in Portuguese ports.
The chorus of denunciation rose loudest on the subject of
the new mojagggs duties. This appeared to the pamphleteers
a species of economic strangulation by which the colonies
were cut off from the source of their specie supply. "The
duty of 3d. per gallon on foreign molasses is well known
1 Dickinson, John, The Late Regulations respecting the British Colo-
nies . . . considered (Philadelphia, 1765). Though published after the
passage of the Stamp Act, attention was given almost exclusively to
the economic effects of the acts of 1764. Note the striking similarity of
Dickinson's views to Charles Thomson's arguments, urged in a letter
of November, 1765, to a London mercantile house. Thomson. Papers
(AT. Y. Hist. Soc. Colls. , vol. xi), pp. 7-12. Thomson was an importer
and also had interests in iron manufacturing and in rum distilling.
Harley, L. R. , Life of Charles Thomson (Philadelphia, 1900), passim.
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?
ejb * THE COLONIAL MERCHANTS: 1763-1776
to every man in the least acquainted with it to be much
higher than that article can possibly bear and therefore must
operate as an absolute prohibition," declared Hopkins. If
the merchants and distillers suffered losses, the provincial
farmers would become deeply involved, because their surplus
stock and products had been sent to the foreign islands in
exchange for molasses. If there were no specie in cir-
culation, debts could not be paid to England, importations
must be reduced, and local manufacturing undertaken.
With the volume of money rapidly shrinking, it was charged
that the prohibition of further issues of legal-tender money
was calculated to heighten the distress, since paper money
had generally served a useful purpose as a circulating
medium within provincial boundaries. Finally, some
warmth was displayed in referring to the commercial sys-
tem as a whole, and the question asked whether the dis-
advantages which the colonies suffered under it and the en-
hanced prices which the colonists paid for British importa-
tions loaded with British taxes at home were not equivalent
to a tax directly levied in America.
The assumptions and arguments, urged by the pamph-
leteers, received substantial confirmation from the prostra-
tion of industry which began to be apparent throughout the
commercial provinces. This period of economic depression
was not, as they contended, produced entirely by the re-
strictive legislation of 1764. The beginning of the change
was traceable to the more vigorous enforcement of the old
Molasses Act in 1763. A more important cause was the
collapse of the artificial war-tirpe nrr^pprity whirV> fl1p prr>-
vinces had enioved. 1 The presence of British forces in
1Franklin, Writings (Smyth), vol. v, pp. 71-73; speech of P. Cust,
M. P. , in Bos. Chron. , June 11, 1770; Colden, Letter Books, vol. ii, pp.
77-78; article in Pa. Journ. , Mch. 21, 1765; Burke's "Observations on
the Right Honourable Mr. Grenville's State of the Nation," Bos.
Chron. , June 26, 1769; "A Friend to the Colony" in Prov. Gaz. , Mch.
26, 1768; "The Citizen" in Pa. Journ. , Jan. 26, 1769.
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? FIRST CONTEST FOR REFORM
57
America had caused a great influx of coin for the paying
and provisioning of the troops; and the high cash prices
paid by the French for foodstuffs added to the supply of
specie. Under such stimulus, prices soared; merchants in-
creased their stocks and undertook speculative risks; farm-
ers enlarged their operations; people generally began to
adopt more luxurious modes of living. The close of the
war and the disbanding of the greatest part of the army
dried up these sources of abundant specie. Merchants and
farmers found themselves deprived of their profitable mar-
kets, with an overplus of supplies on hand. An especially
serious blow was administered to those merchants who had
succeeded during the war in monopolizing the trade of
Havana and the French West Indian islands, after these
colonies had fallen into the possession of England. The
restoration of these islands at the conclusion of peace greatly
diminished this trade. The rice planters of South Carolina
and Georgia would have shared in the distress, had not
Parliament enabled them by the act of 1764 to continue to
export their staple to these new markets.
But the chief cause of the hard times was the restrictive
legislation of 1764. The Boston Post-Boy of June 3, 1765
declared that not one-fifth as many vessels were employed
in the West Indian trade as before the regulations of the
preceding year, and that cash had practically disappeared
from circulation. The mercantile community experienced
"a most prodigious shock" at the ta1lures ot . Nathaniel
Wheelwright. John bcollay, Joseph bcott arid fefTatrrmher
Boston merchants of note. John Hancock, whose own
trad1ng connect1ons were with many parts of the world,
wrote that "times are very bad, . . . the times will be
worse here, in short such is the situation of things here that
we do not know who is and who [is] not safe. " l
n Hancock His Book, pp. 61-62. He concluded: "The affair of
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? 58 THE COLONIAL MERCHANTS: 1763-1776
Conditions were bad at Newport, also. 1 A statement,
issued by leading citizens of New York, lamented the
dwindling of trade, the extreme scarcity of cash, the pro-
hibition of paper money and the recent restrictions placed
on commerce. 2 A New York merchant of twenty years'
standing withdrew from trade because he was apprehensive
of the effects of the new regulations. He testified before
a committee of Parliament that, whereas the price of mo-
lasses at New York had formerly been 1s. 6d. to 1s. gd. per
gallon, the threepenny duty had increased it by one or two-
pence, and the price of the rum distilled from it had ad-
vanced sufficiently to enable Danish rum to undersell the
American on the Guinea coast. The ten or a dozen New
York vessels, formerly engaged in the slave trade, were now
idle. 3 In Pennsylvania, it was complained that " Trade is
become dull, Money very scarce, Contracts decrease, Law-
Suits increase so as to double the number of Writs issued
in every County within two Years past . . . "4 The farm-
Wheelwright's failure with such aggravated Circumstances is the great-
est shock to trade that ever happened here. " In another letter he
wrote: "Money is Extremely Scarce & trade very dull. If we are not
reliev'd at home we must live upon our own produce & manufactures. "
Ibid. , pp. 63-64. Hancock had taken over his uncle's business upon the
latter's death in August, 1764; and, according to Thomas Hutchinson,
old Thomas Hancock had amassed great wealth by "importing from
St. Eustatia great quantities of tea in molasses hogsheads, which sold
at a very great advance. " Mass. Bay, vol. ill, pp. 297-298.
1 Newport Merc. , Feb. 25, 1765.
1 Statement of the Society of Arts, Agriculture and Oeconomy, Wey-
ler's N. Y. Gas. , Dec. 10, 1764.
? Testimony of William Kelly, Feb. 11, 1766, Brit. Mus. Addl. Mss. ,
no. 33030 (L. C. Transcripts), ff. 130, 134-135, 137.
'"The Farmer" in Pa. Journ. , Aug. 23, 1764. The Philadelphia
merchant, Benjamin Marshall, wrote on Oct. 22, 1764: "Cash Mon-
strous scarce (I believe we must learn to Barter), as the Men of War
are here so strict that nothing can escape them . . . " Pa. Mag. , vol.
xx, p. 208. Vide also the business correspondence of S. Rhoads, Jr. , at
this period. Ibid. , vol. xiv, pp. 421-426.
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? FIRST CONTEST FOR REFORM 59
ers of the commercial provinces were involved in the gen-
eral distress. "Merchants and Farmers are breaking and
all things going into confusion," wrote a New Englander
despondently. 1 "What is your City without Trade, and
what the Country without a Market to vend their Com-
modities? " queried a Pennsylvania writer. 2
The merchants did not remain idle while their profits
evaporated and their debts accumulated. They had been
excited to activity by the first rumors that the old Molasses
Act might again be renewed in 1764. A keen observer de-
clared in retrospect, several years later, that the union among
the colonies had derived " its original source from no Object
of a more Respectable Cast than that of a Successful prac-
tice in Illicit Trade, I say contrived, prompted and pro-
moted by a Confederacy of Smuglers in Boston, Rhode
Island and other Seaport Towns on that Coast. "* These
gentry were aided and abetted by the rum-distillers, who
were particularly powerful in New England. 4 John Adams
was franker than most historians when he reflected in his
old age: " I know not why we should blush to confess that
molasses was an essent1al ingredient in American inde-
pendence. U3""
The first move was made by the merchants of Boston,
in April, 176. 1, when they nrgani*gd fop "Soripfty for
encouraging Trade and Commerce within the Province
1 N. H. Go*. , Dec. 7, 1764.
1" The Farmer " in Pa. Journ. , Aug. 23, 1764.
1 Letter of Richard Oswald, a native American and a Londoner in
the American trade, to Dartmouth, Feb. 9, 1775; Stevens, Facsimiles,
vol. xxiv, no. 2032, pp. 3-4.
* In another portion of his letter Oswald alluded to "the great Rum
Distillers of Boston who began all this disturbance. " Ibid.
* He added sagely: "Many great events have proceeded from much
smaller causes. " Works, vol. x, p. 345.
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? 60 THE COLONIAL MERCHANTS: 1763-1776
of Mass^hntu-tfa Bay " 1 There was to be a standing
committee of fifteen to watch trade affairs and to call
a general meeting of members whenever occasion de-
manded. A memorial was drawn up for presentation to
the General Court; and accounts of their activities were
sent to the merchants in other provinces. The committee
also corresponded with influential members of Parliament. 1
Further action was called for by an article in the
Boston Evening Post, November 21 and 28, 1763. The
writer proposed that, at the instance of the Boston mer-
chants, a provincial committee of merchants representing
the maritime towns should urge the General Court to peti-
tion Parliament for a revision of the acts of trade, par-
ticularly for the removal or substantial reduction of the
duties on foreign molasses and sugar. Perhaps in response
to this suggestion, a sub-committee of the Boston merchants
requested a meeting with committees of the merchants of
Marblehead, Salem and Plymouth; and the result was that
the merchants of these ports also presented memorials to the
General Court.
The merchants of New York were the next to take action.
Of these merchants, Lieutenant Governor Colden said:
"Many of them have rose suddenly from the lowest Rank
of the People to considerable Fortunes, & chiefly by illicit
Trade in the last War. They abhor every limitation of
Trade and Duty on it, & therefore gladly go into every
Measure whereby they hope to have Trade free. " * They
1 M. H. S. Ms. , 91 L, pp. 23-25. The rules of organization were
signed by one hundred forty-seven merchants. For a more detailed
account of this organization, vide Andrews, C. M. , "The Boston
Merchants and the Non-Importation Movement," Col. Soc. Mass. Pubs. ,
vol. xix, pp. 161-167.
1 Bos. Gas.
? CHAPTER II
THE FIRST CONTEST FOR COMMERCIAL REFORM
(1764-1766)
EVENTS were shaping themselves in England to accen-
tuate the economic distress which the commercial provinces
had already begun to feel. The Peace of Paris of 1763
marked a turning point in the relations of Great Britain
to her colonies. The mother country faced the complex
task of recasting her imperial policy, of safeguarding her
newly-acquired world empire, of readjusting the acts of
trade to meet the new situation and of improving their ad-
ministration. 1 The particularistic course of the colonial
legislatures during the recent war had shown that the re-
quisition system could not be depended upon to furnish a
permanent revenue for a colonial military establishment;
and the lawlessness of the colonial merchants had revealed
the need for reforming the machinery of administering the
trade laws. Forced to action by these conditions, Parlia-
ment, under the leadership of George Grenville, proceeded
to adopt an imperial policy which in its main principles
conformed to the views long maintained by the British mer-
cantile interests and their apologist, the Board of Trade.
In the light of subsequent history, the most important
1 " The several changes of territories, which at the last Peace took
place in the Colonies of the European world, have given rise to A
NEW SYSTEM OF INTERESTS; have opened a new channel of business;
and brought into operation a new concatenation of powers, both com-
mercial and political. " Pownall, T. , The Administration of the British
Colonies (London, 1768), vol. i, p. I.
5O
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? FIRST CONTEST FOR REFORM 51
feature of the legislation of 1764 was the fact that, for the
first time, Parl1ament prov1ded^specifically for thp raising
of a revenue in America. But as watchful colonists at the
tTme. viewed the umvonTed legislative activity, they were im-
pressed almost solely with the idea that their business inter-
ests were being vitally affected. It goes without saying that
they did not perceive or appreciate the problem of imperial
reorganization with which Parliament was wrestling. They
stood for a Ptolemaic conception of the empire, with Eng-
land as the sun and America the earth about which the sun
revolved; while the statesmen at home justified their course
in the terms of the Copernican theory. 1
The program of Parliament, therefore, so far as the
colonists were concerned, had to stand or fall upon its merits
as legislation dealing solely with colonial interests. The
group of enactments thus readily divided itself into two
parts, those provisions favorable to American commerce
and industry, and those detrimental.
The beneficial portions were of minor importance and
affected chiefly the plantat1on--DrQvjpces where relief was
not particularly nefHpfl South Carolina and Georgia were
allowed, upon payment of a slight duty, to export rice to
any part of America to the southward of those provinces,
in order that they might continue to dominate the markets
which they had entered during British occupation of certain
West India islands in the recent war. 2 As a means of en-
couraging the indigo industry, a protective duty was placed
1 Vide Beer, British Colonial Policy, 1754-1765, pp. 193-251, 274-286,
for an excellent presentation of the imperialistic point of view. Vide
Macpherson, Annals of Commerce, vol. iii, pp. 395-399, for a well-
balanced statement of the colonial view; also Col. Soc. Mass. Pubs. ,
vol. xiii, pp. 431-433.
'4 George III, c. 27. This liberty was extended to North Carolina
in the following year. 5 George III, c. 45.
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? 52 THE COLONIAL MERCHANTS: 1763-1776
on foreign indigo imported into the provinces. 1 On the
other hand, New England fishermen received concessions in
England, by which American whale-fins succeeded in secur-
ing a practical monopoly of the home market ;2 and colonial
rum distillers were favored by an absolute prohibition of
the introduction of foreign rum. s
The detrimental features of the acts were far-reaching
and fundamental in their influence upon American pros-
perity. 4 ResQJuifljaeasures--mere taken against smuggling.
Customs officials were granted ampler author1ty, ami the
powers of the admiralty courts were enlarged. In order
to protect customs officials from damage suits in common
law courts, it was provided that, in cases where the court
held there had been a probable cause for making a seizure,
the officers should not be liable for damages. In addition,
the burden of proof was placed on the owner of the seized
goods or vessel; and all claimants of such goods had to
deposit security to cover the costs of the suit. Stricter
registration of vessels was required. Because of the amen-
ability of vice-admiralty courts to local opinion in the vari-
ous provinces, a vice-admiralty court for all America was
authorized, in which an informer or prosecutor might bring
his suit in preference to the local court, if he so chose.
Equally alarming to the commercial provinces was the
plan to make the old Mol^sse^ Act really productive through
a reduction of rates. The former duty on molasses im-
1 4 George III, c. 15.
14 George III, c. 29. Instead of employing eighty or ninety sloops
in the whale fishery as prior to this time, New Englanders were em-
ploying one hundred and sixty before 1775. Macpherson, op. cit. , vol.
iii, pp. 401, 567-568.
14 George III, c. 15.
4 4 George III, c. 15. Only the main provisions are noted here.
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? FIRST CONTEST FOR REFORM 53
ported from the foreign West Indies was reduced from six-
pence per gallon to threepence, with the understanding that
the new rate would be collected. The old duty on raw
sugar was continued; and an additional duty was levied on
foreign refined sugar.
Other changes were made, which affected colonial mer-
chants only in lesser degree. The purpose of certain of
these was to enlarge the market for British merchandise
in America by enhancing the price of foreign manufactures.
Thus, the amount of the duty withheld in England upon
reshipment of foreign goods to the colonies was doubled. 1
Import duties were placed, for the first time, upon certain
varieties of Oriental and French drygoods when they were
landed in America. Wines, which hitherto had been im-
ported directly from Madeira and the Azores without duty,
were now required to pay a high tariff, while Spanish and
Portuguese wines, which as before were to be imported by
way of Great Britain, were to pay only a low duty. 8 Im-
port duties were also imposed on foreign indigo and foreign
coffee brought into the colonies. The list of articles which
could be sent to Great Britain alone was increased by the
addition of iron, whale-fins, hides, raw silk, potashes and
pearlashes. Slight duties were placed on coffee and pimento
when shipped from one colony to another.
The only regulation that directly concerned the planta-
tion provinces in any unfavorable way was the prohibition
of further issues of legal-tender currency in the provinces
outside oi New ungland. IfllS feStfaint was imposed upon
the compla1nt ot some British merchants engaged in Vir-
1 Prior to this time, the amount had been about 2% per cent.
1 The colonists had desired to obtain permission to make direct im-
portations of wine, fruit and oil from Spain and Portugal. Pa. Journ. ,
June 7, 1764; Bos. Gas. , June 11.
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? 54
THE COLONIAL MERCHANTS: 1763-1776
ginia trade and was merely an extension of the principle
which had been applied in 1751 to New England. 1
Dissatisfaction with the acts of 1764 was thus largely
a sectional matter, affecting chiefly the commercial prov-
inces. It is not surprising that the chief polemic efforts of
the colonists came from provinces such as Massachusetts,
Rhode Island and Pennsylvania; or that, in the one instance,
the author was a lawyer, who time and again had been
employed by smugglers and who sympathized with them
temperamentally;2 in the next instance, a merchant, who
was largely concerned in illicit trade with the West Indies; *
in the third, a gentleman-farmer and lawyer, fully cognizant
14 George III, c. 34; Franklin, Writings (Smyth), vol. v, pp. 85-86,
187-189; Russell, Review of American Colonial Legislation, pp. 120-124.
* Otis, James, The Rights of the British Colonies Asserted and
Proved (Boston, 1764). This pamphlet, largely speculative, made the
novel assertion that the duties of 1764 were as truly a fiscal measure
as taxes on real estate would be. It should be remembered that Otis
had been retained by the merchants of Boston and Salem to attack the
legality of the writs of assistance in 1761. Otis, wrote Peter Oliver in
1781, "engrafted his self into the Body of Smugglers, and they em-
braced him so close, as a Lawyer and an usefull Pleader for them,
that he soon became incorporated with them. " Brit. Mus. Egerton
Mss. , no. 2671 (L. C. Transcripts). Leading merchants of Boston, like
Thomas Hancock and his nephew John, lost no opportunity to recom-
mend Otis as a lawyer to commercial houses in England. Brown, A. E. ,
John Hancock His Book (Boston, 1898), p. 33 et seq. Vide also Hutch-
inson, Mass. Bay, vol. iii, p. 201.
Closer to the economic roots of the troubles was the forceful pamph-
let. The Sentiments of a British American (Boston, 1764), written by
Oxenbridge Thacher, who had been Otis' colleague in the writs of
assistance case. Thacher died in 1765, before his usefulness to the
anti-parliamentary party had fully developed. For a characterization
of the two men, vide Adams, John, Works, vol. x, pp. 284-292.
1Hopkins, Stephen, The Rights of the Colonies Examined (Provi-
dence, 1764). Hopkins also had three sons and four nephews, all cap-
tains of vessels. Weeden, Econ. and Soc. Hist, of New Engl. , vol. ii,
pp. 584, 656, 658.
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? FIRST CONTEST FOR REFORM 55
of the sources from which the prosperity of his community
arose. 1
For the most part, this literature of protest contained a
cogent presentation of the economic springs of mercantile
prosperity. The prevailing note was sounded by a com-
ment in Thacher's pamphlet on the recent action of Parlia-
ment: "Does not this," he asked, "resemble the conduct
of the good wife in the fable who killed her hen that every
day laid her a Golden Egg? " The new measures for en-
forcing the acts of trade were roundly denounced, especially
the provisions for protecting customs officers from damage
suits in case of mistaken seizures, and the provisions grant-
ing to the informer or prosecutor the right to choose the
court in which he wished to sue. These regulations were
termed a denial of the common law and of trial by jury.
The new duties on foreign wines were complained of, on the
ground that wines had now to be brought to America by a
roundabout and expensive route. The restricting of iron
exports to Great Britain caused protest, especially in Penn-
sylvania, because cargoes of iron had always found a ready
market in Portuguese ports.
The chorus of denunciation rose loudest on the subject of
the new mojagggs duties. This appeared to the pamphleteers
a species of economic strangulation by which the colonies
were cut off from the source of their specie supply. "The
duty of 3d. per gallon on foreign molasses is well known
1 Dickinson, John, The Late Regulations respecting the British Colo-
nies . . . considered (Philadelphia, 1765). Though published after the
passage of the Stamp Act, attention was given almost exclusively to
the economic effects of the acts of 1764. Note the striking similarity of
Dickinson's views to Charles Thomson's arguments, urged in a letter
of November, 1765, to a London mercantile house. Thomson. Papers
(AT. Y. Hist. Soc. Colls. , vol. xi), pp. 7-12. Thomson was an importer
and also had interests in iron manufacturing and in rum distilling.
Harley, L. R. , Life of Charles Thomson (Philadelphia, 1900), passim.
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?
ejb * THE COLONIAL MERCHANTS: 1763-1776
to every man in the least acquainted with it to be much
higher than that article can possibly bear and therefore must
operate as an absolute prohibition," declared Hopkins. If
the merchants and distillers suffered losses, the provincial
farmers would become deeply involved, because their surplus
stock and products had been sent to the foreign islands in
exchange for molasses. If there were no specie in cir-
culation, debts could not be paid to England, importations
must be reduced, and local manufacturing undertaken.
With the volume of money rapidly shrinking, it was charged
that the prohibition of further issues of legal-tender money
was calculated to heighten the distress, since paper money
had generally served a useful purpose as a circulating
medium within provincial boundaries. Finally, some
warmth was displayed in referring to the commercial sys-
tem as a whole, and the question asked whether the dis-
advantages which the colonies suffered under it and the en-
hanced prices which the colonists paid for British importa-
tions loaded with British taxes at home were not equivalent
to a tax directly levied in America.
The assumptions and arguments, urged by the pamph-
leteers, received substantial confirmation from the prostra-
tion of industry which began to be apparent throughout the
commercial provinces. This period of economic depression
was not, as they contended, produced entirely by the re-
strictive legislation of 1764. The beginning of the change
was traceable to the more vigorous enforcement of the old
Molasses Act in 1763. A more important cause was the
collapse of the artificial war-tirpe nrr^pprity whirV> fl1p prr>-
vinces had enioved. 1 The presence of British forces in
1Franklin, Writings (Smyth), vol. v, pp. 71-73; speech of P. Cust,
M. P. , in Bos. Chron. , June 11, 1770; Colden, Letter Books, vol. ii, pp.
77-78; article in Pa. Journ. , Mch. 21, 1765; Burke's "Observations on
the Right Honourable Mr. Grenville's State of the Nation," Bos.
Chron. , June 26, 1769; "A Friend to the Colony" in Prov. Gaz. , Mch.
26, 1768; "The Citizen" in Pa. Journ. , Jan. 26, 1769.
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? FIRST CONTEST FOR REFORM
57
America had caused a great influx of coin for the paying
and provisioning of the troops; and the high cash prices
paid by the French for foodstuffs added to the supply of
specie. Under such stimulus, prices soared; merchants in-
creased their stocks and undertook speculative risks; farm-
ers enlarged their operations; people generally began to
adopt more luxurious modes of living. The close of the
war and the disbanding of the greatest part of the army
dried up these sources of abundant specie. Merchants and
farmers found themselves deprived of their profitable mar-
kets, with an overplus of supplies on hand. An especially
serious blow was administered to those merchants who had
succeeded during the war in monopolizing the trade of
Havana and the French West Indian islands, after these
colonies had fallen into the possession of England. The
restoration of these islands at the conclusion of peace greatly
diminished this trade. The rice planters of South Carolina
and Georgia would have shared in the distress, had not
Parliament enabled them by the act of 1764 to continue to
export their staple to these new markets.
But the chief cause of the hard times was the restrictive
legislation of 1764. The Boston Post-Boy of June 3, 1765
declared that not one-fifth as many vessels were employed
in the West Indian trade as before the regulations of the
preceding year, and that cash had practically disappeared
from circulation. The mercantile community experienced
"a most prodigious shock" at the ta1lures ot . Nathaniel
Wheelwright. John bcollay, Joseph bcott arid fefTatrrmher
Boston merchants of note. John Hancock, whose own
trad1ng connect1ons were with many parts of the world,
wrote that "times are very bad, . . . the times will be
worse here, in short such is the situation of things here that
we do not know who is and who [is] not safe. " l
n Hancock His Book, pp. 61-62. He concluded: "The affair of
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? 58 THE COLONIAL MERCHANTS: 1763-1776
Conditions were bad at Newport, also. 1 A statement,
issued by leading citizens of New York, lamented the
dwindling of trade, the extreme scarcity of cash, the pro-
hibition of paper money and the recent restrictions placed
on commerce. 2 A New York merchant of twenty years'
standing withdrew from trade because he was apprehensive
of the effects of the new regulations. He testified before
a committee of Parliament that, whereas the price of mo-
lasses at New York had formerly been 1s. 6d. to 1s. gd. per
gallon, the threepenny duty had increased it by one or two-
pence, and the price of the rum distilled from it had ad-
vanced sufficiently to enable Danish rum to undersell the
American on the Guinea coast. The ten or a dozen New
York vessels, formerly engaged in the slave trade, were now
idle. 3 In Pennsylvania, it was complained that " Trade is
become dull, Money very scarce, Contracts decrease, Law-
Suits increase so as to double the number of Writs issued
in every County within two Years past . . . "4 The farm-
Wheelwright's failure with such aggravated Circumstances is the great-
est shock to trade that ever happened here. " In another letter he
wrote: "Money is Extremely Scarce & trade very dull. If we are not
reliev'd at home we must live upon our own produce & manufactures. "
Ibid. , pp. 63-64. Hancock had taken over his uncle's business upon the
latter's death in August, 1764; and, according to Thomas Hutchinson,
old Thomas Hancock had amassed great wealth by "importing from
St. Eustatia great quantities of tea in molasses hogsheads, which sold
at a very great advance. " Mass. Bay, vol. ill, pp. 297-298.
1 Newport Merc. , Feb. 25, 1765.
1 Statement of the Society of Arts, Agriculture and Oeconomy, Wey-
ler's N. Y. Gas. , Dec. 10, 1764.
? Testimony of William Kelly, Feb. 11, 1766, Brit. Mus. Addl. Mss. ,
no. 33030 (L. C. Transcripts), ff. 130, 134-135, 137.
'"The Farmer" in Pa. Journ. , Aug. 23, 1764. The Philadelphia
merchant, Benjamin Marshall, wrote on Oct. 22, 1764: "Cash Mon-
strous scarce (I believe we must learn to Barter), as the Men of War
are here so strict that nothing can escape them . . . " Pa. Mag. , vol.
xx, p. 208. Vide also the business correspondence of S. Rhoads, Jr. , at
this period. Ibid. , vol. xiv, pp. 421-426.
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? FIRST CONTEST FOR REFORM 59
ers of the commercial provinces were involved in the gen-
eral distress. "Merchants and Farmers are breaking and
all things going into confusion," wrote a New Englander
despondently. 1 "What is your City without Trade, and
what the Country without a Market to vend their Com-
modities? " queried a Pennsylvania writer. 2
The merchants did not remain idle while their profits
evaporated and their debts accumulated. They had been
excited to activity by the first rumors that the old Molasses
Act might again be renewed in 1764. A keen observer de-
clared in retrospect, several years later, that the union among
the colonies had derived " its original source from no Object
of a more Respectable Cast than that of a Successful prac-
tice in Illicit Trade, I say contrived, prompted and pro-
moted by a Confederacy of Smuglers in Boston, Rhode
Island and other Seaport Towns on that Coast. "* These
gentry were aided and abetted by the rum-distillers, who
were particularly powerful in New England. 4 John Adams
was franker than most historians when he reflected in his
old age: " I know not why we should blush to confess that
molasses was an essent1al ingredient in American inde-
pendence. U3""
The first move was made by the merchants of Boston,
in April, 176. 1, when they nrgani*gd fop "Soripfty for
encouraging Trade and Commerce within the Province
1 N. H. Go*. , Dec. 7, 1764.
1" The Farmer " in Pa. Journ. , Aug. 23, 1764.
1 Letter of Richard Oswald, a native American and a Londoner in
the American trade, to Dartmouth, Feb. 9, 1775; Stevens, Facsimiles,
vol. xxiv, no. 2032, pp. 3-4.
* In another portion of his letter Oswald alluded to "the great Rum
Distillers of Boston who began all this disturbance. " Ibid.
* He added sagely: "Many great events have proceeded from much
smaller causes. " Works, vol. x, p. 345.
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? 60 THE COLONIAL MERCHANTS: 1763-1776
of Mass^hntu-tfa Bay " 1 There was to be a standing
committee of fifteen to watch trade affairs and to call
a general meeting of members whenever occasion de-
manded. A memorial was drawn up for presentation to
the General Court; and accounts of their activities were
sent to the merchants in other provinces. The committee
also corresponded with influential members of Parliament. 1
Further action was called for by an article in the
Boston Evening Post, November 21 and 28, 1763. The
writer proposed that, at the instance of the Boston mer-
chants, a provincial committee of merchants representing
the maritime towns should urge the General Court to peti-
tion Parliament for a revision of the acts of trade, par-
ticularly for the removal or substantial reduction of the
duties on foreign molasses and sugar. Perhaps in response
to this suggestion, a sub-committee of the Boston merchants
requested a meeting with committees of the merchants of
Marblehead, Salem and Plymouth; and the result was that
the merchants of these ports also presented memorials to the
General Court.
The merchants of New York were the next to take action.
Of these merchants, Lieutenant Governor Colden said:
"Many of them have rose suddenly from the lowest Rank
of the People to considerable Fortunes, & chiefly by illicit
Trade in the last War. They abhor every limitation of
Trade and Duty on it, & therefore gladly go into every
Measure whereby they hope to have Trade free. " * They
1 M. H. S. Ms. , 91 L, pp. 23-25. The rules of organization were
signed by one hundred forty-seven merchants. For a more detailed
account of this organization, vide Andrews, C. M. , "The Boston
Merchants and the Non-Importation Movement," Col. Soc. Mass. Pubs. ,
vol. xix, pp. 161-167.
1 Bos. Gas.
