Iil1mmmomnu Idiot GIPE-PUNE-014136 BUSINESS ENTERPRISE in the AMERICAN REVOLUTIONARY ERA
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)bananjayarae Gadgil Library IIl1mmmOmnu IDIOt GIPE-PUNE-014136 BUSINESS ENTERPRISE IN THE AMERICAN REVOLUTIONARY ERA BY ROBERT ABRAHAM EAST ----- ~- - No. it31 in the "Stwies in History, Economics f..:.Dd Pub~io ~w" or Columbia University. SUBMITTED IN PARTIAL PULFILLMEN1' OF l'HE REQUIREMENTS rOR THE DEGREE OF DOCTOR OF PHILOSOPHY 11'1 THE FACULTY or POLITICAL ScIENCE COLUMBIA UNIVERSITY NUMBER. 439 NEW YORK 1938 XS2,7~, n ~~ \4 ,~t:. COPYl!IGHT, 1938 BY CoLUMBIA UNIVERSITY PRESS PRINTED IN THE UNITED STATES OF AMERICA 1to MY WIFE EUZABETH PADDOCK EAST PREFACE b seeking the origins of the corporate and other big busi DCSS enterprises .-hich appeared in steadily increasing numbers after the American Ra-olution, the first twelve chapters of this study really serve as an introduction to the last two, in which the earliest of those enterprises are analyzed Such a study necessarily emphasizes the constructive rather th1.' the destructive forces at work in the period, but this in no wise invalidates the thesis. For if the facts cited do not explain the resnIts, what facts do? Surely not the destructive ones.. Xor can it be argued that what happened after 1]81 was due solely to the financial leadership of Alexander Hamilton. Xot only were his ideas not to materialize for another decade, but he was then to appear more troly as the spokesman for, rather than as the creator of, a new business element. It is ineritable that some discussion of politics should accom pany a monograph like this, since politics and business are closely related In the two chapters which deal with that sub ject:. hmll-e,-er, the thesis requires an emphasis on economic factors .-hich resnIts in the rirtna.I exclusion of many others. Such a treatment therefore makes ho pretence to finality, but rather to a tentative hypothesis, to be weighed in the light of subsequent research. I say subsequent, because I do not be lia-e that there has as yet been sufficient study of the Revolu tion through which to evaluate a work of this type, even from the political angle. Documents of a particnlar kind abound, but only a fnr reaDy critical interpretations, especially those made upon a broad basis of social facts, have been forthcom ing. Such an unfortunate situation is largely due to a heavy crust of tradition, .-hich has been only partially db-pelled by the works of such men as \\illiam Graham Sumner, Charles A. Beard, J. Franklin Jameson, Joseph Stancliffe Davis, Allan Xnw, Edward Channing, Charles H. Lincoln, and Thomas p, Abernethy, 7 8 BUSINESS 'ENTERPRISE: REVOLUTIONARY ERA It has been my good fortune to make this study under the direction of an historian fully aware of the need for further critical investigation. To Professor Evarts Boutell Greene of Columbia University I am indebted for my introduction to the problem, in his seminar on the Revolutionary Era. In the years of research since then, he has given me heavily of his time ·3.{Id advice, combining scholarly criticism with a wonderful amount of patience. In all fairness to him, and to those per sons mentioned below, I should add that full responsibility for the development of the thesis, the research that lies behind it, and the form of its presentation, rests with myself alone. Also of the Department of History of Columbia University, Professor John Krout gave me the benefit of two readings of the manuscript, Professor Harry Carman kindly criticized an early draft, and Professor Allan Nevins helped in several im portant ways to enable me to complete the work. A portion of Chapter Nine was developed in a history seminar conducted by Dr. Dixon Ryan Fox, formerly of Columbia University, and now President of Union College. To Dr. Charles A. Beard of New Milford, Connecticut, I am grateful for the heartening encouragement that followed his reading of a draft, and to Professor Norman ·S. B. Gras, of the Graduate School of Business, Harvard University, for stimulating criticism that resulted in improvement of terminology and the avoidance of error on several points. From his spendid knowledge of manu script sources in the period, Mr. Thomas Robson Hay, of Great Neck, Long Island, gave me generous information. The Jona than Jackson papers were made accessible through the kindness of Mr. Austin Oark, of Washington, D. c., and helpful in formation from the New York State Library, Albany, was supplied by Miss Edna Jacobsen of that institution. Miss Josephine Mayer, of Teachers College, Columbia University, enlarged my knowledge about several important characters, and Mr. Joseph Bailey, of New York City, and Dr. Leith Skinner, M.D., of Albany, New York, both criticized portions of the manuscript. Through the aid of Mr. Gerald Snedeker PREFACE 9 of The National Archives, Washington, D. c., the task of proof reading was lightened. The dedication of the book to my wife is inadequate tribute to the person most responsible for the ultimate completion of the work, not only by her steady encouragement but by her assistance in preparing it for the press. As an invaluable guide to the problems and personalities appearing in this study, the index should be carefully noted I>y the reader. It is a product of the fine scholarship of Mr. David M. Matteson, to whom all students of history have long had so much reason to be grateful. I am also indebted to the following institutions for opening their resources to me, and to their staff members who were uniformly courteous and helpful: The Essex Institute, Salem, The Baker Library of the Graduate School of Business, Har vard University, The Massachusetts Historical Society, Bos ton, The American Antiquarian Society, Worcester, The Con necticut Historical Society, Hartford, The Connecticut State Library, Hartford, The Rhode Island Historical Society, Providence, The New York Historical Society, The New York Public Library, The Library of the Chamber of Commerce of New York State, The New York Bank and Trust Com pany, The American Jewish Historical Society, The Library of Columbia University, New York City, The Historical Soci ety of Pennsylvania, Philadelphia, The Library of Congress, The Division of Old Records of the War Department, The Treasury Department, Washington, D. c., and the Burton His torical Collection, in the Free Public Library, Detroit. ROBERT A. EAST. WASHINGTON, D. C. APRIL, 1938. CONTENTS rAGa PUFACE ••••••••••. • • • •• 7 PART I INTRODUCTION CHAPTER J • The Late Colonial Business Scene . 13 CHAPTER II The Revolutionary Ec:onomic Forces •. • • . • .. 30 PART II YEARS OF CHANCE, 1775-1782 CHAPTER III Massachusetts and Rhode Island. • . .. 49 CHAPTER IV Jeremiah Wadsworth and His Associates •• So CHAPTER V Hudson Valley Business . • . • • . IOI CHAPTER VI Robert Morris and His Group . CHAPTER VII Pennsylvania to Northern Virginia .•... 149 CHAPTER VIII Activities Under Two Flags ...•• ISo CHAPTER IX The Question of Business Freedom.. • .• ........... 195 CHAPTER X Some Economic Consequences of the War • • • • • • • • . 213 II 12 CONTENTS PAGE PART III YEARS OF CONSOLIDATION AND EXPANSION, 1783-1792 CHAPTER XI Economic Developments in the 1780's . • . • . • • . • • 239 CHAPTER XII A• Counter-Revolution and its Benefits • • . • • . • . • • . 263 CHAPTER XIII Commercial Banks, 1781-1792 • • • • . • . • . 285 CHAPTER XIV Other New Enterprises: Conclusion . 306 ApPENDIX A ••• 327 BIBLIOGRAPHY • 330 INDEX ••••• 357 CHAPTER I THE LATE COLONIAL BUSINESS SCENE THE early colonial period in America was largely devoted to the conquest of nature by persons possessed with an abun dance of purposeful energy but with little surplus wealth. As the frontier receded, however, and the flow of foreign capital increased, an element slowly emerged in the seacoast region• blessed with an accumulation of more of the things of this world than were required for daily living. By the eve of the American Revolution an impressive amount of personal riches, together with the control of large sums of mercantile capital, were at the disposal of certain persons fortunate enough to dwell in urban eastern communities, or in those small but vigorous towns which fringed the rivers and harbors of the Atlantic seaboard. So greatly, indeed, had the pursuit of profits enriched the . successful northern colonial merchant-the typical sedentary business man-that he could not only build up an elaborate commercial establishment frequently representing ten thousand pounds in ships and buildings, but could also acquire additional riches which enabled him to invest in many other fields. Nor was it the merchant alone who had such interests, for non merchant capitalists had also appeared in the character of those leisured persons called "gentlemen." These two categories of capitalist were not sharply distinguished one from the other, however, since members of commercial families both entered the more cultured professions and inter-married with the landed gentry and provincial office-holders. In'pre-Revolutionary New York the merchant De Peysters and Rutgers were inter married with the land-owning Van Cortlandts; the Ludlows, Alsops, and Floyds were connected with each other and with landed families. In Pennsylvania the commercial Willings, McCalls, and Francises of Philadelphia were related by kinship and marriage with the land-owning Shippens and Yeateses. 13 14 BUSINESS ENTERPRISE: REVOLUTIONARY ERA Commercial, landed, and office-holding interests were similarly united in Massachusetts through such marriages as those con necting the Hutchinsons and Olivers, the Royalls, Olivers, and Vas salls, the Ervings and Shirteys.l The upper crust of society thus became fairly identical with its wealthy group, and an interest in commercial capitalism was accordingly wide-spread among members of the favored social groups. • Since the well-being of commerce affected the interests of many persons other than merchants, it, together with agri culture, became fundamental for the business economy of young America. When ships made quick and prosperous returns from foreign lands, and when wharves bustled with the activi ties of longshoremen, then times were good for many a gentle man who knew not jib from jury sail; then local industry and local borrower were apt to receive the capital they had long since needed.