Financial Markets in Montserrat and South Carolina, 1748-1775

"Capital and Credit with Approved Security": Financial Markets in Montserrat and South Carolina, 1748-1775

David Hancock Departmentof History Harvard University

In the lastthree decades, economic, business, and socialhistorians havebeen striving to understandwhether America was economically independentfrom Britain, particularly whether it wasable to revoltby 1776because it wasno longerinextricably tied to the mothercountry, by bonds of indebtedness,for the satisfactionof its agricultural, commercial,andmanufactured needs [McCusker and Menard, 1986]1. Scholarshave described and explained America's condition in a variety of ways, the most intriguingof which are thosethat focuson the developmentof colonies,the emergence of discreteindependent regions within colonies,and the extentto whichthe partsof the colonieswere boundtogether [Rothenberg, 1985; Brooke, 1989; Beeman, 1984]. Capitalaccumulation was critical to thiscolonial evolution, and specificinformation on the sourcesand destinations of colonialcapital helpsus form tentative conclusions about the financial independence of eighteenth-centuryAmerica. For no plantationeconomy is there a detailedhistorical study of the rolethat the flow of capitaland credit playedin itsdevelopment. There is noexamination of thegeographical sourcesand destinationsof capitaland credit,the linkagesbetween capitaland countryside,and the complicated,interwoven, financial relationshipsthat held a colonytogether and to its mothercountry. Particularlywell suitedto suchan analysisare the situationsof two of theseeconomies -- thoseof an older and stagnantMontserrat, and a

IThis articlehas been improved with thecomments of JacobPrice, Russell Mcnard, John McCusker,Larry Neal, andthe participantsin the BusinessHistory Conference held in Williamsburg,Virginia, in March 1994.

BUSINESS AND ECONOMIC HISTORY, Volume 23, no. 2 Winter 1994. Copyright¸1994 by theBusiness History Conference. ISSN 0849-6825. David Hancock / 62 youngerand dynamicSouth Carolina in the period1748-1775. I am examiningMontserrat and South Carolina as part of a largerproject that studiesthe accumulationand outlay of capitaland the managementof laborin SouthCarolina, Georgia, Jamaica, and Montserrat in the period 1748-1775.In thispaper, I attemptto painta preliminarypicture of the structureof their loanmarkets and the extentto whichfinancing was controlledby the center. The purposeof this essayis to open a discussionof the connectionsamong financing, indebtedness, economic growth, and independenceby providingnew empiricalevidence. This evidence comesin theform of publicly-recordednotes, bonds, and mortgages in the two colonies. While some similarities existed in the conduct and volumeof financing,marked differences occurred in the numberand sizeof loans.Most notable of thedifferences was the degree to which the sourceof the colony'sfinancing was a metropolitancenter: in the Caribbean,financing was closelytied to the Londonmarket; on the mainland,not only was financingnot tied to London,it was in many instancesnot evenfunnelled through the capitalof the colony. These loansshow that there were alternative financing systems in plantation America,and that lending patterns responded broadly to theneeds and circumstancesof individual economies and populations. The Montserrat andCarolina loan markets provide suggestive and tantalizing glimpses of varyingdegrees of economicindependence and offer the possibility thatpolitical independence flowed in partfrom financial separation and decentralization.

Montserrat and South Carolina

First settledin 1632, Montserratis a tiny island,less than 40 square-milesin areasituated at thecrossroads of the eastern Caribbean, southwestof Antigua.Sugar was its principal crop. By thethird quarter of the eighteenthcentury, several hundred extremely fertile and well- wateredplantations of middlingsize were owned or managedby a small numberof landholders(142 Irish, 121 English,and 17 Scottish)and evenly distributedthroughout the island; the island was "wholly cultivated,except what is barren& ... reservedfor pasture[Public Record Office CO 152/25/149-62]. Montserrathad no hinterland Capitaland Credit with ApprovedSecurity / 63 awaitingdevelopment. The productionof sugarwas steady but onthe decline.In theearly 1770s, its planters were exporting approximately 2,000 tonsof sugar(96% of whichwent to Britain)and 1,000tons of rum (only 35% of whichwent to Britain)-- roughlytwo-thirds of the productionlevels which prevailed only thirty years before on the island anda smallamount when compared to contemporarylevels attained in the neighboringLeeward Islands. In the secondhalf of the century, Montserrat'swhite population was also on thewane, although its slave forcegrew by severalthousand. At its height,the island'spopulation included1,300 whites, 260 freeblacks, and 10,000 slaves. Occupations werenot varied: contemporary loan records list onlymasons, vintners, surgeons,attorneys, and merchants, apart from planters and government officials.The capital,the port of Plymouth,possessed two mainstreets, roughly150 inhabitants,and nearly 100 houses,shops, and wharves. Tax rolls specificallylist only two occupations-- barbersand blacksmiths-- at workin thetown. The governmentheld its "important deliberationsin two roomsin whicha Devonshirefarmer would scruple to hoardhis apples"[Coleridge, 1826, p. 182]. In short,Montserrat's economyand society were small and stagnating. 2 Relativeto that of Montserrat,the storyof the SouthCarolina economyis one of growth,rather than stagnation. Permanently establishedin 1670, South Carolina by the third quarter of the eighteenthcentury was extensive(roughly 31,000 square-miles)and expansive,possessing a rapidly unrolling frontier and a largepopulation that grew from 23,000 to 64,000 whitesbetween 1748 and 1775 and from37,000 to 86,000blacks. In theseyears, the colony exported more produceper capita than any other colony, and it figuredas the center of the BritishAmerican rice, indigo,and deerskintrades. Much of the demographicand commercial rise has been attributed to thedynamism of its capital,the port of Charleston.The capitalwas a substantial

2Thesize of itspopulation and produce relegated it to minorimportance in the empire, and in the mindsof subsequenthistorians of the Caribbean.Only a dozenworks discuss the island,and thesefocus largely on its seventeenth-centurypopulation, its role in military conflict,and its geography and architecture [Gwynn, 1929; Berleant-Schiiler, 1989; Crouse, 1943;Puisipher, 1986; Goodwin, 1987]. No onediscusses the rolethat the flow of capital andcredit played in the developmentof its economy. David Hancock / 64 communityat theoutbreak of theRevolution: the 4th largest city on the Americanmainland, home to approximately12,000 inhabitants and over 200 merchantsand 100 craftsmen, as well asthe colony's central courts and governmentaloffices [Price, 1974; Calhoun et al., 1985]. South Carolinawas occupationallydiverse: the list of lendersin its loan recordsnotes 60 differentoccupations that were not directlytied to plantationagriculture; the record of borrowerslists 97 different occupationsnot specifically tied to planting,most but not all livingin the vicinity of Charleston: auctioneers, breeches-makers, cabinetmakers,clockmakers, dancing and fencing masters, goldsmiths, hatters,jewelers, perukemakers, printers, seedsmen, staymakers, and upholsterers,to nameonly a few. Economically,Charleston had a lock on the rice, indigo,and deerskinexport trades of North America and nearlyexclusive control over the region's slave import trade; it wasalso an importantnaval provisioningcenter. Unlike the plantersof Montserratwho, whenthey were not absentee,lived andworked on theirplantations year-round, the planters of SouthCarolina frequently lived in the capitalfor at leasta largeportion of the year,since the neighborhoodsof their plantationswere plaguedwith an unhealthy climateand filled with a largepopulation of blackswhom they feared, andthe capital provided amenities unobtainable in thecounties. Unlike Plymouth,Charleston was very much a city.3

3Whatevertheir interests, the historians of thecolony have tended to focuson the capital. Somediscuss the economy broadly, but necessarily focus on the capital: Verner Crane and RobertMeriwether, for instance,baldly statethe primacyof the city [Crane, 1929; Meriwether,1940]. Othersmake an attemptto examinethe entire economy, but end up focusingon the capital: Gayledetails Charleston's exports, Clowse analyzes colonial industriesgrowing up around the city, and Sirroans discusses the economic bases of colonial politicaldisputes which were resolved in Charleston[Gayle, 1940; Clowse, 1971; Sirroans, 1966]. In doingso, they give the countryside short shdff. More attention to thecountryside is given in Sharrer'sstudy of indigoculture, Ackerman's study of land grants,and Haywood'sstudy of agriculturalbounties [Sharrer, 1971; Ackerman, 1977; Haywood, 1959],but these works are narrowly limited in scope.Even the illuminating and relevant analysisof Leila Sellersis confined,her focuson Charlestonand her exclusiveuse of newspapers,magazines, andmerchants' papers missing the colony-wide context in whichthe importanceof Charlestonwas situated [Sellers, 1934]. Capitaland Credit with ApprovedSecurity / 65

Capital and Credit

To understandthe differences in thetwo markets,I havecompiled two exhaustivelists of notes,bonds, and mortgages for theperiod 1748- 1775 -- one for Montserrat,and one for SouthCarolina -- from the Deed booksof Montserrat,the Mortgage Books and Miscellaneous Books of SouthCarolina, and the CloseRolls of GreatBritain? Thereare 124 loans in the Montserrat loan market, and 3,252 in the South Carolina market. Takentogether these lists constitute a data-baseof nearlyall publicly-recordedloans involving both colonies, whether the loans were drafted in America or Britain? Notes, bonds, and mortgagesadhered to stipulated legal conventions.In the Montserratmarket, they were long, elaborate, handwrittenmanuscript deeds drawn up by lawyers;in the Carolina market,they were comparatively short, pre-drawn, handwritten forms whichwere often composed by theparties themselves and filled out and

4MortgageBooks, vols. FF, VV, WW,XX, YY, ZZ, 3A,3B, 3C, and 3D, and Miscellaneous Records,vols. MM-RR, Public Recordsof the Secretaryof State, South Carolina Departmentof Archivesand History, Columbia, South Carolina; Deed Books, 1748-75, CourtHouse Vault, Plymouth,Montserrat; and Close Rolls, C 54, PublicRecord Office -- ChanceryLane, London. I amthankful to two researchassistants, Jason Factor and Javier Gonzalez,for theirhelp in compilingand interpreting these databases.

5In accumulatingdevelopment capital, the eighteenth-centuryAmerican colonists had severaloptions: his own or hisfamily's pre-existing resources; sweat equity; and retained earnings,in additionto capitaland credit transfers. Such transfers are also recorded in the accountsand letters of individualprivate merchants and planters, and these records provide a richmine from whichto extractinformation about sources, destinations, and uses of loan capitaland credit. But this information may be unique to theindividual; it maynot represent anythingmore than one person's needs and opportunities. Public, legal records, in the form of promissorynotes, bonds, and especially mortgages, provide a ready-madebank of data. More importantly,they collectively paint a pictureof financialbusiness in an entirecolony, giving us a broadly-based,biographical and demographic sense of the instrumentwhich turned"the Great Wheel of UnfathomableCommerce" round [Rogers, v. 4, 1974,p.311], a sensethat is notgiven by therecords of otherkinds of developmentcapital. The only otherscholar to studymortgages in earlyAmerica is RussellMenard, but his ground- breaking,provocative analysis covers an earlierperiod 1700-1740 and his sampleis selective[Menard, 1990]. My sample,by contrast,covers the period1748-1775 and is exhaustivebut for theloans given by the SouthCarolina land bank [Crouse,1977, p. 29]. Currentresearch is filling thisgap. David Hancock / 66 signedby the borrower? In bothcolonies, witnesses for theborrowers andlenders later appeared before a justiceof thepeace and attested to the validityof the signatures.The justice gathered these and similar documentstogether and periodically shipped them to theoffices of the ColonySecretary in the capital,where a clerk enteredthem into a generalset of DeedBooks (in Plymouth)or specificsets of Mortgage Booksand Miscellaneous Books (in Charleston). A promissorynote was a simplewritten statement to repaya specifiedsum of money,either at a certaintime or ondemand. A bond wasslightly more formal: it witnesseda loanof moneyand stated a penaltyfor failureto repaythe loan accordingto an agreed-upon schedulewithin a specificperiod. A mortgagewas an even more secure type of debt,taking precedence in repaymentover bonds, notes, and bookdebts. Sometimes a mortgageaccompanied a bond to guarantee repayment,but a mortgagecould stand alone. A mortgagetook one of two forms.The "classicalcommon-law mortgage" was a loanof goods in exchangefor a loanof money:the borrower conveyed his land in fee simple to the lender with "a covenantfor reconveyance"upon repaymentof thedebt. Undera secondkind of "mortgageby demise," the borrowergranted the lendera lease(as opposed to absoluteright) which was terminatedupon the repaymentof the loan. The choice between the kinds of mortgageswas determinedlargely by the advantageseach offered; by thethird quarter of theeighteenth century, the advantagesof the demisemortgage outweighed those of the common-lawmortgage. With a classicalcommon-law mortgage, a lendercould obtain damages for defaultin repayment;with a mortgage by demise,however, he or shecould obtain specific performance, as well as chattelinterests in the propertywhich could be passedon to heirs or executors. Moreover, with a common-lawmortgage, a borrowercould secure the loan only with freehold,whereas, with a demisemortgage, he or shecould secure it with leaseholdor freehold. Bothmortgages listed the names, occupations, and residences of the borrowersand lenders, and sometimes of thosewho stoodto guarantee

6Printedforms did not appearin SouthCarolina until 1766 and,even then, they did not renderpre-drawn, hand-written forms obsolete. Pre-drawn forms of anytype were not used in Montserrat. Capitaland Credit with Approved Security / 67 the borrowers'repayment. The amountof the loanwas specified, and the date that the debt was sworn and the dates that it was to run from and to were stipulated;after the fact, the datethat a loan was fully repaidwas often noted by a clerkin themargins of thecolony's books. Finally,mortgages listed collateral security, not only obvious things like plantations,slaves, household furniture, and trade goods, but also less common items like a billiard table, inheritancefrom a father, 200 poundsof chocolate,or evenPew #25 in St.Philip's Church. 7 Usingthese records raises at leastone interpretativeproblem: therewere undoubtedlyother forms of debtthat were not recorded. Becauseof their formality and security,one suspectsmortgages recordedloans that werelarger in sizeand riskier in repaymentthan otherkinds of loans. In addition,one suspects that, compared to notes andbonds, mortgages recorded loans between parties who knew each otherless well, and were more legalistic, more literate, and wealthier? Thus,a problemarises: in boththe Montserrat and South Carolina databases,mortgages greatly outnumberall other public recordsof indebtedness,yet, because of thebiases of mortgages,their share of all indebtednessshould be lessthan it appearsto be. In short,there were almostcertainly more non-mortgaged loans in marketthan the historical recordsuggests. Notwithstandingthe fact that we stillonly have a portionof what wasactually lent, there is no reasonto believethat the patterns for the geographicdispersion of developmentcapital and creditwere any differentfor mortgagesthan for otherrecords of indebtedness.And,

?Differentcolonies exhibited different patterns of offeringcollateral security. Between 1748 and1775, seven eighths of borrowersin SouthCarolina secured their loans with slaves;land wasrare, appearing in only5% of loans.In Montserrat,where the average citizen was twice aswealthy, borrowers secured not only three-fourths of theirloans with slavesbut also four- fifths with land. The averagewealth at deathin Montserratwas approximatelyœ800 sterling,whereas the averagewealth at deathin the CharlestonDistrict was œ416 [Jones, 198o].

8Problemswith literacy are not great. Those borrowers who made a markrather than signed theirname constituted only 2% of all borrowersin SouthCarolina; in somesections of the backcountry,no morethan 10% of thepopulation was illiterate [Wallace, 1961, p. 197]. No studiesof Montserratliteracy have yet been conducted,but no marksappeared in the Montserratrecords. Similarly, the hurdleof possessingproperty is not insuperable,since anyproperty was mortgageable, even a pen-knifeor a coffee-mug. David Hancock / 68 more importantly,the problemof havingtoo manymortgages in the database,rather than presenting an obstacle, actually highlights the stage of the economyin whichthese loans were granted.For, as a colony expanded,prospered, and matured, its financialinstitutions (including mortgages)ramified across the region. In short,as economiclife becamemore complex, the needto controlbeyond one's reach became more pressing. Smaller, simpler, more personal paRems of organization,such as completereliance on bookdebt ties, fell by the wayside,and financial relationships became more substantial, difficult, and impersonal.Increasingly, legalistic mechanisms like mortgages displacedbook debt, notes and even bonds as a form of linkage. The prevalenceof mortgagesstands witness to thegrowth and elaboration of the overalleconomy.

Sourceand Destinationof Capital and Credit

Capitaland credit flowed into plantation America from outside in the form of cash and credit broughtby immigrantsand financial assistanceproffered by Americansin othercolonies, inhabitants of the mothercountry, and sometimes even inhabitants of othercountries like theNetherlands. Internal sources complemented these external sources, as citizensof a colonylent moneyand extended credit to one another. As Tables l a & b suggest,loan money from externaland internal sourcesrose and fell in the loan marketsof the two plantation economiesin volatile spurtsin the third quarterof the eighteenth century?Historians have often singled out the annual agricultural cycle asan influenceon theups and downs of business[Sellers, 1934, p. 88]. But when one looks at the two loan databases,one finds no decisive seasonaldivision in the datesloans were granted or due? Nor was

9Colonialcurrencies have been converted to poundssterling, using McCusker, 1978. •øLoanstended to bewritten and signed in theearly months ofth year;they fell duein the samemonths, usually January or March. Accountingpractices, rather than agricultural cycles,probably determined dating. Capitaland Credit with ApprovedSecurity / 69

Table la. MontserratFinancing, 1748-1775

Number Value Average Size Year ofLoans ofLoans Size perCapita

1748 2 3,200 1,600 3 1749 1 1,505 1,505 1 1750 4 7,521 1,880 6 1751 2 ,1,020 510 1 1752 2 10,220 5,110 8 1753 3 9,694 3,231 7 1754 3 12,845 4,282 9 1755 8 25,294 3,162 18 1756 6 5,303 884 4 1757 13 37,935 2,918 27 1758 3 30,000 10,000 21 1759 5 10,337 2,067 7 1760 0 0 0 0 1761 2 8,250 4,125 6 1762 1 3,750 3,750 3 1763 6 23,527 3,921 17 1764 5 8,996 1,799 7 1765 7 5,654 808 4 1766 17 46,912 2,760 35 1767 5 17,793 3,559 13 1768 6 27,644 4,607 21 1769 3 15,100 5,033 11 1770 5 2,747 549 2 1771 1 149 149 0 1772 2 12,480 6,240 9 1773 3 8,342 2,781 6 1774 6 20,124 3,354 15 1775 3 9,006 3,002 7

TotaFAverage 124 365r348 2•946 273 David Hancock / 70

Table lb. SouthCarolina Financing,1748-1775

Number Value Average Size Year of Loans of Loans Size perCapita

1748 66 7,226 109 0.32 1749 114 28,029 246 1.18 1750 144 17,034 118 6.81 1751 127 16,078 127 0.62 1752 142 27,379 193 1.01 1753 134 12,217 91 0.44 1754 118 15,216 129 0.52 1755 111 11,977 108 0.40 1756 123 11,682 95 0.37 1757 73 8,720 119 0.27 1758 115 13,959 121 0.41 1759 142 20,357 143 0.58 1760 125 16,807 134 0.46 1761 131 13,418 102 0.36 1762 142 21,338 150 0.55 1763 49 9,673 197 0.24 1764 54 9,414 174 0.23 1765 75 11,153 149 0.26 1766 78 10,987 141 0.25 1767 261 37,955 145 0.84 1768 174 24,242 139 0.52 1769 111 14,343 129 0.30 1770 77 10,648 138 0.22 1771 158 25,625 162 0.50 1772 125 29,214 234 0.54 1773 190 39,415 207 0.69 1774 75 13,383 178 0.22 1775 18 11,871 660 0.19

TotaFAverage 3•252 489•360 150 12.69 Capitaland Credit with ApprovedSecurity / 71 thereany correlationbetween the rise and fall of sugarprices and the Montserratmarket, or betweenthe rise and fall of riceor indigoprices and the Carolina market. A far more influential external factor was the progressof the SevenYears War andits aftermath.The courseof the war itself does not seem to have hindered the work of the markets. This is especiallytrue for Montserrat,where the war period saw a doubling of theannual value of lending,partial proof that this war wasgood for the developmentof the Atlantic economies?! However, the internationaldepression that followed the Peace of Parisin 1763does appearto havediscouraged the flow of developmentmoney through 1766[Rogers, v. 4, 1974],in muchthe sameway thatthe Peaceof Aix- la-Chapellewhich ended King George's War in 1748had previously led to a clampplaced upon lending [Stumpf,1976, p. 183]. What is moststriking about their fluctuationsin lendingis the difference between the two markets. The scale of the South Carolina economywas much larger, in termsof thesize of itspopulation and the amountof its exports,than that of Montserrat. Yet the value of its recordedlending was only one-thirdlarger in value than that of Montserratover the course of this28-year period, and its average loan was one-twentiethof that of Montserrat,since almost thirty timesas manyloans were recorded in SouthCarolina as Montserrat. What light canthe dimensions of geographicaldispersion and interpersonal linkage shed on this difference? Where did loan capitaland creditcome from? As detailedin Table2a, Montserratprovides a simplemodel of a pre-Revolutionary plantationeconomy at oneend of the lendingcontinuum. In the 28 yearscovered by thisstudy, 124 loanswere recordedin the Montserrat market,totalling œ365,346 and averagingœ2,946. Some52% of the recordednotes, bonds, and mortgages, equalling 69% of thevalue, came fromGreat Britain. Another 34% of theloans, representing 24% of the value,came from Montserrat itself. Half of the loansoriginating in

•The entryof theFrench into the war in 1757momentarily dampened the ardor of lenders andborrowers alike who daily expected to seeFrench privateers off theircoast [Rogers, v. 2, 1970]. David Hancock / 72

Table 2a. Montserrat, Source of Loans, 1748-1775

Value Percentage Average

Source Number Percentage (Padsste•l.) of value value

Great Britain 64 52% 252,357 69% 3,943

Montserrat 42 34% 86,045 24% 2,049

St.Anthony's Parish 21 17% 23,154 6% I, 103

Plymouth 12 10% 3,503 I% 292

non-Plymouth 9 7% 19,651 5% 2,183

St. PeteVsParish 6 5% 22,119 6% 3,687

St. George'sParish 13 10% 40,353 1I% 3,104

St. Pnlrick's Parish 2 2% 420 0. 1% 210

North America I I% 487 0. I% 487

Other We•t Indian Islands 9 7% 22,758 6% 2,529

Unknown 8 6% 3,699 I% 462

Total/Average 124 100% 365,346 100% 2,946

Montserrat(a quarterof their value) came from southwesternSt. Anthony'sParish, which contained the capital port town Plymouth and the subsidiarytown Kinsale. Although Plymouth provided 10% of all loansin the market,these small loans constituted only 1% of total value.12 Plymouth with its small populationof professionalsand laborers,never dominated the lending market on theisland; indeed, in value,it neverdominated its own parish. More important were outlying parishesinhabited by the largest,wealthiest sugar planters: nearly a third of the internalloans (nearly half of their value), for instance, originatedin thedry, highly fertile northeastern parish of St.George that was dominatedby a handfulof large,wealthy English sugar planters. Thesemen gave, on average,more than three times the amountin each

•2HalfofthePlymouth loans were under œ150. Only two were above œ400 -- œ1,349and œ704-- bothwell belowthe islandaverage. Capitaland Credit with ApprovedSecurity / 73

Table 2b. South Carolina, Source of Loans, 1748-1775

Valoe Percentage Average

Source Number Percentage (Pudsate fl.) of value value

Great Britain 23 I% 21,901 4% 952

South Carolina 2,851 88% 421,192 86% 148

BerkeleyCounty 2,090 64% 329,649 67*4 158

Charle•n 1,633 50% 257,231 53% 158

non-Charle•n 457 14% 72,417 15% 158

CravenCounty 466 14% 53,187 1I% 114

Georgetown 151 5% 17,892 4% I 18

non-Georgetown 335 10% 35,294 7*4 105

GranvilleCounty 142 4% 15,311 3% 108

Beaufort 65 2% 6,674 I% 103

non-Beaufort 76 2% 8,521 2% 112

CollemonCounty 153 5% 23,045 5% 151

Other N-A Colonie• 17 I% 5,875 I% 346

Unknown 359 1 I% 40,781 8% 114

Total/Average 3,252 489,359 150 of their loansthat St. Anthonylenders gave. Finally,7% of all loans (6% of totalvalue) came from other eastern Caribbean islands, 6% (1%) came from unknownsources, and 1% (0.1%) came from mainland British North America. SouthCarolina was very differentand more complex. Between 1748and 1775,3,252 loanswere recorded in SouthCarolina, totalling œ489,360and averaging œ150. Only 1% of therecorded notes, bonds, andmortgages in the SouthCarolina loan market, comprising only 4% of the value,originated in GreatBritain. Some88% of all loans, 86% of total value,came from Carolinasources. Berkeley County, where Charlestonwas situated,provided more than five times the numberand amount of loansthan did anyother county in the colony. Lenders in unknown locations and other North American colonies providedthe remainder. David Hancock / 74

Why did SouthCarolina appear to receiveso little creditfrom Britain? Part of the problemmay be evidentiary:much capital and creditalmost certainly came to Charlestonmerchants in the form of debtsentered into the booksof their British correspondentswho suppliedthem with goodsand services. This is a formof creditdifficult to track and accountfor on a colony-widebasis. But therewere also fewerabsentee South Carolina planters living in London,relative to the populationthey represented,than there were absenteeMontserrat plantersthere; as a result,there were fewer Carolinians permanently abroadand able to assisterstwhile compatriots. More intriguing was the unwillingnessof Charlestonmerchants, in dealing with Britons, to securebook debt with bonds or mortgages,a custom that was unique in the colonies. Suchsecurity had neverbeen the practicein Carolina; Charleston merchants refused to do business with British merchants who demandedit [Rogers,v. 4, 1974,p. 400]. CautiousLondon investors looked elsewhere? Giventhe reputed dominance of theseaboard, its ports, and their inhabitantsto the economyof SouthCarolina, one would expect them to hold supremacyin lendingmatters, and they did. Undeniably, Charlestonprovided the greatest share of capitaland credit to thecolony -- 50% of all loans,and 53% of all value. In fact, Charlestonwas the onlyjurisdiction in thecolony to lendmore than it borrowedduring the yearscovered by the database,lending œ127,816, half itstotal, outside the city. Charlestonlenders gave more per loanthan did lendersfrom any other part of the colony, except Berkeley County in which Charlestonwas situated: loans from Charlestonand Berkeley lenders wereœ158 on average,whereas Colleton, Craven, and Granville lenders averagedœ151, œ 114, and œ108, respectively. Other ports contributed relatively little. Beaufort,in Granville County,to the southof Charleston,supplied 2% of loans(1% of value),while Georgetown, in CravenCounty, to the north,supplied 5% of loans(4% of value). But Charleston'slending did notpush all othercapital and credit transfersinto the background.The relativeinsignificance of Beaufort and Georgetown,not only to the colonybut even to the countiesin whichthey were situated, suggests the hitherto neglected importance of

•3Nosuch prohibition prevailed in theGeorgia, Monksemit, orJamaica money markets. Capitaland Credit with ApprovedSecurity / 75 thecountryside in mattersof financing.For, as Table 2 notes,the non- urbanareas of Georgetown'sCraven and Beaufort's Granville provided as many loansand as muchvalue as the two ports. In the caseof Craven,they provided double. In SouthCarolina, the broadpattern is that loan moneymoved from the capitalto the countryside. But sub-patternsare equally revealing,and the contrast with Montserratis againstriking. Table3a & b breakdown the destinationsof loansby country,colony, county, city, andtown. The shareof loanmoney going to Britainfrom South Carolinais negligible:one loan, valued at œ647.Unlike Montserrat planters,far fewerCarolina planters were absentees residing in England anddrawing off theirprofits. Some 5% of loans(4% of value)went to individualsprimarily residing in otherNorth American colonies, mainly Georgia,and another 1% of loans(1% of value)went to lendersliving in unknownlocations. Thus, the greatestshare of loanmoney went to Carolinians. Most notable in the breakdown of internal destinations is the low sharetaken by Charlestonresidents: 24% of the loans,26% of the value. Fora citywith a dynamic,growing economy, with hundredsof merchantsand craftsmen, this is surprising.In termsof thenumber and valueof loanstaken, Charleston residents took roughlythe sameas the non-Charlestonresidents of BerkeleyCounty or theresidents of Craven County.Moreover, the non-urban areas in thefour counties took more than twice the number and value of loans than the three urban areas. CravenCounty absorbed the most,a reflectionboth of its relatively undevelopedterritory and of itsrecent successful cultivation of indigo. Thus,the countrysideplayed an importantrole in the acquisitionof developmentcapital. Again,the case of Montserratprovides significant contrasts. Great Britainfigured prominently as a destinationof loanmoney -- 12%of the loans,and 16% of thevalue. The likelihoodthat a planterwould leave the islandand establish himself in stylein southernEngland was much greaterin CaribbeanAmerica than it wasin NorthAmerica, and all but one of the British borrowers in the Montserrat market were absentees. Plantersand merchants on neighboringislands took 5% of the loans (6%ofthe value). Another10% of the loans(6% of thevalue) went to unrecordeddestinations. The greatestshare of loan moneywent to David Hancock / 76 plantersand merchantsin Montserrat-- nearlythree-quarters. St. Anthony'sParish took the greatestnumber of recordedloans and the secondlargest amount of money. But if we reaggregatethe data,we findthat the agricultural countryside took 64% of theloans (69% of the value).It was St. George'sParish, where the mostsuccessful planters livedand worked and the largest plantations were situated, that took the greatestamount of loanmoney. Plymouth played an insignificant role -- takingonly 9% of the loansand 2% of the value.

Table 3a. Monsterrat, Destination of Loans, 1748-1775

Value Percentage Average

Destination Number Percentage (Pndssteri.) of value value

Great Britain I$ 12% 58,470 16%. 3,898

Montserrat 91 73% 260,727 71% 2.865

St.Anthony's Parish 35 28% 84,940 23% 2,427

Plymouth I 1 9%0 8,245 2% 750

non-Plymouth 24 19% 76,695 21% 3,196

St.Peter's Parish 4 3% 7,846 2ø/, 1,962

St. George'sPariah 29 23% 127,132 35% 4,384

St. Palrick'sPariah 23 19% 40,809 1I% 1,774

North America 0 0% 0 0% 0

Other WHt Indiau Islands 6 5% 23,085 6% 3,848

Unkuown 12 1(?/o 23,065 6% 1,922

Total/Average 124 100% 365.346 100% 2,946

Closeanalysis of the sourcesand destinations of recordedloans suggestsfurther differences between the two plantationeconomy loan markets,and points up the degreeto whichcapital and credit markets were decentralized. Tables 4a & b record the nature of the connections. In SouthCarolina, loans were predominantly local transactions. Most loanswent from a lenderor groupof lendersin onecounty to a borrower in the samecounty. Someloans, of course,stretched across county lines, but thesewere alwaysin the minorityduring this period. Capitaland Credit with ApprovedSecurity / 77

Table 3b. South Carolina, Destination of Loans, 1748-1775

Value Perc•nla•e Average

D•ttnatton Number Percentage (Pnd• iterl.) of value valne

Great Brittan I 0% 647 0% 647

South Carolina 3,057 94% 461,905 94% 15I

BerkeloyCounty 1,584 49% 249,495 51% 158

Chatlesion 790 24% 127,816 26% 162

non-Chatlmion 794 24% 121,680 25% 153

CravenCounty 796 24% 112,690 23% 142

Georgetown 24 I% 13,755 3% 573

non-Cseorge•own 772 24% 98,934 20% 128

GranvilleCounty 302 9% 44,841 9% 148

Beaufot• 18 I% 1,279 0.3% 71

non-Beaufort 284 9% 43,562 9% 153

Colle',onCounty 375 12% 54,879 1I% 146

Other N-A Colonies 20 I% 5,859 I% 293

Unknown 173 5% 20,751 4% 120

Total/Average 3,252 100% 489,359 100'4 150

Charleston,for instance,provided from 39% to 43% of themoney taken by borrowersin Craven,Colleton, and Granville Counties, and this is not insignificant.Yet, between75% and 84% of the value of loans grantedby Granvilleand Craven lenders went to borrowersfrom their own counties;and 46% of Colletonmoney went to Colleton.Even Berkeleylenders (including Charleston lenders, whom one would expect to be less parochialin their investments)gave 61% to Berkeley borrowers.Thus, although Charleston certainly exercised great force in thefinancial affairs of thecolony, a county-by-countyanalysis suggests the presence,strength, and viability of alternativelocal institutions. Despiteits importance, Charleston did not monopolize the financial life of thecolony. Decentralization was more common than one might have at firstexpected. A slightlydifferent pattern prevailed in Montserrat.There, loans generallycrossed oceanic lines. Londonwas alwaysthe market's primarycenter. In the 39 instanceswhen lenders and borrowers both David Hancock / 78

4a. Internal Transfersof Capital and Credit, Montserrat,1748-1775

Percentageof Percentageof total value total value lent lent Source Destination Number Value to deatination by source

St.Anthony's Parish StAnthony's Parish 7 5,638 7*/0 24%

St. Petees Parish I 153 2% I%

St.George's Parish 5 4,918 4% 21%

St. Patrick's parish 4 904 2% 4%

Unspecified 3 1,541 7*/0 7*/0

SL PeteesParish St Anthony'sParish 0 0 0% 0%

SL Peter's p•rish I 193 2% I%

St. George'sparish 2 21,294 17.,• 96%

St. Patrick's P•rish I 561 I%

Unspecified 2 72 0.3% 0.3%

St.Georges parish StAnthony's Parish 4 11,581 14% 29%

St. Petees Parish 0 0 0% 0%

St.Georg•a pariah 3 21,918 17./, 54%

St. PaUick'sParish 3 5,860 14% 15%

Unspecified I 149 1% 0.4%

St.Pauick's Parish St Anthony'sParish I 200 0.2% 48%

St. Petees Parish 0 0

St. George'sParish 0 0 0% 0%

St. Patrick's Parish I 220 I% 525,

Unspecified 0 0 0% 0% Capitaland Credit with ApprovedSecurity / 79

4b. Internal Transfers of Capital and Credit: South Carolina, 1748-1775

Pe•cenmseof pe•cenmseof total value total value lent lent Source Destination Number Value to de•tinn6on by source

BerkeleyCounty

Charleston GranvilleCounty 103 17,463 39% 7%

ColletonCounty 170 23,615 43% 9%

BerkeleyCounty not C'ton 383 72,660 60% 28%

Charleston 606 83,991 66% 33'/0

CravenCounty 275 45,003 40% 17%

Unspecified 99 15,076 73%

BerkeleyCo. GranvilleCounty 20 5,096 1I% 7% Not C'ton ColletonCounty 52 13,778 25% 19%

BerkeleyCounty not C'ton 275 35,121 29% 49¾0

Charleston 52 8,937 7% 12%

CravenCounty 36 7,029 6% 10%

Unspecified 19 1,881 9%

All BerkleyCo. GranvilleCounty 123 22,559 50%

CollelonCounty 222 37,393 68ø/, I

BerkeleyCounty not C'ton 658 107,781 89% 33%

Charleston 658 92,928 73% 28%

CravenCounty 311 52,032 46% 16%

Unspecified I 18 16,957 82% 5%

CravenCounty GranvilleCounty 6 851 2% 2%

ColletonCounty 2 79 0. I% 0. I%

BerkeleyCounty not C'ton 29 2,881 2%

Charleston 17 2,397 2%

CravenCounty 396 44,940 40% 84%

Unspecified 16 2.038 10% 4% David Hancock / 80

Percemage total value total value lent lent Source Destination Number Value to destination bysource

GrenvilleCounty I 16 11,494 26% 75%

ColletonCounty 3 592 1% 4%

BerkeleyCounty not C'ton 12 2359 2% 15%

Charleston 4 180 0.1% 1%

CravenCounty 0 0 0% 0%

Ut•pecified 7 686 3% 4%

ColletonCo. GrenvilleCounty 10

ColletonCounty 95 10,513 19% 46%

BerkeleyCounty not C'ton 27 6.605 5% 29%

Charleston I 0 3,0

CravenCounty 3 474 0.4% 2%

Unspecified 8 588 3% 3% wasnot significantlycentralized. Underone-third of the loanswhere borrowersand lendersboth residedon the islandstayed within the boundsof the parish; only parishwhere intra-parish lending reached significantproportions was Plymouth'sSt. Anthony. The non- dominanceof anyone parish is hardlysurprising, since the entireisland wasless than the size of the countiesand most of the parishesin South Carolina.

An Analysisof the Differences

The differences between the Montserrat and South Carolina loan marketsare striking, yet whollycomprehensible in terms of the societies andeconomies in whichthey arose. Although the totalvalue lent is not radicallydifferent, Carolina taking only 31% moreloan money in this period,the numberof loansin SouthCarolina was twenty-sixtimes greaterthan that in Montserratand the amount of theaverage loan one- twentieththe size. Some 69% of Montserrat'sloan money came from Britain and 24% from Montserrat,whereas 4% of SouthCarolina's loan moneycame from the mothercountry and 86% from the colony. The Capitaland Credit with ApprovedSecurity / 81 residedon the island,more than half originatedin the capitaltown's parish;St. Anthony figured as an importantsecondary center, providing morethan half the loans. Yet, withinthe colony, lending and borrowing capitalcity providedonly 1% of the moneyin Montserrat,but 53% in SouthCarolina; non-urban areas in Montserratprovided 23%, whereas non-urbanareas in Carolina33%. Loan moneyin Carolinaflowed alongmore local channels than it did on the island. One hypothesisexplaining these differences is that the records themselvescreate the impressionof difference. That is to say, Montserratand SouthCarolina possessed different economic-legal cultures:in Montserratit mayhave been unusual to recordsmall loans, while Caroliniansrecorded all of their loantransactions. Unfortunately, to date, no contemporarydescription of such selectivity or comprehensivenesshas been uncovered for eitherjurisdiction. While it seemssignificant if we shouldfind that Carolinians recorded all loans andMontserratians recorded only a few, it is difficultat thisstage of our understandingto know what the significancewould be. Perhaps Carolina'seconomic-legal culture considered small loans, many loans, andloans that cut across internal boundaries important for the wealthof theindividual and colony alike, but such conjecture awaits further study. A moresupportable hypothesis emanates from the opportunities enjoyed by the two colonies. Specifically,their economieswere differentin size, in capacityfor development,and in population.In short,South Carolina had a plantation-basedeconomy; tiny Montserrat was a plantation. In SouthCarolina, there existed a large classof lendersthat facilitatedtransfers of capitaland credit -- numerous relativelywealthy or at leastcomfortable men andwomen who did not needto plowtheir earnings back into their own mercantile, professional, and agriculturaloperations, and could easily lend their savingsat interest. Therealso existed a largeclass of borrowerswho absorbed loancapital and credit -- menand women of smalland middling means and operationswho requiredsmall amounts of moneyto help them moveahead. Underscoring the presence of thispopulation are the facts that many lendersand borrowersin South Carolina'srelatively diversifiedeconomy were not directlytied to planting,and that most were part of a transplantedEuropean population that had movedto South Carolinato live there permanently. In contrast,Montserrat David Hancock / 82 possessedneither a largeand able lending group nor a largeand highly diversifiedborrowing class. During the third quarter of thecentury, the islandwas home to only severaldozen attorneys, merchants, surgeons, skilledcraftsmen, and service providers whose livelihood was not tied primarilyto sugar.Over 90% of Montserrat'sfamilies were engaged in sugarcultivation, an extremelycapital- and labor-intensivepursuit. Moreover, Montserrat'splanters, through the numberof their own absenteesand their correspondents, were as closely tied to GreatBritain asto the island;those who planted did sowith onething uppermost in theirminds: to makeenough money to returnto Britain. Relatedto themix of thepopulation as a conditioningfactor in the differentiationthat arose in the loanmarkets of plantationeconomies is thenature of agriculturalproduction. While sugarplanting demanded large and continuousinfusions of capitaland labor,rice and indigo plantingrequired fewer and smaller amounts. A typicalplantation on Montserrat,for instance,covered 250 acresand possessed 100 slaves. At leastœ3,500 but perhaps as much as œ10,000 was needed to establish oneselfon sucha sugarplantation during this period. In contrast, althoughit might rangebetween 100 and 500 acres,a typical rice plantationin theSouth Carolina lowcountry possessed only from 10 to 50 slaves.A Carolinarice planter with 200 acresand 40 slavesneeded seven-tenthsto one-quarterthe amountof money (that a similarly- endowedCaribbean sugar planter needed) to purchaseland (which was cheaperor free), and equipit with buildings(which were fewer and simpler),slaves, provisions, and miscellaneous production-related items liketools [Menard, 1990, p. 7].14 Both undertakings were expensive, of course,but the costsassociated with the two modesof production createddifferentiated needs in thetwo populations,and encouraged the emergenceof divergentfinancing markets.

Conclusion

The evolutionof two differentplantation economies -- different in thesize of theirterritory, the capacity for expansion,the size and mix of the population,and the choiceof a staplecrop -- broughtwith it

•nOnaverage, a lenderin theSouth Carolina database mortgaged seven slaves. Capitaland Credit with Approved Security / 83 lendingpatterns and capital and credit markets that also diverged. On the one hand, SouthCarolina lending and borrowingwere frequent events(even if smallper-capita and per-loan transactions), conducted in a relatively sophisticatedmanner (witness the use of forms and specializedbooks, the allowanceof installmentpayments, and the participationof institutionallenders like churchesand societies), local andto a remarkabledegree decentralized, and largely independent of the transfermarket in Britain. On the otherhand, Montserrat transfers were infrequentevents ot•en involving immense amounts, conducted in a relativelyprimitive fashion, for all intentsand purposesestablished overseas,and almostwholly dependenton the interestsof British lendersand their resources.Further research on capitalaccumulation and outlay is neededto discoverthe extentto which backcountry, capital,and metropolitan markets were integrated, and the uses to which theirresources were put; more work is requiredto understandfully the relation between the diversificationof the economy and the independenceof the colonies' financial markets. The approach followed in the presentessay opens up new possibilitiesfor understandingthe different experiencesof American plantationeconomies and the independenceof specificcolonies.

References

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