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Chronicles of America Volume 13 - The Fathers of the Constitution

<h2>CHAPTER II</h2> <h3>TRADE AND INDUSTRY</h3> Though the word revolution implies a violent break with the past, there was nothing in the Revolution that transformed the essential character or the characteristics of the American people. The Revolution severed the ties which bound the colonies to Great Britain; it created some new activities; some soldiers were diverted from their former trades and occupation; but, as the proportion of the population engaged in the war was relatively small and the area of country affected for any length of time was comparatively slight, it is safe to say that in general the mass of the people remained about the same after the war as before. The professional man was found in his same calling; the artisan returned to his tools, if he had ever laid them down; the shopkeeper resumed his business, if it had been interrupted; the merchant went back to his trading; and the farmer before the Revolution remained a farmer afterward. 23 The country as a whole was in relatively good condition and the people were reasonably prosperous; at least, there was no general distress or poverty. Suffering had existed in the regions ravaged by war, but no section had suffered unduly or had had to bear the burden of war during the entire period of fighting. American products had been in demand, especially in the West India Islands, and an illicit trade with the enemy had sprung up, so that even during the war shippers were able to dispose of their commodities at good prices. The Americans are commonly said to have been an agricultural people, but it would be more correct to say that the great majority of the people were dependent upon extractive industries, which would include lumbering, fishing, and even the fur trade, as well as the ordinary agricultural pursuits. Save for a few industries, of which shipbuilding was one of the most important, there was relatively little manufacturing apart from the household crafts. These household industries had increased during the war, but as it was with the individual so it was with the whole country; the general course of industrial activity was much the same as it had been before the war. A fundamental fact is to be observed in the 24 economy of the young nation: the people were raising far more tobacco and grain and were extracting far more of other products than they could possibly use themselves; for the surplus they must find markets. They had, as well, to rely upon the outside world for a great part of their manufactured goods, especially for those of the higher grade. In other words, from the economic point of view, the United States remained in the former colonial stage of industrial dependence, which was aggravated rather than alleviated by the separation from Great Britain. During the colonial period, Americans had carried on a large amount of this external trade by means of their own vessels. The British Navigation Acts required the transportation of goods in British vessels, manned by crews of British sailors, and specified certain commodities which could be shipped to Great Britain only. They also required that much of the European trade should pass by way of England. But colonial vessels and colonial sailors came under the designation of “British,” and no small part of the prosperity of New England, and of the middle colonies as well, had been due to the carrying trade. It would seem therefore as if a primary need of the American people immediately after the Revolution was to get access to their old 25 markets and to carry the goods as much as possible in their own vessels. In some directions they were successful. One of the products in greatest demand was fish. The fishing industry had been almost annihilated by the war, but with the establishment of peace the New England fisheries began to recover. They were in competition with the fishermen of France and England who were aided by large bounties, yet the superior geographical advantages which the American fishermen possessed enabled them to maintain and expand their business, and the rehabilitation of the fishing fleet was an important feature of their programme. In other directions they were not so successful. The British still believed in their colonial system and applied its principles without regard to the interests of the United States. Such American products as they wanted they allowed to be carried to British markets, but in British vessels. Certain commodities, the production of which they wished to encourage within their own dominions, they added to the prohibited list. Americans cried out indignantly that this was an attempt on the part of the British to punish their former colonies for their temerity in revolting. The British Government may well have derived 26 some satisfaction from the fact that certain restrictions bore heavily upon New England, as John Adams complained; but it would seem to be much nearer the truth to say that in a truly characteristic way the British were phlegmatically attending to their own interests and calmly ignoring the United States, and that there was little malice in their policy. European nations had regarded American trade as a profitable field of enterprise and as probably responsible for much of Great Britain’s prosperity. It was therefore a relatively easy matter for the United States to enter into commercial treaties with foreign countries. These treaties, however, were not fruitful of any great result; for, “with unimportant exceptions, they left still in force the high import duties and prohibitions that marked the European tariffs of the time, as well as many features of the old colonial system. They were designed to legalize commerce rather than to encourage it.” ¹ Still, for a year or more after the war the demand for American products was great enough to satisfy almost everybody. But in 1784 France and Spain closed their colonial ports and thus excluded the shipping of the United States. This 27 proved to be so disastrous for their colonies that the French Government soon was forced to relax its restrictions. The British also made some concessions, and where their orders were not modified they were evaded. And so, in the course of a few years, the West India trade recovered. <div class="footer"> ¹ Clive Day, Encyclopedia of American Government, Vol. i, p. 340. </div> More astonishing to the men of that time than it is to us was the fact that American foreign trade fell under British commercial control again. Whether it was that British merchants were accustomed to American ways of doing things and knew American business conditions; whether other countries found the commerce not as profitable as they had expected, as certainly was the case with France; whether “American merchants and sea captains found themselves under disadvantages due to the absence of treaty protection which they had enjoyed as English subjects”; ² or whether it was the necessity of trading on British capital—whatever the cause may have been—within a comparatively few years a large part of American trade was in British hands as it had been before the Revolution. American trade with Europe was carried on through English merchants very much as the Navigation Acts had prescribed. <div class="footer"> ² C. R. Fish, American Diplomacy, pp. 56-57. </div> 28 From the very first settlement of the American continent the colonists had exhibited one of the earliest and most lasting characteristics of the American people—adaptability. The Americans now proceeded to manifest that trait anew, not only by adjusting themselves to renewed commercial dependence upon Great Britain, but by seeking new avenues of trade. A striking illustration of this is to be found in the development of trade with the Far East. Captain Cook’s voyage around the world (1768-1771), an account of which was first published in London in 1773, attracted a great deal of attention in America; an edition of the New Voyage was issued in New York in 1774. No sooner was the Revolution over than there began that romantic trade with China and the northwest coast of America, which made the fortunes of some families of Salem and Boston and Philadelphia. This commerce added to the prosperity of the country, but above all it stimulated the imagination of Americans. In the same way another outlet was found in trade with Russia by way of the Baltic. The foreign trade of the United States after the Revolution thus passed through certain well-marked phases. First there was a short period of 29 prosperity, owing to an unusual demand for American products; this was followed by a longer period of depression; and then came a gradual recovery through acceptance of the new conditions and adjustment to them. A similar cycle may be traced in the domestic or internal trade. In early days intercolonial commerce had been carried on mostly by water, and when war interfered commerce almost ceased for want of roads. The loss of ocean highways, however, stimulated road building and led to what might be regarded as the first “good-roads movement” of the new nation, except that to our eyes it would be a misuse of the word to call any of those roads good. But anything which would improve the means of transportation took on a patriotic tinge, and the building of roads and the cutting of canals were agitated until turnpike and canal companies became a favorite form of investment; and in a few years the interstate land trade had grown to considerable importance. But in the meantime, water transportation was the main reliance, and with the end of the war the coastwise trade had been promptly resumed. For a time it prospered; but the States, affected by the general economic conditions and by jealousy, tried to interfere with 30 and divert the trade of others to their own advantage. This was done by imposing fees and charges and duties, not merely upon goods and vessels from abroad but upon those of their fellow States. James Madison described the situation in the words so often quoted: “Some of the States, … having no convenient ports for foreign commerce, were subject to be taxed by their neighbors, thro whose ports, their commerce was carryed on. New Jersey, placed between Phila. & N. York, was likened to a Cask tapped at both ends: and N. Carolina between Virga. & S. Carolina to a patient bleeding at both Arms.” ¹ <div class="footer"> ¹ Records of the Federal Convention, vol. iii, p. 542. </div> The business depression which very naturally followed the short revival of trade was so serious in its financial consequences that it has even been referred to as the “Panic of 1785.” The United States afforded a good market for imported articles in 1788 and 1784, all the better because of the supply of gold and silver which had been sent into the country by England and France to maintain their armies and fleets and which had remained in the United States. But this influx of imported goods was one of the chief factors in causing the depression of 1785, as it brought ruin to many of 31 those domestic industries which had sprung up in the days of non-intercourse or which had been stimulated by the artificial protection of the war. To make matters worse, the currency was in a confused condition. “In 1784 the entire coin of the land, except coppers, was the product of foreign mints. English guineas, crowns, shillings and pence were still paid over the counters of shops and taverns, and with them were mingled many French and Spanish and some German coins.… The value of the gold pieces expressed in dollars was pretty much the same the country over. But the dollar and the silver pieces regarded as fractions of a dollar had no less than five different values.” ¹ The importation of foreign goods was fast draining the hard money out of the country. In an effort to relieve the situation but with the result of making it much worse, several of the States began to issue paper money; and this was in addition to the enormous quantities of paper which had been printed during the Revolution and which was now worth but a small fraction of its face value. <div class="footer"> ¹ McMaster, History of the People of the United States, vol. i, pp. 190-191. </div> The expanding currency and consequent depreciation in the value of money had immediately 32 resulted in a corresponding rise of prices, which for a while the States attempted to control. But in 1778 Congress threw up its hands in despair and voted that “all limitations of prices of gold and silver be taken off,” although the States for some time longer continued to endeavor to regulate prices by legislation. ¹ The fluctuating value of the currency increased the opportunities for speculation which war conditions invariably offer, and “immense fortunes were suddenly accumulated.” A new financial group rose into prominence composed largely of those who were not accustomed to the use of money and who were consequently inclined to spend it recklessly and extravagantly. <div class="footer"> ¹ W. E. H. Lecky, The American Revolution, New York, 1898, pp. 288-294. </div> Many contemporaries comment upon these things, of whom Brissot de Warville may be taken as an example, although he did not visit the United States until 1788: <blockquote> The inhabitants … prefer the splendor of wealth and the show of enjoyment to the simplicity of manners and the pure pleasures which result from it. If there is a town on the American continent where the English luxury displays its follies, it is New York. You will find here the English fashions: in the dress of the women you will see the most brilliant silks, gauzes, 33 hats, and borrowed hair; equipages are rare, but they are elegant; the men have more simplicity in their dress; they disdain gewgaws, but they take their revenge in the luxury of the table; luxury forms already a class of men very dangerous to society; I mean bachelors; the expense of women causes matrimony to be dreaded by men. Tea forms, as in England, the basis of parties of pleasure; many things are dearer here than in France; a hairdresser asks twenty shilling a month; washing costs four shillings a dozen. ¹ </blockquote> <div class="footer"> ¹ Quoted by Henry Tuckerman, America and her Commentators, 1864. </div> An American writer of a later date, looking back upon his earlier years, was impressed by this same extravagance, and his testimony may well be used to strengthen the impression which it is the purpose of the present narrative to convey: <blockquote> The French and British armies circulated immense sums of money in gold and silver coin, which had the effect of driving out of circulation the wretched paper currency which had till then prevailed. Immense quantities of British and French goods were soon imported: our people imbibed a taste for foreign fashions and luxury; and in the course of two or three years, from the close of the war, such an entire change had taken place in the habits and manners of our inhabitants, that it almost appeared as if we had suddenly become a different nation. The staid and sober habits of our ancestors, with their plain home-manufactured clothing, 34 were suddenly laid aside, and European goods of fine quality adopted in their stead. Fine ruffles, powdered heads, silks and scarlets, decorated the men; while the most costly silks, satins, chintzes, calicoes, muslins, etc., etc., decorated our females. Nor was their diet less expensive; for superb plate, foreign spirits, wines, etc., etc., sparkled on the sideboards of many farmers. The natural result of this change of the habits and customs of the people—this aping of European manners and morals, was to suddenly drain our country of its circulating specie; and as a necessary consequence, the people ran in debt, times became difficult, and money hard to raise. ¹ </blockquote> <div class="footer"> ¹; Samuel Kercheval, History of the Valley of Virginia, 1833, pp. 199-200. </div> The situation was serious, and yet it was not as dangerous or even as critical as it has generally been represented, because the fundamental bases of American prosperity were untouched. The way by which Americans could meet the emergency and recover from the hard times was fairly evident—first to economize, and then to find new outlets for their industrial energies. But the process of adjustment was slow and painful. There were not a few persons in the United States who were even disposed to regret that Americans were not safely under British protection and prospering with Great Britain, instead of suffering in political isolation. <hr class="main" /> <div class="chapterhead"> 35 </div> <div style="break-after:column;"></div>

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