The Critical Period of American History

by John Fiske

At the close of the eighteenth century the barbarous superstitions of the Middle Ages concerning trade between nations still flourished with scarcely diminished vitality. The epoch-making work of Adam Smith had been published in the same year in which the United States declared their independence. The one was the great scientific event, as the other was the great political event of the age; but of neither the one nor the other were the scope and purport fathomed at the time. Among the foremost statesmen, those who, like Shelburne and Gallatin, understood the principles of the "Wealth of Nations" were few indeed. The simple principle that when two parties trade both must be gainers, or one would soon stop trading, was generally lost sight of; and most commercial legislation proceeded upon the theory that in trade, as in gambling or betting, what the one party gains the other must lose. Hence towns, districts, and nations surrounded themselves with walls of legislative restrictions intended to keep out the monster Trade, or to admit him only on strictest proof that he could do no harm. On this barbarous theory, the use of a colony consisted in its being a customer which you could compel to trade with yourself, while you could prevent it from trading with anybody else; and having secured this point, you could cunningly arrange things by legislation so as to throw all the loss upon this enforced customer, and keep all the gain to yourself. In the seventeenth and eighteenth centuries all the commercial legislation of the great colonizing states was based upon this theory of the use of a colony. For effectiveness, it shared to some extent the characteristic features of legislation for making water run up hill. It retarded commercial development all over the world, fostered monopolies, made the rich richer and the poor poorer, hindered the interchange of ideas and the refinement of manners, and sacrificed millions of human lives in misdirected warfare; but what it was intended to do it did not do. The sturdy race of smugglers—those despised pioneers of a higher civilization—thrived in defiance of kings and parliaments; and as it was impossible to carry out such legislation thoroughly without stopping trade altogether, colonies and mother countries contrived to increase their wealth in spite of it. The colonies, however, understood the animus of the theory in so far as it was directed against them, and the revolutionary sentiment in America had gained much of its strength from the protest against this one-sided justice. In one of its most important aspects, the Revolution was a deadly blow aimed at the old system of trade restrictions. It was to a certain extent a step in realization of the noble doctrines of Adam Smith. But where the scientific thinker grasped the whole principle involved in the matter, the practical statesmen saw only the special application which seemed to concern them for the moment. They all understood that the Revolution had set them free to trade with other countries than England, but very few of them understood that, whatever countries trade together, the one cannot hope to benefit by impoverishing the other.

This point is much better understood in England to-day than in the United States; but a century ago there was little to choose between the two countries in ignorance of political economy. England had gained great wealth and power through trade with her rapidly growing American colonies. One of her chief fears, in the event of American independence, had been the possible loss of that trade. English merchants feared that American commerce, when no longer confined to its old paths by legislation, would somehow find its way to France and Holland and Spain and other countries, until nothing would be left for England. The Revolution worked no such change, however. The principal trade of the United States was with England, as before, because England could best supply the goods that Americans wanted; and it is such considerations, and not acts of Parliament, that determine trade in its natural and proper channels. In 1783 Pitt introduced into Parliament a bill which would have secured mutual unconditional free trade between the two countries; and this was what such men as Franklin, Jefferson, and Madison desired. Could this bill have passed, the hard feelings occasioned by the war would soon have died out, the commercial progress of both countries would have been promoted, and the stupid measures which led to a second war within thirty years might have been prevented. But the wisdom of Pitt found less favour in Parliament than the dense stupidity of Lord Sheffield, who thought that to admit Americans to the carrying trade would undermine the naval power of Great Britain. Pitt's measure was defeated, and the regulation of commerce with America was left to the king in council. Orders were forthwith passed as if upon the theory that America poor would be a better customer than America rich.

Ship-building in New England.

British navigation acts and orders in council directed against American commerce.

The carrying trade to the West Indies had been one of the most important branches of American industry. The men of New England were famous for seamanship, and better and cheaper ships could be built in the seaports of Massachusetts than anywhere in Great Britain. An oak vessel could be built at Gloucester or Salem for twenty-four dollars per ton; a ship of live-oak or American cedar cost not more than thirty-eight dollars per ton. On the other hand, fir vessels built on the Baltic cost thirty-five dollars per ton, and nowhere in England, France, or Holland could a ship be made of oak for less than fifty dollars per ton. Often the cost was as high as sixty dollars. It was not strange, therefore, that before the war more than one third of the tonnage afloat under the British flag was launched from American dock-yards. The war had violently deprived England of this enormous advantage, and now she sought to make the privation perpetual, in the delusive hope of confining British trade to British keels, and in the belief that it was the height of wisdom to impoverish the nation which she regarded as her best customer. In July, 1783, an order in council proclaimed that henceforth all trade between the United States and the British West Indies must be carried on in British-built ships, owned and navigated by British subjects. A serious blow was thus dealt not only at American shipping, but also at the interchange of commodities between the states and the islands, which was greatly hampered by this restriction. During the whole of the eighteenth century the West India sugar trade with the North American colonies and with Great Britain had been of immense value to all parties, and all had been seriously damaged by the curtailment of it due to the war. Now that the artificial state of things created by the war was to be perpetuated by legislation, the prospect of repairing the loss seemed indefinitely postponed. Moreover, even in trading directly with Great Britain, American ships were only allowed to bring in articles produced in the particular states of which their owners were citizens,—an enactment which seemed to add insult to injury, inasmuch as it directed especial attention to the want of union among the thirteen states. Great indignation was aroused in America, and reprisals were talked of, but efforts were first made to obtain a commercial treaty.

John Adams tries in vain to negotiate a commercial treaty.

In 1785 Franklin returned from France, and Jefferson was sent as minister in his stead, while John Adams became the first representative of the United States at the British court. Adams was at first very courteously received by George III., and presently set to work to convince Lord Carmarthen, the foreign secretary, of the desirableness of unrestricted intercourse between the two countries. But popular opinion in England was obstinately set against him. But for the Navigation Act and the orders in council, it was said, all ships would by and by come to be built in America, and every time a frigate was wanted for the navy the Lords of Admiralty would have to send over to Boston or Philadelphia and order one. Rather than do such a thing as this, it was thought that the British navy should content itself with vessels of inferior workmanship and higher cost, built in British dock-yards. Thirty years after, England gathered an unexpected fruit of this narrow policy, when, to her intense bewilderment, she saw frigate after frigate outsailed and defeated in single combat with American antagonists. Owing to her exclusive measures, the rapid improvement in American shipbuilding had gone on quite beyond her ken, until she was thus rudely awakened to it. With similar short-sighted jealousy, it was argued that the American share in the whale-fishery and in the Newfoundland fishery should be curtailed as much as possible. Spermaceti oil was much needed in England: complaints were rife of robbery and murder in the dimly lighted streets of London and other great cities. But it was thought that if American ships could carry oil to England and salt fish to Jamaica, the supply of seamen for the British navy would be diminished; and accordingly such privileges must not be granted the Americans unless valuable privileges could be granted in return. But the government of the United States could grant no privileges because it could impose no restrictions. British manufactured goods were needed in America, and Congress, which could levy no duties, had no power to keep them out. British merchants and manufacturers, it was argued, already enjoyed all needful privileges in American ports, and accordingly they asked no favours and granted none.

Such were the arguments to which Adams was obliged to listen. The popular feeling was so strong that Pitt could not have stemmed it if he would. It was in vain that Adams threatened reprisals, and urged that the British measures would defeat their own purpose. "The end of the Navigation Act," said he, "as expressed in its own preamble, is to confine the commerce of the colonies to the mother country; but now we are become independent states, instead of confining our trade to Great Britain, it will drive it to other countries:" and he suggested that the Americans might make a navigation act in their turn, admitting to American ports none but American-built ships, owned and commanded by Americans. But under the articles of confederation such a threat was idle, and the British government knew it to be so. Thirteen separate state governments could never be made to adopt any such measure in concert. The weakness of Congress had been fatally revealed in its inability to protect the loyalists or to enforce the payment of debts, and in its failure to raise a revenue for meeting its current expenses. A government thus slighted at home was naturally despised abroad. England neglected to send a minister to Philadelphia, and while Adams was treated politely, his arguments were unheeded. Whether in this behaviour Pitt's government was influenced or not by political as well as economical reasons, it was certain that a political purpose was entertained by the king and approved by many people. There was an intention of humiliating the Americans, and it was commonly said that under a sufficient weight of commercial distress the states would break up their feeble union, and come straggling back, one after another, to their old allegiance. The fiery spirit of Adams could ill brook this contemptuous treatment of the nation which he represented. Though he favoured very liberal commercial relations with the whole world, he could see no escape from the present difficulties save in systematic retaliation. "I should be sorry," he said, "to adopt a monopoly, but, driven to the necessity of it, I would not do things by halves.... If monopolies and exclusions are the only arms of defence against monopolies and exclusions, I would venture upon them without fear of offending Dean Tucker or the ghost of Dr. Quesnay." That is to say, certain commercial privileges must be withheld from Great Britain, in order to be offered to her in return for reciprocal privileges. It was a miserable policy to be forced to adopt, for such restrictions upon trade inevitably cut both ways. Like the non-importation agreement of 1768 and the embargo of 1808, such a policy was open to the objections familiarly urged against biting off one's own nose. It was injuring one's self in the hope of injuring somebody else. It was perpetuating in time of peace the obstacles to commerce generated by a state of war. In a certain sense, it was keeping up warfare by commercial instead of military methods, and there was danger that it might lead to a renewal of armed conflict. Nevertheless, the conduct of the British government seemed to Adams to leave no other course open. But such "means of preserving ourselves," he said, "can never be secured until Congress shall be made supreme in foreign commerce."

Reprisal impossible; the states impose conflicting duties.

It was obvious enough that the separate action of the states upon such a question was only adding to the general uncertainty and confusion. In 1785 New York laid a double duty on all goods whatever imported in British ships. In the same year Pennsylvania passed the first of the long series of American tariff acts, designed to tax the whole community for the alleged benefit of a few greedy manufacturers. Massachusetts sought to establish committees of correspondence for the purpose of entering into a new non-importation agreement, and its legislature resolved that "the present powers of the Congress of the United States, as contained in the articles of confederation, are not fully adequate to the great purposes they were originally designed to effect." The Massachusetts delegates in Congress—Gerry, Holton, and King—were instructed to recommend a general convention of the states for the purpose of revising and amending the articles of confederation; but the delegates refused to comply with their instructions, and set forth their reasons in a paper which was approved by Samuel Adams, and caused the legislature to reconsider its action. It was feared that a call for a convention might seem too much like an open expression of a want of confidence in Congress, and might thereby weaken it still further without accomplishing any good result. For the present, as a temporary expedient, Massachusetts took counsel with New Hampshire, and the two states passed navigation acts, prohibiting British ships from carrying goods out of their harbours, and imposing a fourfold duty upon all such goods as they should bring in. A discriminating tonnage duty was also laid upon all foreign vessels. Rhode Island soon after adopted similar measures. In Congress a scheme for a uniform navigation act, to be concurred in and passed by all the thirteen states, was suggested by one of the Maryland delegates; but it was opposed by Richard Henry Lee and most of the delegates from the far south. The southern states, having no ships or seamen of their own, feared that the exclusion of British competition might enable northern ship-owners to charge exorbitant rates for carrying their rice and tobacco, thus subjecting them to a ruinous monopoly; but the gallant Moultrie, then governor of South Carolina, taking a broader view of the case, wrote to Bowdoin, governor of Massachusetts, asserting the paramount need of harmonious and united action. In the Virginia assembly, a hot-headed member, named Thurston, declared himself in doubt "whether it would not be better to encourage the British rather than the eastern marine;" but the remark was greeted with hisses and groans, and the speaker was speedily put down. Amid such mutual jealousies and misgivings, during the year 1785 acts were passed by ten states granting to Congress the power of regulating commerce for the ensuing thirteen years. The three states which refrained from acting were Georgia, South Carolina, and Delaware. The acts of the other ten were, as might have been expected, a jumble of incongruities. North Carolina granted all the power that was asked, but stipulated that when all the states should have done likewise their acts should be summed up in a new article of confederation. Connecticut, Pennsylvania, and Maryland had fixed the date at which the grant was to take effect, while Rhode Island provided that it should not expire until after the lapse of twenty-five years. The grant by New Hampshire allowed the power to be used only in one specified way,—by restricting the duties imposable by the several states. The grants of Massachusetts, New York, New Jersey, and Virginia were not to take effect until all the others should go into operation. The only thing which Congress could do with these acts was to refer them back to the several legislatures, with a polite request to try to reduce them to something like uniformity.