Founding Fathers and debt repudiation question: More on Robert Morris: Debts in the colonies: Reaction in Britain to non-payment of debts: The British Creditors:

 

The Blackheath Connection

Chapter 16

 

America, the Founding fathers and the debt repudiation question: the morality of the American Revolution:

 

     One major factor becoming evident from maritime histories from the time of the Boston Tea Party is that detailed treatments are lacking on the mischievous effects after 1783 (at least in Jefferson's view) of the international trading of Robert Morris, who dealt extensively in tobacco. ([1])

 

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     Meanwhile, neither Price nor Kellock probed Campbell's long career as a contractor, also a tobacco trader, delivering convict servants to Virginia and Maryland. Campbell's career relates also to the transportation of convicts to Australia from 1786, and so his career can be seen as pivotal in the administration of convict transportation, across decades as well as across oceanic space. ([2]). Given his 60 years of age in 1786, Campbell can also be viewed as an old-style Anglo-American merchant whose preferred methods of operation were eclipsed by the Revolution. ([3]) Other topics tending to remain bereft to-date of useful detailed information are the revival of the US-London tobacco trade, which before 1775 had been mostly a re-export trade to Europe; and the first US trade with India, South East Asia, and China. Of all relevant questions, the most sensitive appears to be what American historians term "the debt repudiation question". We also notice that American historians seem never to have been deliberately provoked by English historians to produce a resolution of this question, which bears on the morality of the American Revolution - and of the Founding Fathers.

 

     Repeatedly, questions have been raised and probed by American historians, who appear to suffer a "mea culpa complex". Each time American historians are visited by new trends in historiography, they find themselves freshly obliged to rake over "the debt repudiation question". Given this, any assessment of the significance of a meeting in 1786 between Thomas Jefferson and Duncan Campbell, as chairman of the British Creditors, would be useful if it could contribute an opinion on the appropriateness of this long-standing American sensitivity. ([4]) American historians have meanwhile taken pains to rebut claims that debt avoidance was a motive for the American Revolution. Here, the most convincing rebuttal has been delivered by Emory Evans. ([5])

 

     One British Creditor appearing (genealogically) in this whaling context is Mary Wilkes, sister of John Wilkes, whose pronouncements on liberty had helped fuel the development of the American Revolution. Mary's second husband was George Hayley, who to 1775 had corresponded with the Boston patriot merchant, John Hancock. ([6]) Inheriting Hayley's estate, Mary became a British Creditor, finally claiming £79,600  from Americans. ([7]) Here, as Creditors, the situations of Mary Wilkes/Hayley and Duncan Campbell can provoke new ways of looking at the post-revolutionary era, since both provoke the historian to re-examine maritime history. ([8])

 

    Mary Wilkes' case presents difficulties when attempts are made to recompile information, since from 1784 the American whaler, Francis Rotch, became her business associate, if not her paramour as well. ([9]) Rotch maintained a close association with the Nantucket whaling community, that is, with the American whaling industry - an industry the United States lost chiefly because the Nantucket whalers adopted a highly disapproving attitude to what they termed "debt repudiation".

 

     Rotch expended considerable effort trying to obtain permission for the Nantucket whalers to emigrate to England en masse, as an integrated community. He was rebuffed, so he later settled his whalers at Dunkirk. The still-unwritten biography of Mary Wilkes/Hayley is part of this story, for rivalry developed between Britain, the United States and France over whaling, just as the Pacific Ocean was newly opened up to European shipping, a large component of which included British vessels carrying convicts to New South Wales. ([10]). When that rivalry is considered, historians usually shy from considering the battle occurring in London between the South Whale Fishery and the East India Company about British use of Pacific waters. What remains unknown is whether Mary Hayley invested any significant sum in either American or French whaling, if that might have mattered?

 

     Many themes could be developed here, including those pertinent to the almost chnothic emergence of the great American contradiction, Isolationism versus Manifest Destiny. ([11]) Just one still-unwritten maritime history is the revelation of just how Robert Morris and his associates financed the American Revolution, and managed the maritime resources required. That story, told fully or not, stands rather apart from the usual terms cast for several contexts, including the debt repudiation question. ([12])

 

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    How did Morris accomplish the financing of the revolution? The information allowing one to illustrate this clearly has not yet been published, and probably never will be. From 1776, the financial techniques used by Morris and his associates remained controversial. Christie in Crisis of Empire writes that Morris used

 

"the most sophisticated credit techniques with an acumen that would dazzle a contemporary international banker." ([13])< /p>

 

     It may be due to this dazzling acumen, along with loss of his papers, that Morris's achievements have so far eluded close inspection? What is evident is that some of Morris' revolutionary associates from 1784 initiated US trade with Asia. But it remains unclear, to the point of murkiness, how far ignorance about the financing of the revolution can be linked to neglect of the history of US-Asian trade since 1783. ([14])

 

        Matthew Ridley entered a new phase when in March, 1781 he was appointed agent for Maryland, and asked to obtain a loan for the state in Europe. (It was then he took Morris' two sons, Robert and Thomas, to Europe). Ridley went to France in November, 1781. (Ridley at times also dealt with Robert Morris' loyal friend, Gouvenour Morris, no family relation to Morris). Ridley obtained no loan in France, but after discussion with John Adams in Holland he obtained a loan from Nicolas and Jacob van Staphorst of Amsterdam. ([15]) Ridley was back in France in August, 1782 and there became friends with John Jay.

 

     Few secrets were kept from Ridley, and about September-October, 1782, when Britain and the US were negotiating, the terms of Jay's draft of a treaty were learned in London, by 8 October, 1782. Ridley knew of the animosity between Jay and Franklin, and from time to time he commented on the high-level power plays between France, Spain and Britain which threatened to swamp US interests. ([16]) On 31 August, 1782, Ridley was seeing Jay and discussing matters such as Robert Morris' dealings with the French financier, Ferdinand Grand.

 

 As Duncan Campbell by 1786 probably knew, Morris by 1786 was still selling American tobacco at forward-contract prices to the Farmers-General, largely, and also understandably, as a result of understandings made earlier, from 1776. ([17]) Also understandably by 1786, these arrangements had less flexibility than the "new nation", and Jefferson himself, felt would be appropriate. ([18]) The time had come for a renegotiation about tobacco marketing. The problem was: what to do about Robert Morris?

 

     It is only lately been known, that while Sir Robert Herries was based in London, one of his suppliers in Scotland of American tobacco was a cousin of Jefferson's enemy, Alexander Hamilton (1755-1804. ([19]) (However, there seems no reason to believe that Alexander Hamilton was in touch with any such cousin by 1786). From Sumner's summation, it seems Morris by 1786, still benefiting from his trading connections arising from 1776 or so, was working a kind of futures market in tobacco, using "attempts to control the exchange", a tactic stemming from the financier's hubris Morris had begun to entertain after his period with the US treasury had ended in 1784. ([20]) With this, the continued silence of historians on the revival of US-London tobacco trade remains problematical.

 

It is not accidental that information on the career of the formerly-unknown Campbell is of assistance in identifying gaps in narratives. Any historian researching Campbell's period as a London tobacco trader (or, indeed, any London tobacco re-exporter) will, by 1776, inevitably have to explain how Robert Morris and his associates intervened in marketing American tobacco. Inadequate information about Morris' career continues as a stumbling block for the researcher - and this severely affects discussions of the British Creditors.

 

     It is possible that further research on other British Creditors would provide useful data, but apart from Mary Hayley, and Lane, Son and Fraser, one would hesitate to suggest which particular Creditors' situations would provide useful information . What is clear is that after 1783, the Jeffersonian anxiety about US enterprise becoming newly entrapped in the coils of British capital was justified. The meaning of the problems with US maritime history, referred to above, is that it remains unclear how much genuine success Jefferson enjoyed as he strove to free the US of this anxiety. Here, Robert Morris' scheme to sell the US domestic debt to foreign financiers should remain a matter for attention.

 

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     The view taken in this book of the American Revolution is of a new nation "freeing itself from constitutional or economic bonds" or, "a colonial struggle for independence". In view of "debt repudiation" I propose that the term "debt moratorium" would be more appropriate to the actual moral and practical circumstances of the situation. ([21]) The American colonists from 1773 called an angry moratorium on the application by British merchants of policies of debt entrapment... entrapment which, in the American view, unnaturally, unnecessarily, and unjustly strangled the growing economies of the American colonies. ([22]) "Debt repudiation" is too blunt a term, fits the facts inadequately, and does not take into adequate account the long history of English commercial policies applied to pre-1775 colonies.

 

     I term these policies, "debt entrapment policies". Accompanied by credit extension by individual British and Scottish merchant houses, such policies were routinely applied to West Indian colonies, to North America, and were also a feature of English commercial dealings in the East, firstly with Indian merchants in Surat, Bombay, Calcutta, Madras, later at Canton after about 1775. ([23]) "Debt entrapment" can be noticed in North America as early as the 1720s, during the period of the career of the tobacco merchant, Micajah Perry, if not earlier. ([24])

 

     Those becoming interested in the history of the transportation of British convicts will find that from 1695, one of the first, prominent merchant names they will encounter in London-Virginia trade in that context will be, Micajah Perry. Perry was involved in trade in coerced labour. Campbell was one of the inheritors of that tradition. Trade in slaves from Africa and the transportation of British convicts were different wings of trade in coerced labour. It is widely accepted that from 1783, America's failure to free slaves continued a tragedy for humanity. Consideration of Jefferson's meeting with the British Creditors sheds more light on this as well. The American Declaration of Independence provoked change in many political attitudes. But if research on trade in coerced labour is pressed back to Micajah Perry's time, a wider perspective is generated on attitudes to slavery - attitudes which the American Revolution failed to change.

 

More on Robert Morris and tobacco:

 

      Johnstone the British peace envoy travelled to the US about June 1778, but he was distrusted by men such as Robert Morris. ([25]) Doubtless, Campbell would have been interested in Johnstone's mission. There were to arise, squabbles over US paper money, which Quakers refused to handle as it had been issued for purposes of war. The attitude of the (Loyalist) Nantucketeers here was particularly resented; they committed "the accursed crime of refusing paper money". The Nantucketeers as we know from other sources also had a hardline moral opinion on the debt repudiation question. ([26]) To the end of 1777, the firm of Willing and Morris broke up, but this not announced in public till 28 July, 1778. ([27]) Willing wanted to wind up his English affairs; Morris disliked working with the French.

 

    Between 1778-1781, Morris was acknowledged as the premier merchant in the US. Now completely private, he continued dealing with Bingham, who was based at Martinique. Profit from privateering had tapered off, Capt. Ord went back to ordinary sailing. Morris soon teamed with a partner, Jonathan Hudson, who speculated in salt, then tobacco, then the two did business with tobacco, rum, plantations, lands. Hudson became rather impetuous, and was also linked to Peter Whitesides and Co., from July 1778. Hudson began buying, say, 2000 tobacco hogsheads at a time. Morris was also dealing extensively with and for the French merchant, John Holker, in Philadelphia, Virginia and Maryland. (There are forty volumes of Holker Papers in the Library of Congress). By early 1779, accusations were brewing against Morris, ([28]) resentment grew about his private dealing versus public capacity, more so in the case of the ship Farmer  Capt. Dashiel from Baltimore, captured by the British,. (Ver Steeg does not think Morris was at fault in this controversial case).

 

     By early 1780, American tobacco was to be requisitioned as a commodity to be accumulated and traded as payment for the import of necessary items which could not be furnished by the US' own resources. ([29]) By April 1781, the blockading of the Chesapeake made this almost impossible to succeed. After 9 November, 1780, ([30]) William Lee was mentioning the name of the Dutch banker, Van Berkel, and a contract. Sumner (p. 252) says that British knowledge of this contract became the immediate reason for the war between Britain and Holland! About then, the US had some 165 ships out privateering, with 6000 men aboard, especially from New England towns. ([31]) The year was quite a year for business confidence in the US, partly as John Holker purchased for the French forces in the US itself. The year 1781 was a peak year for American privateers, the number declined in 1782. ([32]) In the spring of 1780, Morris was dealing with William Turnbull and Co.; and Holker and Morris became partners with Turnbull here; the firm later became Turnbull, Marmie and Co. Holker taught Morris much about dealing with France, and allowed Morris to use considerable funds freely. Holker also furthered links with William Turnbull and Co., Benjamin Harrison Jr. and Co., and Stacey Hepburn and Co., trading in tobacco, indigo and rice. Hepburn sent some goods via St Eustatius. And in 1781, Morris sent his two sons, Robert, twelve, and Thomas, ten, to Europe for their education, in care of Matthew Ridley, commercial agent for Maryland. ([33]) The Morris boys were at Geneva and Leipsic till 1788 when they came home.

 

Debts in the colonies:

 

     With the 1775 outbreak of revolution, some colonies were in serious financial trouble.

Some issued unsupported paper money. Virginia offered to accept payment of British debts in local scrip, not exactly debt repudiation, though some creditors thought it was. ([34]) There were some seizures of British property, such as stores and account books in the charge of local factors. When London found out all this, seventeen firms signed a petition asking the king for protection and wanting any treaty with Americans to register each colony responsible for the full discharge of all debts with the total interest thereon [a point on which Campbell always later insisted when he was chairman of the British Creditors]. ([35])

 

      After the revolution began, Pigou of Pigou and Booth for example returned to England. In 1777 as British troops occupied, he returned to New York, but he was back in England by 1779 or 1780. The partnership had been ended. Booth tried to set up alone but by 1782 was bankrupt. (Booth once wrote a book on a complete system of book-keeping.) Pigou and Booth in 1790 claimed £6056 from New York and Pennsylvania as pre-war debts. ([36])

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Reactions in Britain to the non-payment of debts:

 

      No accurate figures exist on the Anglo-American debts of 1775, but the guess is around £5 million. British commissioners settled the last claims in 1811 but their disbursements were well below what was claimed, and gave little real idea of what Americans had owed, as many debts had been paid off or adjusted in American courts before any problem or information reached the British commissioners. ([37])

 

     Information on the agents of British merchants in America, and lists obtainable of men acting on debt recovery briefs for British merchants such as Campbell, after the revolution, now hoves more clearly into view. The situation on the debt recovery situation for the British has been outlined by Jacob Price and Tommy Thompson, by Sheridan, Kellock, Olson, Emory Evans, and here Price's information plus a reading of the Campbell Letterbooks solves a mystery.

 

      It is now possible to look more closely at which British merchants were most active in the area of hoped-for debt recovery, and related matters. ([38]) During 1776, tobacco merchant James Russell (in a most complicated situation) had been given a largely honorific trusteeship of Maryland bank stock, in the form of stock of the Bank of England. ([39]) In Baltimore, Maryland, William Russell, with the firm Russell and Ridley (i.e., with Campbell's agent, Matthew Ridley), remained as Campbell's agents for the duration of the American Revolution. ([40]) (By 1791, Campbell's agent in Virginia was John Rose of Leeds Town, Virginia.)

 

     In Glasgow, ([41]) Virginians and Marylanders owed merchants an estimated £1,366,085 sterling. By 1780, the Scots tobacco trade was operating at six per cent of its pre-war levels. Glasgow suffered a major credit crisis by 1778. But Glaswegians were surprisingly resilient and there was no widespread bankruptcy amongst tobacco merchants.

 

     British resentment over the non-payment of debts was to be long-lasting. But there were risks to the game too, and no British merchant wished to tip any balances unduly or prematurely. Secrecy became necessary, as did some duplicity in the case of a colonial firm at Baltimore later dealing with sales of Irish convict and indentured labour, Woolsey and Salmon. (Merchants of Bristol may also have been involved in those shenanigans?) ([42]) The name Salmon surfaced later with the absurd ventures of George Moore into clandestine convict transportation in 1783. By June 1775, the Baltimore merchant George Woolsey wrote to an English correspondent, that colonials were "very tardy" in paying their debts. ([43]) The historian Richard Sheridan has counted 37 Glasgow firms with £31,000 in debts owing at 112 stores in Virginia. ([44])

 

     And in America? At Bunker Hill on 17 June, 1775, General Howe attacked and forced rebels away, although he needed several attacks and he lost 1054 men, killed or wounded, half his force. Some of the names of the British officers at Bunker Hill can be noticed ironically in coming chapters, and one of them Francis Grose, years later, can be held partly responsible for the lack of town planning in the early British colony at Sydney, Australia, when he was commandant of the New South Wales Crops and a much too sanguine acting-governor. (Also present at Bunker Hill, later associated with the early days of Britain's Australian convict colony, was David Collins, secretary to the new colony at NSW, 1788-1796)

 

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    A relative of William Eden, Robert Eden, wrote to Lord Dartmouth on 30 December, 1774. ([45]) This clue suggests that William Eden would have been waiting in the wings in London, turning over his ideas on what to do with transportable convicts if, God forbid... they might no longer be able to be sent to the colonies! ([46]) Eden, ([47]) a  talented man, not necessarily an idealist or zealot such as John Howard, had first begun to think of penal reform when attending lectures by Blackstone, the legal commentator. (Jeremy Bentham attended Blackstone's lectures when he was only sixteen). As well, one of Eden's friends, Sir James Macdonald of Sleat, had been impressed by the ideas of Beccaria, who in 1764 had published On Crimes and Punishments, a product of the Enlightenment. Eden may also have known that in 1752, a suggestion that convicts not be transported, but sent to work in the naval dockyards, was rejected in the Lords. ([48]) By about 1767, Eden was a bachelor barrister in London, and it may have been there, Bolton suspects, that Eden perhaps saw the impact of the law on those who suffered most - unsuccessful defendants - when 160 felonies could be capitally punished. His attention was also probably taken by a House of Commons inquiry of November 1770 into the criminal laws, which had involved Sir William Meredith and Sir Charles Bunbury, and resulted in a few felonies being removed from the list for capital punishment being applied. Eden developed an idea of using convict labour and first mooted it in embryo in his book published in 1772, Principles of Penal Law, in a section entitled The  Limitations of Transportation. ([49]) He was punitive only concerning the worst criminals, whom he thought could be transported to Africa. During his research, Eden had considered the views of Plato, one of the early Church Fathers, and contemporary continental views, and he produced an original synthesis perhaps adapted also to the coming, industrializing age.

 

     Eden displayed some originality, since to 1772 there had been no reason for the courts or politicians to think of abandoning reliance on transportation to North America. Also, with Christopher Court, Thomas Eden was one of the top seven London importers of tobacco, ([50]) so William Eden may have been tobacco-wise, familiar with the American scene. Eden observed that transportation was "more frequently inflicted as a mode of punishment, than permitted as an act of Mercy". He observed on the political utility of the practice of exile in Russia, and that as the British conducted exile, it was more beneficial to the prisoner than to the community.

 

      "Enormous offenders" Eden thought could be exchanged for Christian slaves in the Islamic states. Other felons could be sent to the coasts of Africa for various purposes. And so, Eden wished to expand the horizons of the traditional imposition of punishment - he wished transportable convicts to be used for purposes associated with arduous or unpleasant public works business - business that had never before been seriously contemplated with respect to transportable prisoners. Eden was especially critical of the arbitrary manner in which punishments were applied, or mercy doled out in a manner calculated to impress social inferiors with the powers of their superiors, but actually, to  discredit the impartiality of the law. He wanted a systematic review of laws, but of course came up against the old conservative distaste for doing anything which might bring the current system into disrepute, a sin not as bad as libelling the judges, but a sin all the same. The system stultified any desire for the exercise of a more objective professionalism. And obviously, where the British convict went, so did British law and other jurisdiction; most British convicts sent out of the kingdom obviously had to dwell in some kind of British colony.

 

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The Merchants having traded to North America prior to 1776: Or, The British Creditors:

 

     In London on 30 November, 1791, the American core-group merchants, Duncan Campbell, John Nutt and William Molleson wrote to Henry Dundas (Home Secretary April-June 1791, later Secretary of War), enclosing a copy of an account of merchants' losses by the American Revolution. ([51])

 

Campbell in 1791 claimed that he had lost a total of £38,135/3/10, some £25,634/17/7 in Virginia and £12,500/6/3 in Maryland.

 

Campbell and his associates also claimed:

 

Abel and Macaulay in South Carolina had lost £5,630/3/5d; (these were an underwriting house at Lloyd's of London).

 

George Bogue had lost £2,746/15/10;

 

Stevenson, Randolph and Cheston of Bristol had lost £14,000, all in Maryland;

 

One William Jones had lost £80,000 in Virginia;

 

The losses totalled by November in 1791 were £2,522,952/9/5d. The break-up of losses by states, so the merchants memorialised, was: Virginia £390,225/18/1d; Maryland £310,407/11/9d; South Carolina £596,289/19/2d; Georgia £247,781/14/6d; Massachusetts £280,535/16/2d. ([52])

 

The total of £2.5 million would not have included the claimed losses of merchants based in Scotland. And to chase that £2.5 million, and more so to chastise the rebellious Americans, Britain spent about £100 million, to fail to put down the American Revolution. Such is the cost of folly and arrogance.

 

     Campbell from 1778-1782 and later was to lead the British fight for the return of  Americans debt monies, allegedly repudiated. Campbell's biography has remained lost in this context, of so much British dread, of the revolution of which the United States has become so proud. But lost he was. And this too is all part of The Blackheath Connection. By 1789 at the London suburb of Blackheath, many merchants who had lost by the American Revolution, including Campbell, formed a loose cartel. Their names were to become closely associated with the transportation of convicts to Australia, and the opening of the Pacific Ocean to commercial British shipping. This "Blackheath Connection" however was not discovered until 1989. But before all this can be outlined, more information on the origin of the hated Thames River prison hulks has to be traced.

 

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Endnote1: By 1776, Alexander Speirs's Glasgow house was owed about £46,000. ([53]) Most of Glasgow's tobacco merchants were united by blood and marriage in one kinship group. Some of the leading Glasgow tobacco houses were Spiers, French and Co. (Alexander Spiers and Co. were a large landholder in Renfrew); and William Cunninghame and Co. The French were important customers for Scots tobacco merchants. Bogle, Somervell and Co. were one merchant. The Virginia and Maryland Courts were shut from the summer of 1774, so debt matters could not be pursued. An agent for Alexander Spiers and Co. of Glasgow was Alexander Banks, merchant at Manchester in Chesterfield County). ([54])

 

Endnote2: Governor Robert Eden in December 1774 felt that Marylanders would "undergo any Hardship soon than acknowledge a Right in the British Parlt," regarding internal taxation of the colony. And historian Tommy Thompson concludes that the credit system in Maryland was a contributing factor to the Revolution. ([55])

 

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[Finis Chapter 16]

Chapter 16 words 4464 words with footnotes 6744 pages 13 footnotes 55