American Tempest (4 page)

The leap into merchant banking propelled them into still-larger enterprises such as “commodity barter”—the exchange of shiploads of commodities with merchants in other colonies and overseas without exchanging cash—or paying any taxes. In effect, each colony was an independent nation, and none trusted the value of the other's paper money. Merchants in
different colonies paid each other with either specie—gold or silver coins—or “commodity money.” In one transaction, a Rhode Island arms merchant wrote to Thomas Hancock that he was “bound to Boston in order to buy two hundred small arms for our force and two hundred blankets for them, and as our currency will not pass at Boston, I prepare to pay for the above articles in molasses.”
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When the values of commodities in both ends of a trade were unequal, one merchant simply gave the other “change” in the form of nonperishable staples, such as gunpowder, molasses, corn, rum, or, more commonly, salted fish.

Each expansion opened other opportunities. Commodity trading, for example, grew into two-way international trade and even more profitable triangular trade, which involved huge, complex three-way trades between three continents—again, all tax-free. Reinvested profits on the first trade added to the profits on the second, and when the accumulated profits were reinvested carefully in a third trade, all the seamen, ships' officers, and, of course, the merchant often garnered undreamed-of riches when their ship unloaded its last cargo at the end of its last leg . . . as long as the ship didn't fall prey to a storm or pirates.

All too often, one leg of a triangular trade involved the purchase of slaves in Africa and their shipment to the West Indies or the American South for resale in barter deals for molasses, sugar, rum, or tobacco. In two-way trade, a New England merchant, for example, might sell salted fish to a French West Indies trader for molasses that his ship brought home to New England for distillation into rum. In a triangular trade, he might take his initial cargo to Africa, trade it for slaves, whom he carried to the West Indies and traded for molasses for the New England distillery. To cut costs of international trade, the largest merchant houses bought and operated their own ships.

The most successful merchant-bankers took advantage of every profit opportunity—especially the huge, rough-and-tumble London market for whale oil and whale “bone,” which was actually cartilage. The former was essential for both illumination and lubrication, and manufacturers used whale bone to make corset stays, cap stiffeners, buggy whips, and similar items. The first boats to arrive in England from America with spring
supplies each year made the most money, and the most successful merchants always found ways to be first. Although some merchants waited for whalers to bring their catch to Boston for processing and subsequent transport to London, Thomas Hancock sent his ships to isolated whaling settlements along the shores of northern New England and Newfoundland nearer the hunting grounds and closer to England. There, his agents traded badly needed items such as clothing, tools, foodstuffs, and rum for processed oil and bone, which they then carried directly to London before other whalers had even off-loaded their catch in Boston. Once in London, the sailors, who earned a percentage of the proceeds for each load, jumped onto the piers and drove bidding for their cargoes to fever pitch by spreading rumors that theirs might be the last oil cargo to reach port for months. London agents earned 3 percent of the proceeds whereas captains and crews earned 89 percent—either to pocket or to buy goods to bring back to Boston to resell for even more money.

As they prospered from whale oil transactions, some Boston merchants bought or built their own fleets. By 1732 the House of Hancock owned more than a dozen ships. Whenever overproduction of a commodity sent prices too low to be profitable, Hancock simply dropped out of that particular trade and looked elsewhere for profit opportunities. One year he bought twenty thousand acres of timberland in Connecticut, Massachusetts, and Maine to convert into lumber. In Boston he bought some rental properties and a three-eighths share in Clarke's Wharf, the city's longest and busiest finger pier after Long Wharf. Renamed Hancock Wharf, it stretched into the harbor from Fish Street, where Paul Revere sold silverware, copper engravings, carved picture frames, music sheets, surgical instruments, dental plates, and his own crude drawings.

With wealth came power, of course, and, in 1740, a year after building and moving into his palatial home on Beacon Hill overlooking Boston, Hancock joined the town's other great merchants—Thomas Hutchinson, Andrew Oliver, Thomas Cushing, Richard Clarke, and brewer Samuel Adams, Sr.—on both the Governor's Council and as one of five selectmen who ruled the town of Boston as both legislators and executives with control over the city's finances and commerce. As with elections to the General Court (the provincial legislature), Boston limited voting for selectmen to
the town's six hundred–odd “freeholders”—the wealthiest, most influential white, propertied males who made up about 4 percent of the population.

As leaders in both business
and
politics, however, selectmen held in their hands the destinies of thousands of farmers, craftsmen, shopkeepers, and small merchants who depended on Boston's giant merchant-banking houses as a central market to buy supplies and sell goods and services. All had worked together in the friendliest fashion for more than a century—until 1740, when an acute shortage of British currency combined with an economic slump to leave New England farmers, craftsmen, and shopkeepers with too little cash to buy supplies from the big merchant houses. Forced to barter, farmers often found themselves at the mercy of Boston's merchants, who drove produce prices lower by pitting one farmer against another—and soon threatened the survival of many local farms.

In 1740 Samuel Adams, Sr., the owner of the town's largest brewery, came up with a scheme to establish a “land bank” to print paper currency of its own and lend it to farmers against the value of their lands, or “real estate.” As producer of New England's most popular beverage, he had an interest in seeing that farmers who came to town to sell produce could fill their pockets with enough cash to fill their carts with barrels of beer to take home. As Sam Adams's Land Bank paper gained currency, farmers gained the upper hand in the marketplace, forcing merchants to accept the paper or see suppliers and customers turn to merchants who would. Within a year of its appearance, Land Bank paper began undermining the value of British currency, and Boston's leading merchant bankers—the Hutchinsons, Olivers, and Clarkes along with Royal Governor Jonathan Belcher, who was also a merchant—appealed to Parliament to outlaw local currency in New England. Farmers descended on Boston to protest, threatening merchants who refused to accept land bank currency.

“They are grown so brassy and hardy as to be now combining in a body to raise a rebellion,” Belcher complained. Believing the mobs of farmers were “ripe for tumult and disorder,” Belcher ordered sheriffs to jail mob leaders and break up demonstrations—with rifle butts if necessary. Although the farmers dispersed, they voted Samuel Adams and other members of the Land Bank party onto the Executive Council. Governor Belcher vetoed their election and Parliament outlawed the Land
Bank, converting the Samuel Adams family into bitter foes of British rule in America.

Declared “criminals” and criminally liable for all outstanding Land Bank paper at face value, Adams and his partners became the targets of speculators and charlatans who scoured the farmlands, buying up Land Bank currency at huge discounts, then presenting them to Adams and other Land Bank directors in Boston for payment at face value. The run on Land Bank assets all but bankrupted Adams and created a lasting division between Boston's merchant-aristocrats and the rest of the economic community—farmers, shopkeepers, small merchant houses, and, most especially, Samuel Adams.

The split—and the bitterness it engendered—reached down into the next generation, when Harvard demoted Samuel Adams's son, Samuel Adams, Jr., from the fifth-highest rank in his class to the bottom. Harvard's humiliating system of “gradation” ranked students according to family social and economic standing. Although all acquired the title “Sir” as upperclassmen and alumni, they sat, walked, ate, and slept according to family rank while still in school. The son of a Massachusetts governor or Harvard president stood, marched, or sat at the head of his class in processions, in church, in recitation rooms, and at meals. Next in rank came sons of former governors, trustees, large landowners, major contributors, clergymen, and so on. Sons of farmers ranked last, with Sam Adams, Jr., ranking even lower after the Land Bank fiasco. His father's plight forced the young man to find work to help pay costs of attending college and sparked what became both a lifelong loathing of Hutchinson and other merchant-aristocrats and a deep hatred for British authority. According to Chief Justice Peter Oliver, Sam Adams was ready to commit any “crime” to overthrow the government. “When asked to draw the picture of the devil,” Oliver recounted, “a celebrated painter responded he would ask Sam Adams to sit for him.”
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T
hen, as now, war—or preparations for war—promised enormous riches for merchants large enough to supply the military needs of warring nations. War had been a virtual constant somewhere in the American colonial world since 1613—in New England, Canada, Ohio, along the Mississippi River, in the Floridas or West Indies, and along the South American coast. It had usually been a three-way affair between England, France, and Spain—with Indian tribes joining one side or the other, depending on which of the white forces seemed strongest and likeliest to serve Indian interests with guns, land, and liquor.

Thomas Hancock had lived on Beacon Hill only a few months when British King George II declared war on Spain after British captain Robert Jenkins claimed that the Spanish had seized his ship eight years earlier and cut off his ear—and he displayed what looked like an ear to a committee of Parliament. In fact, the British had been raiding Spain's forests in Central America and Florida for a decade, and Jenkins's ear provided an excuse for England to seize the territories. In January 1740 James Edward Oglethorpe, founder of Georgia, invaded Florida, and Massachusetts Governor Jonathan Belcher organized an expedition to raid Spanish cities in the Caribbean. A thousand New Englanders, eager for plunder, signed up—a huge number for a city of only fifteen thousand—and Belcher, who had
built a fortune as a merchant before securing the governorship, turned to his selectman-merchant friends to supply troops with beef, pork, clothing, tents, and other basics.

Boston's merchants found other ways to profit from the conflict by arming their own ships and obtaining government licenses, or “letters of marque,” to seize and plunder enemy merchant vessels on the high seas. Such letters of marque distinguished privateers from pirate vessels, in that they complemented their nation's navies by attacking enemy cargo ships. As compensation, privateers kept the goods and ships they seized and sold them on the open market. Members of some of the colony's most renowned families joined the treasure hunt, including Colonel Josiah Quincy and his brother Edmund, neighbors of lawyer John Adams in Braintree (now Quincy), Massachusetts. The first Quincys had arrived in Boston in 1633 and could trace their family to the Baron de Quincy, one of the noblemen who forced King John to sign the Magna Carta. Josiah and Edmund moved to Boston and built just one privateer, but it returned from its first and only voyage with a Spanish vessel in tow containing a lifetime of riches—161 chests of silver, two chests of gold, and untold amounts of jewelry, silverware, and other valuables.
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The Quincys never went to sea again.

As Spain and England spilled their treasures into the ocean in the War of Jenkins's Ear, much of it washed ashore onto Boston's docks and into the pockets of the town's great merchants. In March 1744 the French joined Spain and enlarged the conflict—and the profits of Boston's merchants. A new royal governor in Massachusetts, William Shirley, believed that Boston's safety depended on capturing the French fortress at Louisbourg on Cape Breton Island. He organized the largest military expedition ever undertaken in the colonies—a fleet of about one hundred vessels—to carry four thousand New England militiamen and their British commanders to Canada. On the recommendation of his predecessor, he appointed Thomas Hancock to round up the ships and supply the entire expeditionary force with food, clothing, arms, ammunition, and all other materials for as long as the force remained in Canada. Although Britain ceded Louisbourg back to the French at the end of the conflict, the Louisbourg expedition earned Hancock almost £100,000 and made him Boston's—and possibly America's—richest man.