Smuggler Nation (13 page)

France, Great Britain, and their respective allies were at war for more than two decades during the French Revolutionary and Napoleonic Wars. For the United States, such an unusually extended period of warfare presented immense risks, but also great trading opportunities. Indeed, America’s foreign relations during this period were largely driven by efforts to simultaneously exploit these conflicts for commercial gain while desperately trying to avoid becoming entangled in them. It was an increasingly precarious balancing act, made doubly difficult by the national government’s tenuous authority over the commercial activities of the country’s merchant class. What was good for American trade created chronic headaches for American diplomacy.

For instance, playing both sides, American merchants carried out an illicit business with French and British privateers in violation of
U.S. treaty agreements. “The French Privateers bring their prizes into Charleston, S-C, and sell them openly,” lamented one British official in May 1794.
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Indeed, historian Melvin H. Jackson notes that in Charleston the privateering commerce benefited local merchants particularly through “the clandestine trade in guns, powder, shot, and above all, in ships.”
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Meanwhile, U.S. treaties with France (1778) and Great Britain (1783) forbade the selling of their prizes in American ports. In the early 1790s, Alexander Hamilton at first advised customs officials to take an accommodating and nonconfrontational stance toward French and British privateers unloading captured goods at American ports. Later he called for barring the landing of any captured prizes, in accordance with U.S. treaty obligations. The influx of prize goods at American ports nevertheless persisted, but more quietly—a form of smuggling in which goods were purchased at a substantial discount, sometimes with the collusion of local customs officials, and then resold at market prices.
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America’s neutral status provided the main mechanism through which U.S. merchants took advantage of and profited from war. The country’s declaration of neutrality in 1793 made it possible for U.S.-flagged vessels to dominate the shipping of goods between the warring European powers and their empires, particularly when carrying West Indies goods to Europe and European manufactures to the Western Hemisphere. With British and French commercial vessels preoccupied by war and harassed by enemy navies, American vessels took full advantage. “The wars of Europe,” proclaimed the
Columbian Centinel
in 1795, “… rain riches upon us; and it is as much as we can do to find dishes to catch the golden shower.”
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Thanks largely to this “carrying trade,” American shippers tripled their profits between 1792 and 1796. Douglas North calculates that between 1793 and 1801, the value of exports and net earnings generated by the carrying trade grew nearly fivefold.
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What eventually derailed this trade bonanza was growing conflict over the definition of neutral versus contraband commerce. The United States insisted that neutral status meant that its ships by definition carried neutral goods—“free ships, free goods”—and even argued that provisions and naval stores should be classified as noncontraband items. To circumvent British objections that the United States was
directly aiding the enemy by shipping goods from French colonies to mainland Europe, American merchants would first import belligerent goods to the United States and then reexport them as “neutral” items. Britain grudgingly tolerated this legal fiction even though it was essentially a form of laundering enemy trade. Moreover, merchants could cut corners by manipulating the paperwork and not even bother to go through the trouble of first off-loading the goods in U.S. ports prior to reexport.
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Some would maintain the appearance of a “broken voyage” while in practice shipping directly to Europe.

This peculiar trading scheme persisted for years. Great fortunes were made, enriching merchants such as Nicholas Brown and Thomas P. Ives in Providence, William Gray and Joseph Peabody in Salem, and John Jacob Astor and Archibald Gracie in New York.
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Under the chaotic conditions of war, American ships were at times seized and their goods declared contraband. For instance, France seized a large number of neutral American ships trading with Britain during the so-called Quasi-War of 1798–1800, an undeclared conflict between France and the United States. But the rewards still far outweighed the risks.

Then Britain suddenly changed the rules of the game. In 1805, following the
Essex
decision of the British Admiralty Court, Britain began to seize large numbers of American vessels, announcing that American merchants carrying goods from enemy ports would now have to prove that the final destination of the goods was in fact the United States. In the absence of such proof, the goods would be considered contraband and subject to seizure. Trade now became a much riskier enterprise for American merchants, with their vessels increasingly falling prey to privateers empowered by “letters of marque” to seize goods Britain viewed as aiding the enemy. But as historian Gordon Wood explains, “It was not the actual number of seizures that most irritated Americans; rather it was the British presumption that His Majesty’s government had the right to decide just what American trade should be permitted or not permitted. It seemed to reduce America once again to the status of a colonial dependent. This was the fundamental issue that underlay America’s turbulent relationship with Britain through the entire period of the European wars.”
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At stake here, in other words, was the very power to define what constituted contraband, and for the United
States losing this definitional battle to its former rulers was yet another unhappy reminder of its subordinate position.

In further disrespect of U.S. sovereignty, British ships increasingly stopped and boarded American vessels in search of British subjects among the crew—essentially treating them as human contraband and therefore subject to seizure. Any man without documents validating his American citizenship could be forcibly removed and impressed into the British Navy. And even those with documents were treated with suspicion, given the ease with which papers could be forged or bought. “[T]he flagrant and undeniable abuses of the official documents of American citizenship,” concluded the Admiralty, “have obliged their Lordships to look at all such documents with the utmost distrust.”
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Many sailors were in fact deserters from the British navy. At the time, no British subject had the legal right to expatriate to another country. From the British perspective, then, these sailors were essentially illegal migrants who had smuggled themselves to America in violation of British emigration laws; and their numbers were not insignificant. Secretary of the Treasury Albert Gallatin acknowledged that an estimated nine thousand out of twenty-four thousand sailors aboard U.S. vessels were British subjects.
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The excuse they provided for British interference in American shipping had serious political ramifications.

Napoleon, meanwhile, escalated his war with Britain in 1806 by stepping up his attacks on Britain’s trading relations, often at the expense of American shippers. In what came to be known as the Continental System, Napoleon declared a prohibition on trade with Britain, including seizing all goods and ships (regardless of nationality) departing from British ports and those of its colonies. Already alarmed by the British crackdown on the carrying trade, this was more dismaying news for American merchants, since the combination of these restrictive English and French moves essentially criminalized all neutral commerce. American trade would continue, and even flourish, but in a far more chaotic and violent Atlantic world.
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France had essentially declared war on American trade with England, and England had similarly declared war on American trade with France. “The English take all vessels bound to Spanish or French ports and the Spanish or French take all vessels bound to or from an English port,” wrote one American
merchant in 1807. “As all the Ports in Europe are either English, Spanish or French, we are therefore prevented from going any where or coming from any where.”
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Thus, unavoidably, one or the other major European powers now treated previously neutral American trade as contraband commerce.

Breaking France’s Haiti Blockade

While the European carrying trade involved creatively navigating the shifting line between licit and illicit commerce, American merchants also engaged in trade that was unambiguously illegal.
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American merchants trading with Haiti’s rebels, for instance, involved violating both French and U.S. laws, and this starkly revealed the tenuous nature of the federal government’s authority over the country’s merchants. Trade between the United States and the French colony of St.-Domingue grew rapidly in the second half of the 1780s, with American merchants exchanging dried fish, pickled fish, processed beef, livestock, and flour for coffee, rum, and sugar. By 1790, almost all U.S. molasses and sugar imports came from the island.
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This trade not only persisted but also expanded after the outbreak of the Haitian Revolution in 1791, with American merchants in New York, Philadelphia, and Baltimore dominating the market.
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At the end of the decade, American arms and other supplies were so crucial that the black rebels started calling Americans “the good whites.”
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French envoy to the United States Louis Pichon complained that despite his country’s efforts to militarily interdict the illicit trade, “the American merchants … would still find some means of trading” with the island “by resorting to trickery at first and finally to force.”
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After taking office in 1801, President Jefferson publicly expressed sympathy for the French position, yet in practice he took a hands-off approach toward the country’s merchants. In response to French accusations that the United States was continuing to illegally arm the Haitian rebels, Secretary of State James Madison emphasized the distinction between the official policy stance of the American government and the behavior of the country’s merchants.
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There was mounting evidence, however, that the latter were not only arming their vessels without authorization (to fend off French privateers and break through
the French naval blockade of Haiti) but doing so with the complicity of U.S. customs agents in ports from New York to Charleston.
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Pichon charged that American merchants were engaged in “a private and piratical war against a Power with which the United States are at peace.”
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Ever-louder French complaints compelled the Jefferson administration to finally push to put a stop to the Haiti trade. This would be just the beginning of a long and difficult campaign by Jefferson to more forcefully police American merchants, in this case not over the payment of customs duties but rather over trade that violated national policy and undermined U.S. diplomacy. Jefferson wrote in his Fourth Annual Message to Congress in 1804:

Complaints have been received that persons residing within the United States have taken on themselves to arm merchant vessels and to force a commerce into certain parts and countries in defiance of the laws of those countries. That individuals should undertake to wage private war, independently of the authority of their country, can not be permitted in a well-ordered society. Its tendency to produce aggression on the laws and rights of other nations and to endanger the peace of our own is so obvious that I doubt not you will adopt measures for restraining it effectually in the future.
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Jefferson’s call for action prompted not only political resistance but charges of hypocrisy and government complicity. Federalist Senator William Plumer of New Hampshire bluntly stated in November 1804, “Our merchants have traded to St. Domingo [Haiti]—Our government has never once intimated to them that that trade was unlawful—or that they ought not to arm their vessels in carrying it on.” He continued: “On the contrary our Merchants have at our Custom houses cleared out their vessels for that island, when they were known to be fully armed & manned. Not a single Collector has refused, or even hesitated, to give them a Clearance. Will our government now … expose our innocent merchants to ruin!”
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After extended debate, Congress passed a watered-down law in 1805. Congressman George Logan, a strong backer of the administration, acknowledged that the new law had “operated as a deception” and that, in practice, “the trade with St. Domingo has been carried on to as great if not greater extent than formerly.”
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The French were well aware of the growing disconnect between official U.S. policy and commercial practice. Only months after the law was enacted, French General Louis Ferrand, commander of Napoleon’s forces in Haiti, declared war on all American shipping in the West Indies. Ferrand listed by name a number of armed American merchant vessels that “are not only engaged in that execrable commerce, but actually transport the arms and ammunition of Dessaline’s [
sic
] army from one port to another, thereby becoming auxiliaries of the black rebels against France.”
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Scrambling to salvage relations with France, Jefferson now pushed to fully prohibit the Haiti trade. But skeptics in Congress argued that such a prohibition was unenforceable. Congressman Jacob Crowninshield of Massachusetts commented that regardless of what restrictions are passed, “you cannot stop the intercourse between citizens of the United States and the inhabitants of St. Domingo.”
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And indeed, historian Donald Hickey notes that despite the February 1806 ban on U.S. trade with Haiti, “American supplies reached Haiti anyway, carried either in foreign ships or in American ships operating clandestinely.”
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American merchants had no particular political affection for the Haiti rebellion. Far from it: many were nervous that it could inspire slave revolts at home. But this was a business opportunity too good to pass up.