Merchants

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MERCHANTS

In eighteenth-century parlance, a "merchant" was a wholesaler who traded in foreign markets. Residing in seaport cities, with their businesses and even their homes usually located conveniently close to the wharves, merchants played key roles in the early American economy. Merchants arranged for farm products to move from the countryside to seaports, imported manufactured necessities and luxuries for colonists' consumption, and shipped cargoes of raw materials and produce to Europe, the West Indies, and Africa.

In a precarious business world, merchants had to be flexible and versatile. Besides buying and selling goods, they served as bankers by extending credit and transferring funds, and acted as insurance underwriters. Because communications were slow and unreliable, merchants used agents in foreign ports to purchase and ship their orders of merchandise and to find buyers for their shipments from America. Alternatively, merchants might consign goods to a ship's captain or associate known as a supercargo, who traveled with the shipment and handled its sales. Merchants often hedged their investments by putting funds in business or real estate. Among New York merchants, land was the preferred investment; others owned shares of companies such as iron furnaces. A trader could specialize in dry goods (textiles, notions, and certain items of clothing), meaning that his main contacts were in Great Britain, or in wet goods (rum, molasses, coffee, and other imported groceries), in which case he did business in many ports. Generally, dry goods dealers were the more prosperous of the two groups.

It is customary to refer to a "merchant class," implying a coherent, wealthy group that wielded political and economic clout. But in fact merchants varied widely in their ethnicity, politics, religion, and income. In all the major seaports—Boston, New York, Philadelphia, and Charleston—some merchants were among the elite, upper ranks, but by no means were all merchants in that class. Philadelphia traders, for example, included wealthy merchants as well as middling ones whose income was equal to that of a shopkeeper or artisan. (Even struggling merchants enjoyed a higher social status than that of artisans or mechanics, however, because they did not work with their hands.) Most merchants who did reach the upper strata worked their way up rather than relying on inherited wealth; they did not have time for politics while they were active in business. Thomas Hancock, for example, the son of a Puritan minister, began as a bookseller in Boston and made his fortune by supplying British troops during the Seven Years' War. He left a substantial business to his nephew, John Hancock, who succeeded him in the House of Hancock; John, however, found he had more aptitude, interest, and success in politics than he enjoyed as a merchant, and his business suffered as a consequence.

In the Lower South the status of upper-tier merchants was comparable to that of wealthy planters; merchants sometimes owned plantations as well as city businesses, and they intermarried frequently with planter families. Charleston, the fourth-largest (and wealthiest) city in the colonies, had the largest concentration of merchants in the South. By the late colonial period, Charleston merchants conducted 75 percent of the region's overseas trade; they did most of their business with British firms, with whom they formed close business and social ties.

The two principal ports of the middle colonies, New York and Philadelphia, had sizable merchant communities. In Philadelphia before the Revolution, about fifty men (or 10 percent of the total number of merchants) handled half of all the city's shipping. These top Philadelphia merchants were among the wealthiest men in America, and, though not rich by European standards, they lived in aristocratic fashion. Merchants such as Robert Morris and Joshua Fisher resided in three-story, elegantly furnished brick townhouses and frequently built countryseats outside the city.

In New England, Boston was the main port, but it competed for trade with lesser places, including Newburyport, Marblehead, Salem, Newport, Providence, and Portsmouth. Here too, certain families—the Faneuils, Hancocks, and Boylstons of Boston, and the Browns of Providence—rose to prominence, rising above the lesser merchants to form a wealthy, near aristocratic, class. Although he came to relish hobnobbing with the common man, John Hancock lived extravagantly, including riding in a coach with liveried servants.

Some merchants were actively engaged in the cause of liberty, whereas others were lukewarm. Hancock was popular among the working classes in Boston because of his Patriot stance and his association with Samuel Adams. When Hancock was placed under arrest for smuggling (evading duties was everyday practice for Boston shippers), a mob dragged a British custom boat through the streets, then burned it in protest. South Carolina merchant Christopher Gadsden was so ardent for the rebellion that he was known as a Southern Samuel Adams. Prominent Rhode Island merchant John Brown was among the locals who wounded the captain of the British customs boat Gaspée, then set it on fire in 1772. In Newburyport, Massachusetts, merchants supported the radical movement wholeheartedly, perhaps because they had fewer ties to Britain than merchants in other cities. In some cases merchants may have supported the periodic boycotts of British imports for economic reasons; it is possible that boycotts gave merchants a chance to unload the accumulation of dry goods that the British merchants had dumped on the American market, or that some merchants saw nonimportation as a way to drive competitors out of business.

In other instances merchants were cautious and conservative when it came to rebellion. Like their more zealous counterparts, they, too, worried about British infringement on American rights, and some were even willing to sacrifice for the cause. However, there was no sustained support among all merchants for nonimportation. In Philadelphia and New York, traders were reluctant to jeopardize business by cutting ties with British firms. Sometimes merchants supported boycotts under duress; in 1773 Philadelphia merchants James Abel and Henry Drinker anticipated a healthy profit when they agreed to sell tea for the British West India Company. They had to give up the commission when visited by a "tar and feather committee" enforcing the boycott against the Tea Act. Even in Boston, where there were major protests, including the Boston Tea Party, merchants were not united. The historian John Tyler found that, of 392 Boston merchants whose sentiments can be determined, 42 percent were Patriots and 39 percent were Loyalists. Loyalists tended to be Anglican dry goods traders with ties to British exporters, while most Patriots were Congregationalists who dealt in a variety of goods.

Sectional interests also played a role. When the Continental Congress decided to ban exports to Great Britain in response to the Coercive Acts, South Carolina insisted and Congress acquiesced that it continue exporting rice, a clear indication that neither all colonies nor all merchants were united in a course of action. The rice trade aside, Congress warned merchants that violators of the sanctions would be considered "enemies of American liberty." Because colonists were increasingly directing their resentment not only toward what they saw as British oppressors, but also at merchants and others in positions of power and wealth at home, mob rule continued to keep reluctant merchants in compliance.

Merchants may have had good reason to question rebellion, considering that after the war the nation plunged into a depression that lasted until the 1790s. Although they sought new markets in distant places, merchants were hampered by Britain's punitive trade restrictions and by lack of imperial protection. British merchants also dumped goods on the American market and then demanded payment in scarce specie (money in coin) rather than paper money, so that American merchants, in turn, pressed customers for payment and caused resentment among citizens already affected by the depression and inspired by the rhetoric of liberty. Moreover, wealthy creditors, including some merchants, pressed Congress to repay war loans and bonds, with interest and in specie, while ordinary citizens agitated for paper money and tax relief. When tensions between upper-class creditors and working- and middle-class debtors erupted in Shays's Rebellion in Massachusetts, merchants helped finance the militia that quelled it. Wealthier merchants and businessmen merchants were thus clearly aligned with the educated elites who believed that too much government in the hands of ordinary people was dangerous. They were also among the nationalists who backed the movement to craft a new Constitution that would strengthen the federal government and allow it to regulate trade, impose taxes, and raise a standing army, as well as rein in state and individual powers.

Throughout the nineteenth century northern merchants attempted to reduce the nation's reliance on imports by investing in factories. Indeed, by the antebellum era New England had become the nation's most industrialized region. New York and Baltimore continued to grow, while Philadelphia declined in relation to the other ports. By 1800 Baltimore merchants were siphoning off trade from the Eastern Shore and western Pennsylvania and leading the nation in flour exports. New York trade surpassed that of Philadelphia in the early nineteenth century, and Philadelphia merchants made the transition from being leaders of American commerce to holding important positions in banking, manufacturing, mining, and coastal trade. Southern planters and businessmen, rather than expand into manufacturing, continued to put their emphasis on agriculture.

bibliography

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Diane Wenger

Encyclopedia of the New American Nation