Shipping Industry

views updated


The shipping industry was vital to the early American economy. Before the Revolutionary War, the colonies' annual exports averaged £2,846,000, while imports totaled £4,233,844. Only the South maintained a favorable balance of trade; that region mainly focused on growing and exporting its extremely lucrative crops: tobacco, rice, and indigo. The situation was different in the North. Though the middle colonies had a staple crop in wheat, merchants there still imported twice as much as they exported. New England's rocky soil did not permit a staple crop; the region had to import foodstuffs from other colonies, and its imports were triple its exports. Lacking the valuable agricultural products of the South, northern merchants turned to shipping and merchandizing services. Between 1768 and 1772 colonial shipping earnings averaged £610,000, a figure second only to tobacco exports, which had an annual value of £766,000. (This was followed by bread and flour, £410,000; rice, £312,000; fish, £115,000; indigo, £113,000; corn, £83,000; pine boards, £70,000; staves and headings, £65,000; and horses, £60,000.)

colonial era

Philadelphia and New York City were the major ports of the middle colonies; merchants varied in their income and prestige, but some of them, such as Stephan Girard and Robert Morris of Philadelphia and Peter Livingston of New York, were among the richest men in the colonies. Wheat was the main middle colony export, but merchants also dealt in flour, flaxseed, barrel staves, and meat, dividing their trade among Britain, southern Europe, and the West Indies. Like their New England counterparts, middle colony merchants (with the exception of Quakers) dealt in slaves. Early on, merchants used Britishowned ships, but by 1770, three out of five ships clearing New York and three out of four in Philadelphia were locally owned, giving rise to an active regional shipbuilding industry.

Of New England's exports (which included livestock, salted and preserved fish, wood products, rum, and potash), 60 percent went to the West Indies, 19 percent to Britain and Ireland, 15 percent to Europe, and 3 to 4 percent to the African slave trade. Boston and Newport were the region's primary ports; secondary centers included Portsmouth, Salem, and Gloucester, Massachusetts; Providence, Rhode Island; and New Haven and New London, Connecticut. Such New England merchants as Thomas and John Hancock of Boston, the Tracy and Jackson families of Newburyport, and Robert "King" Hooper of Marblehead amassed substantial wealth and built palatial homes from their earnings in shipping.

In the Chesapeake, the main crop was tobacco, shipped primarily through Scottish and English factors employed by British merchants. By the 1770s Chesapeake farmers had diversified into wheat production and were exporting 100 million pounds of tobacco and 3,000 tons of flour and bread annually. The grain trade produced new settlements, including Alexandria, Fredericksburg, and Richmond, Virginia, and Baltimore, Maryland, which had become the nation's leading flour market by 1800. These cities did not approach northern urban centers in size, but they offered more commercial services than the small towns where tobacco factors worked.

In the Lower South the main port was the wealthy city of Charleston, South Carolina. Rice was by far the most valuable export; merchants shipped two-thirds of the crop each year to Britain and sold the remainder to southern Europe and the West Indies. Other products included indigo, naval stores, and lumber products, which went mainly to Britain, and grain and meat products, sold in small quantities to the West Indies.

The French and Indian War (1754–1763) profoundly affected American shipping. An influx of money accompanied British troops to America. The House of Hancock in Boston, for example, owed much of its considerable fortune to supplying British forces during the war. However, with peace the general prosperity ended. In 1764 and 1765 Parliament imposed the Sugar and Stamp Acts, which attempted to tax the colonies to help pay for the war, and in 1767 they passed the Townshend Act, which imposed import taxes on tea, glass, lead, and paper. These actions prompted American merchants, some more willingly than others, to sign nonimportation agreements. The Tea Act of 1773 had a similar but even more devastating effect on shipping; when a group of Bostonians destroyed a valuable shipment of tea in protest, Parliament passed a bill closing Boston's port. This and other Coercive Acts (1774) prompted the newly formed Continental Congress to curtail shipping (except for the lucrative rice trade) to Britain and the British West Indies.

the revolution and after

When war broke out officially in April 1775, American overseas trade shut down completely; later that year Congress authorized trade with the West Indies, and in 1776 trade resumed with other non-British areas. However, until 1778 British ships blockaded New England (except Boston) and middle colony ports; after 1778 the British moved the blockade south to Savannah and Charleston. Some American merchants gave up their ships to the fledgling American navy, but others turned to smuggling or privateering or ran blockades to trade with France, Spain, and Holland, though commerce never reached prewar levels.

After the Revolution, the nation experienced numerous economic problems, some directly linked to the struggling shipping industry. Britain prohibited American trade with the West Indies, placed high duties on rice and tobacco, and declared American-built vessels (no matter who the owner) ineligible for imperial trade. Spain and France also withdrew or curtailed their wartime trade agreements. Moreover, now that America was no longer under Britain's protection, pirates from the Barbary States in North Africa harassed American ships and demanded bribes in return for safe passage.

American exports rose after 1793, when France and Britain went to war; both countries converted their merchant vessels to warships, and American shippers found markets for food and other supplies in Europe. However, trade came at the risk of losing ships and sailors to the French and British navies, as each side resented America doing business with the other. (From 1798 to 1800 America and France waged a Quasi-War over this issue.) The problems of ship seizures and impressments continued when France and Britain resumed hostilities in 1803 after a two-year lull. In response, President Thomas Jefferson imposed the Embargo of 1807, which prohibited American ships from engaging in any foreign trade. The disastrous embargo particularly affected New England, where reliance on shipping was greatest; it was lifted in 1809 with certain restrictions. Continuing interference with shipping led America to declare war on Britain in 1812, and exports fell drastically until the war ended in 1815. (The crisis prompted some northern merchants to invest in manufacturing, especially textile and shoe production, to ease reliance on imports.)

Despite these interruptions, in the early nineteenth century American ships were involved in the China tea, California hide, international whaling, and cotton trades, as the shipping industry benefited from the technological, transportation, and managerial innovations that characterized this era. With the invention of the cotton gin, cotton became the South's major crop. Between 1793 and 1815, annual production rose from 3 million pounds to 93 million pounds; by 1840 cotton comprised half of all U.S. overseas shipments. New designs in ships meant increased efficiency and cargo space; capacity grew from an average 300 tons in the 1820s to 1,000 tons by the 1850s. As Americans expanded further west, new canals, turnpikes, and steam-powered riverboats streamlined the movement of farm products to eastern and southern ports. In 1818 New York's Black Ball Line introduced regularly scheduled transatlantic crossings, a move that helped New York surpass Philadelphia as the nation's premier port. By 1829 the nation was poised on the brink of a golden age of American shipping, symbolized by swift, tallmasted clipper ships and expansion into distant markets. The British development of an iron-hulled, oceangoing steamship signified that even more change was imminent, but until 1860 wooden sailing ships continued to dominate the industry.

See alsoChina Trade; Embargo; Foreign Investment and Trade; Merchants; Quasi-War with France; Shipbuilding Industry; Slavery: Slave Trade, African; Steamboat; Transportation: Canals and Waterways; War of 1812; Whaling .


Baxter, W. T. The House of Hancock. New York: Russell and Russell, 1965.

Doerflinger, Thomas M. A Vigorous Spirit of Enterprise: Merchants and Economic Development in Revolutionary Philadelphia. Chapel Hill: University of North Carolina Press, 1986.

Green, Jack P. Pursuits of Happiness: The Social Development of Early Modern British Colonies and the Formation of American Culture. Chapel Hill: University of North Carolina Press, 1988.

McCusker, John J., and Russell R. Menard. The Economy of British America, 1607–1789. Chapel Hill: University of North Carolina Press, 1985.

Shepherd, James F., and Gary M. Walton. Shipping, Maritime Trade, and the Economic Development of Colonial North America. Cambridge, U.K.: Cambridge University Press, 1972.

Diane Wenger