Engerman S.L., Gallman R.E. The Cambridge Economic History of the United States, Vol. 1: The Colonial Era

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The

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Colonies:

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and

Society

227

growth that the northern colonies measured before 1775 can be accounted

for by the mushrooming reproduction of rural households.

Much less economic growth, by comparison, stemmed from gains in

economic productivity. The northern colonists had a model for agricul-

tural improvement in the rural economy of England, which marked steady

progress from the late seventeenth century onward, but with land so

abundant, it made much more sense to invest time and resources into the

development of new land than into any attempt to work previously cleared

acreage more intensively. Even on the best soils of eastern Pennsylvania,

where the commercial incentive to raise productivity was strongest, inter-

est in proper rotation patterns, nutrient-fixing crops, protein-rich grasses,

fertilizers, and selective breeding remained limited to a tiny minority of

farmers until after the Revolution. Accordingly, insofar as changes in per

capita wealthholdings give some indication of changes in the level of

economic activity, it seems that rural people planted European husbandry

in American soil and raised its productivity up to European levels within

the first generation of settlement but did not improve upon their yields

and herds before the end of the colonial period. The livestock holdings of

most farmers in Pennsylvania and Massachusetts compared favorably with

those of their English counterparts within a quarter-century of settlement

but did not grow further before 1775. Grain and hay yields were high on

newer lands, but they did not rise (and in New England may, indeed, have

fallen) toward the end of the colonial period. The value of land and land

improvements climbed over time - most rapidly in the earliest decades of

settlement (when much of it was being cleared) and during the third

quarter of

the

eighteenth century (when the demand for foodstuffs overseas

was increasing) - but the degree to which this reflected growth in the

productivity of farm labor itself

unclear.

A more likely arena for rising productivity in the rural economy was in

craft manufacture. During the seventeenth century, when there was, in

William Bradford's words, so much "labour and servise to be done aboute

building and planting," and when opportunity to hunt and fish was as

close as the untamed forest, the craft skills that immigrants had brought

with them were largely laid aside.

With the development of regional

markets and the growth of population in older towns beyond the employ-

ment opportunities in agriculture, farm families began to spend more of

their time on domestic manufacture, craft services, and wage labor. Al-

William Bradford, Of Plymouth Plantation, 1620-1641, ed. Samuel Eliot Morison (New York:

1952),

28.

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228 Daniel

Vicfeers

ways the principal workers in manufacture throughout the early modern

world, women participated in this development but probably experienced

it as less of a change. Spinning probably came to occupy more of their time

in the eighteenth century (or so it seems from the slowly rising incidence

of woolen and linen wheels in farm inventories), but textile work had

always lain within the female province even at the beginning of settle-

ment. The same was true with tailoring and the running of dairies;

although more of

this

production may have been commercially directed in

the later colonial period, the shift was slight. For men, the growing

interest in by-employments (craft manufacture and wage work pursued on

a part-time basis) marked more of a transformation - or at least a resump-

tion of Old World habits after the frontier interlude. Although a few

artisans such as smiths, millers, and carpenters normally moved into

newer settlements and stuck to their trades, the great majority of found-

ers,

regardless of their training, styled themselves only as planters or

farmers and retained little in the way of specialized craft equipment. As

communities matured, the outdoor tasks of land clearance, fencing, con-

struction, and hunting

—

all of which framed the growing season

—

diminished in importance, and men had to find ways of otherwise improv-

ing the idle days between harvest and ploughing times. In the second and

third generation, therefore, rural youths began learning trades to support

themselves until they came into land of their own and later to supplement

the income from their farms. In Acadia, although virtually all the planters

worked the land, a census taken as early as 1671 styled many inhabitants

by specialized occupational titles that included: surgeon, weaver, cooper,

farrier, gunsmith, joiner, mason, carpenter, tailor, and toolmaker. Shoe-

making, seafaring, and ironworking, as well as shipbuilding and other

forms of carpentry, were especially popular from New England southward

to Pennsylvania; but the full range of by-employments, which these young

colonists adopted to fortify themselves against the threat of underemploy-

ment, was very broad. Although it is impossible to measure the contribu-

tion that the combined labors of women and men in such by-employments

made to the rural economy, it provided the beginnings of import substitu-

tion. In the short run, it produced no industrial transformation of

the

sort

that was gathering force in western Europe after 1750, but it did set the

stage for something similar following Independence.

The density of economic integration within rural communities and

across the regions of which they formed a part did not distinguish the

northern colonies absolutely from their plantation counterparts. Still, the

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history of that integration - rooted in the diversified household labors of

both sexes and patterned on the European example - was already well

established in the Northeast when it began to spread across the South.

And it was this degree of regional integration that gave the northern

colonies a further distinctive quality: their dynamic maritime economy.

THE SEAPORT ECONOMY

Much of the money that financed the original settlement of the New

World came from merchants and gentry who planned to win their invest-

ment back from profits earned in the transoceanic business of supplying

the settlers and shipping their produce to market. Rarely did they antici-

pate moving to the New World, and rarely was it necessary. Although

there were many problems in the organization of production that had to be

sorted out on the western shores of the Atlantic, the business of provi-

sioning plantations and assembling staple crops for export was relatively

straightforward, and the colonial end could often be handled either by

agents or by the planters themselves. The real complexities of the trade lay

in the old country, where the problems of recruiting capital, assembling

dry goods for shipment to the colonies, distributing the colonial produce

to consumers across Europe, and dealing with the imperial administrators

and their regulations demanded that the major players be present. For

plain business reasons, the great merchant houses that organized the

colonial trades remained resident in Seville, Amsterdam, Genoa, Lisbon,

London, Bordeaux, and a host of smaller ports, and they rarely migrated

to the Americas.

In the northern colonies, trans-Atlantic trade started with vessels from

ports like Bristol, Plymouth, Le Havre, La Rochelle, and San Sebastian,

which conducted the early migratory fishery and carried dried cod to

Southern Europe. The commercial needs of New Englanders - in both the

import of dry goods and the export offish and timber - were first handled

chiefly by their Puritan connections within the merchant community of

London. The Dutch West India Company held a monopoly on trade in

New Netherland until 1639, and a small coterie of Amsterdam merchant

families dominated the colony's commerce thereafter. Philadelphia was

the last-founded of the major northern colonial ports and launched into

overseas trade faster than any other; yet in the first half-century, it too

depended on British or New England capital and shipping for most of its

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230 Daniel Vickers

trans-Atlantic business. Throughout the Northeast, even the earliest per-

manent settlements possessed wholesale merchants, who assembled car-

goes of fish and farm produce and placed sizable orders for European

goods, but almost never were these individuals "traders by sea," who

ventured their wealth abroad and assumed the full risk of commerce.

What distinguished the seaboard communities north of the Chesapeake

from their counterparts to the south was the rapidity with which northern

colonial traders evolved into merchants in the full sense of the word:

owning and managing ships, providing banking and insurance services for

other dealers, financing local industries, and buying and selling in a

multitude of different markets. Except for the local underwriting of insur-

ance, most of these functions had developed in Boston before 1675

were common to Newport, New York, and Philadelphia by the early

eighteenth century. It is true that through to the end of the colonial

period, even the wealthiest of American merchants remained dependent in

much of their business on European capital. During the commercial boom

that followed the Seven Years' War, for example, British merchants

flooded the colonial ports with dry goods sent on their own accounts to be

sold on commission. By the outbreak of the Revolution, however, the four

port towns mentioned above had become general

entrepots

(centers of

ware-

housing and distribution), on at least the scale of such secondary European

ports as Bristol, Nantes, or Cadiz.

For many years, historians have rightly celebrated the role of merchants

in the development of these seaport economies. One should not overesti-

mate the merchant contribution, however, since a great many of the

decisions taken in their name - constructing vessels, operating them,

negotiating in foreign ports, managing small manufactories, and so on -

were delegated to the master mariners and craftsmen who were the special-

ists in their respective fields. Where merchants did play a central role was

in the coordination of these separate activities through the manipulation of

capital. Thomas Doerflinger has argued that the economic dynamism of

the northern colonies depended upon the peculiarly "vigorous spirit of

enterprise" of the business class, which stemmed in turn from the special

challenge of trying to wring profits from a newly developing region that

exported little that could not be obtained within Europe itself.?

The more

Jacob M. Price, "Economic Function and the Growth of American Port Towns in the Eighteenth

Century,"

Perspectives

American

History 8 (1974), 138.

Thomas M. Doerflinger, A

Vigorous

Spirit of

Enterprise:

Merchants

and

Economic Development

Revolu-

tionary Philadelphia (Chapel Hill, NC: 1986).

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fundamental question, however, is why merchants were there in such

numbers to begin with. This is an important problem, because the local

residency of merchants was not a necessary consequence of settlement

itself,

even in prosperous colonies, yet it was invariably

factor of consider-

able economic advantage. The most probable explanation is that in order

to profit from coordinating and financing such complex economies

—

complex because diversified, and diversified because settled in families

—

successful entrepreneurs had to be on the spot. Relatively simple colonial

economies based on one or two staple exports could be serviced from a

distance; witness the rapid growth of the Newfoundland fisheries and of

the Chesapeake and West Indian plantations - financed and often owned

overseas. The same was not true where colonies were more locally inte-

grated. The creative development of the carrying trades and the fisheries

was largely a merchant achievement therefore, but it was an achievement

that can be understood only within the context of the diversified regional

economies that demanded a merchant presence.

In New England, the first local merchants began by acquiring dry

goods imported on the accounts of London dealers and retailing them to

immigrant planters who paid for their purchases in the coin they had

brought with them. The calling of the Long Parliament in 1640 and the

subsequent outbreak of the English Civil War, however, brought an end to

the Puritan Migration and choked off this inflow of immigrant specie.

Merchants in Boston and Salem had to begin casting about immediately

for other ways of raising payment to cover their obligations overseas. This

they managed in remarkably short order by assembling cargoes of farm

produce, timber, and fish for delivery to English vessels and shipment to

the Wine Islands and Southern Europe. This was no simple business; it

involved coordinating a complex network of independent small producers.

In essence, the diversity of Massachusetts' population, even at this early

stage in its history, created both a demand for merchant services and an

opportunity for merchant profit. Fishermen had settled on the maritime

periphery of the Bay Colony because they could obtain there the land,

provisions, and equipment they required. Planters had carved farms from

the wilderness knowing that they could service precisely the sort of urban

market that fishermen provided. And craftsmen had scattered across the

region on the understanding that they might supply the specialized needs

of seamen and landsmen alike. There was money to be made in facilitating

the myriad small transactions that connected these families, and it was in

this activity - complicated enough to demand the sort of intricate local

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232 Daniel

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knowledge that residence made possible - that the first generation of New

England merchants found their niche.

Building on their strategic position within this regional market, traders

in Boston (during the 1640s) and then in Salem and Newport (after 1660)

began to experiment in launching overseas ventures of their own. With

skilled shipwrights in towns like Newbury and Scituate to furnish them

with hulls, blacksmiths and riggers in the larger ports to ready these

vessels for sea, fishermen outfitted on credit to provide them with cargoes,

and farmers with cartloads of produce sufficient to provision voyages, local

merchants were in a position to compete effectively with their counter-

parts in the Old World: first in the coasting trades to Newfoundland,

Long Island, and the Chesapeake; then in the West Indian market; and

sometimes in voyages to certain portions of Europe

itself.

The objects of

this commerce included not only fish, meat, horses, flour, and barrel

staves, but also reexported English manufactures and Caribbean sugar,

and even the vessels themselves, which European shipowners appreciated

for their reasonable quality and low cost. The volume of trade was not

enormous, and into the early eighteenth century, New England commerce

retained a speculative flavor. The risks in trading across war-torn waters

into relatively thin colonial markets led to a rapid turnover in personal

fortunes, the continual reorganization of merchant groupings, and

prefer-

ence for operations on a fairly small scale. Yet the complexity of this

business was considerable, and Boston in particular evolved into a general

entrepot of surprising maturity within a half-century of its foundation.

The maritime economy of New England continued to grow in extent

and productivity, though at a diminishing rate, through the end of the

colonial period. Although the tonnage of shipping that cleared Boston

harbor annually for foreign ports only doubled, from 20,927 in 1714—7 to

42,506 in 1772, the volume of trade out of secondary ports like New-

buryport, Salem, and Marblehead picked up much of

the

pace.

Shipbuild-

ing in Massachusetts rose by 150 percent between 1697—1704 and 1769—

71,

and New Hampshire yards were also launching many more vessels

toward the end of the period. Annual exports of codfish from the Bay

Colony rose from 120,000 quintals in 1716 to average 350,000 during

the period 1765—75, and the yearly product of the whaling industry

(launched on Cape Cod and Nantucket at the beginning of

the

eighteenth

century) climbed from 600 barrels in 1715 to 30,000 barrels during

1772—5.

During the fifty years leading up to the Revolution, productivity

in the various seafaring industries, as reflected (imperfectly) in declining

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ocean freight rates and rising per capita output of codfish and whale oil,

probably climbed at an annual rate of between 0.5 and 1.0 percent. Some

of these gains were organizational

—

mainly economies of scale made possi-

ble by the growing safety, regularity, and volume of trade within the

developing imperial market. Thus, by the end of the colonial period,

merchants could profitably employ larger ships with smaller man/tonnage

ratios,

turn them around more swiftly in port, and pay less in insurance

than they had at the beginning of

the

eighteenth century. Other advances

had more to do with developments in technology. In the fishery, the

adoption of schooners untied crews from the coastline and freed them both

to follow the seasonal migrations of the cod from one offshore bank to

another and to remain in their ocean-bound workplace without interrup-

tion when the fish were biting. The whaling industry also moved to larger

vessels not only to extend its range but later to accommodate the installa-

tion of try works, used to render the whale oil on board the ship.

The pace of growth in New England's maritime industries declined in

the latter half of the colonial period for a number of reasons. For one

thing, as population began to press against the supply of productive land

throughout the region, shipowning merchants had to search farther afield

for cargoes. New England ports in general, and Boston in particular, had

also to bear the progressively sharper competition from their rivals in New

York and Philadelphia, and the deep-water transport that Yankees com-

monly performed for merchants in the Middle Colonies before the mid-

eighteenth century gradually dried up. In terms of productivity, more-

over, it is almost certain that the greatest gains were captured in the

seventeenth century, when merchants, seamen, shipbuilders, and the like

were first mastering the task of applying the knowledge of organization

and technology developed in the mature economy of

the

Old World to the

resource-abundant but practically undeveloped environment of the New.

The whaling industry is a case in point. Initially, the colonists on Long

Island and Nantucket prospered at an extraordinary rate simply by first

employing an inexpensive and traditional Basque and Dutch boat-based

technology on the herds of right whales migrating past their shores and

then selling the oil at a world price determined mostly by the far more

costly and capital-intensive whale

fishery

pursued by European whalers in

Arctic waters. As the eighteenth century wore on, the adoption of larger

ships and the launching of longer voyages allowed output to continue

rising but at a progressively slower

pace.

Thus the quantity of oil landed at

Nantucket rose at an annual rate of 12 percent between 1715 and 1730, 6

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234 Daniel

Vickers

percent between 1730 and 1748; and only 4 percent between 1748 and

1772.

In most branches of this preindustrial northern economy, economic

growth was most dynamic in the early days, when there was most to be

learned about this rich and lightly exploited environment. In New

England

—

the first-settled of the northern colonies

—

this slowdown, if

mild, was nonetheless measurable from the depression following Queen

Anne's War through the Revolutionary War.

New York was the oldest of the major American ports but also the

slowest to develop. Founded in the 1620s by the powerful Dutch West

India Company as a fort to protect the entry to the New Netherland

colony, it served next to no commercial function at first beyond the

warehousing of furs and trade goods. After the Company relinquished its

trade monopoly in 1639, most local commerce was captured by a handful

of Amsterdam firms, but

few colonists - among them, such ex-company

officials as Frederick Philipse and Oloff Van Cortlandt

—

joined in the

export trade on their own account. After New Netherlands passed into

English hands in the 1660s, merchants based in the colony and experi-

enced in the trade took advantage of the exclusion of Dutch shipping

under the Navigation Acts and began shipping furs abroad themselves.

Because peltry was high in value relative to its bulk, New Yorkers devel-

oped an early interest in searching out complementary cargoes - Virginia

tobacco, whale oil from Long Island, or logwood from the Yucatan - to

obtain the fullest possible lading for their vessels. Furs arrived in the

colonists' hands fully processed and did not become the object of further

manufacturing until delivered to the shops of European hatters and furri-

ers,

hence they did not provide

particularly strong staple base for diversi-

fication and development. Furthermore, since the Dutch West India Com-

pany showed little interest in peopling its colony (and there was not much

else to persuade prospective emigrants to leave the prosperous, tolerant

Netherlands to face the difficulties of homesteading on a frontier contested

by English, French, and Iroquois), the growth of an agricultural hinter-

land and the business of servicing it was also slow to develop.

Beginning in the last quarter of the seventeenth century, however,

family farming on the model of the Old World began to develop in New

York

—

owing partly to natural increase amongst earlier inhabitants and

partly to the new inflow of German, English, Scottish, and French Hugue-

not families. With the spread of the household economy that they prac-

ticed (mainly as tenants in East Jersey and up the Hudson) arose in tandem

the commercial importance of New York as a port. The surplus of home

The Northern Colonies:

Economy

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235

produce found its way into the hands of Manhattan merchants, either

through dealings within the regional market or in the form of rents paid

directly in wheat (since most of the great landlords lived in town and were

also the colony's principal exporters); this fueled the growth of a sizable

export trade to the West Indies, southern Europe, and Britain from the

1670s onward. Some items were sent abroad in relatively unprocessed

form, but others like potash, whale oil, bread, and barrel staves were

products that passed through several hands in their local manufacture and

enriched those local traders who facilitated the necessary interregional

exchange. The considerable crops of wheat that were harvested in Albany

County, for example, kept local millers busy enough in 1769 to fill "31

sloops . . . which carry from 400 to 500 barrels of Flour each, trading

constantly from thence to [New] York & ... make Eleven or 12 Trips a

year each."

A good many New York merchants had interests in the

numerous little mines and iron foundries across the Hudson in New Jersey

that they furnished with capital, specie for wage payment, provisions

obtained upriver, and shipping both locally and abroad. On the one hand,

it was the presence of a sizable merchant community on Manhattan that

spurred this sort of productive, linked development; on the other hand, it

was the rising activity of settled and diversified rural households from the

end of the seventeenth century onward that sustained the growth of a

resident trading community and profitable maritime sector in the first

place.

Although Philadelphia's history as a port began in 1682, a good

half-

century after the foundings of Boston and New York, it had passed its

colonial competitors in population, cleared tonnage, and value of exports

by the middle of the eighteenth century. The city on the Delaware was

born with a combination of advantages that, in a preindustrial world, no

other North American urban center could match. The first was its large

and fertile hinterland

—

productive enough to allow Philadelphia mer-

chants to have begun a regular provisioning trade to the West Indies that

already numbered ten vessels annually in 1689. By 1700, wheat had

established itself as the colony's prime commodity and one that local

farmers could raise efficiently enough to penetrate even European markets,

where it had to compete with local produce. In 1711, Isaac Norris could

write that "the country has within 10 or 12 years Encreast to near Ten

times its ... produce of Corne [,] wheat Especiallyf,] and the Markett of

'» Richard Smith, Journal (1769), quoted in Bidwell and Falconer, History of

Agriculture

the Northern

United States, 140.

236 DanielVickers

Lisbon hath been of great advantage to

us."

This latter business could be

enormously profitable, especially during the years

—

not uncommon in the

eighteenth century

—

when European harvests foiled, prices soared, and

the wheat trade commanded at healthy freighting charges every idle ship

in the harbor.

Philadelphia's second edge stemmed from the character of Pennsylva-

nia's original migrant population. Like the Massachusetts Bay Company

but unlike the Dutch West India Company, William Penn had taken real

pains to encourage settlement in family units. Penn realized that although

single people might be willing to emigrate to parts of

the

New World that

lacked the diversity of services that Europe afforded, families in general

were not. From the beginning, therefore, he consciously recruited a wide

variety of skilled tradesmen and a fair community of merchants to coordi-

nate and exploit the complex of local talent, so that they themselves might

prosper as they facilitated the reproduction of households about them.

Samuel Carpenter, a Quaker merchant from Barbados, came to Pennsylva-

nia in 1683 and launched a collection of enterprises that seized upon this

plethora of human capital - organizing the construction of

the

town's first

wharf,

financing several grain mills, founding a lime-burning business,

and trading to the West Indies

—

all with such success that by the 1690s,

he was the wealthiest trader in the province. Shipowning was an impor-

tant part of his business, and again he was well-situated in Philadelphia,

where local craftsmen had been launching vessels since the year he arrived.

By 1692, Isaac Norris could report that already "we are Rarely without ten

or twelve Vessels on ye Stocks."

The "laborious handicrafts{men]" and

"industrious husbandmen" that flocked to Pennsylvania generated enough

business in their desire to establish their own ships and farms and in their

demand for English imports to support Carpenter and dozens of other

dealers."

More than any of the other northern mainland colonies, Pennsylvanians

concentrated on the production of

single export crop - wheat. By

itself,

as the example of the plantation colonies proved, no staple product how-

ever valuable could guarantee the parallel development of port facilities,

merchant exporters, or a thriving maritime sector. Considered strictly as

*> Isaac Norris to Joseph Pike [?], June 1711, quoted in Frederick B. Tolles, Meeting House and

Counting House: The Quaker Mmbants of Colonial Philadelphia, 1682-1763 (Chapel Hill: 1948),

87n.

" Quoted in Joseph A. Goldenberg, Shipbuilding in Colonial

America

(Charlottesville, VA: 1976), 50.

" Penn, "Some Account of the Province of Pennsylvania," in Soderlund, ed., William

Penn

and the

pounding of Pennsylvania, 63.