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Success and Failure Factors: American Merchants in Foreign Trade in the Eighteenth and Early Nineteenth Centuries*

Published online by Cambridge University Press:  24 July 2012

Stuart Bruchey
Stuart Bruchey
Affiliation:
Assistant Professor of Business History at Northwestern University
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Abstract

No definitive comparison of factors contributing to success and failure in business is possible. Yet a look at some of those factors, operative in a number of similar circumstances, helps sharpen the customary vague generalizations. An examination of the elements of prudence, diligence, housekeeping habits, intelligence, foresight, use of agents, degree of control, and teamwork suggests that in commerce of the period luck was probably of less influence than commonly supposed. A by-product of this broad inquiry is a specific and highly illuminating comparative picture of mercantile business practice.

Type
Articles
Information
Business History Review , Volume 32 , Issue 3 , Autumn 1958 , pp. 272 - 292
Copyright
Copyright © The President and Fellows of Harvard College 1958

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References

1 Pares, Richard, Yankees and Creoles (Cambridge, 1956), p. 139.Google Scholar Pares finds this “strange.” But except for the necessity of dividing profits with Joint investors no such calculations were required: merchants based their investment decisions not upon records of past gain or loss but upon fresh market information; Bruchey, S., Robert Oliver, Merchant of Baltimore, 1783–1819 (Baltimore, 1956), pp. 135–141.Google Scholar

2 In 1805. For this and other information about the duPonts I wish to express my gratitude to Dr. Norman B. Wilkinson, Research Associate of the Eleutherian Mills-Hagley Foundation in Wilmington, Delaware.

3 Porter, Kenneth W., The Jacksons and the Lees (Cambridge, 1937), Vol. 1, p. 4.CrossRefGoogle Scholar

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10 Hedges, op. cit., p. 11.

11 ORB 5, pp. 42–44, to P. Godeffroy Sons & Co., et al., March 22, 1803 (Md. Hist. Soc).

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20 See list of sailings in front of ORB 6 (Md. Hist. Soc).

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26 Baxter cites not only the records of a “general store,” but also those of an innkeeper and blacksmith (pp. 275, 278, 280). It is true that a merchant was also a storekeeper, but I disagree with Baxter's conception of the storekeeping function as the focal point of the merchant's business activity, an activity in which ventures in foreign trade are regarded as “sidelines to his principal business” (p. 280). Baxter first elaborated this conception in his interpretation of Thomas Hancock as driven to engage in a variety of trading enterprises by the necessity for obtaining sterling exchange with which to pay for the goods he imported from London for sale in his store. In my opinion, it is infelicitous to envisage Hancock's “little bookshop” as the “nerve-center of a complex and far-flung business,” which included shipowning, mining and paper mill projects. (Baxter, House of Hancock, pp. 45–48, 62.) I believe Hancock to have been a typical 18th-century merchant in the sense that he sought profits from investments in diverse enterprises.

27 Martin, Margaret E., Merchants and Trade of the Connecticut River Valley, 1750–1820 (Smith College Studies in History, Vol. XXIV, No. 1, 1938–1939), p. 144.Google Scholar Daybooks, how ever, are books of first, rough entry and can be expected to have been kept with less formality than journals.

28 Littleton, A. C. and Yamey, B. S., Studies in the History of Accounting (Homewood, Ill., 1956), p. 11Google Scholar (Introduction by B. S. Yamey).

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32 Ibid., p. 16.

33 Editor's preface (N. S. B. Gras), in Baxter, House of Hancock p. xxii.

34 White, op. cit., p. 656. But James was certainly not a meticulous bookkeeper all his business life (cf. p. 352 with pp. 469, 490, and 492).

35 Bruchey, op. cit., p. 364.

36 Harrington, op. cit., p. 96.

37 In Md. Hist. Soc., Baltimore. The Oliver entry is in ORB 10, p. 225.

38 Martin, op. cit., p. 124; Hedges, op. cit., p. 330; to Francis Johonnot, Feb. 15, 1784 (Letter Book, Johnson, Johonnot & Co., 1783–1785, Md. Hist. Soc).

39 White, op. cit., p. 243.

40 Bruchey, op. cit., p. 317.

41 For Sombart and Weber, see Harrington, op. cit., p. 68; Wilson, Charles, Anglo-Dutch Commerce & Finance in the Eighteenth Century (Cambridge, 1941), p. 11Google Scholar; Baxter, House of Hancock, p. 197ff., 300ff.; Tooker, op. cit., p. 75.

42 Porter, Jacksons and Lees, Vol. I, p. 48; Hedges, op. cit., p. 27; Harrington, op. cit., p. 91; Baxter, House of Hancock, p. 56; Crittenden, Christopher C., The Commerce of North Carolina, 1763–1789 (New Haven, 1936), p. 109Google Scholar; Hedges, op. cit., p. 9; Pares, op. cit., p. 77.

43 Ltr. to Capt. Thomas O'Bryan, July 30, 1794. Smith Letter Book, III (1794–1818), Md. Hist. Soc.

44 Martin, op. cit., p. 133; Pares, op. cit., pp. 84, 78. It is my conclusion, rather than Pares', that advances were therefore not as important as they would otherwise have been.

45 Fairchild (Pepperrells), op. cit., p. 156; Pares, op. cit., p. 77; White, op. cit., pp. 307, 339.

46 For West Indian trade expansion in the case of New York, see Harrington, op. cit., App. D and G; for Philadelphia, see Albion, Robert G., “Colonial Commerce and Commercial Regulation,” in Williamson, Harold F., ed., The Growth of the American Economy (New York, 1951), p. 53Google Scholar; for Baltimore, see Gould, Clarence P., “The Economic Causes of the Rise of Baltimore,” in Essays in Colonial History Presented to Charles McLean Andrews by his Students (New Haven, 1931)Google Scholar; for the Connecticut Valley region (general trade expansion), see Martin, op. cit., pp. 19–20, 52–53; for Newport, see Bridenbaugh, op. cit., pp. 331, 362; for Charles Town, see Bridenbaugh, op. cit., p. 332; for the British West Indies, see Pitman, F. W., The Development of the British West Indies, 1700–1763 (New Haven, 1917), pp. 190, 202–203.Google Scholar

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48 Bruchey, op. cit., pp. 80, 190, 194–195.

49 Ltr. to Messrs. P. Burling & Co., Nov. 6, 1788 (Smith Ltr. Bk., II, in Md. Hist. Soc.).

50 ORB 4, pp. 29–31, to J. & F. Baring & Co., July 22, 1800. (My italics.) (Md. Hist. Soc.)

51 Harrington, op. cit., p. 87.

52 Baxter, House of Hancock, p. 302; Hedges, op. cit., p. 28; Fairchild, op. cit., p. 51.

53 Cutler, Carl C., Five Hundred Sailing Records of American Built Ships (Mystic, Conn., 1952), p. 22Google Scholar; Heaton, Herbert, “The American Trade,” in Trade Winds, Parkinson, C. N., ed. (London, 1948), p. 200.Google Scholar

54 Fairchild, op. cit., p. 52.

55 Bruchey, op. cit., pp. 144, 300. (My italics.)

56 Hedges, op. cit., pp. 72–73 (Baxter); White, op. cit., p. 541 (Beekman).

57 Ltr. to John Gay, July 30, 1794. (Smith Ltr. Bk., III, Md. Hist. Soc.) Col. Wro. Pepperrell tried in 1727 to obtain the services of an agent in Carolina to avoid the delays of ship captains (Fairchild, op. cit., pp. 94–95).

58 Bruchey, op. cit., pp. 149–151.

59 Fairchild, op. cit., pp. 164, 54–55 (Pepperrells); Baxter, House of Hancock, p. 201 (Hancock); White, op. cit., p. 350 (Beekman).

60 Bruchey, op. cit., pp. 149–151, 159, 142, 156–157.

61 White, op. cit., p. 298.

62 Bruchey, op. cit., pp. 150–151.

63 ORB 18, p. 46, entry of Feb. 15, 1806; ORB 6, p. 411, to J. G. Villaneuva, Sept. 13, 1808 (Md. Hist. Soc).

64 White, op. cit., p. 290 (Gerard Beekman), p. 387 (James Beekman); Tooker, op. cit., p. 75 (Trotters); Bruchey, op. cit., p. 143.

65 White, op. cit., p. 387 (James Beekman); Fairchild, op. cit., pp. 66–67.

66 Fairchild, op. cit., p. 163 (Pepperrells); Hedges, op. cit., p. 27 (Browns); White, op. cit., pp. 253, 387 (Beekmans); Porter, Astor, Vol. I, pp. 533, 536; Bruchey, op. cit., pp. 142–143 (Olivers).

67 Fairchild, op. cit., pp. 156, 163.

68 Bruchey, op. cit., pp. 146–147.

69 ORB 3, pp. 81–82, to Hall & McIntosh, Aug. 16, 1797 (Oliver); White, op. cit., Vol. I, p. 272, to John Bennit, Jan. 28, 1756; Porter, Autor, Vol. I, p. 431; Hedges, op. cit., pp. 78–80.

70 Smith Ltr. Bk., III, 1794–1818 (Md. Hist. Soc).

71 Pares, op. cit., p. 85.

72 Hedges, op. cit., p. 29.

73 White, op. cit., pp. 534 (Gerard Beekman), 347 (James Beekman); Porter, Jacksons and Lees, Vol. I, p. 88; Lamb, Robert K., “The Entrepreneur and the Community,” in Men in Business, Miller, W., ed. (Cambridge, 1952), p. 93Google Scholar; Bruchey, op. cit., Chap. 6 (Oliver).