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III. The Treasury and Open Contracting, 1778–1782

Published online by Cambridge University Press:  11 February 2009

Norman Baker
Norman Baker
Affiliation:
State University of New York at Buffalo
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Extract

During the War of American Independence, the Treasury Board contracted for a wide range of army supplies. Opposition, both in parliament and the press, persistendy criticized the methods employed in the allocation of contracts. It was widely believed that contracts were awarded in the interests of ministerial influence, not public economy; contractors were the friends of government and enjoyed excessive profits. The most frequendy proposed alternative was to contract through public advertisement and accept the lowest tender received. This method was normally referred to as open contracting. Isaac Barre was the main opposition spokesman on matters relating to army supplies and it was his view, expressed in the House during April 1778, that ‘contracts ought to be open, and offered to the lowest bidder'. Government spokesmen and contractors sitting in the House regularly countered this argument with the assertion that open contracts’ would be prejudicial to the public service. Men inadequate to the accomplishment of the contracts, would at all times bid lower than men of ability and reputation, and they would do much more injury by serving the public badly, than the difference of expense. 'Although neither Lord North nor John Robinson, the Treasury Secretary mainly responsible for contract business, were fully satisfied with existing contract methods, they sought economies within those methods and even the Shelburne ministry, when it radically altered the contracting system for supplying the army in America in 1782, decided against the open contracts championed by friends of Shelburne when in opposition.

Type
Articles
Information
The Historical Journal , Volume 15 , Issue 3 , September 1972 , pp. 433 - 454
Copyright
Copyright © Cambridge University Press 1972

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References

1 For discussion of other Treasury contracts made during the war, see Baker, N., Government and Contractors : The Treasury and Army Supplies 1775–83 (1971).Google Scholar

2 Stockdale's Parliamentary Register, VIII, 245.Google Scholar

3 Ibid. p. 253. Sir George Wombwell in the House, May 1778.

4 In the autumn of 1782, the major North American provisioning business was placed in the hands of a close friend of Shelburne, Francis Baring, on a commission basis. For the economies achieved through this method, see Baker, , op. cit. pp. 159–60.Google Scholar

5 The Treasury had also operated closed contracts for overseas supply and open contracts for encampments during the Seven Years War.

6 T29/47, p. 53. The Public Advertiser had published the news that camps were to be established in its edition of 24 Mar.

7 T29/47, p. 62.

8 Ibid. pp. 71–2.

9 There is a suggestion here of a not uncommon Treasury practice whereby instructions were acted upon before they had been formally issued by the Board. Otherwise it is difficult to see how the advertisement could have appeared in the press on 15 Apr.

10 London Gazette, 15–18 Apr. 1778. A draft is contained in Ti/547.Google Scholar

11 T29/47, p. 85.

12 T1/546. It was not uncommon for the Treasury to negotiate contracts in terms of prices containing even smaller fractions than this. The pricing of the major provisioning contracts for North America was fixed at 5 27/32d. in 1781. See Baker, , op. cit. p. 50.Google Scholar

13 T29/47, p. 94.

14 For evidence and discussion of the way in which the Treasury became more economy-minded, see Baker, , op. cit. pp. 43–63 and 247–8.Google Scholar

15 T54/42, pp. 488–91; T54/43, pp. 66–71, 213–7, 334–9 and 464–0- While some part of this reduction reflects changes in costs and in the numbers to be supplied, there was still a distinct relative reduction after 1778.

16 T29/48, p. 530.

17 T29/49, p. 23; T27/33, p. 72.

18 AO I 520/176, 521/176, 522/177 and 523/177. In this and other respects, there are information gaps for 1778 because Fraser's accounts were never declared at the Exchequer, or, if they were, they do not appear in Audit Office records in the Public Record Office.

19 Calculations were usually undertaken for the Treasury by the office of the Comptroller of Army Accounts, whose zeal for minute mathematical expression was more evident than any appreciation of the significance of the figures it was handling.

20 T1/545. Criteria adopted from practice in the Seven Years War.

21 T1/553.

22 Ibid.

23 I.e., the absence of Fraser's declared accounts.

24 In fact, the ratio between commodities in Forbes' calculations compares closely with those actually supplied in 1779 and 1780, when wheat prices were generally low, but not with the figures for 1781 and 1782 when wheat prices were higher and similar to those applying in 1778.

25 Forbes' price for forage was lower than Fraser's and as this item of supply was in greater demand than reflected in the original comparison of tenders, the cost of supplies under his terms would have been lower, despite the higher original tender as calculated by the Treasury.

26 The Parliamentary Register, Stockdale, J. (ed.), X, 235–7.Google Scholar

27 T1/546, T1/553, T29/47, p. 94.

28 As the Treasury did not publish the terms of the successful tenders, a further question arises as the source of information, or rumour on which both Forbes and Clerke based their charges.

28 T29/48, p. 271.

30 T29/47, p. 261; T1/548 (31–2). On a number of occasions Atkinson dealt with the Treasury on Fraser's behalf.

31 Amongst bequests in Atkinson's will was an annuity valued at §700 in favour of Robinson. Probate Court of Canterbury, Norfolk 460.

32 See Baker, , op. cit. pp. 28, 161–75, 191, 207 and 209. Atkinson received particular notoriety from his execution of rum contracts in the early years of the War.Google Scholar

33 T1/546, T29/48, p. 259; T29/49, p. 182; T29/50, p. 107; T29/51, p. 184.

34 T29/48, p. 259.

35 T29/50, p. 107.

36 Ibid. It is not surprising to find Potter amongst those submitting tenders involving an extreme expression of the contractor's art. His whole commercial career could be described in terms ranging through competitive, to lively and even eccentric. He undercut Treasury provisioning contractors and Navy Board contractors, sold bread in London under the assize price, ran a steam mill in Southampton and went bankrupt in 1783. Pelham, R. A., ‘The Old Mills of Southampton’, Southampton Papers, No. 3, 1964. London Guildhall MSS 5177/10.Google ScholarHampshire Chronicle, 28/4/83. See also Baker, , op. cit. pp. 49–56.Google Scholar

37 T1/546 (Forbes' estimates of actual supply), T1/553, T29/48, p. 259; T29/49, p. 182; AO I 520/176 and 521/176. Low bread values in tenders of 1779 and 1780 reflect low wheat prices prevailing in those years.

38 T1/567 (89–90).

39 T29/50, p. 120. Had Potter submitted the lowest tender, an interesting situation would have arisen, for he had held Treasury contracts for provisioning troops in North America since the previous autumn, when his intervention had enabled the Board to beat down the price at which the established contractors had been willing to negotiate.

40 During consideration of Forbes' allegations regarding the 1778 contract and in the course of extensive enquiries into the rum contracts held by Richard Atkinson in the opening years of the war.

41 AO I 522/177 and 523/177.

42 Ibid.

43 T1/567 (89–90).

44 See above, p. 436.

45 T29/52, pp. 17, 22 and 25.

46 T1/567 (89–90). Apart from John Maton, Adams was the only man to submit a proposal for each of the five summers, 1778–82.

47 See Baker, , op. cit. p. 209.Google Scholar

48 In 1782 charges were in fact made that one such commissioner had failed to pay sufficient attention to the ‘public economy’. T1/580 (175–6, 178 and 188–93).

49 T54/44. p. 100

50 This was the address of one of the men who stood security for Maton in 1779.

51 T1/553, T1/569 (256), and T29/48, p. 270.

52 T1/568 (184). The Curtis brothers had been Wilkite voters in 1768–9. Rude, G., Wildes & Liberty (Oxford, 1962), pp. 84, 88 and 180.Google Scholar

53 Ibid. (197).

54 B5/6, p. 125.

55 T27/34, p. 437.

56 T29/66, p. 405.

57 T29/67, p. 532.

58 T1/545.

59 T29/33, p. 327.

60 T1/545.

61 T1/582 (235).

62 T27/34, p. 112. This partnership was prominent as a major sub-contractor supplying provisions for the armies in North America.

63 T29/48, p. 270.

64 T1/553.

65 AO I 520/176, 521/176, 522/177 and 523/177 (for 1778, the figures are based on Forbes' estimates of actual supply).

66 Alexander suffered exactly the same experience in 1794.

67 T29/48, pp. 245–6.

68 T29/49, pp. 186–7, 189, 191, 195, 197, 202, 204 and 221. Ironically, the value of provisions supplied in 1780 was easily the lowest of the war and totalled under half of the value for which securities were required.

69 T29/48, p. 270, T29/52, p. 41.

70 T29/50, pp. 107 and 122. There is no record of Isaac Samuel Furtado in the London directories of the period.

71 T1/546, T1/555 (350–59).

72 T1/567 (89–90), T1/568 (197), T29/49, p. 182.

73 T29/52, p. 41, T29/53, p. 288.

74 T1/545, T29/48, pp. 245–6, T29/49, p. 182. Southampton Petty Customs Book, 1769–73.

75 T1/555 (188–91), T29/33, p. 327, T29/34, p. 97.

76 T1/546, T29/48, pp. 245–6, T29/49, p. 182, T29/50, p. 107, T29/51, p. 184, T29/66, pp. 9, 16 and 405, T29/69, p. 168.

77 T1/569 (89–90), T29/49, p. 182, T29/51, p. 184, T29/53, p. 3.

78 T1/546, T29/52, p. 17. AO I 180/541.

79 Although some of these associations were of a local nature, for instance, that between Maton and Keele, others spread much further afield, Maton of Salisbury, Lance of Kent, Baldwin of Surrey and Edyvane of Cornwall.

80 John, A. H., ‘The Course of Agricultural Change, 1660–1760’, in Pressnell, L. S. (ed.), Studies in the Industrial Revolution (1960), p. 125.Google ScholarGranger, C. W. J. and Elliott, C. M., ‘A Fresh Look at Wheat Prices and Markets in the Eighteenth Century’, Economic History Review, vol. xx, no. 2, 08 1967.Google Scholar

81 In addition, troops camped in Hyde Park during the Gordon Riots had to be supplied.

82 AO I 520/176, 521/176, 522/177 and 523/177. For reasons for the shifting concentration, see Patterson, A. T., The Other Armada, 1778–82 (1960).Google Scholar

83 WO 1/825, fo. 55.

84 T1/576 (344).

85 AO I 523/177.

86 See below, p. 448.

87 The Treasury action over this was confined to a call upon Cox to meet his obligations under the contract. T29/49, p. 314.

88 T29/67, p. 517. Christopher Lance, who submitted tenders and acted as a sub-contractor during the American War, was another who obtained a contract during the Revolution Wars but, ‘totally failed in laying in stores’, and was removed from his position as contractor. T29/68, pp. 180 and 192.

89 PRO B 1/71, p. 107. Gentleman's Magazine, 1781, p. 296.Google Scholar Although there was a sharp increase in wheat prices in the autumn of 1780, it came too late to have any significant bearing on Cox's performance under the contract. Guildhall Library, Bakers Company Minutes, MSS 5183/5.

90 PRO B 6/6.

91 T27/34. p. 407.

92 T1/576 (239–40).

93 PRO B 6/6.

94 One knows more of Maton's sub-contracting network than that of other contractors because the men concerned pestered the Treasury for direct payment once Maton went bankrupt. The Treasury refused to meet these requests. T29/53, p. 288. T29/54, pp. 196–7.

95 T29/47) p. 367.

96 T1/555 (188–191), the opinion of the Solicitor and Attorney-General, from which most of the material of this section is taken.

97 T1/544.

98 T29/47, p. 367, T27/32, p. 234.

99 T1/563 (281).

100 T1/559 (12–13).

101 T1/588 (271). The charges against him did not inhibit Baldwin from continuing to tender for encampment contracts nor from acting again as a sub-contractor.

102 T1/581 (346–7).

103 Ibid.

104 T27/34, p. 495.

105 Ibid.

106 AO I 177/523.

107 As a Member of Parliament, Herbert had supported government in the early stages of the war, but by 1779 was generally voting with the Opposition. His rigorous pursuit of this matter with the Treasury may have reflected this political shift or a genuine concern for the well-being of the troops under his command. Sir Namier, Lewis and Brooke, John, History of Parliament, 1754–92 II 612–13.Google Scholar

108 T54/42, pp. 488–91.

109 T1/555 (350–9).

110 T27/32, p. 471, T29/48, p. 288.

111 T54/43, pp. 66–71.

112 The timing of purchases could be important because of sharp fluctuations in price levels during any given summer and autumn.

113 Treasury documents at the Public Record Office only contain details of all tenders received for the years 1778, 1779 and 1781.

114 The 1778 figure cited here is adjusted from the actual terms of the tender and contract to conform to those applying for the remainder of the war. T54/42, pp. 488–91, T29/48, p. 259.

115 T29/48, p. 259. Guildhall MSS 5183/5. The average tender for items other than bread dropped between 1778 and 1779; it is thus unlikely that Fraser's search for a higher margin in respect of bread was an attempt to compensate for reduced margins in respect of other commodities.

116 T1/567 (89–90), T54/43, pp. 213–7.

117 Guildhall MSS 5183/5.

118 Ibid.

119 T29/48, p. 259, T1/567 (89–90).

120 More knowledge of the arrangements between contractor and sub-contractor and of the precise timings of deliveries would make it possible to judge more accurately the impact of rising prices on the contractor himself. However, the major shifts in price usually took place at harvest time when a considerable proportion of the deliveries had been completed.

121 The encampment season is here taken to include the months April to October. An allowance has been made for the inferior bread required under the 1778 contract.

122 See Baker, op. cit. pp. 242–7. From 1780, the Treasury was also getting a better bargain under closed contracts, but profit margins never sank as low as they did under open-contracting.