Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-05T04:23:00.577Z Has data issue: false hasContentIssue false
  • English
  • Français

The British Credit Crisis of 1772 and The American Colonies*

Published online by Cambridge University Press:  03 February 2011

Richard B. Sheridan
Richard B. Sheridan
Affiliation:
University of Kansas
Get access Rights & Permissions [Opens in a new window]

Extract

Few stones have remained unturned in an effort to reconstruct Anglo-American history in the critical years from the Treaty of Paris in 1763 to the outbreak of the Revolution in 1775. Much has been learned by investigating such problems as public finance, colonial administration, and mercantile policy within the context of an expanded British empire. It is not always realized, however, that by the Treaty of 1763 Great Britain acquired new fields for capital investment as well as vast new lands to govern. In addition to taxation and public expenditure, such problems were raised as capital recruitment and allocation, the modification of financial institutions, and the adjustment of debtor-creditor relationships. Though distinct in certain respects, public and private finance impinged upon each other in the period from 1763 to 1775. This was especially the case after the British credit crisis of 1772, when, in addition to the controversy over tea, debtor-creditor relations between the thirteen colonies and the mother country underwent marked deterioration.

Type
Articles
Information
The Journal of Economic History , Volume 20 , Issue 2 , June 1960 , pp. 161 - 186
Copyright
Copyright © The Economic History Association 1960

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Sutherland, Lucy S., “Sir George Colebrooke's World Corner in Alum, 1771–73,” Economic History, III (Feb. 1936), 237–38.Google Scholar

2 Adams, Charles F. (ed.), The Works of John Adams, Second President of the United States (Boston: Little, Brown & Co., 1856), X, 384.Google Scholar

3 Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, Cannan Edition (New York: The Modern Library, 1937), pp. 567–68.Google Scholar

4 William Knox, The Interest of the Merchants and Manfacturers of Great Britain in the Present Contest with the Colonies (London, 1774), p. 33.

5 Ashton, T. S., An Economic History of England: The 18th Century (London: Methuen & Co. Ltd., 1955), p. 206.Google Scholar

6 Harwell, Richard B., The Committees of Safety of Westmoreland and Fincastle, 1774–1776 (Richmond: Virginia State Library, 1956), p. 36.Google Scholar

7 Public Record Office, London, Treasury 79: 30, American Loyalist Claims Commission, Claim of Farrel & Jones of Bristol, John Wayles to Farrel & Jones, dated Virginia, Aug. 30, 1766, f. 5.

8 Knox, The Interest of the Merchants and Manufacturers, pp. 35–36.

9 Russell, Elmer B., The Review of American Colonial Legislation by the King in Council, in Columbia University Studies in History, Economics and Public Law, LXIV No. 2 (New York, 1915). PP. 125–36.Google Scholar

10 10 Ibid., pp. 120–25; Miller, John C., Origins of the American Revolution (Boston: Little, Brown & Co., 1943), p. 75.Google Scholar

11 Sutherland, Lucy S., The East Indian Company in Eighteenth-Century Politics (Oxford: Clarendon Press, 1952), p. 32.Google Scholar

12 Ashton, Economic History of England, p. 193.

13 Sutherland, The East India Company, p. 34.

14 Smith, Wealth of Nations, p. 157.

15 George Chalmers, An Estimate of the Comparative Strength of Great Britain (London, 1786), p. 123.

16 Anderson, Adam, An Historical and Chronological Deduction of the Origins of Commerce (London, 1801), IV, pp. 182–83.Google Scholar

17 In testifying before a Committee of the House of Commons in 1790, George Hibbert, a London sugar merchant, estimated the debts due from the Sugar Colonies to Great Britain at no less than, £20,000,000 sterling. Parl. Papers, 1790, XXIX, p. 386. In Jamaica alone executions to the value of £22,563,786 sterling were lodged in the provost marshal's office between 1772 and 1792. Bryan Edwards, The History, Civil and Commercial, of the British Colonies in the West Indies (London, 1794), II, 497.

18 Ford, Paul L. (ed.), The Writings of Thomas Jefferson (New York: G. P. Putnam's Sons, 1894), IV, 155:Google Scholar Adams, Works of John Adams, II, 383; Dexter, Franklin B. (ed.), The Literary Diary of Ezra Stiles (New York: Charles Scribner's Sons, 1901), II, 227–28.Google Scholar

19 This is an estimate based upon a statement of the British merchants of debts due from each of the American states, and given to the government, at its request, in 1791. The total amount of the debts, £4,930,656 13s. 1d. sterling, includes interest for fourteen years at 5 per cent per annum. By deducting 40 per cent for interest, the estimated debt amounts to £2,958,-390 sterling in 1776. This statement of the American debts is found in Bemis, Samuel Flagg, Jay's Treaty, A Study in Commerce and Diplomacy (New York: The Macmillan Company, 1923), p. 103.Google Scholar

20 20Knox, The Interest of the Merchants and Manufacturers, pp. 34–38.

21 Abernethy, Thomas P., Western Lands and The American Revolution (New York: D. Appleton-Century Co., 1937), pp. 79–90.Google Scholar

22 Sellers, Leila, Charleston Business on the Eve of The American Revolution (Chapel Hill: University of North Carolina Press, 1934), pp. 44–47.Google Scholar

23 Smith, Wealth of Nations,p. 564.

24 Sterling debts were also secured by judgments and protested bills of exchange. Gray, Lewis C., History of Agriculture in the Southern United States to 1860 (Washington: Carnegie Institution of Washington, 1933), I, 409–15, 423–25Google Scholar; Baldwin, Benjamin R., The Debts Owed by Americans to British Creditors, 1763–1802, Unpublished Ph.D. Thesis (Bloomington: University of Indiana, 1932), pp. 1–9Google Scholar; “Richmond in By-Gone-Days, by an old Citizen,” De Bow's Review XXVIII, No. 2 (Feb. 1860), pp. 199–201.Google Scholar

25 Gray, History of Agriculture, I, 422–23, 425–28; Price, Jacob M., “The Rise of Glasgow in the Chesapeake Tobacco Trade, 1707–1775,” William and Mary Quarterly, 3rd Ser., XI, No. 2 (April 1954), pp. 179–199CrossRefGoogle Scholar; Soltow, J. H., “Scottish Traders in Virginia, 1750–1775.” The Economic History Review, 2nd Ser., XII, No. 1 (Aug. 1959), pp. 83–98.Google Scholar

26 Baldwin, The Debts Owed by Americans to British Creditors, pp. 10–12; Richard Pares, Yankees and Creoles, The trade between North America and the West Indies before the American Revolution (Cambridge: Harvard University Press, 1956), pp. 161–63.Google Scholar

27 Innis, Harold A., The Cod Fisheries, The History of An International Economy (New Haven: Yale University Press, 1940), pp. 212–13.Google Scholar

28 Harrington, Virginia D., The New York. Merchant on the Eve of the Revolution (New York: Columbia University Press, 1935), p. 343Google Scholar; Bezanson, Anne, Prices and Inflation During the American Revolution, Pennsylvania, 1770–1790 (Philadelphia: University of Pennsylvania Press, 1951) PP 73–78, 285.CrossRefGoogle Scholar

29 Sir Clapham, John, The Bank, of England, A History (Cambridge: At the University Press, 1944), I, 157–72, 242–51.Google Scholar

30 Hamilton, Henry, “The Failure of the Ayr Bank, 1772,” The Economic History Review, 2nd Ser., VIII, No. 3 (April 1956), pp. 405–417.CrossRefGoogle Scholar

31 Smith, Wealth of Nations, pp. 293–301.

32 Wilson, Charles H., Anglo-Dutch Commerce & Finance in the Eighteenth Century (Cambridge: At the University Press, 1941), pp. 169–77Google Scholar; Kerr, Andrew W., History of Banking In Scotland, 2nd ed. (London: A. & C. Black, 1902), pp. 95–109.Google Scholar

33 The Gentleman's Magazine and Historical Chronicle (London: June 1772) MDCCLXXII, p. 293.

34 Ashton, Economic History of England, p. 254.

35 MacPherson, David, Annals of Commerce (London, 1805), III, 533–34.Google Scholar

36 Clapham, The Bank, of England, I, 247–49.

37 Burk, Edmund, Speeches and Letters on American Affairs, Rhys, Ernest (ed.), Everyman's Library (London: J. M. Dent & Sons Ltd., 1945), p. 9, n. 1.Google Scholar

38 Sutherland, The East India Company in Eighteenth Century Politics, pp. 248–69.

39 Munro, James (ed.), Acts of the Privy Council of England, Colonial Series, “The Unbound Papers” (London: H.M.S.O., 1912), VI, 549.Google Scholar

40 MacPherson, Annals of Commerce, III, 534, 556; Ragatz, Lowell J., The Fall of the Planter Class in the British Caribbean, 1763–1833 (New York: The Century Company, 1928), pp. 132–36.Google Scholar

41 Ibid., p. 524.

42 Adams, The Works of ]ohn Adams, II, 265.

43 Bezanson, Prices and Inflation During The American Revolution, p. 285; “Paper Money in Colonial Virginia,” William and Mary College Quarterly, 1st Ser., XX (1911–1912), p. 256.Google Scholar

44 MacPherson, Annals of Commerce, III, 583; Ballagh, James C. (ed.), The Letters of Richard Henry Lee (New York: The Macmillan Company, 1911), I, 54.Google Scholar

45 Bezanson, Prices and Inflation During The American Revolution, pp. 286–89; Baxter, William T., The House of Hancock., Business in Boston 1724–1775 (Cambridge: Harvard University Press, 1945), pp. 296–97.Google Scholar

46 Compiled from statistics in MacPherson, Annals of Commerce, III.

47 Taylor, George Rogers, “Wholesale Commodity Prices at Charleston, South Carolina, 1732–1791,” Journal of Economic and Business History, IV (Feb. 1932),. 366–77;Google Scholar George Rogers Taylor and Ethel D. Hoover have prepared a weighted index of wholesale prices for Philadelphia, New York, and Charleston (1850–1859 equals 100), which shows that the index rose from an annual average of 80.3 in the period 1763–1770, to 84.9 in 1771, and to 98.2 in 1772. From this peak it then declined to 90.9 in 1773, 84.3 in 1774, and 78.0 in 1775, after which it rose to 108.0 in 1776. Hearings before the Joint Economic Committee 86th Congress, 1st Session, April 7, 8, 9, and 10, 1959. Study of Employment, Growth, and Price Levels, Part 2—Historical and Comparative Rates of Production, Productivity, and Prices (Washington, G.P.O., 1959). PP 394–95.Google Scholar

48 Taylor, “Wholesale Commodity Prices at Charleston, South Carolina,” p. 366.

49 Henry Laurens to John Knight in Liverpool, dated Westminster, England, March 17, 1773, in Donnan, Elizabeth, Documents Illustrative of the History of the Slave Trade to America (Washington: The Carnegie Institution, 1935), IV, 458–59.Google Scholar

50 Nathaniel Russell to Christopher Champlin, dated Charleston, Dec. 1, 1773, Ibid., IV, 465.

51 William Allason to John Backhouse in Liverpool, July 15, 1773, “The Letters of William Allason, Merchant of Falmouth, Virginia,” Richmond College Historical Papers (Richmond, 1917), II, No. 1, p. 150.Google Scholar

52 “Paper Money in Colonial Virginia,” pp. 235–36.

53 Mason, Francis Norton (ed.), John Norton & Sons, Merchants of London and Virginia (Richmond: The Dietz Press, 1937), p. 293.Google Scholar

54 George F. Norton to John H. Norton in York Town, Virginia, dated London, July 8, 1772, Ibid., p. 254.

55 Thomas Everard to John Norton in London, dated Virginia, Sept. 25, 1772, Ibid., p. 276.

56 Robert Carter Nicholas to John Norton in London, dated Virginia, Nov. 30, 1772, Ibid., p. 283.

57 Same to same, Feb. 12, 1773, Ibid., p. 301.

58 John Norton to John H. Norton, dated London, March 20, 1773, Ibid., p. 311.

59 Idem.

60 Mason, John Norton & Sons, pp. 293, 315, 318, 342–44; “Almost three fourths of the merchants of London trading to America, particularly to Virginia and Maryland,” became bankrupts during the crisis of 1772 and subsequent depression, according to Lord Sheffield. Observations on the Commerce of the American States, New Ed., (London, 1784), p. 208, note.

61 Boyd, Julian P. (ed.), The Papers of Thomas Jefferson (Princeton: Princeton University Press, 1950), I, 92–93.Google Scholar

62 John Norton to John H. Norton, dated London, Aug. 6, 1772, Mason, John Norton & Sons, p. 266.

63 William Wiatt to Wiatt, Francis, in William and Mary College Quarterly, 1st Ser., XII (1903–1904), 113–14.Google Scholar

64 “Paper Money in Colonial Virginia,” William and Mary College Quarterly, 1st Ser, XX (1911–1912), 235.Google Scholar

65 Ibid., p. 256.

66 Ibid., pp. 235–36, 255–57.

67 William Wiatt to Wiatt, Francis, in William and Mary College Quarterly, 1st Ser., XII (1903–1904), 113–14.Google Scholar

68 “Paper Money in Colonial Virginia,” pp. 237–240.

69 Harrell, Isaac S., Loyalism in Virginia, Published Ph.D. Thesis, University of Pennsylvania, (Philadelphia, 1926), pp. 24–25.Google Scholar

70 7 0 Public Record Office, London, Treasury 79: 1–151. See description of these papers in Paullin, C O. and Paxson, F. L., Guide to the Materials in London Archives for the History of the United States Since 1783 (Washington: The Carnegie Institution, 1914,) pp. 490–92.Google Scholar

71 Public Record Office, London, Treasury 79: 3, Claim of Cary, Moorey & Welch of London; Treasury 79: 19, Claims of James Buchanan & Co., Capel & Osgood Hanbury, and John Hyndman & Co., all of London; Treasury 79: 32, Claim of John Lidderdale of London; Treasury 79: 9, Claim of Farrel & Jones of Bristol.

72 Public Record Office, London, Treasury 79: 11, Claim of Spiers, Bowman & Co. of Glasgow; Treasury 79: 22, Claim of George Kippen & Co. of Glasgow. The debts which were recorded in the account books of the Scots factors of these firms in Virginia currency have been reduced to sterling at the rate of £ 125 Virginia currency to £ 100 sterling.

73 Public Record Office, London, Treasury 79: 11, Claim of Spiers, Bowman & Co., Representation of James Hopkirk, March 30, 1805.

74 Price, Jacob M., “The Rise of Glasgow in the Chesapeake Tobacco Trade, 1707–1775,” William and Mary Quarterly, 3rd Ser., XI, No. 2 (April 1954), 196.Google Scholar

75 George Washington is included in this group.

76 Craven, Avery C., Soil Exhaustion as a Factor in the Agricultural History of Virginia and Maryland, 1606–1860, in University of Illinois Studies in the Social Sciences, XIII, No. 1 (March 1925), 63–71.Google Scholar

77 William Allason to John Backhouse in Liverpool, July 15, 1773, “The Letters of William Allason, “Richmond College Historical Papers, II, No. 1, 150.

78 Farish, Hunter D. (ed.), Journal & Letters of Philip Vickers Fithian, 1773–1774: A Plantation Tutor of the Old Dominion (Williamsburg: Colonial Williamsburg, Inc., 1943), p. 35.Google Scholar

79 MacPerson, Annals of Commerce, III, 581–82; Robertson, M. L., “Scottish Commerce and The American War of Independence,” The Economic History Review, 2nd Ser., IX, No. 1 (Aug. 1956), 123–128.CrossRefGoogle Scholar

80 Lord Sheffield, Observations on the Commerce of the American States, New Ed. (London, 1784), p. 241.