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So Great a Profit
So Great a Proffit
HOW THE EAST INDIES TRADE
TRANSFORMED
ANGLO- AMERICAN CAPITALISM
JA M ES R . F IC HT E R
H A RVA R D U N I V E R S I T Y P R E S S
Cambridge, Massachusetts & London, England
2010
Copyright © 2010 by the President and Fellows of Harvard College
All rights reserved
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Fichter, James R.
So great a profit : how the East Indies trade transformed
Anglo-American capitalism / James R. Fichter.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-674-05057-0 (alk. paper)
1. United States—Commerce—Asia.
2. Asia—Commerce—United States.
3. United States—Foreign economic relations—Great Britain.
4. Great Britain—Foreign economic relations—United States.
5. Capitalism—United States—History. I. Title.
HF3118.F53 2010
382.0973'05—dc22
2009050549
Dedicated to my father,
the wisest man I know
The American commerce to the East,
will ere long rival England.
—Independent Chronicle,
Boston, MA, 1796
Contents
1
Introduction
7
1
Revolution
2
America Sails East
3
Commerce in a World at War
4
America’s Re-export Boom
5
Merchant Millionaires
6
Beyond the British Empire
7
The India Trade
8
America’s China and Paciic Trade
9
Death of the India Monopoly
10
31
56
82
111
149
173
232
American Capital and Corporations
Conclusion
278
Archival Sources 291
Abbreviations 293
Notes 295
Acknowledgments 373
Index 375
205
252
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Salempore
Alliabad
Chandernagore
Serampore
Surat
Santipore
Chinsura
Calcutta
Bombay
Masulipatam
Goa
Glasgow
Liverpool
London
Bremen
Emden
Jersey
Island
La Rochelle
Bordeaux
Madras
Arcot
Pondicherry
Calicut
Tranquebar
Tanjore
Cochin
Mahé
Genoa
Livorno
K
Vellore
Lübeck
Hamburg
Amsterdam
Boulogne
Paris
Pulicat
Copenhagen
Kiakhta
Kandy
Ragusa
Beijing
Lisbon Barcelona
Smyrna
Xi’an
Chengdu
Malta
Oudh
Bengal
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Suzhou
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Red
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Gujarat
Hooghly R.
Hyderabad
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Egypt
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Per
Suez
Isthmus
Macau
Pangasinan
Pampanga
Cavite Jalajala
Mindoro
Nicobars
E a s t
I n d i e s
Diego Garcia
Agalega
St. Helena
Mozamb
Comoros
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Mauritius/
Ile de France
Rodrigues
Port Louis
Madagascar
Réunion
Mascarene Islands
Cape Colony
Stellenbosch
Graaff-Reinet
Cape Town
Cape of Good Hope
Tristan da Cunha
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Salem Nova Scotia
Boston
New York City
Baltimore Philadelphia
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New Orleans
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Falklands
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St. Lucia
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Tierra del Fuego
Cape Horn
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So Great a Profit
Introduction
In 1784 the irst U.S. merchantman reached Asia. For such a new
nation it was a ittingly small start. Less than three decades later,
U.S. trade with Asia was greater than that of any other Western
nation on earth, save Britain. How could this happen? Europeans
had bought tea on the China coast for centuries, and now Americans were not simply appearing among the mix of Western traders
in China but enjoying precipitous commercial success. Between
1793 and 1812, French, Dutch, and Danish merchants soon found
themselves sailing in American wakes.
At irst glance this seems incredible. But the trade raises questions
that can tantalize the imagination. The trade grew quickly, only to
be set back on its heels just as quickly again. Was this a twenty-year
blip in history, or did this trade have long-term effects? Did it inluence the development of the United States? Did the shifts in global
trade achieved by American merchants inluence the rest of the
world?
The simplest explanation for the growth of American trade in
Asia credits the French Revolutionary and Napoleonic Wars—termed
here the French Wars—for American commercial success. British
warships kept French and French-allied merchants from the sea, and
neutral traders from the United States took up the Continentals’ trade.
U.S. merchantmen traficked between the Caribbean and Europe in
an old and well-known story; surely developments in Asia were
echoes of the same phenomenon—no more, no less.
2 . So Great a Profit
Americans sailed to more places in Asia than China alone, and
the French Wars can help explain the growing U.S. trade with
these other parts of Asia as well. If Americans sailed so far to take
up France’s trade with China, they might be willing to take up the
carrying trade between French Europe and the French, Dutch, and
Spanish colonies in Asia. Indeed, American trade in the French
Indian Ocean colonies of the Mascarenes (roughly 500 miles east
of Madagascar), in Dutch Java, in Dutch Southern Africa, and in
Spanish Manila boomed during the French Wars. The boom was
remarkable—quite so in some cases—and gives credence to the
neutral-trade thesis.
American trade also lourished in British Bengal, in the very
heart of the British Empire in Asia. This success, too, could at least
partly be credited to the French Wars—the East India Company
certainly explained the Americans’ trade this way—with the Americans simply meeting French demand for Indian goods. And yet in
Bengal the French Wars are a necessary but not suficient explanation, for the U.S. trade in Bengal was intimately connected with
British merchants in Calcutta and in London. These connections,
which the French Wars do little to explain, make it dificult to conceive of a discretely American trade with India as much as of an
American trade abetted by British merchants, who were ostensibly
the Americans’ competitors. U.S. merchants in India, and in Asia
more generally, competed with the English East India Company
for the carriage of goods between Asia and the Atlantic. Yet they
worked with British merchants—Company directors, shareholders, and employees among them—to do so. How does one explain
the bizarrely competitive and cooperative connections between the
Americans so recently departed from the British Empire and the
British traders now remaking that empire in Asia?
Through these connections, U.S. trade to Asia between 1783
and 1815 transformed both the British Empire and the United States.
Because of these connections it is dificult to consider American
trade to Asia without its British counterpart, and so this book is not
a history of American trade to Asia but of Anglo-American capitalism there. The far-reaching consequences of the trade suggest
the deep links between the United States and the rest of the world
Introduction . 3
from that country’s inception. They also yield a new understanding of the American relationship with the British Empire after
American independence as well as new avenues of inquiry into the
“great divergence” between east and west.
China, India, the Mascarenes, and Southeast Asia constitute a
vast array of ports and countries, each meriting study in its own
right. And yet examining them together is essential because that was
how early modern Americans and Europeans saw them: of a piece
and as part of the great expanse of the world’s shore stretching
from the Cape of Good Hope eastward to the Straits of Magellan
and referred to as the East Indies. By the eighteenth century the
East Indies included the Indian Ocean and the East Asian littoral,
fading into the South Seas somewhere over what we would call the
Western Paciic. “East Indies” was a vague term and made sense
only from an Atlantic perspective—that is, Western and maritime—
whereby however far Calcutta and Canton were from each other
they seemed still ininitely closer to each other than to home, whether
that home was London or Brest or New York. Eighteenth-century
European empires were primarily Atlantic in focus, and Western
governments regarded the Indies as a realm beyond. “Distant” had
once meant “beyond the pale” or “beyond the line.” In the eighteenthcentury Atlantic it meant “beyond the Capes,” and to Atlantic men
in the east, a term like “East Indies” thus made sense. In the minds
of the American, British, and European merchants who traded to
the Indies, China, Bengal, and the Mascarenes were all East Indian
destinations.
The East Indies were more than an abstract formulation. Each European East India Company had its own patent, making that Company the exclusive national merchant between the East Indies and
the Atlantic and giving the East Indies economic deinition. As
American independence ended British rule in one part of the
world, it brought American merchants into competition with the
English East India Company in another. Americans were not new
to Asia: colonial American merchants had smuggled and pirated
their way across the Indian Ocean in the early eighteenth century,
and others had gone east legally with the East India Company. But
after 1783 Americans went east as U.S. citizens, not British subjects.
4 . So Great a Profit
This new U.S. commercial presence was greater, more sustained,
and spread across more of the Indies than anything that had emanated from North America before. It also occurred in tandem with
the recentering of the British Empire on the east. As a result, the
English East India Company found itself with a new and vigorous
competitor in Asia just as the Company itself was coming under
greater scrutiny as the custodian not of a remote imperial backwater but of a growing imperial heartland. The rivalry was consequential: when Parliament revoked the Company’s monopoly on
Indian trade at the end of the French Wars, many Members of Parliament pointed to the Company’s failure to deal with its American competition.
Thus the American trade to the East Indies as a whole had repercussions for society, economies, and politics on both sides of the
Atlantic. In Britain it helped end the East India Company’s monopoly on British trade to India and helped begin Britain’s nineteenthcentury free-trade empire there. In the United States it abetted
the accumulation of wealth and inancial capital in the hands of the
wealthiest Americans, creating inanciers who would profoundly
alter the shape of American business. British merchants gained free
trade, becoming more like their American counterparts, and American merchants gained capital and became more like their opposite
numbers in Britain. Convergence between British and American
trades to the east led to convergence between Britain and America
at home.
Thus the need to examine the East India trade in a global context.
The convergence between British and American East India merchants occurred while the center of global economic activity was
shifting from Asia to the North Atlantic. This shift was known as
the “great divergence.” Historians offer various reasons for the divergence, including markets, European property rights, industrialization, and colonialism.1 Of these, industrialization is usually taken
as the main cause of the North Atlantic’s rise, leaving capital to a
supporting role at best.2 But capital was key. Capital, often in the
form of specie (silver coin), was fundamental to American and
British trade in Asia and to east-west interaction generally. The
U.S. East Indies trade had effects out of proportion to its size, in
Introduction . 5
part because of the role of capital. Recent scholars of the great divergence have missed this point by misunderstanding capital, failing to distinguish between paper money and ixed capital on the
one hand and gold and specie—which were fungible and globally
accepted—on the other.3
The early U.S. East Indies trade encouraged the capitalization
that reoriented New England and the mid-Atlantic states in the
world economy; it served as a marker for those who had specie in
the early national U.S. economy; and it spurred reforms in British
and, to a lesser extent, European trade links to the Indies, so that
the global North was broader, more uniform, and more directly
linked to the Indies, a region that was not yet but would soon become a center of the global South. The U.S. East Indies trade had
diverse effects because it intersected at various points with European countries’ trade (and the inancing thereof) in Asia, particularly Britain’s. Despite the East India Company’s formal monopoly, British and American trade in Asia were, though fundamentally
distinct, inancially interconnected: the global low of capital and
global Anglo-American commercial networks could not help but link
them. Likewise, the economic transformations of the nineteenthcentury Atlantic and of nineteenth-century Asia are distinct but
related. Yet not just any characterization of their relationship will do.
Though the great divergence occurred just as the Anglo-American
east-west trade opened to well-capitalized private merchants, there
is little evidence that these merchants opened trade to Asia solely
or even primarily to export industrial goods. Once the east-west
trade had been liberalized, however, it was certainly easier for merchants subsequently to export the industrial products of the North
Atlantic. Capital is key here as well, since liberalization of eastwest trade in Britain and capital accumulation in the United States
(and perhaps also in British outports) allowed merchants to exploit this divergence better.
The ties among world history, U.S. history, and British imperial
history are fundamental to understanding the transformation of
the Anglo-American trades to the Indies. Therefore this book covers
an array of subjects; British policymakers, American merchants,
and corrupt French oficials all play their part. So, too, do creole
6 . So Great a Profit
society in Java, Qing Chinese governance, and British policy in
India.
In passing among the histories of the United States, the British
Empire, and the world, this book uses new and familiar sources.
Shipping records from South Africa, Mauritius, India, Indonesia,
the Philippines, St. Helena, and the United States; American and
British merchants’ papers; French imperial correspondence; and less
thoroughly examined portions of English East India Company records join the American State Papers series and more-familiar Company correspondence. Taken together, these sources reveal transformations in disparate places that were deeply interrelated.
This book is arranged around the French Wars, which catalyzed
the changes wrought by expanding Anglo-American connections.
Chapters 1 and 2 consider the development of American trade to the
Indies in the years 1783–1793, explaining how it functioned before
the French Wars began. Chapters 3–8 examine the booming U.S.
trade to the Indies during the period of the French Wars, 1793–1812,
each chapter covering a different aspect of the U.S. East India trade
in this period. The remaining chapters look at the longer-term effects of the U.S. East India trade after 1812 in both the British Empire and the United States.
But before 1813, before these dual transformations, before the
great divergence, and before the nineteenth-century convergence
of British and American free-trade liberalism in Asia, there was an
eighteenth-century separation between the two nations: the American Revolution. And so it is with the American Revolution, and with
the Asian tea that was the source of so much trouble, that this
story begins.
S
chapter one
Revolution
Some time after one in the morning, a “violent knocking at the Streetdoor” startled Benjamin Fanueil and his family from bed. Fanueil
opened the bedroom window to ask what was the matter. A man
answered back that he carried a “letter of great consequence,” something that could not wait for morning. He slipped it under the door.1
At “about one o’Clock” the same morning, Richard Clarke also
woke to a “violent knocking at the door.” By moonlight he and his
brother made out two men in the courtyard below. One held “a
letter from the Country.” Clarke sent his servant to fetch it.
Elisha Hutchinson woke to ists on his door that night, too. We
have a letter, the callers told him, urgent.
Fanueil, Clarke, and Hutchinson read:
Boston Novr 1, 1773
The Freemen of this Province understand from good Authority
that there is a Quantity of Tea Consigned to your house by the
East India Company which is Distructive to the Happiness of every
well wisher to his Country[;] it is therefore expected that you
personally appear at Liberty Tree on Wednesday next at 12
o’Clock at noon day, to make a publick resignation of your Commission agreeable to a Notiication of this day for that purpose.
Fail not upon your Peril.2
This was the irst in a series of events in which tea, though an
Asian commodity, helped bring about American independence.
8 . So Great a Profit
As a consequence, global trade would link the United States from
its very beginning to the trade with Asia and, somewhat paradoxically, to the fate of Britain’s Asian empire.
The next morning, a Tuesday, the Hutchinsons, Clarkes, and
Fanueils ventured “abroad” and found “Printed Notiications” all
over town, calling local residents to witness their resignations at
the Liberty Tree on Boston Common. The notices implied, as Richard Clarke later complained, that they had given up their part in
the tea consignment, even though they had agreed to nothing of
the sort. But their nemeses had no patience for details like that.3
At eleven o’clock on Wednesday, church bells across Boston began
to toll and continued until noon. The town crier walked the streets,
summoning people to the Liberty Tree. And they came. Some estimated 500 people, others guessed even more. Meanwhile, the merchants involved in selling the East India Company’s tea met at
Clarke’s warehouse on King Street. No one there “entertained the
least thought of obeying the Summons” to the Liberty Tree. One did
not obey “people of the lowest rank,” as Clarke termed the crowd.
Instead, the merchants opposed “the Mob” and decided to force
them to obey, and in this they were pleased to have “a number of
Gentlemen of the irst Rank” join them.4
At one o’clock that afternoon, an angry crowd marched from
the Liberty Tree down to the warehouses to seek out the merchants
who had ignored their summons. Massed at the warehouse door,
the crowd sent a deputation inside asking the merchants to give up
selling the Company’s tea and to agree to send the tea ships back
to Britain once they arrived. The merchants “irmly refused” and
gave the request its “proper contempt.” The response stirred the already angry mob outside. “Irritated with the haughty manner with
which the answer was . . . given,” the people charged the warehouse
door.5
The merchants set their servant to shut the outer doors before
the mob could break in. Nathaniel Hatch, a local justice of the
peace with them in the warehouse, rushed to help. They made “all
possible exertions to stem the torrent of the Mob.” Hatch shouted
out again and again to the people outside. He was a magistrate.
In the king’s name, he commanded them to disperse. Outside, the
Revolution . 9
crowd shouted back all sorts of “insulting and reproachful words,”
and, with so few people holding the doors from within, the mob
ripped them clean off their hinges.6
Inside, the merchants and their “irst Rank” friends led upstairs
to the counting house. The staircase was narrow; a hatch at the
top opened into the upper story. On the staircase the merchants
made their most “vigorous efforts” to ight back the crowd below
before leeing into the counting room and throwing down the
hatch. There they sat. After an hour and a half, the throng, bored,
was mostly “drawn off.” And the merchants, surrounded by a pack
of friends, made their way home in relative safety.7
That was hardly the end of it, however. The next night Benjamin
Fanueil found another “menacing Letter” addressed to all the tea
merchants “thrust under” his door. It tried to “intimidate them
from executing their Trust,” in Clarke’s phrase.8
Gentlemen,
It is currently reported, that you are in the extremest anxiety
respecting your standing with the good people of this Town . . .
as Commissioners for the sale of the Monopolized and Dutied
Tea, we do not wonder in the least that your apprehensions are
terrible . . . long have this people been irreconcilable to the Idea
of spilling human blood, but . . . this is the last warning you are
ever to expect.
Thursday evening 9 O’clock November 4th, 17739
Similar threats and plenty of rumors circulated in the days that
followed. Then, mid-month, the Fanueils began to hear stories that
“a number of picked men” were going “to break into our house
one night.” “I can hardly believe it,” Benjamin Fanueil wrote, but in
his words a sense of fear belied his disbelief.10
The Clarkes, too, heard the rumors of “an Assault” on their
home. On November 17, as the Clarkes gathered for a family celebration, the rumors proved true. Suddenly they were “alarmed
with the sounding of Horns, whistling and shouting, and a violent
Beating at the Doors.” The Clarkes moved the “women into the
safest Part of the House,” while the men tried to secure the doors
and windows on the bottom story as best they could. From the