Download Thomas Jefferson and the Effort to Establish Commercial Relations

Thomas Jefferson and the Effort to Establish Commercial Relations between
the United States of America and the Habsburg Empire in the 1780s
There was a mutual initiation on the part of the United States of America and the
Habsburg Empire to conclude a treaty of commerce in the 1780s. Eventually, this attempt
proved to be unsuccessful. In this paper I wish to raise two questions:
1. What were the reasons of this failure? How could it happen that the two countries did
not conclude a commercial treaty despite the good intentions of both parties involved?
2. What kind of role did Thomas Jefferson and his ideas of political economy play during
the negotiations? Did his ideas and political tactics have any role in the failure of the
negotiations?
This topic could interest the Hungarian scholarly community and the wider audience for
several reasons. Firstly, Hungary was part of the Habsburg Empire at that time. It means that
this was also one of the first efforts to establish commercial relations between the United
States and Hungary. Secondly, this attempt is practically unknown in Hungary but it is not
widely known in the United States either.
The first effort to establish diplomatic and commercial relations between the two states
was made by the Second Continental Congress as early as 1777 with the appointment of
William Lee the commissioner of Congress to the courts of Berlin and Vienna. This attempt
proved to be unsuccessful, but here and now I do not want to go, into the details of this
mission since I have published it earlier.
After the failure of William Lee’s effort, the accession of Joseph II to the throne of the
Habsburg Empire in 1780 effected a change in the relationship of the two countries. Joseph
wanted to enhance the economic competitiveness of his empire. In order to gain this end he
intended to establish new commercial relations and the United States seemed to be an
adequate partner. The Americans on their part were ready to react to the initiation of Joseph
since they wanted to reorganize their external trade dominated by Britain before the American
Revolution.
Contemporary American commercial policy was heavily influenced by Thomas
Jefferson, who was a leading member of the Confederation Congress in 1783-1784, and who
represented the United States in Paris between 1784 and 1789. Commercial policy was an
integral part of Jefferson’s political thought. He wanted to preserve the United States as the
republic of freeholders. According to him, in contrast to the wage-workers employed in the
industrial sector, freeholder farmers were the only group in society which could maintain its
political and economic independence, since “Corruption of morals in the mass of cultivators is
a phenomenon of which no age nor nation has furnished an example”. (Peterson, 290)
Jefferson thought that the enormous land resources of the American West allowed the United
States to remain the democracy of republican cultivators for centuries to come. But the
surplus of agricultural products produced by the virtuous American farmers must be exported
to other, mainly European countries, in order to import the industrial products needed by
Americans in exchange for them. In this way, the well functioning system of commercial
relations was a necessary prerequisite of the maintenance of republican political order, and
formed an integral part of Jefferson’s political thought.
In theory, Jefferson supported free-trade policy based on mutual advantages. It means
that he wanted to break with mercantilist economic policy pursued by contemporary European
powers. But he also realized that European powers would not be ready to respect the freetrade policy of the young American republic. He came to the conclusion that under such
circumstances the adaptation of the formula of most favored nations could be an acceptable
solution. The application of this formula meant that if the United States wanted to conclude a
commercial treaty with a European power, the latter had to grant the same privileges for the
United States it had already granted to other powers in the case of which the formula of the
most favored nation had already been applied.
Jefferson was the member of the committee of three elected by the Confederation
Congress to compose a report regarding the commercial relations of the United States. The
proposal of the committee submitted on December 20, 1783 reflected the views of Jefferson
and was based on the formula of the most favored nations. Extensive commercial relations
with the Caribbean possessions of different European powers were very important from the
point of view of the economy of the thirteen mainland colonies before the American
Revolution and the leaders of the United States wanted to preserve this crucial trade. But they
were also well aware of the fact that European powers would not allow free trade policy
regarding their colonies in the Caribbean. This is the reason why the report of the committee
of three made some concessions regarding this important relation. According to the report the
commercial treaties of the United States should form a coherent system based on the formula
of the most favored nations, but it is also clear from it that the committee and Thomas
Jefferson favored the conclusion of commercial treaties with European powers possessing
colonies on the American continent, and they were ready to compromise regarding this
fundamental relation. This conviction of Jefferson proved to be crucial from the point of view
of the fate of the proposed commercial treaty with the Habsburg Empire.
The report of the committee of three enumerated sixteen European states with which
the United States should conclude treaties of amity and commerce, and we can find the name
of the “court of Vienna” on this list. Jefferson and his fellow committee members proposed
the appointment of a special committee to pursue the negotiations with the enumerated
European powers, and this committee would also have the right to sign the treaties on
condition that the Confederation Congress would have the right to ratify them. The mandate
of the special committee would have expired after two years and the committee of three
proposed John Adams, Benjamin Franklin, and John Jay as the members of it. This instruction
also proved to be very important from the point of view of the commercial treaty with the
Habsburg Empire, since the expiration of the mandate of the committee played a crucial role
in the fiasco of it. The Confederation Congress adopted the proposal of the committee of three
on May 7, 1784 with the exception of one point: instead of John Jay Congress elected Thomas
Jefferson the third member of the special committee to conclude treaties of amity and
commerce with European states.
Meanwhile, the leaders of the Habsburg Empire also decided to initiate negotiations
concerning the conclusion of a treaty of commerce with the Habsburg Empire. The empire
had a seaside on the Adriatic Sea and the territory of present day Belgium also belonged to the
empire at that time. Joseph thought that the new American state was also in a great need of
new commercial partners to substitute Britain. Consequently, he initiated the conclusion of a
treaty of commerce with the United States and he also urged the establishment of real
commercial relations between the two states. Accordingly, Joseph II informed Count Mercy,
his minister to the French Court that he considers commerce with the Americans extremely
important on February 18, 1783. Joseph also indicated that he would welcome an American
overture to establish diplomatic relations.
It is clear that the initiation came from the Austrian side this time, but the diplomats of
the Habsburg Empire wanted to avoid the impression that the Viennese court made the first
step. According to contemporary European diplomatic etiquette the Emperor of Germany was
considered to be the most prestigious monarch on the continent, the only emperor besides the
tsar of Russia. Consequently, the Habsburg diplomats wanted to suggest that the first official
step should be taken by the Americans.
Nevertheless, by the summer of 1783 it became clear for the American diplomats in
Europe that there was a definite will on the part of Joseph II to conclude a commercial treaty
with the United States. Count Mercy the ambassador of the Habsburg Empire in Paris visited
John Adams in his quarters on July 3. As Adams put it in his letter to Robert R. Livingston,
who was the secretary of foreign affairs of the Confederation Congress, “we run over a
variety of subjects, particularly the commerce which might take place between the United
States and Germany by the way of Trieste and Fyume and the Austrian Netherlands”.
But not Adams was the only American diplomat who informed Congress about the
intentions of Joseph II. Benjamin Franklin also sent a letter to Livingston. He informed him
that the emperor of Germany was ready to conclude a commercial treaty with the United
States, if Congress would propose such a treaty.
On the basis of the information provided by Franklin and Adams the Confederation
Congress decided to make the official initiation the Viennese government wanted them to do.
On October 29, 1783 Congress informed the ministers plenipotentiary of the United States of
America at the court of Versailles that “You are instructed and authorized to announce to his
Imperial Majesty the Emperor of Germany, or to his ministers, the high sense which the
United States in Congress assembled entertains of his exalted character and eminent virtues,
and their earnest desire to cultivate his friendship, and to enter into a treaty of amity and
commerce for the mutual advantage of the subjects of his Imperial Majesty, and the citizens
of these United States”.
Franklin informed Count Mercy about the above mentioned decision of the
Confederation Congress only on July 30, 1784, almost a year later. As he explained to the
Austrian diplomat “the appointing and instructing commissioners for treaties of commerce
with the powers of Europe generally, has by various circumstances been long delayed, but is
now done, and I have just received advice that Mr. Jefferson late Governor of Virginia,
commissioned with Mr. Adams our minister in Holland, and myself for that service”.
Mercy replied to the letter of Franklin on the very same day. He agreed to transmit the
letter of the Congress without delay to his court what he did on August 1, 1784. He wrote to
his government about the intent of Congress to conclude a treaty of amity and commerce with
the Habsburg Empire, and he told them that the American commissioners will arrive for this
purpose in Paris by the end of August. He asked chancellor Kaunitz to instruct him what he
should do. The chancellor answered the letter of Mercy in September. He informed the
ambassador that the conclusion of a treaty of amity and commerce also depended on the
opinion of the provincial governments, especially on the opinion of the government of the
Austrian Netherlands. Nevertheless, he instructed the government of the later province to
contact Mercy in Paris for this purpose. Kaunitz told Mercy that the Viennese government
was open to every arrangement which could lead to the development of commerce between
the two states. Mercy communicated the response of his court to Franklin on September 28,
1784. He informed the Doctor that “I have the honor to communicate to you that his Majesty
the Emperor has agreed to the said proposition, and that he has directed the government
general of the Low Countries to adopt measures to put it in execution. When the particulars
respecting this matter shall be sent me I shall instantly communicate them”.
At first sight everything seemed to be all right. The two parties expressed their definite
will to conclude a treaty of amity and commerce with each other and they appointed the
negotiators. Nevertheless, the two states never concluded a treaty in the 1780s. In the second
part of my presentation I will try to explain why.
At this stage of the story Thomas Jefferson became the major player. As it was
mentioned before Jefferson was elected as one of the members of the committee to negotiate
commercial treaties on May 7, 1784. He arrived in Paris on August 6, 1784, and by 1785 he
became the substitution for Benjamin Franklin as the minister plenipotentiary of the United
States at the Court of Versailles. Jefferson received a very interesting letter from an old friend
from Vienna in September 1785. Actually this old friend was the only twenty-eight years old.
Marquis Lafayette who had the opportunity to meet Joseph II and Chancellor Kaunitz in
Vienna. He wrote to Jefferson that on the basis of his conversation with the latter “I am apt to
think he may order his ambassadors to talk with you or Mr. Adams”.
The reaction of Jefferson to this letter is very important from our point of view. He
sent a copy of the letter of Lafayette to John Adams in London on September 24, 1785, but he
made a very interesting comment to it: “In the present unsettled state of American commerce,
I (want to) avoid all further treaties except with American powers. If Count Merci therefore
does not propose the subject to me, I shall not to him, nor do more than decency requires if he
does propose it”. It is clear from this excerpt that Jefferson did not want to initiate or continue
the negotiations with the Austrian ambassador. It is interesting because their instructions
definitely instructed them to negotiate a treaty with the Viennese court. We have to pose the
question, why Jefferson started to pursue such a dilatory tactics? Why did he want to avoid
the conclusion of a commercial treaty with the Habsburg Empire?
We can find the answer to this question in the definite change that is clearly visible in
the political economic thought of Jefferson. Due to the mercantilist economic policy of the
European powers the American initiation to conclude commercial treaties on the basis of free
trade or the formula of the most favored nations proved to be unsuccessful on the whole.
Congress enumerated sixteen European countries as possible commercial partners of the
United States, but by the fall of 1785 the American commissioners could conclude a single
treaty with Prussia. This failure forced Jefferson to reconsider his ideas regarding the
commercial treaties with European countries. By this time he thought that the commercial
treaties of the United States should form an integral system in which no European countries or
territories ruled by European powers could possess special privileges. Now, Jefferson started
to argue that the United States should grant special privileges to those European countries the
markets of which are crucial from the point of view of American commerce. As I have
mentioned before, the Caribbean possessions of such European powers as Britain, France, the
Netherlands or Spain played very important role in American export trade before the
American Revolution, and the Confederation Congress allowed the American commissioners
to make concessions regarding this crucial relation. Jefferson clearly strengthened this policy
and he started to prefer the conclusion of commercial treaties with European countries with
possessions on the American continent. And during these negotiations he was ready to adapt
to the European laws of game and to grant mutual privileges to the parties involved in the
negotiations. According to Jefferson European countries would have access to the ports of the
United States only on condition if they would open their possessions in the New World for
American shipping. He wanted to find a solution to the post revolutionary crises of American
trade and he also intended to make a breakthrough regarding the conclusion of commercial
treaties. From this point of view, the conclusion of Commercial treaties with European
countries with American colonies seemed to be much more preferable for Jefferson than a
treaty with the Habsburg Empire which did not have possessions in the New World and the
commerce of which with the United States was negligible.
By every indication Lafayette’s visit in the capital of the Habsburg Empire had a
definite impact on the decision makers in Vienna. On January 12, 1786 Count Mercy took the
step Jefferson wanted to avoid or at least wanted to postpone: he proposed the subject of the
commercial treaty to the American ambassador. As it is clear from a letter of Jefferson to John
Adams the Austrians were still waiting for the reply of the Americans to the letter of Mercy to
Franklin on September 28, 1784. Jefferson told Mercy that “I knew well that Doctor Franklin
had written as he mentioned, but that this was the first mention I had ever heard made of any
answer to the letter, that on the contrary we had always supposed it was unanswered and had
therefore expected the next step from him.” As it is clear from another letter of Jefferson to
John Adams Jefferson simply did not tell the truth. Both Americans were well aware of the
answer of Mercy. As Jefferson put it “you remember as well as myself wherein Count Mercy
informed us the Emperor was disposed to enter into commercial arrangements with us and
that he would give orders to the government of the Austrian Netherlands to take the necessary
measures”. But it is also true on the other hand that at the end of his reply Mercy added that
“when the particulars respecting this matter shall be sent me I shall instantly communicate
them”. This sentence really indicates that the next communication should have come from the
Austrian side.
The situation was a clear deadlock: the Americans could suppose with good reason
that the next step should be taken by the other side. But it is also true, that according to the
new dilatory tactics of Jefferson they did not want to make any initiation. On their part the
Austrians thought that the next step should be taken by the Americans, and they did not hurry
to give the necessary orders to the government of the Austrian Netherlands.
Mercy was still waiting for his authorization regarding the hereditary provinces of the
Habsburg Empire, when Jefferson left for London to visit John Adams at the end of February
1786. Jefferson’s visit of England is most well-known for his tour of famous English gardens,
but one of the official aims of it was the conclusion of a treaty with Portugal, and he
considered treaties with powers with American dominions more important. His departure for
London was another proof of his dilatory tactics and of the fact that he considered the
conclusion of a commercial treaty with the Habsburg Empire of secondary importance.
Jefferson left London on April 26, 1786, but while he was in England Mercy had
received his full powers to negotiate a commercial treaty. Everything seemed to be all right
again. Now, the only problem was that the commission of the American diplomats to
conclude commercial treaties with European powers was close to expiration. Congress
declared in May 1784 that “such commission be in force for a term not exceeding two years”.
Mercy approached Jefferson with his full powers at the beginning of May and the commission
of the American diplomats officially expired a few days later on May 12, 1786. Jefferson
informed the Imperial ambassador about it, but Mercy did not despair. According to Jefferson
he supposed “Congress would have no objections to renew them, proposed that I should write
to them on the subject, and in the mean time desired our project and observed that we might
be proceeding to arrange the treaty, so as that it should be ready for signature on the arrival of
our powers.”
But Congress did not judge it proper to renew the commission of Jefferson and his
fellow commissioners. The reasons of it are clear from the letters of John Jay who was the
secretary of foreign affairs of the Confederation Congress. As Jay explained to Jefferson in
his letter of August 18, 1786 “It has happened from various circumstances that several reports
on foreign affairs still lay before Congress undecided upon. The want of an adequate
representation for long intervals, and the multiplicity of business which pressed upon them
when that was not the case, has occasioned delays and omissions which however unavoidable
are much to be regretted”. Jay also added that “I have advised Congress to renew your
commission as to certain powers, our treasury is ill supplied, some states pay nothing and
others very little… The people generally uneasy in a certain degree, but without seeming to
discern the true cause”. Jay also informed Jefferson about his opinion about the “true cause”
of problems and difficulties: “I have long thought and become daily more convinced that the
construction of our federal government is fundamentally wrong. To vest legislative, judicial
and executive powers in one and the same body of men, and that too in a body daily changing
its members, can never be wise. In my opinion those three great departments of sovereignty
should be forever separated, and so distributed as to serve as checks on each other”.
In another letter to Jefferson on February 9, 1787 Jay informed Jefferson that
regarding the renewal of the commission of the American diplomats in Europe “I am… at loss
to judge what they will direct respecting treaties of commerce with the emperor and other
European powers. For my part I think and have recommended that commissions and
instructions should be sent you and Mr. Adams for those purposes. In my opinion such
treaties for short terms might be advantageous. The time is not yet come for us to except the
best”.
It is clear from his letters that Jay blamed the wrong structure of the federal
government for the problems of foreign policy and for the delay regarding the renewal of the
commission of the American diplomats in Europe. The commission of Jefferson and John
Adams concerning the conclusion of treaties of amity and commerce with foreign powers had
never been renewed. American politics started to move towards the elaboration of a new
federal constitution and a new governmental structure, and under such circumstances the
Confederation Congress did not want to make decisions for the long run. The matter was
dropped by the Confederation Congress consequently the Habsburg Empire couldn’t conclude
a treaty with the United States. It is also true on the other hand that Joseph II was also forced
to confront more and more difficulties. His reforms provoked resistance movements in all
parts of his empire. This led to open rebellion in the Austrian Netherlands and brought
Hungary to the brink of an open revolt. Joseph also started a war against the Ottoman Empire
which proved to be a complete disaster. All these difficulties diverted the attention of Joseph
from the commercial treaty with the United States.
To sum it up there were several reasons why the United States of America and the
Habsburg Empire did not conclude a commercial treaty in the 1780s.
1. No doubt that some misunderstandings and the communication gap in transatlantic
communication played some role in it;
2. Ineffective administrations on both sides also had an impact;
3. The growing difficulties of Joseph II and the Austrian government in Europe was
another factor;
4. A new governmental structure in the United States was in the making and under such
circumstances the Confederation Congress did not want to renew the commission of
his commissioners in Europe;
5. The changing attitude of Thomas Jefferson concerning the system of commercial
treaties of the United States also played an important role since it occurred at the very
same time when the negotiations with the Habsburg Empire arrived at a crucial stage.
The death of Joseph and the outbreak of the French Revolution made an end of enlightened
reforms in the Habsburg Monarchy for decades. The two states concluded the first
commercial treaty only in 1829 and established diplomatic relation only in 1838.