Volume 4, Chapter 22, Commodities, Manufacturing and Foreign Trade
Before the war, Great Britain had been the principal exporter to and importer from the American colonies.
America had been particularly dependent upon Britain for supplies of high-grade manufactured goods, including textiles and ammunition.
Now, the outbreak of war suddenly cut off these supplies necessary for the American economy and, more acutely, for the American army.
The total imports from England to the American colonies were 2.6 million pounds sterling in 1774,
Plummeting to less than 200,000 pounds sterling in 1775 and 50,000 pounds sterling the following year.
Apart from privateering, the Americans would have to make up the gap by shifting to other sources of trade.
The major obstacle to this vital shift in trade patterns faced by the Americans was, paradoxically enough,
The Continental Association, an intelligent method of putting pressure on England before
Lexington and Concord, was now simply a destructive, self-imposed barrier on importing supplies.
The pressure policy had failed, war had begun, and now the desideratum was to obtain supplies.
Already in July 1775, John Adams, Richard Henry Lee and other radical delegates to the Congress had recommended that American ports be thrown open to all countries except Great Britain.
Throwing American ports open to imports from all other nations, however, would mean open and outright defiance of the time-honored navigation acts.
and hence a long step toward outright proclamation of independence from Britain, a step which
the conservative and timorous in the colonies were not yet prepared to take.
Despite the drastic change of conditions, the American rebels, suffering from a cultural
lag, continued to enforce even the non-importation provisions of the Continental Association
and Congress, in effect, reaffirmed the association in May and July of 1775. By mid-July, rationality
began to break through and Congress authorized, for a period of nine months, the importation
of munitions from anywhere in exchange for American produce, the Continental Association
and Not Withstanding.
Merchants were specially licensed by the Congress to receive these imports.
So shame-faced were the delegates about this arrangement that it was not revealed to the
public until late October.
American foreign trade had been further gravely crippled by the approach of the date set by
the Continental Association for Non-Exportation, September 10, and by its zealous enforcement
by the Local Committees of Safety. At the end of October, further breaches were made
by Congress's recommendation to the provincial governments and to its own newly created Secret
Committee to license ships to export produce to the West Indies in exchange for munitions.
Moreover, export of food to Bermuda in exchange for salt and munitions was now officially
allowed.
It also began to dawn on some colonists that Britain's exemption of four of the last
revolutionary colonies, New York, Delaware, North Carolina, Georgia, after April 1775
was now a boon rather than a bane.
The conservative Whig, Thomas Willing of Pennsylvania, a merchant and ship owner, argued in October
that it was absurd to act like the dog in the manger, not suffer the four colonies to
export because we can't. We may get salt and ammunition by those ports.
But on November 1, Congress decided not to allow this major breach, and by the end of
1775, this particular matter had become academic as a result of Britain's anathematizing all-American
and Trade with the Prohibitory Act.
November 1 indeed was a black day for rationality as well as for the Revolutionary War effort,
for Congress staunchly reaffirmed the non-importation pact, with the exception of the specifically
licensed shipments for munitions.
Those aptly called fools by Adams in July had prevailed then, and they tightened their
in November. Non-exportation would expire on March 1, 1776, and this fact, as well
as the increasing strangulation of foreign trade, reopened the debate on open or closed
ports at the beginning of that year. This time, willing, eager enough to import goods
into American ports, was hardly eager to throw open American importation to the ships of
of All Nations. Typically, the conservative faction in Congress chose to place protection
of the state-granted privileges above success for the Revolutionary War effort. Thomas Johnson
of Maryland wailed that the merchants and shipbuilders would suffer if foreign nations
enjoyed the carrying trade to America. Samuel Chase of Maryland and John Yocum Zubly of
of Georgia opined that opening of the ports smacked too much of American independence.
Spearheading the fight for free trade with the rest of the world were the radicals Richard
Henry Lee and George Wythe of Virginia, Christopher Gadsden of South Carolina, and John and Sam
Adams of Massachusetts. They pointed to the growing scarcity of goods and the consequent
Distresses of the Poor.
They also shrewdly noted that admitting the ships of foreign nations would be likely to
bring in its wake foreign warships to protect the merchant vessels, thus aiding in the American
struggle against the British Navy.
The Virginia Provincial Convention urged Congress to open the ports, as did the Philadelphia
Committee of Inspection.
The British Prohibitory Act proved to be the decisive means of radicalizing Congress on
this issue, and on April 6, they provided that imports and exports of all goods to and
from all parts of the world, except Great Britain and her possessions, would henceforth
be free. The onerous acts of trade and navigation were at last no more, and Sam Adams exalted
that we have torn into shivers their acts of trade by allowing commerce subject to regulation
to be made by ourselves with the people of all countries.
Here was a momentous step indeed toward American independence from Great Britain.
Although the restrictions of the Continental Association on Trade with Britain remained,
the freeing of all other trade greatly reduced their crippling impact and they were soon
Having relaxed still further, one of the most onerous provisions of the association, in
effect since March 1, 1775, imposed total non-consumption of tea. Zealous enforcement
by local radical committees understandably alienated many citizens from the radical cause.
Also understandably, merchants put pressure on Congress to relax what had now become absurd
as well as tyrannical regulation.
Despite the opposition of Benjamin Franklin, Thomas Lynch of South Carolina, and Richard
Henry Lee, Congress agreed on April 13, 1776, to permit at least the sale and consumption
of all tea imported before December 1, 1774, when the non-importation clauses of the Continental
Association had gone into effect. Since it was difficult to distinguish between tea imported
before and after that date, this measure proved another advance toward freedom of trade. Still
another important advance toward free trade was the liquidation of the economically absurd
provisions of the Continental Association for fixing the prices of imported goods at
their previous levels. Since the association and then the war were bound to make these
goods far more scarce and therefore raise their prices, enforcement of such provisions
could only lead to drastic shortages of the goods and dislocation of the economy. Shortages
and dislocation later aggravated by the still higher prices necessarily brought about by
and the paper money inflation financing the war effort.
In the North, the price regulations caused a great deal of trouble from the beginning
of the non-importation, particularly in New York and Philadelphia and their tributary
markets. Most foodstuffs were grown in America rather than imported and hence remained abundant
during the War. The important exceptions were salt, tea, and the West Indies products sugar
and molasses. The dearth and consequent high prices of previously abundant West Indies
commodities in contrast to the more stable prices of home products were the particular
irritants in the North and hence were the special objects of zeal in enforcement by
by the Radical Local Committees. During the winter of 1775-76, the Philadelphia Committee
continually harassed the merchants. In December 1775, the Committee fixed detailed wholesale
and retail prices for oil, following this up on March 6, with a comprehensive schedule
of fixed prices for such West Indian trade products as salt, molasses, rum, coffee,
cocoa and sugar. Violators would be advertised as sordid vultures who were preying on the
vitals of their country in a time of general distress. This petulant deed was quickly imitated
by the New York Committee, which had previously harassed merchants for alleged overcharging
in the Price of Pins.
The Newark Committee followed with similar schedules for West Indian commodities on March
15, and other imitators were the Joint Committees of Inspection of the towns of New London County
and the Joint Committees of Hartford County, Connecticut.
The New Hampshire Provincial Congress and the Providence, Rhode Island Committee also issued
frequent warnings and outcries against the rise of prices.
In the South, the major scarce imported commodity was salt. Salt was essential for the preservation
of meat and fish, and the bulk of colonial supplies of salt had come from Turks Island
in the British West Indies, now closed to American shipping. Local communities in the
South, particularly in Virginia and Maryland, tried desperately and unavailingly to stop
the rise in the price of salt, efforts which could only aggravate the shortage. People in
the Virginia uplands went so far as to join in looting raids against the salt stocks of
tidewater merchants, raids which only intensified the shortage still more. Congress was finally
moved at the end of December 1775 to relieve the salt shortage by opening Maryland, Virginia
and North Carolina, to the import of salt from any foreign country and to the export
of any produce in exchange. Thus, salt, at least in the Upper South, won free trade before
other commodities. Having watched the colonies struggle unavailingly against price increases
for scarce commodities, Congress decided to complete its great free trade program of April
1776 by completely scrapping the price control provisions of the Continental Association.
Wisely asserting that merchants should be encouraged to import from abroad by a prospect
of profits proportionate to the risks incurred, Congress resolved on April 30 to end the powers
of committees of observation and inspection to regulate the prices of goods. Domestic
trade immediately flourished again with the sweeping away of the restrictions and the
merchants happily ignored the exemption that Congress had tried to make for green tea.
The breaking of this logjam, of course, allowed prices to rise to their free market levels,
thereby clearing supply and demand. Unfortunately, Congress soon partially backtracked on its
Free Market Policy, and on May 30, it advised the local committees once again to fix the
price of salt. Most of the provinces and local committees were quick to adopt this advice,
thereby perpetuating a salt shortage. The New Jersey Committee of Safety on the other
hand displayed better sense. When in various sections of the province angry mobs formed
to Coerce Merchants into Lowering Their Prices, the New Jersey Committee warned the people
that any forced reduction of prices would merely discourage importation and end by injuring
the mass of the poor.
The gravest commodity shortage for the American war effort was ammunition, especially gun
and Powder, the great bulk of which had formerly been imported from England. Without ammunition,
of course, the war would be over promptly. The Americans made determined efforts to encourage
and subsidize domestic manufacturing of powder, but with little success. America, after all,
was not a manufacturing country, and there was no reason why it should have been. Agriculture
was its metier, and over 90% of the population lived on farms, including plantations.
Cities were far more important to centers for commerce, trading in and for American
agricultural products, than for manufacturing.
What manufacturing took place was on a small scale indeed.
There were artisans in urban centers, and the more prevalent household manufacturers,
For example, of the family's chief clothing in the rural areas.
The exception to the paucity of manufacturing for the market was Philadelphia, the largest
city in British America.
Wood from nearby forest and hides from neighboring farms provided raw material for numerous types
of manufacturing, and local iron, zinc and copper mines supplied the material for manufacture
of Arms. Seeing that the powder shortage was critical, the Continental Congress as early
as June 10, 1775 urged the provincial governments to subsidize or engage themselves in the manufacture
of gunpowder. In Philadelphia and in Virens, with its tradition of manufacturing, six powder
mills were soon producing several thousand pounds of powder a week. The Virginia Convention
Virginia also passed a bill subsidizing powder mills, but with little success.
Many Virginians attempted powder manufacture, but they soon found that the heavy capital
requirements and costly operations forced them to abandon the field.
As the powder shortage accelerated throughout the colonies and subsidized private manufacture
After proved hopelessly uneconomic, Virginia turned in January 1776 to consider the establishment
of public powder mills at government expense. But despite the active support of the powerful
John Page, the attempt was blocked by a majority of the Virginia Committee of Safety, and especially
by the President of the Convention, Edmund Pendleton. At any rate, it was rapidly becoming
It's been clear that domestic powder production could supply only a negligible amount of the needs of the American forces.
Even Philadelphia's contribution could only be a drop in the bucket and was inferior in quality to European powder besides.
In short, the great bulk of American powder still had to be imported.
The obvious source was the West Indies and this meant that tobacco, the great staple demanded in Europe, would be the main source of funds to pay for the imported powder.
And tobacco meant Virginia, the great center of tobacco production and export.
The first attempt to expand the import of powder came in Virginia during 1775 when the merchant and planter, John Goodrich, was sent by the Committee of Safety to negotiate the purchase of powder in the West Indies.
Goodrich, however, through no fault of his own, was soon in trouble on all sides.
The British discovered his mission and arrested him, and after his release, Virginians, led
by the Isle of Wight Committee of Safety, denounced him for daring to consider buying
ammunition from the British West Indies.
Few Americans, indeed, seemed to realize that purchase of war supplies from the British
British would be a boon, not a living shame, for the American war effort. After all, there
was no mystical taint attached to British ammunition. Goodrich, in understandable disgust
at his persecution, abandoned the struggle and joined the British cause.
A more successful effort to import powder came in April 1776 after the American seizure
of Dorchester Heights and the British evacuation of Boston. French and Dutch merchants became
far more optimistic about rebel chances and promptly began to sell a steady and abundant
flow of powder to the Americans, using the entrepôt of Saint Eustatius, Dutch West Indies,
and Martinique, French West Indies, to exchange European gunpowder for Virginia and Maryland
and Tobacco. Large, though necessarily sporadic, shipments of arms and ammunition also came
from Spain to the back country of Virginia by way of Havana and the port of New Orleans
in Spanish Louisiana. So abundant was the flow of imports after April 1776 that the
colonies had no further worries about a shortage of gunpowder.
For other types of arms and ammunition, American domestic sources were far superior. Particularly
important was the rapidly growing iron industry of Pennsylvania. From producing only one-seventieth
of the world's crude iron, bar and pig iron, in 1700, the American colonies produced 30,000
in 1775, one-seventh of the world's output and exceeding the iron production of England.
Pennsylvania, with its abundance of iron ore, timber for fuel and access to nearby markets, was preeminent in iron output.
Southeastern Pennsylvania had no fewer than 73 iron furnaces and forges,
The largest and most numerous being in Berks County, north of the Schuylkill River.
Hence, during the winter of 1775-76, Pennsylvania manufactured over 4,000 stand of arms.
Other major centers of iron manufacture were in northwestern New Jersey, around Lake Hoppetcong, northwestern Connecticut,
around Salisbury and northeastern Maryland and after 1775 in various parts of Virginia and together they produced another 4,000 stand of arms.
In contrast to the production of crude iron, the manufacture of finished iron had been restricted, though only slightly in practice, by the British Iron Act of 1750.
The stimulus of war contracts, however, quickly spurred the construction of iron foundries in Massachusetts, New Jersey, Maryland, and especially in Pennsylvania.
And village blacksmiths and other artisans were fully competent to turn their attention to finished iron for the war effort.
The Americans also benefited from zinc deposits in northwestern New Jersey and copper mines
in New Jersey, Pennsylvania and Maryland. As a consequence, the Army suffered no shortage
of iron, rifles, muskets or ammunition. American cannon, however, proved far inferior to European
and the rebels quickly placed their reliance on cannon, whether iron or brass, imported
from France or captured from the British.
There was one vital ingredient of ammunition, however, that was short during the war, lead.
So scarce was lead that as early as June 1775, the Continental Congress pleaded with the
provinces to open up governmental lead mines.
Several colonies tried this desperate experiment, but as might be expected, the results were
for Failures, Yieldless Mines as in New York or Marginal Mines as in Middle Connecticut.
This should have been expected, for any useful lead mines would have been discovered and
exploited by private enterprise.
The only workable lead mines were operating in southwestern Virginia, near what is now
Austinville.
By the summer of 1776, the Americans were stripping lead from clocks and windows to
To Provide the Continental Army
Of the food products, we have seen that the major item in short supply was salt. While
some salt could be imported from the West Indies, the Americans also constructed makeshift
factories along the coast to make salt from evaporated sea water. This was a basically
uneconomic process to be sure, but was made temporarily profitable by the high price of
of Salt Caused by the Scarcity of Supply Thus, when market prices were permitted
to rise, the wartime shortage of salt created its own partial corrective.
Also cut off by the war was a very large amount of textiles for clothing imported from Great
Britain, but this drastic cut was nearly compensated by large increases in household manufacturers
In New England and the Middle Provinces, farmers with ready flexibility increased their household production of woolen and linen cloth.
In the South, farmers and planters increased their output of homespun linens, cottons and linsey woolsy.
And many backcountry settlers simply wore their deer skin clothing as before.