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1774 and the Scottish Tobacco Merchant

The Letterbooks of Alexander Hamilton, Piscataway Factor, Parts 1 (1774) (1774-1775). Maryland History Magazine, LXI [June 1966][1] , and Part II, 1967, Volume LXII

Alexander Hamilton was a Scottish merchant at Piscataway, a small Potomac port in Prince George less than a mile from Warburton Manor, where Ralph Forster’s future wife was born and raised. A small creek off the Potomac directly across the river from Mount Vernon, the village of Piscataway was home also to Robert Wade, with whom Ralph Forster had financial dealings. There’s no doubt but what Ralph Forster and Alexander Hamilton would have known one another. Both had been store owners catering to tobacco planters, though by 1774, Forster was Sheriff of the county and may have withdrawn from merchandising affairs. Though it’s not clear exactly the structure of Forsters business, it seems that he was in independent merchant with close ties with London merchants, although he may have been in partnership or served as an agent for the Philpot merchants of London. Surely Forster and his partner at Law Frank Leeke were involved in collection actions for the London merchant.

Hamilton, on the other hand, was a store manager employed and posted by a Scottish tobacco merchant who maintained a hand full of store operations in various parts of Maryland and Virginia. Letters between Hamilton and his employer, James Brown of Glasgow provide a vivid picture of the business affairs of a colonial merchant suffering through turbulent times as the colonial resistance to British policies was leading to the Revolutionary War.

From 1750-1775 there had been a steady rise of Scottish merchants in Maryland. They paid cash, sent tobacco to Glasgow merchants, who operated with London merchandising houses in providing British cloth and manufactured goods to large and small tenant farmers alike.

John Glassford was one of the largest of Maryland tobacco importers. Alexander Hamilton of Piscataway was employed by James Brown and Company of Glasgow, to whom most of the letters in his letterbook were addressed.

Hamilton had come to Maryland in 1768 and worked at the time for James Brown who was then in the colony managing the affairs of Simson, Baird and Company. There were other employees on the Piscataway store books in this period, including a Robert Buchanan and a James Hoggan. Salaries for the chaps ranged from 5 pounds a year to 45, thus their work likely ranged from clerk and stock-boy to store manager. Hamilton’s arrival came at a time when James Brown was returning to Scotland. This was quite common among the Scottish merchants where there was considerable moving back and forth, and also a great deal of interlocking company memberships. James Brown also had partners involved in other stores in Maryland where Brown was involved in the business with one of his brothers. A third Brown had built a business in Jamaica but returned to Maryland and participated in firms owned by his brothers.

The Scottish merchants he’d no monopoly, and there were numerous commercial rivalries among tobacco traders in Maryland. While there were independent merchants in Maryland with ties to London merchant houses, other merchants in the province were agents or extensions of long established commission-oriented traders. These older houses did not purchase tobacco outright in the colony, but contracted with larger planters to take their product, and that of the smaller farmers they were playing brokers for on English trading ships to London, and often from there on into European markets. These commission-oriented traders had historically served as banks and in the prior century had often provided mortgages for the land purchases of large plantation owners. While these plantation owners paid freight and were responsible to insure their cargo, their returns reflected the best prices that the merchant houses could get, minus a commission upon sale. Usually, but not always, these proceeds amounted to considerably more than Scottish merchants provided to local farmers, though “cash on the barrel-head was quite popular with smaller farmers” and allow for rapid growth of this newer business model. The merchants of Whitehaven and London often represented very large merchandising firms in London with large staffs with access to the best and most fashionable manufacturers and sellers of whatever goods the planters wanted packaged and shipped for them in return.

Competition between the established British houses, and the Scottish merchants was intense. Adding to the options for plantation owners and Maryland farmers were independent British merchants who owned stores and managed relationships with merchant houses. These operated far more like the traditional concessions, though the stores were not operated by paid employees of the London firms. Concession houses took the tobacco and got the best prices they could, and often those prices wouldn’t be determined for another year or two as the London houses charged the plantation owner storage and tobacco could be retained in hogsheads for a couple of years pending the right price shifts in markets throughout Europe. The variability of prices was always a problem, and among those living life along with the traditional model, they were often purchasing and having sent goods years before their security was moving onto markets at unknown prices. The uncertainties involved led to large issues of trust, let alone the very large indebtedness which most plantation owners had in relation to their merchant houses as their ‘banks’ or funders. On the other hand, merchants in the colony who were working ‘on the spot purchases’ always ran the risk of paying higher prices than warranted once they’d paid the freight, insurance, and related costs into a market of rather widely fluctuating prices. Each store in a Scottish merchant’s orbit awaited instructions as to the price to be paid, and the amount of tobacco to be purchased as farmers struggled with their options. Agents in the field communicated to headquarters assessments of annual crops, and while some stores in a system would be taking in crops, others might not be on a particular year. Correspondence from an Annapolis agent in London to the colonies suggested that only ports out of which they wanted tobacco purchased in one particular year was Indian Landing and Pig’s Point — two landings where Ralph Forster had his stores.

The forms of transaction between these models, and among merchants varied as well, and had a bearing on the dynamics of relationships. Scottish planters were working with a shorter-term business model, knowing how much tobacco they wanted to buy, and the prices they were willing to pay. Planters sometimes worked together to produce scarcity until their merchants raise proposed prices. Planters who shipped concessions and paid commissions usually got better prices in the end, but they were working on long lines of credit which extended over many years of indebtedness. Planters at times attempted to establish contracts with multiple or alternative buyers, though London houses hired agents to scour the colonies to detect such situations so as to keep themselves from extending credit to farmers deeply indebted to others. In the early 1760s, and again in the early 1770s, the British economy went into rapid recessions which involved massive restrictions of credit, and therefore stronger than usual efforts on the part of merchants to collect due bills from planters.

The political storms moving toward the American revolution generally involved British efforts to seek compensation for their expenditures in the colonies (and elsewhere) during the French and Indian War (apart of a far wider global war in which Britain had been involved). Many British felt that Americans should share in financial responsibility for the protection of their security, though “no taxation without representation” became a popular cry, and protests against Stamp Acts and tariffs were many. As an antidote, American merchants had been banning together to discouraging trade of any kind with the home country, including the importation of manufactures or even the export of agricultural goods. If one looks at the court dockets of counties in Maryland in the early 1770s, they were of a sudden full of cases relating to unpaid debts during those conditions of tight credit. Among the strongest cries from patriotic rebels committed to full independence was shutting down those courts and canceling all debts to British merchants.

1774 – 1775 Correspondence

In the Spring of the year, Hamilton was corresponding with the James Brown, the owner of his Glagow firm, providing updates on his efforts to fill ships for the annual convoy. In the springtime, even before tobacco had been delivered to the warehouses from which it would be shipped, Hamilton was making tentative commitments about tobacco which would be made available to his firm. Usually, ships came from Europe in the spring or summer laden with goods for stocking stores, and headed back in the fall in convoys. Flat boats brought tobacco crops down many streams and tributaries to district warehouse ports where there were province-authorized warehouses for inspection, grading and storage. The warehouses held tobacco, and that which was to be sold and shipped out in the fall might be from that season, or since tobacco well barreled had a good shelf life, from the previous year. Much dependent on the farmer’s situation, and especially with the short-cycle trade of smaller planters, seasonal shipments were often from the current year.

In his note to the home office, Hamilton noted that he was starting to gather commitments from planters, often in units of hundreds of hogs of tobacco which would later be transported from warehouses in small boats for loading on the trans-Atlantic ship in the fall. With quantities of good tobacco being low, Hamilton was providing advice and information, but needed a determination from headquarters about prices to be paid for the annual crop. Competitors at various nearby ports had already announced what they were willing to pay at receiving stations and their cargo goals. Hamilton was looking at and doing his own inspection on crops as they were going into the warehouse for grading. There were the usual problems with flat boats getting caught in storms, barrels flooded with water so that tobacco was discolored and either set to rot or required extra handling to be salvaged at lower quality. It had been a dry spring, so the tobacco was slow to come in to the warehouse, and much of it was of such poor quality that higher amounts than usual were being rejected by the governor appointed inspectors. He was waiting to hear how much tobacco headquarters wanted to purchase, and at what price. He was awaiting the goods that he expected them to send for stocking the store as one means of attracting commitments from farmers since many of them preferred to be paid in goods rather than cash. Hamilton had advised the company on the Irish linens and other goods he advised, but items to be sold in the stores were ultimately determined by what the owners wanted to ship.

Since goods distributed to the colony went onto the store books as obligations to the merchant house, British suppliers often overstocked their colonial outposts and left with them the problem of getting goods further moved into merchandising chains. The Maryland stores supplied not only local planters, but served as distributors to inland stores and merchandisers, or they sold excess supplies of times that had difficulties moving on discount markets in Philadelphia.

And so in his June letter, Hamilton was again stressing the importance of the company forwarding on goods which would attract potential tobacco sellers to the store. It was clear from his note that he had not been receiving particularly attractive inventory, and had been receiving low quality items which he had difficulty moving into markets. He had plenty of unsold hoes and was receiving more. Hamilton knew that the company had sent two ships for porting tobacco back to England, but he wasn’t sure that he could fill one of them without drumming up more business. The fact that it was widespread knowledge to planters that London merchants had sent over more ships than usual that were already in Chesapeake bay looking to take on consignments was suggesting to planters a strong market and that they might expect good prices, making them less willing to accept lower offers from Scottish merchants. It later became apparent that the parent firm was not unmindful of business risks related to their operations in the colonies. Already news of American merchant and colonial association efforts to restrict trace as a means of sending a “message” to Parliament was being taken into consideration, and news of efforts around the colonies by rebels to shut down courts and the collection efforts of resented British merchants was having a chilling effect. And past these, economic conditions in Britain were having their own effects since banking crises and depressions in 1762 and again in 1773 had both led to credit restrictions.

Correspondence from Hamilton toward the end of 1774 to his owners in Scotland illustrated the frustrations of a store manager of the time. His store was overstocked by the parent company’s shipment of items which didn’t do well in the local market, tobacco was coming into warehouses slowly and of mixed quality. Given pressure from the rebels and the increasing hostility toward merchants, collections were difficult and politicians were threatening to close the courts against collection actions all together. This was starting to happen in sections of Virginia, and protesters at local courts in Maryland were soon triggering at least temporary court closures. Merchant associates were committing to not importing manufactures, and pressure was mounting toward terminating all exports, even those of the agricultural lifeblood of the province, as protests against British policies. Decisions were being debated outside of the merchant associations and in the Committees of Observation and by the Colonial Congress.

Already by the end of 1774, traditional business and political concepts and practices regarding nearly everything were being swept away. For decades, the more populist elected representatives comprising the Lower House had been aggressively anti-proprietary and routinely challenged the authority of the governor, appointed by the proprietary. Governor Eden had been called to England for part of the year though even his pay schedules for the posted officers of his administration had become matters of challenge. With several key Upper House office holders having drawn pay at old schedules having been taken to court and fined, the regular government had been largely brought to a halt.

Following the British landing of troops in New England, colonies had developed Committees of Correspondence in order to coordinate efforts, and within Maryland and others, county and state Committees of Observation were taking on local authority surpassing that of traditional government offices. The more conservative and gentry-oriented elements of communities found their places being taken by ‘patriots’ more strongly committed to not only ‘independence’ but changing all systems. Friction and division were rapidly developing with in the community. The wealthiest planters, generally among the hand full of intermarried families who had identified with English landed gentry had supported proprietary traditions. Many of these were proud of what they considered English democratic traditions, and while many vehemently protested British foreign policy of the day, they held out hope for compromise of some sort and a return to union. Many members of this group had been educated, and sent their children to British schools, traveled widely on the continent, and even owned plantations both in the colonies and in England or Scotland. Rebels, often members of Sons of Liberty had stronger local roots, and rather than inhabiting the gentile traditions of plantation life, social clubs and urban entertainments, were often part of newer communities and involved in more entrepreneurial realms. The fast rising city of Baltimore, for instance, was far more “rebellious” than was Annapolis, the graceful center of gentry-oriented Maryland social life.

There is no doubt but there was widespread bitter popular opposition to British efforts to get Americans to share in efforts to pay off debts accumulated in the period following the global French and Indian War. Most of the population was sympathetic to the cause of reform in British policies though far from all believed that a full separation was required.

This “pro-country” vs “pro-crown” distinction had long existed in Maryland politics and was accompanied my many profound misunderstandings. One can read the diaries of Calvert proprietary representatives in the colonies and gather the impression that burgers elected by communities to the province’s “Lower House” were almost uniformly ignorant and poor, though later analysis of land holdings demonstrated that communities only elected as representatives among themselves the largest land owners.

Jonathan Boucher, a prominent clergyman of the day, who had come from humble Virginia origins before being sponsored to education in England and returning to the colonies viewed politicians supporting the ‘rebel’ cause as overly ambitious social strivers seeking illegitimate gains. He and others were alarmed that lower class elements were striving to gain control of Anglican vestries in order to appoint tobacco inspectors who would be more lenient in grading tobacco and thus threatening the quality reputation of the provinces output. Traditionalists were outraged at efforts to close the local courts so that legitimate debts owned to ‘outside interests’ might not be collected.

Through the late 1760s and on into the early 1770s, “country” vs. “crown” conflicts had predominated in conflicts, and politics of the day was widely disseminated in the drinking clubs and public press. Drinking clubs often served as debate societies and strong legal and rational argumentation were a popular entertainment, as was heated conversation and debates common nearly every night in taverns throughout the territory. Disputations were often aggressive in person and in the press. The Maryland Gazette often published from it’s first page long multi-paged letters of argument from often ‘anonymous’ (though people usually suspect the culprits involved) contributors, often answered by long published rebuttals in the next publication. These debates would go on for weeks and were often central to the politics of the day. They revealed attitudes and beliefs among ‘Englishmen’ which ultimately came to have disastrous consequences for the careers of some once signs of loyalty to shared British traditions became a justification for violence or grounds for confiscating one property. By the end of 1774 already, some “Loyalists” were already evacuating Maryland for safer harbors in New York or London in order to preserve their lives and honor.

Progress toward a separation was having impacts on business. Not only were owners and managers considering strategies for protecting their own interests, they are dealing with difficulties of securing debts, dealing with the impacts of a quickly diminishing community of business persons, and suffering impacts of explicit decisions taken by the rebels in their efforts to show resolve to the British. Merchant associations had called for a self-imposed embargo of manufactures pending the repeal of the Tax Act, and talk was already in the air of altogether disallowing the export of agricultural goods from the colony. The steps already taken, toward non-importation was producing despair as economic fluctuations set of by these moves seemed to produce a growing trend toward independence and intensified frictions between parts of the community. Some had anticipated the blockages of trade which were partially implemented, holding goods in anticipation, while others were soon caught in rough circumstances for not having put supplies away. Prices reflected scarcities and were soon fluctuating as tensions rose. Hamilton anticipated in his correspondence that given the current frustrations, and if the self-restrictions are adhered to, that even in advance of any final decisions to preclude shipment of agricultural crops that conditions within the year would be riotous, no the least among the poor. His implicit reading of a social class cleavage into this projection is interesting and is supported by historical observation that the large body of small farmers of Maryland was not only generally disinterested in politics but distrustful of more landed ‘rebels’ who seemed to them to be pursuing independence more for their interests than those of the bulk of the population.

Alexander Hamilton’s store operation came into direct conflict with the revolutionaries by the end of 1774 when goods consigned to its Scottish owners stores in Prince George were confiscated by the Committee of Observation for the county and sold at public auction. Agents of the store ultimately reacquired the good by outbidding competition and paying a good premium over the cost of the goods, the excess proceeds to the Committee being sent for the relief of Boston. Not all inbound shipments to the colony were apprehended, though the Committee illustrated its powers in a series of confiscation of pipes of wine and other goods being imported by several Annapolis merchants.

August 74
Hamilton wrote to his owner letting him know that tobacco was coming in slowly. Because of the weather people were having trouble getting it down streams and were reluctant it seemed to him awaiting more information about prices which had been posted high at several of the local stores. He believed that another reason that tobacco was coming in slowly was because of the non-importation resolves which were being debated by various groups of merchants and politicians in the colonies. Already these discussions were producing a general scarcity of goods which was triggering holding and fluctuations in prices. The prospect of firming up colonial commitments to non-importation awaited the results of deliberations of colonial representatives who were to meet in Philadelphia on September 18.

An unintended result for the business of tobacco traders of the tension with Briton had been that savy planters, in anticipation of possible trade restrictions had reduced their planting of tobacco crops and increased land allocation to the production of wheat, grains, and corn. These latter could be sold throughout the colonies or in the Caribbean, making for production more suitable to developing an independent economy.

Already the Committees of Observation in Maryland were bringing about reforms in government administration. Tobacco inspectors who had been appointed by the proprietary had been pulled from the governor’s authority and given to the official church, whose local vestries served to distribute mail and community news on Sunday mornings. In the new scheme of things people elected as vestrymen within their districts were to take new roles as inspectors. There was concern that this move might result in collusive decisions by inspectors on behalf of their neighbor planters, and that this new regime might compromise quality decisions. There governmental steps were in the works and described by Hamilton in his briefing of the home office. In Virginia, the legislature had thwarted the efforts of it’s crown-appointed governor to set pay rates for his appointees, which had brought a close of courts and therefor collection actions against debtors. The “spirit” of the times against authority was stimulating a number of kinds of initiatives, some of which involved threats of violence against British merchants and interests. At one public meeting in Albermaine it had been proposed that rather than being subject to whatever prices that merchants wanted to charge the public, that people ought to invade the stores and take whatever goods they wanted, paying for them as it suited them, and prices they thought fair. The proposal, Hamilton noted, had been met with applause.

October 1774.

Hamilton wrote to his owner after having received a shipment of goods that he was being asked to sell through the store. The quantity of stock provided was small and Hamilton’s recommendations had not been honored. He’d been shipped more unneeded farm implements and hoes, and no Irish Linen. He as forthright in telling his own that he thought this shipment had been a great mistake, though he allowed that the sail cloth they had included was of good quality at a fair price and had sold out quickly. He thought that this shipment would not encourage his business with the planters who would go to other stores where on credit or for tobacco payable in the spring they could get what they wanted. Not only would have excess inventory that he couldn’t move, he would have difficulty supplying the tobacco needed by the company. Inventory was shipped on credit, and only with sales could he make payments against the store’s obligations — thus he feared that revenues would preclude his paying off store debts for the year.

Hamilton had received instructions on prices and quantities of tobacco desired along with the shipment of goods for the store. This was late in the year to be receiving instructions, and he noted that already the bay was being visited by many London ships seeking cargos. He therefore warned that it would take some time before he could get the company’s goods loaded.

Hamilton also reported on his collection efforts and noted his efforts to get bonds and notes as well as signed settlements. He had sold one horse and still had three on hand. Mr. Lee have gone from his store to the owners’ Bladensburg store twenty miles to the north upon the death of it’s manager and had hired a young man to fill his place. He had also paid for the construction of a small house adjoining the store where he could entertain potential customers and maintain privacy and confidentiality at negotiations with them.

Hamilton informed Brown that Congress had resolved that local non-importation agreements would be firm as of the first of December and that it had been determined that all exportation would soon be stopped next until “the act of Parliament so obnoxious to Americans was repealed”. He also noted troubling signs in the colony. That fall, Annapolis experienced it’s own version of the “Boston Tea Party” when the ship of the Dick and Stewart Company arrived with a large shipment of tea consigned to a merchant of the city. Although merchants were advised against submitting to British taxes, Steward mistakenly went aboard the ship and paid duties demanded by toll takers. The Committee of Observation for the city and county assembled and were of the opinion that the tea should be burnt. The angry crowd outside was somewhat split with some satisfied and others insisting that the ship be burned along with the tea. After the Assembly had decided that only the tea needed to be burned, a rebellious faction captured Steward and threatened to call up 3000 armed vigilantes, to put him to death and torch his home as well as the ship if he did not go with them immediately. Stewart was intimidated into setting fire to his own ship, which burned to the water line in Annapolis harbor.

December 1774

Correspondence from Hamilton to Brown in December of 1774 found the merchant admitting that headquarters had likely been wise to hold back provisioning his store any more adequately than it had. It was becoming ever more clear that in the colonies that most where against any kind of trade with the home country. Businesses were on the way to closing down. Collections were difficult and becoming even more so. Recently in court’s at adjoining Calvert county, desperate planters had protested at court, demanding that they close, and judges had given in to their demands, just as they had in Virginia. It seemed that courts would be adjourned from December until at least February and no one knew what would happen from them. The argument of those “Sons of Liberty” was that “administering justice impartially” would allow Loyalists the revenues with which they could acquire arms to fight against them. Rebels had set out to prevent that from happening.

Though it was increasingly clear that inbound shipments would not be received, it had not yet been decided to cease the export of tobacco. Planters were often optimistic that colonial politicians wouldn’t cut off their own primary source of income, and rather ironically often anticipated that uncertainties would likely enhance the prices they’d receive for tobacco given uncertainties of the market. If in the past year they’d been promised 30 pounds per hogshead, they looked forward to being offered 50 by the Scottish merchants. Hamilton advised his owner against rising to the bait of such expectations.

Winding Down

In 1775 and 1776 there were a number of strange real estate transactions on records for merchants of Maryland. Many had been going out of business, with Scottish and British parties sometimes preparing to evacuate the country, or in any case to transfer titles for their property to others better prepared to withstand potential confiscations of estates. This was true for several merchants of Piscataway an Nottingham where stores and even 100 acre estates were being passed for five shillings. A number of these sorts of arrangement came under contest toward the 1780s when state funds were low and Maryland legislation, which had not allowed for final formal proceedings was beginning to enable acquisitions in order to support state coffers from such transactions. Numerous confiscations were completed by 1781, though in this and succeeding years, a number who had migrated to England during the period of highest stress were returning in order to secure assets. Those who had been classified as clear Loyalists were often obligated to proceed from England to New York and inquire from there regarding their right to enter Maryland and pursue their land or commercial interests since British merchants often wanted to remain debts and legislation regarding their rights to settle obligations was established only slowly.

Alexander Hamilton, like many merchants, closed down his business near 1776. Rather than travel abroad he retired with relatives in Virginia, though he returned to Prince George near 1784 handmade repeated efforts to resume his business and rain the company’s debts.

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