The Currency of Empire

Front matter

THE CURRENCY OF

EMPIRE

JONATHAN BARTH

Introduction

. Silver, Mercantilism, and the Impulse for Colonization

. Economic Rebellion, Competition, and Growth in English America, 1680-1685

. Reconstructing a Mercantilist Empire, 1690s

Epilogue: The Grand Settlement

Acknowledgments 299 Notes 301

THE CURRENCY OF EMPIRE

Introduction

This book examines the pivotal role that silver and gold money played in the formation and working out of England’s American colonial project in the seventeenth century. The book argues, first, that money was the primum mobile, or prime mover, of English imperial action and overseas activity, including the impulse for colonization, the regulation of colonial trade, and the introduction of certain fundamental changes in imperial colonial administration. Second, the book argues that money was also a chief catalyst for colonial resistance to that same mercantilist order, an order that many colonists believed prejudiced or wrongly subordinated their economies to imperial or London interests. This colonial resistance, propelled in large measure by money-related matters, grew stronger and more virulent as the century proceeded, until much of it dissipated with the onset of a new imperial age after the 1690s.

By analyzing the close relation between money, trade, and political power, this book seeks a more comprehensive explanation for the many tensions that prevailed in the seventeenth century between empire and colony. New perspectives on a number of seminal events and developments arise from viewing the early empire through a currency lens. John Pollexfen, a founding member of the Board of Trade, argued in 1697 that “Trade and Coyn have such a dependence one upon the other, that they could not well be consider’d distinctly.”' I agree with that statement but extend it to also include empire and politics, both of which have such a dependence on money—and vice versa—that the study of one requires considering the other. Money, as an object of historical study, possesses unique explanatory power. This book will demonstrate how and why pecuniary matters—matters of or relating to money—were so critical to this period. In so doing, I hope to shed additional light on many of the most important economic and political hallmarks of the first one hundred years of England’s empire in America.

The passing of Queen Elizabeth in 1603 closed an important first chapter in the history of the early English empire. The city of London, formerly a peripheral outport confined to simple exchange across the Channel, was now a major commercial hub, home to a host of cosmopolitan-minded merchants with direct trading relationships in Mediterranean, Baltic, and East Indian markets.” Silver, gold, and negotiable paper instruments representing silver and gold mediated exchange within these new Elizabethan trade networks. The profits therefrom resulted in a singular increase in the circulating money supply in England and most especially in London, equipping merchants with investment capital to finance further overseas ventures.’

Still, the achievements of the Elizabethan age paled in comparison with what was to come. In the seventeenth century, England’s overseas dominions and commercial interests transformed in ways that few earlier could have imagined possible. By the final decades of the seventeenth century, London seemed poised to become “the General Emporie of the World,” as one writer put it.* Over the century, England’s exports and imports each rose more than sixfold; particularly lucrative was the reexport trade of North American, Caribbean, and East Indian commodities.” After 1660 especially, transoceanic commerce with the East Indies and Americas grew spectacularly, and none faster than transatlantic commerce. Traffic to and from colonial America accounted for nearly one-fifth of London’s overseas trade by the end of the century.°

The interests of trade and state had never been so tightly wrapped together as they were in the seventeenth century. Overseas trade was indispensable to the English government, boosting its revenue and helping to finance the growth in state institutions. In turn, English government—the navy, bureaucracy, and laws protecting English commercial interests—proved indispensable to the ever-growing troop of cash-loaded merchants in London, of whom approximately one thousand had some sort of trading connection to colonial America by 1700.’ By that date, England’s commercial interests and dominion spanned the world: an empire of trade, an empire of money.

Silver and gold were the currency of empire. They drove imperial action; they made the empire move. “Money is the primum mobile which moves the

Spheres,” a prominent English merchant wrote in 1679; “. . . it’s the sovereign cordial, which gives life to all noble Actions and Designs.”* The reasons for this were plain. To quote a few contemporaries of that age, silver and gold money was “every where coveted, and never out of fashion” —of “general Use almost every where,” the “common receipt, and standard of all the world,” a “vitall spirit of trade” that “answereth all things, and commandeth all things under the Sun.”’ This was true whether one was in Europe, the Middle East, India, or China; silver, in particular, had become “as merchandise the basis of the greatest commerce in the world.” “

Money is as necessary for the carrying on of Trade, as Nerves and Sinews are for the motion of the Natural Body,” said Sir Josiah Child in 1694."

As prime mover, silver and gold figured prominently, even centrally, in England’s dealings abroad. This was particularly true in colonial America, and that is the central concern of this book. Whether the enterprise was private or public, commercial or political, much of England’s overseas activity in this period had as its general goal or justification the promise of a quantifiable increase of silver and gold in public and private coffers in England, especially London. This pecuniary motive and rationale—the raison d’argent—found its intellectual basis in the predominant mercantilist ideas of the day. Experience and conventional wisdom taught that a greater supply of silver and gold— procured through a favorable balance of trade, or trade surplus—was the most important prerequisite in securing national power, prestige, security, and plenty. Mercantilist ideas about money and foreign trade informed everything from overseas commercial regulations to war and diplomacy, the conquest and colonization of faraway lands, and the administration from London of colonial dependencies. Greatness, wealth, and glory were the end, money was the indispensable means, and colonies were among the most important means to acquiring that money.

One reason for the mercantilist fixation on silver and gold was their preeminent role in state formation. The two metals financed the building of vast armies and navies, sustained expansive bureaucracies, and nourished a relatively prosperous people and mercantile community primed for taxes and lending to government. Merchants financed state activity through loans and taxation. A stronger, more robust state, in turn, secured expanded markets for merchants, which fattened their pockets and made them all the more ready to finance state activity: “Money being,” as one writer described it in 1693, “the very Life of War, and Sinews of all Publick Action.” “In the Language of Trade, Money is the Alphabet that forms the Sound,” declared Daniel Defoe in 1706." In the language of empire also, money ruled the day. Money and imperial power enjoyed a symbiotic relationship: each benefited the other. “Profit and Power ought joyntly to be considered,” reasoned Child.'* The country’s merchants, landowners, and even masses enjoyed greater prosperity by consequence, and the resulting tranquility made for more stable government: “the People will be Contented,” said another writer, “and the Exchequer maintained in a Full Spring Tide.” Child, a prominent East Indian merchant, summed up the benefits nicely: “Foreign Trade produceth Riches, Riches Power, Power preserves our Trade and Religion, the security of the Liberty, Property, and Protestant Religion of this Kingdom.”'®

Yet there also existed a certain scarcity to silver and gold, even as they emanated so profusely from Mexican, Peruvian, and Japanese mines. The supply was necessarily limited; a state could not simply will more into existence like paper money from a printing press. Thus, in the wake of new mining discoveries in the Americas and Japan in the sixteenth century, rival empires positioned themselves to become masters of the world’s metallic output. The major economic question of the day regarding foreign trade was how to acquire more of the two metals and then how to retain them. This, in turn, led to the corollary question of how the state might optimally intervene to support such economic action, usually through restrictions or prohibitions of some sort or another.

The international scramble for money in the mercantilist age rested not on mining per se but on the so-called balance of trade. The balance-of-trade doctrine was the chief cornerstone of mercantilist thought. Mercantilist prescriptions for the economy were numerous, highly varied, and often incongruous. Yet all derived from this fundamental axiom. All mercantilists agreed that a country ought to export more goods on balance than it imported. Trade deficits drained money from the country, trade surpluses provided a country new money; the former was “unfavorable,” the latter was “favorable,” and the state should always stand ready to intervene on behalf of that balance. Subscribing to this principle was what made a mercantilist a mercantilist. Despite frequent and vehement disagreements on particular points of policy, consensus reigned among mercantilists on the issue of the trade balance. The doctrine provided a coherent, cohesive element to mercantilism, which otherwise was quite heterogeneous.

A favorable trade balance fulfilled the pecuniary imperative. It rendered mines entirely unnecessary. The English learned this lesson early in North America. Some at first were severely disappointed in the lack of mines on the eastern part of the continent. And yet through proper control and economic regulation, England’s American empire soon proved a mercantilist bonanza, vastly improving the kingdom’s overall trade balance and hence England’s supply of money. All depended on this balance and on proper use of state power to improve it. “The Theory of Trade is a Princely Science, and the true Regulation of it the Key of Empire,” wrote William Wood, one of the most prominent mercantilist thinkers of the early eighteenth century.’

This scramble for silver and gold, however, did not ensue only between rival kingdoms and empires. The competition ensued also within the same empire, between different men of different regions and of different interest groups, espousing different visions of political economy. This competition arose between metropole and periphery, between neighboring colonies, and often within the same colony.

In this book the intraimperial struggle for money is as important as the international struggle. Imperial policymakers designed the colonial system to center money in England. This made sense at the time, given the international contest for money. But in designing it in this fashion, imperial policymakers inadvertently created the groundwork for immense economic tension between London and the colonial periphery. In the second half of the seventeenth century especially, many leading colonists acutely resented their subordinate economic position. They believed that absent mercantilist controls, their colony might be wealthier and in command of more coin. And thus far, their subordinate station seemed to offer them comparatively little in return.

Colonies were among the greatest assets in any mercantilist empire. Colonies supplied the empire with goods, necessities, or luxuries not native to the home country but formerly imported from other countries. This supply improved the kingdom’s trade balance. Additionally, colonists imported merchandise from the home country, sometimes comprising the kingdom’s most dependable overseas market—again, improving the trade balance. The ideal colony primarily served the economic needs of the mother country (as contemporaries so often labeled England). Economic regulations were meant to secure this service. Colonies were in every way subordinate to wider imperial goals, operating as total dependencies, at least in theory. Whether or not that colony had a robust, secure, and uniform money supply was of little to no concern to most mercantilists, for it had no bearing at all on England’s trade balance. If anything, a plentiful supply of silver coin in a colony evinced that something had in fact gone wrong with England’s management of the empire, as most coin ought to center in England. “It is not expedient for England to give the Plantations opportunities of laying up great Banks of Treasure among themselves,” wrote an anonymous author in 1701.'8

But the bulk of England’s colonists wanted wealth and money too: or at least a competent sum of it. It is necessary here to define our terms. By wealth— or affluence—I mean a suitable or plentiful possession of things of value. By money (at least here) I mean the predominant money of the seventeenth century: silver and gold coin. Money is a form of wealth, but not all wealth is money. Wealth, for example, might include fine nonmetallic imports from abroad or any other commodity of relative value and worth. Colonists, in general, wanted both: they wanted nice things, and they wanted a suitable medium of exchange. They wanted money for the many reasons that people and communities for thousands of years have wanted money—for private purposes, yes, but also for the public purpose of stimulating trade and the local economy. The circulation of money was as necessary for commerce as the circulation of blood in one’s body. So earnest were colonists for money that in the absence of coin they often resorted to alternative, nonmetallic commodity monies to mediate commercial exchanges, including tobacco, sugar, and all sorts of grain. Of course coin was preferable to these, if available—desired for its portability and near-universal demand. If coin was not to be had, then many colonists still desired, at least, a higher standard of living: the capacity to acquire more imported goods, for example.

England’s American colonists resorted to a variety of means to increase their stock of coin or standard of living. Some were licit, others illicit. They included import substitution, export expansion, smuggling, piracy, colonial mints, and coin devaluation. Many colonists wished to trade freely with the buyers and sellers who offered them the most competitive prices, whether or not that buyer or seller fell within the English mercantile orbit. Sometimes the best price could be found through legal avenues of trade, but often foreign tradesmen offered a better price for the goods they sold or for the goods they bought. Here, colonists found themselves directly at odds with England’s mercantilist program, which barred such trade. The question at this point was whether to obey or to disobey.

When imperial regulations interfered with the colonists’ innate desire for greater affluence and more money, illegal trade proved a powerful temptation. Imperial officials could tolerate illegal trade if sporadic and not terribly widespread. But when it increased or became better organized—with colonial governments even colluding in the act—the integrity and functioning of the whole mercantilist order was at risk. A forceful hand seemed to many imperial officials the only sensible option. At this point, the economic and monetary squabble transformed into a political fight. One of the founding principles of England’s early American empire was that colonies were economically subordinate to the fiscal and monetary needs of the mother country. When colonists subverted this agenda and pursued their own pecuniary interests, they undermined one of the chief reasons for England having an empire in the first place. This subversion warranted, from the empire’s perspective, an authoritative response, including major political and institutional reforms and reorganization. Political coercion, it was hoped, would solve the economic problem, bringing even the most obstreperous colonist or colony into line.

In both England and colonial America there prevailed an intense desire to secure a workable, vibrant, and relatively uniform currency. A perusal of the century’s many documents, treatises, statute books, and private and public correspondence reveal these monetary desires unequivocally. These desires, however, were not always reconcilable: they often clashed. In the second half of the century in particular, competing economic and monetary demands placed England and its colonies on a collision course that resulted in a series of tumultuous political battles and other like episodes. Many of the major political contests from this period bore a direct relation to the pecuniary conflict that arose from mercantilism and colonial resistance to the colonies’ subordinate economic status. This struggle became especially stark after 1675 and even threatened to break up the empire a full one hundred years before the American Revolution. Not until the grand settlement of the 1690s did the crisis finally begin to subside, with most colonists tentatively accepting, on a conditional basis, their subordinate place within a mercantilist empire that promised greater benefits and a more persuasive bargain than anything the earlier Stuart kings had offered them before 1688. The consequence was the thriving of a reconstructed mercantilist empire for almost three-quarters of a century.

In this book I pursue three chief investigative questions. First, was there an organizing principle behind England’s pursuit and sponsorship of overseas colonies, and, if so, what was it precisely, and was it coherent? Second, how did that principle, over space and time, direct or influence the regulation and administrative management of colonial America? Third, what were the repercussions for the colonial sphere, and how, over space and time, did the organizing principle influence colonial attitudes toward imperial authority?

This book does not pretend to contain exhaustive answers to any of these questions, of course. Instead, it insists that the answers cannot be arrived at in any remotely comprehensive manner without taking the question of money seriously. Currency alone cannot provide all-encompassing answers to these questions. But money possesses exceptional explanatory power: first, of the imperial project as a whole and, second, of the ever-changing relationship between empire and colony. The lens of currency offers a new perspective on this critical early period of American, English, and imperial history. By identifying money as a common denominator in many of the most significant episodes of the seventeenth century, I aim in this book to supply new insights into colonial development, the broader Atlantic economy, and the ever-evolving politics and constitution of the early English empire.

First, was there an organizing principle at all behind England’s early empire? Did it have a functional purpose? Historians have long debated this question. Those who argue against the existence of a coherent organizing principle emphasize the role of disparate private interests in promoting and maintaining much of the early empire. The fiscally strapped state played only a reactive role and, even then, only intermittently, ad hoc, and often reluctantly, yielding way rather to dissimilar initiatives of competing private interests: all resulting, these historians argue, in “a patchwork mosaic of measures adopted through expediency or accident” —an empire, in short, that was “rather unsystematic.”!”

This book, by contrast, maintains that there was indeed a coherent, organizing principle behind the early English empire. The book does not deny, of course, the unusually decentralized character of the early empire, nor the prevalence of ad hoc experimentation, the centrality of private initiative, or the existence of ulterior motives. The book does not deny that fiscal constraints limited what the early English state could accomplish overseas, nor that those constraints contributed to the aforementioned patchwork mosaic of colonial governments. But fiscal weakness—the state’s lack of money—is precisely what underscored the need for an empire. This, I argue, justified the organizing principle. Decentralization, from the empire’s vantage point, was certainly less than desirable, yet necessary given the fiscal constraints at the beginning. Imperial officials soon deeply regretted this framework; after 1660 especially, it was ever obvious that decentralization precluded the successful operation of a well-managed mercantilist empire. But the organizing principle was always there.

The organizing principle was that colonies existed primarily to support the economic, fiscal, and monetary needs of the mother country. The latter included English merchants but, above all, the state. Colonial economic subordination was the intention from the start, even when private initiative undertook such projects. John Cary, a merchant from Bristol and political economist, described it this way in his massively influential Essay on the State of England in 1695: “This was the first Design of settling Plantations abroad, that the People of England might better maintain a Commerce and Trade among themselves, the chief Profit whereof was to redound to the Center.” “These are our Golden Mines,” he said of the colonies, “and have helpt to support the Ballance of Trade.”*° Cary’s view, as we will see, was not an isolated opinion, nor was it a novel one in the 1690s. Rather, his view was about a century old. It existed from the beginning, even as far back as the age of Elizabeth, before a permanent colony had yet been established. As the century proceeded, the impulse only strengthened, corresponding to the growth and rising significance of the American colonial economies.

Colonial economic subordination—the answer to the second part of our first inquiry—derived from a body of economic thought known retrospectively as mercantilism. It would be challenging to think of a more contentious term in the historiography of early modern economies than mercantilism. Some historians embrace its use wholeheartedly, others use it only very reluctantly, still others reject it outright. Probably the worst thing to happen to the term was carelessness by economic historians who expanded its definition to include beliefs characterizing the views of only some of the proponents of the balance-of-trade doctrine, and yet these historians treated those positions as additional, essential tenets of mercantilism. An inaccurate, crude caricature of mercantilism prevailed for many decades among economic historians, opening the way for a torrent of criticism by scholars (mostly British) who soon pointed out that many of the early-modern thinkers traditionally classified as mercantilists did not hold many of those views at all. For example, some historians held (and some even now hold) that all mercantilists believed that international trade was a zero-sum game, that gold and silver alone were wealth, that internal trade was sterile, and so on. We know now that those positions—while held by some men—were not even close to representative of the economic thought of the wide range of thinkers traditionally identified as mercantilists. Thus, the critics rightly dismantled the amorphous parody that the term mercantilism had become. Economic thought in the seventeenth and early eighteenth century, they argued, was not stale or suffocating, but innovative, rich, and dynamic, and it encompassed many opinions and views. In this, they were mostly correct, but they went a critical step too far by denying that there was any coherence at all to mercantilism, calling for the term to be either discarded altogether or, if retained, stripped of any real meaning. This book dissents strongly from that view.”!

Mercantilism, on the whole, was a coherent, diverse, forward-thinking, and rational way of approaching and conceptualizing the economy in the early-modern period. Whether or not mercantilism was successful or sound we can leave to economists to debate. That lies far beyond the purview of this book. Nonetheless, the term mercantilism is as indispensable to descriptions of empire and foreign trade in this period, as the term capitalism is when describing the history of Western economies since the nineteenth century. Like capitalism, mercantilism permitted widely divergent views and policy prescriptions underneath the wider umbrella that comprised its distinctive, essential tenets. If nonuniformity means that we must rid ourselves of the term mercantilism—as some have argued—then we must also rid ourselves of the terms capitalism, feudalism, and socialism. Have socialists ever uniformly agreed on policy? Obviously not: there are varying schools of thought within the broader yet meaningful, coherent framework that people call socialism. In the same manner, we may speak of different mercantilist schools of thought, and of different mercantilist visions, all of which consciously or unconsciously adhered to a broader mercantilist consensus. The balance-of-trade doctrine, and its corollary argument for a regulatory state (on behalf of supporting that balance), was important enough in economic history to justify historians distinguishing this period of economic thought from preceding and subsequent bodies of opinion. One of the goals of this book, then, is to encourage historians to use the term mercantilism carefully, precisely, but also confidently and without apology.

In early-modern England a motley of commercial and political interests concurred in a broad yet far-reaching agenda endorsing the use of state power to secure greater trade surpluses. The precise methods for doing so were immensely complex and controversial; debate, disagreement, and animosity characterized many of the economic discussions of the day, as disparate groups within England clashed over strategy and method. There was no single, exact blueprint for how to proceed; there was no single mercantilist pressure group. Some of them undoubtedly had naked private interest primarily in mind, but they always couched their arguments in rhetoric concerning the public good, framing their policy prescriptions in the common language of mercantilism. Many, perhaps the majority, knew they might privately benefit from the adoption of a particular policy or regulation yet sincerely regarded their interests as aligned with the public, national goal of achieving or retaining a favorable trade balance. The bulk of them were true believers. By the latter decades of the seventeenth century, colonial America figured prominently on most of their minds.

The second inquiry—the ways in which this organizing principle (mercantilism and colonial economic subordination) directed or influenced imperial policy toward the colonies—permeates every chapter of the book. The hallmark, of course, was the famous series of Navigation Acts authorized by Parliament in 1651, 1660, 1663, 1673, and 1696. Nevertheless, expression of this influence began even before the mid-seventeenth century. Moreover, it was not limited to the Navigation Acts but included royal decrees, the creation of executive or advisory councils, the appointment of new emissaries, and continual attempts at political reorganization and reform. It was not a coincidence that major imperial reforms followed the eruption of significant monetary or fiscal crises in England, whether in the early 1620s, at the middle of the century, in the 1670s, or in the 1690s.

The answer to the third inquiry—the impact of this organizing principle on imperial-colonial relations—lies at the heart of the book. Mercantilism required compliance. First, mercantilism required compliance from groups within England itself, whose private interests often ran contrary to the purported interest of the whole. More important, for our purposes, mercantilism required compliance from a colonial sphere whose economic interests often ran contrary to England’s purported economic interests.

It was not easy to persuade colonists in a far-flung decentralized empire to surrender economic self-interest, particularly when it was not entirely clear what they might gain in return. Many colonists possessed a radically different vision for empire than the one endorsed from London. This alternative vision insisted on the application of equal economic rules throughout the empire. It rejected the London-imposed mercantilist vision that used economic constraints to center money in England.

This incongruity of visions, rooted in competing economic and monetary ambitions, resulted in intense political conflict between England and much of colonial America in this period. It began most conspicuously in the 1650s, intensified after the Crown’s Restoration in 1660, and then erupted into full-blown political warfare in the 1670s and 1680s, when imperial administrators responded to colonial resistance by suppressing many of the colonists’ most cherished political liberties. But this tumult was rather short-lived. After 1688 many, though notably not all, of those political liberties returned, and a new war with France rendered imperial protection that much more valuable to many of England’s colonists. A powerful new sensibility toward empire appeared widely throughout the colonies in this latter period. Colonial attitudes changed—not overnight, but perceptibly and fairly quickly. During and after the 1690s, colonials, by and large, came to tacitly accept their subordinate station within the mercantilist empire. This acceptance helped to ensure the survival and singular success of Britain’s mercantilist empire through much of the coming eighteenth century. The new, more effective administrative model of empire that arose from the reforms of the 1690s—and especially those from the all-important year of 1696—functioned, not perfectly or seamlessly, but very impressively for nearly seventy years. In light of the many stresses of the seventeenth century, this was a remarkable achievement.

Why was the impulse for colonization so strong in England in the early modern period? Why settle colonies overseas? What stimulated imperial action, administration, and regulation? Why did certain stages of imperial development occur when they did? What was the catalyst for administrative change? What motivated the many varied colonial responses to these changes? All of these questions I hope to answer, in part, by investigating more closely the relation between money and power in early English America.

Chapter 1

Silver and gold coin and bullion permeated world markets as never before in the sixteenth and seventeenth centuries. The inexorable current of metals, especially of silver, from the Americas and Japan permanently transfigured some of the most important political, economic, and social institutions in Europe and across much of the globe. Affluent merchants and companies in select cities in western Europe controlled much of the global silver trade; in silver, they finally possessed a good as highly in demand in China and India as Eastern goods were in Europe. The economic advantages accruing to these merchants and companies, and the political advantages accruing to the countries to which they belonged, were extraordinary. Silver and gold not only provided merchants and consumers with the means to buy an unprecedented abundance of merchandise abroad, but also financed the steady accretion of state power and military might in the several Atlantic-bordering countries in Europe—all resulting in the formation of a highly competitive, multinational, European managed, global empire of silver.

The underlying significance of silver and gold to the state and economy— to power and to plenty—provoked a calculated scramble between rival European empires for the two coveted metals. By the early decades of the seventeenth century, in England especially, a new way of thinking about the state and economy—an order retrospectively labeled mercantilism—came to dominate most ideas and conversations about the general benefits but also potential pitfalls of foreign trade. This development carried vast political implications. Mercantilism emphasized the role of the state in managing trade so that silver and gold accumulated and remained within national borders. For this accumulation of metals, a favorable balance of trade was most necessary. Exports, on balance, must exceed imports. Only through an overall trade surplus would silver and gold enter into and, on balance, remain within a country. Mercantilists no doubt were a heterogeneous bunch, particularly in England, deviating broadly on specific strategy and policy prescriptions. All agreed, however, on the balance-of-trade doctrine, and all agreed that while the incoming current of silver and gold was not the end in itself, it was in fact the optimum way to enhance national power, prestige, security, and plenty. Money was the means to secure the empire’s chief ends.