“Monopolizers in this day of common calamity are our worst oppressors…they ought to be restrained by Government within the limits of what is right and fit…” The sentiments expressed in this quote could well be attributed to the contemporary movement called Occupied Wall Street. The quote, however, was written October 29, 1776 in a patriot’s letter posted in Needham, Massachusetts. The American Revolution, born out of virtue and the desire for independence and personal liberties, also encouraged rampant speculation, price fixing, and profiteering by monopolizers and extortionists. George Washington called these “pests of society…the greatest enemies we have to the happiness of America.”
The War for Independence Ends the Mercantile System
The English colonies in North America were accustomed to growing prosperity, largely as a result of the Navigation Acts. Professor Oliver M. Dickerson, in his study of the Navigation Acts, concludes that British trade policies resulted in a high level of prosperity, elevating the social and economic conditions of many colonists. According to Dickerson, “The colonies were prosperous and wages of labor were admittedly higher in the continental colonies than elsewhere in the world.”
The outbreak of revolution, however, ended the complex system of trade. American ports were blockaded and goods comprising the “necessaries of life” became scarce. Robert Morris, writing on February 27, 1777, advised a “secret” business partner that European goods could be sold “for up to 500 to 700 percent.” In 1778, “insider information” on the part of Continental officials, led to the purchase of French flour which was then resold “upon the public” at more than 100 percent.
Alexander Hamilton, commenting on the French purchase, wrote on October 19, 1778, “When avarice takes the lead in a state, it is commonly the forerunner of its fall.” Hamilton may have reflected on the final decades of the Roman Republic when senators became rich through corruption as Rome’s hegemony began to extend beyond the western Mediterranean. At Valley Forge, Hamilton bitterly commented on Pennsylvania farmers that were more willing to sell to the British for payment in gold and silver rather than supporting the hungry soldiers in the Continental Army.
Profiteers Enriched Themselves at the Expense of the Poor
The October 1776 letter-writer, identified only as “P.W,” called the monopolizers “destroyers of the poor” and “grand oppressors.” Especially hurt were poor soldiers whose wages were in arrears. Samuel Shaw, writing to his parents, blamed “monopolizers and extortionists” for the currency deprecation that made living even more difficult for already poor soldiers. Shaw had lost his horse and, owing to his military responsibilities, needed to replace the animal. But for Shaw, a replacement horse cost two years in Army pay. Similar grievances, including owed wages, were a cause of the 1781 mutinies in the Army.
Salt was a necessary commodity, used to preserve beef and fish. Pre-war salt supplies had been imported into the colonies. During the war, however, salt became an object of price-fixing, earning enormous profits for monopolizers. In June 1777, North Carolina Governor Richard Caswell received a warning letter that profiteering parties could be expected in that state, buying up the “necessaries of life,” such as salt, in order to fix prices well above pre-war standards.
Greed and the Virtues of Liberty
None of the writers commenting about Revolutionary War profiteers suggest an end to the system of free enterprise as it is understood by contemporary definition. What they objected to was greed, the willingness to monopolize goods deemed “necessary” for everyday living and then raise prices well above what average citizens were able to pay. As in the case of “P.W,” merchants, forced to pay exorbitant sums, had little choice in passing on costs to consumers.
In December 1777, Thomas Jefferson received a letter detailing how high prices threatened the integrity of the Army in regard to supplies. The letter-writer claims that, “The avarice of individuals will be more fatal to the liberties of America than the sword of the enemy…”
The eventual end of the war didn’t result in a lessening of greed: speculators continued to fix prices in order to obtain excessive profits and continued to purchase war bonds for a fraction of their worth from investors that had fallen on hard times. When the first Congress voted to pay all outstanding bonds, speculators received a windfall. Some of those were the very members of Congress that voted on the measure.
The Revolution represented an ideal of virtue for many of the architects like Patrick Henry and Thomas Jefferson. Reality represented, however, a prolonged period of struggle. As in most wars, there were profiteers – men who became wealthy by over-reaching common standards, even in war. The same would happen during the American Civil War; some of the great captains of industry and finance like J.P. Morgan began amassing fortunes during that struggle.
From the documents, it is evident that Revolutionary leaders like Washington, Hamilton, and Jefferson demonstrated serious concerns regarding war-time monopolizers, particularly as regarding prices impacting military requirements. Yet ordinary citizens felt this impact as well. Unbridled avarice appeared to conflict with patriotism and virtue at a time all patriots needed to be of one resolve.
References:
- Oliver M. Dickerson, The Navigation Acts and the American Revolution (University of Pennsylvania Press, 1951)
- Documents on the American Revolution in The Spirit of Sixty-Six: The Story of the American Revolution as told by its Participants, Henry Steele Commager and Richard B. Morris, editors (Castle Books, Harper/Collins, 1967)
- Robert Middlekauff, The Glorious Cause: The American Revolution 1763-1789 (Oxford University Press, 2007)
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