Empire of Liberty: A History of the Early Republic, 1789-1815 (106 page)

With so much of its income and wealth involved in overseas trade, it was not surprising that the United States government vigorously supported freedom for neutral commerce on the high seas in wartime. Great Britain, as a strong naval power, however, never agreed with the liberal principles of wartime commerce that were so dear to the Americans. Since the British navy controlled the seas, the British government quite understandably thought that the American carrying trade between the French and Spanish West Indies and Europe was actually French and Spanish trade covered by the American flag. The British protested that this trade violated what they called the Rule of 1756, which stipulated that commerce prohibited in time of peace was also prohibited in time of war. This rule, which the British had first set forth during the Seven Years’ War, thus enabled British prize courts (courts that judged the legitimacy of the seizure of enemy ships or enemy goods on neutral ships) to deny the right of neutral nations in wartime to trade with ports in belligerent countries that had been closed to them in peacetime—which had been the case for the Americans with the French and Spanish empires. Britain was especially eager to prevent the neutral United States from carrying goods between the Caribbean colonies of France and Spain and ports in Europe. The British denied that “free ships made free goods” and declared that they would take enemy property wherever they could find it, even from neutral ships on the high seas.

In order to comply with the British Rule of 1756 American shippers developed the legal fiction of the “broken voyage.” By carrying goods from the French and Spanish colonies to ports in the United States, unloading and paying duties on them, and then reloading and receiving rebates on most of the duties before re-exporting them to France and Spain as presumably American and therefore neutral goods, American traders technically conformed to the British Rule of 1756. At first tacitly and then officially, as determined by a British admiralty court in 1800 in the case of the
Polly
, British authorities had accepted this practice of the “broken voyage,” ruling that enemy goods became neutral property if imported into the United States before being re-exported. The American re-export trade thrived, and the Republicans became its great defenders.

The situation was bizarre. The Republicans in the Congress were those most determined to promote the neutral rights of Americans to carry belligerent goods throughout the world in wartime without fear of their vessels and crew being seized by the belligerents. Yet curiously nearly all the congressional Republicans came from areas in the South and West that supplied few if any of the ships and sailors that were being taken by the belligerents. By contrast, the section of the country, Federalist New England, that did supply the bulk of the ships and sailors for America’s overseas
commerce was the section most opposed to the Republicans’ policy of defending America’s neutral rights on the high seas. Republicans seemed obsessed with overseas trade even though most of them or their constituents were not directly engaged in it; they even carried their promotion of neutral rights to the point of wanting to prohibit America’s participation in the very international trade that made a defense of neutral rights necessary. It seemed as if many Republicans really did not like overseas commerce yet were eager to defend the rights of Americans to engage in it.

In fact, many Republicans did dislike much of the overseas commerce they were defending, believing that there was something fraudulent about the commercial riches that the European wars were bringing to America. Merchants involved in the carrying trade, especially New England merchants, who were mostly Federalists, seemed to be prospering simply from America’s neutrality. John Randolph objected strongly to having “this great agricultural nation” governed by urban merchants. He called the carrying trade—”this mushroom, this fungus of war”—utterly dishonest and wanted no part in defending it.
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Although Jefferson knew the re-export trade was lucrative, he too was not happy with a commerce that tended to get America involved in Europe’s wars, especially with American ships’ carrying the goods of belligerents. He believed that “a steady application to agriculture with just trade enough to take off its superfluities is our wisest course.” By contrast, he said, the carrying trade fed on the evils of war and encouraged “a spirit of gambling” and the desire to make money without labor. Those merchants engaged in the wartime re-export trade produced nothing of their own and only profited from the work done by others. By becoming merely neutral carriers of goods, Americans, Jefferson concluded despairingly, were launched “into the ocean of speculation, led to over trade ourselves, tempted to become robbers under French colors, and to quit the pursuit of Agriculture the surest road to affluence and the best preservative of morals.”
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Not only did Jefferson, aristocratic Southern planter that he was, express disdain for what he thought were the low pecuniary motives of merchants, but he hated and thought “absurd” the fact that commerce was “converting this great agricultural country into a city of Amsterdam,—a mere headquarters for carrying on the commerce of all nations.”
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Despite this contempt for America’s neutral carrying trade, which he thought benefited mostly his Federalist enemies, Jefferson as president devoted most of his diplomatic energies to defending it. As a result, he not only quarreled with Britain but nearly went to war with the former mother country, a war that above all he wanted to avoid. In trying to implement his policy, he ended up completely stopping the flow of all American overseas trade and at the same time repressing his fellow citizens to a degree rarely duplicated in the entire history of the United States. Jefferson’s extraordinary efforts to defend the rights of neutrals to trade freely drove the country into a deep depression and severely damaged his presidency. He ended up violating much of what he and his party stood for.

N
OT ONLY DID
J
EFFERSON
and the Republicans have unusual ideas about America’s political economy, but, more important, they possessed a radical appreciation of the role of commerce in international affairs and an inspired vision of what the world might be.

Jefferson’s foreign policy grew out of his hopes for America’s domestic economy. Unlike the Federalists, who anticipated the United States even-tually—maybe in a half century or less—developing a diversified and balanced manufacturing economy like that of Great Britain, Jefferson and the other Republican leaders, but not many of their Northern followers, wanted the United States to remain predominantly rural and agricultural. Jefferson and Madison certainly did not want or expect America to become more like commercially developed Europe, at least not in the foreseeable future. Madison in the Constitutional Convention had warned of a time in the distant future when “a great majority of the people will not only be without landed, but any other sort of property,” and reminded his colleagues that “we see in the populous Countries in Europe now what we shall be hereafter.”
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But he and many other Republicans hoped that that depressing future might be put off—for at least a century or two—by the prevalence of free land in America and by the fact that most Americans remained independent farmers. Believing in the same four-stage theory of social development as the Federalists, the Republican leaders had a vested interest in freezing time and holding America back from becoming sophisticated and luxury-loving like the nations of the Old World. And from the evidence of the seemingly unchanging rural and farming character of American society in the early nineteenth century, they were increasingly confident that the nation was pretty firmly fixed in the agricultural stage of development.

While most Federalists were disappointed that the society was not becoming more urban, more complicated, and more hierarchical, the Republican leaders welcomed America’s social stasis. They celebrated the dominance of farming and the absence of the large-scale urban manufacturing that was characteristic of the poverty and decadence that afflicted the Old World. Jefferson in his
Notes on the State of Virginia
had argued that no people in their right minds would ever voluntarily turn to manufacturing. The British and French had begun industrializing only because they had run out of land and their farmers had been forced to migrate to the cities and become dependent laborers working in houses of industry turning out gewgaws and other superfluities that no one actually needed. But Americans, said Jefferson, were not in that situation. “We have an immensity of land courting the industry of the husbandman.” The more farmers the healthier the society, said Jefferson. “While we have land to labour then, let us never wish to see our citizens occupied at a work-bench, or twirling a distaff. . . . Let our work-shops remain in Europe.”
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Although the Southern Republican leaders were opposed to European-style urban manufacturing, they were not opposed to commerce. Quite the contrary: overseas commerce was essential to preventing the development of large-scale manufacturing. Although Jefferson in the 1780s had talked wistfully of having America “stand with respect to Europe precisely on the footing of China,” practicing “neither commerce nor navigation,” so that “we should thus avoid wars, and all our citizens would be husbandmen,” he realized this was “theory only, and a theory which the servants of America are not at liberty to follow.” The American people had “a decided taste for navigation and commerce,” and the country’s political leaders had to take this taste into account. The best way to promote international trade was “by throwing open all the doors of commerce and knocking off its shackles.”
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Opening up trade abroad became crucial for the Republican leaders. Desiring as they did the United States to remain predominantly rural and agricultural, they were confronted with the problem of ensuring sufficient markets for the agricultural surpluses of America’s many hardworking and productive farmers. Since the Southern Republicans did not want America to develop huge urban centers, they could not assume the existence of a large domestic market for the surpluses of farm goods. If the farmers were unable to sell their produce somewhere, they would stagnate, slip into mere subsistence farming, and become idle and lazy and
eventually morally unfit for republican government. Hence developing markets abroad for America’s agricultural produce became essential for sustaining America’s experiment in republicanism. The Federalists, declared Jefferson, could not have been more wrong in thinking him “an enemy of commerce. They admit me a friend of agriculture, and suppose me an enemy to the only means of disposing of its produce.”
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But since the European states would not open up their markets voluntarily, Jefferson and other Republican leaders thought that the only recourse America had was to “adopt a system which may shackle them in our ports as they do us in theirs.” The English especially were pig-headed in resisting the liberalization of their commerce. Jefferson had concluded as early as the 1780s that “nothing will bring them to reason but physical obstruction, applied to their bodily senses.” “We must shew them,” he said, “that we are capable of foregoing commerce with them, before they will be capable of consenting to an equal commerce.”
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America had to create its own navigation system and use commercial retaliation against the European states, especially Great Britain, in order to compel them to free up their international trade.

The Republicans were confident of America’s ability to bring economic pressure on Great Britain because they believed that it was more commercially dependent on the United States than the other way round. Although Britain was the chief purchaser of American exports, which the Republicans regarded as “necessaries,” it was also selling America more goods than any other country. Because Britain supplied nearly 80 percent of America’s imports, it seemed to the Republicans to be particularly dependent on American markets for its industries. And because the former mother country sent to America mostly manufactured “luxuries” or “superfluities,” Britain seemed particularly vulnerable to American commercial coercion.
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Although Americans always overestimated the effectiveness of the non-importation agreements of the 1760s and 1770s, many continued to see them as America’s special weapon against Great Britain. “It is universally agreed,” wrote the well-known merchant William Bingham in 1784, “that no country is more dependent on foreign demand, for the superfluous
produce of art and industry [than England];—and that the luxury and extravagance of her inhabitants, have already advanced to the ultimate point of abuse, and cannot be so increased, as to augment the home consumption, in proportion to the decrease that will take place on a diminution of foreign trade.”
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In other words, if the Americans restricted their purchases of English luxury goods, there being no market elsewhere for them, the manufacturing poor in England would be thrown out of work, leading to hunger and rioting, which would force the government to change its policies. The possibility of taking advantage of England’s susceptibility to this kind of economic coercion had been undermined by Jay’s Treaty of 1795, which is why the Republicans hated it so much.

I
N 1801 THE
R
EPUBLICANS
were at long last in control of the national government and in a position to bring pressure to bear on the British to break up their navigation system as soon as Jay’s Treaty lapsed in 1803. Yet as important as this need for markets for America’s agricultural produce was to the Republicans, it would be a mistake to see the foreign policy of the administrations of Jefferson and Madison as simply designed to compel Great Britain to open up more of its markets to American goods. The quarrel the Republicans had with Britain was much more political than economic. They did not want merely to change Britain’s navigation policies; they wanted to change its monarchical regime.