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C H A P T E R I

Overseas Empire

y

American economic history has European roots. Transplanted in American soil, they produced a simiar, but not identical, harvest to those in Europe. The same was not true in other parts of the New World. Since that harvest has played (and con­ tinues to play) an important role, our story begins with a superficial tour of European history to better understand why Europeans became interested in North America, why they came to a new land and established colonies. Next, we wiU look at the process of colonization in general. Who invested their wealth in colonization? Who elected to make the trip to North America, and under what conditions did they live and work? What property right did colonists hold in North American land? Finally, we will exam­ ine the history of the major colonies, the first three in particular. All three initially were private ventures, and their histories illustrate that colonization was a risky investment. The risks accepted, the lessons learned would play an important role in the growth and development of the American economy.

EUROPEAN EXPANSION AND DISCOVERY

In Europe, the epoch known as "antiquit/' ended with the overthrow of the Roman emperor Romulus Augustus by the barbarian leader Odoacer in 476 C.E.

During the three centuries of bloody history that fol­ lowed, the peoples of Western Europe survived in the cultural and legal ruin of the old Roman Empire in the West. On the other hand, the Roman Empire in the East, based in Constantinople, flourished in even greater glory.

In the seventh century, most of the old Roman Empire, East and West, was overturned by the relendess force of Islam. Within a century following Muhammad's death in 632, Muslim armies swept the world, wiping out the cultures and dynastic structures ^ of preceding millennia. The old Persian Empire was conquered in 634; Cadiz, in Spain, fell in 711. The next step was France, but there, according to historian Henri Pirenne, the tide of history changed. The vic­ tory of Charles Martel at the Batde of Tours in 732 marked the end of the Muslim expansion.

To Pirenne, it was the European response to Islam that created modem Western civilization. Beginning with Charlemagne (742-814), the thousand-year process of uniting European peoples into nation states—political and economic groupings of similar lan­ guage, custom, culture, and dynastic linkages—ensued.

At first, the organization of land and labor in Northern Europe became what is called feudal, a com­ plex and pyramidal hierarchy of mutual obligations and rights with respect to both labor and land that extended firom the peasant to the king. In simplest terms, peasants farmed the land assigned to them by manorial lords and.

4

European Expansion and Discovery 5

in retum, received protection and some supplies. Manorial lords received their land firom the king.

Surrounding this system was the spiritual force of the Roman Catholic religion and its supranational or­ ganization, one of history's greatest and most long- lived bureaucracies. In 1492, when Queen Isabella of Spain granted Christopher Columbus a patent to work his wiU on "some islands and a continent in the ocean," it was the right of conquest of a Christian sov­ ereign that was invoked—together with a promise to indemnify any Christian prince injured by the forcefiol actions of Isabella's agent, Columbus. That same year. Christian Spain captured Granada firom the Moors, ending more than 700 years of Muslim rule in Spain.

During the centuries, European sovereigns had • developed certain rules of the game. Foremost

among them was disdain for all non-Christian soci­ eties. This was to be continued in the Americas. The right of conquest of any Christian prince looms large in early American history, for it was that power that legitimized the European colonial acquisitions in the Americas. The Europeans might fight among themselves, but their right to subdue and rule the American "savages" was not seriously in question— neither in 1521 when Cortez subjected Mexico to Spanish rule, nor in the late nineteenth century in the United States when the surviving American Indians were herded onto reservations. The military response of the West to non-Christian conquest, begun with its response to the Muslims, had an incredibly long historical legacy.

Movement toward the modern European nation state began in the late fourteenth century. The Renaissance bloomed in the fifteenth century as Europe surged ahead in many humanistic, political, and military areas. Historians customarily mark this as the end of feudalism and the beginning of mercantilism, Adam Smith's term that is usually ap­ plied to the intellectual and institutional environment that accompanied the emergence of strong, central­ ized nation states. Mercantilists believed that interna­ tional trade was a zero-sum game; they believed in the necessity of governmental regulation to maximize the wealth of the nation. These beliefs held center stage until the American Revolution, which occurred

at the same time that Smith first argued that less reg­ ulation would lead to wealthier nations.

The Nation State The counterplay of Roman Catholicism and Islam re­ flects, in the broadest possible brush strokes, the his­ torical transformation of the early modern European world. European culture had evolved as a blend of old and new—the Roman alphabet and Arabic numerals. By the end of the fifteenth century, the nation state was emerging in Europe; national rulers appeared in Sweden, England, Russia, France, and Spain, together with groupings of German-speaking peoples under their own kings and nobles. The movement was accel­ erated by the Protestant Reformation, beginning in 1519, which underpinned the independent power of the English, Dutch, Swedes, and major German prin­ cipalities. The power of the city-state was fading, as was that of the great supranational rulers. The nation state extended the reach of the market; in comparison to the city-state, larger areas were subject to uniform laws governing property, contracts, and commerce.

By the end of the fifteenth century, Northern Europe already had become a center of commercial growth. Greater security of persons and property at home and abroad had resulted firom the centuries-long legal evolution of the more stable governments into recognized political configurations. Long-distance trade was growing at sea and along the rivers, espe­ cially in the North Sea and Baltic, under the laws of the Hanse cities. These laws included rules for insur­ ance, negotiable instruments, and, especially, individ­ ual property rights. The latter are the rights of an owner to use, sell, or exchange property. Stable law makes the world less uncertain. The evolution of such law enhanced the economic development of Western Europe. As Adam Smith later argued, a legal system that protects private property and allows property owners to pursue their private self-interest is led, as if by an invisible hand, to increase national wealth.

Other necessary institutions developed with the law. As early as the fourteenth century, Italian merchant bankers had branches all over Western Europe, including some in England. They financed manufacturing as well as trade; they lent money to

6 CHAPTER 1 Overseas Empire

kings and commoners alike. In particular, they uti­ lized the bill of exchange, a dated order to pay against the shipment of goods, to cut down on the need for shipping coin and bullion to make payments, gready simplif^ng the conduct of foreign trade.

Population Patterns The growth of commerce implies the growth of cities and population. Despite its agrarian base, the organization of late medieval Europe, before the time of the nation state, contained suitable provision for urban growth. Bologna in the early thirteenth century may have numbered 64,000 people. Paris at the beginning of the fourteenth century numbered 60,000 people; Cologne, 50,000. In addition, thou­ sands of market tovms and ullages were the sites of production—food processing, milling, wood and metal fabrication—and the accumulation of tradable goods, such as textiles. From these towns and cities, trade spread back into the hinterland (the area sur­ rounding the town with wMch-it trades) and down the rivers to the oceans and more distant markets.

The development of towns and trade was uneven because of the uneven fate of the population. The story of European population growth is not a story of steady growth. Evidence shows that from the middle of the tenth century to the early fourteenth century, strong grovrth nourished the civilization of the late Middle Ages. This brilliant episode, in which permanent investment accompanied growth (shown not only in new, enlarged city boundaries, but also in the great Gothic cathedrals) ended rela­ tively suddenly because of famine, then the plague, in the fourteenth century. The most famous disaster was the Black Death of 1347-1348, which may have killed half of Europe's population. It was said that as many as 200,000 smaller medieval tovras and villages were completely depopulated. Recuperation took generations.

Recovery from that catastrophe provided a rising base for fiirther commercial and productive develop­ ment in the fifteenth century, just at the time the new nation states were engaged in active overseas expansion. By 1545, Britain had 3.2 million people and had not yet recovered entirely from the plague.

With minor setbacks, primarily due to the incredible destruction of life caused by the religious wars of the late skteenth century, European population growth provided the strength for the commercial expansion that would characterize the years of discovery and colonial settlement of the Americas.^

The Discoveries According to mercantilist thought, material re­ sources were to be employed to foster the economic and political strength of the nation state. To that end, nation states undertook exploration, discovery, and, ultimately, colonization. Mercantilists be­ lieved that the price level was directly related to the money supply, the fiindamental lesson of the quantity Aeory of money. Rising prices usually meant brisk trade, good business, and increased taxes. Consequently, one factor that motivated European expansion in the Americas was interna­ tional trade and finance, in particular the acquisi­ tion of precious metals. Mercantilism was an alliance of power between the king and the mer­ chant capitalists. The king depended on the mer­ chants to build the national treasury, while the merchants depended on the king to protect their economic interests.

In 1415, the Portuguese crossed over to North Africa and captured Cuenta, marking the beginning of permanent European expansion overseas. After Columbus returned to Spain firom his first voyage, an arrangement was concluded in 1494 between the Spanish and the Portuguese (the Treaty of TordeziUas) in which Spain was granted all lands discovered more than 370 leagues west of the Cape Verde Islands, a measurement that in time gave Portugal claim to Brazil. De Soto landed in Florida in 1539; then he discovered the Mississippi River before dying in what is now Arkansas. Working north from Mexico by land, the Spanish crossed the Southwest, going as far as modern Kansas. In 1540, a Spanish officer serving under Francisco Coronado was the first European to see the Grand Canyon. These discoveries established Spanish claims to large portions of what is now the United States. Thus, in one century, primarily because of the

England Overseas 7

Spanish and Portuguese, the dimensions of the world in European eyes had completely changed.

Other European monarchs followed suit. The English were the first to organize. In 1496, penny- pinching Henry VII issued letters of patent to the Genoese adventurer Giovanni Caboto (John Cabot) "to seeke out, discover and finde whatsoever isles, countries, regions or provinces of the heathen and infi­ dels, which before this time had been unknown to aU Christians."^ On 24 June 1497 Cabot reached Cape Breton, Nova Scotia, which he claimed for Henry VII. His discovery (and later voyages by him and his sons) established the initial English claim in the New World and again altered the course of history—^but not for another century. The English continued to hope that a northwest passage, a shortcut to Asia, could be found in the continent's northern waters. After several fiitile attempts by agents of Henry's son and his grand­ daughter Elizabeth to find this shortcut, a company with a charter firom James I established the first per­ manent English setdement in Virginia in 1607.

England was not the only European nation with designs on North America. In 1608, the French founded Quebec. The Dutch, long in the Hudson River for trade purposes, established what became New York City in 1624. A Swedish colony, established in 1643 in what became Pennsylvania, vras passed to the Dutch in 1655 and, then, to the English.

By 1650 the Spanish, English, Dutch, and French were aU established in what would become the United States and Canada. All four powers were nation states in the modem sense (the Dutch had a republic). The Spanish and French represented European military prowess, actually their main interest. The Dutch and English represented the commercial revolution that was sweeping Northern Europe (in part fiieled by Spanish gold from the Americas). England would have the most impact on our history.

ENGLAND OVERSEAS

The Investors By the time the English followed Cabot's discoveries with actual colonization, the riches of the New World had become legendary. Gold and silver

shipped to Spain (some of it intercepted by English privateers) had found its way into circulation all over Europe. Following the defeat of the Spanish Armada in 1588, English merchants, whose ships and money had been engaged in the war effort, began a search for potentially profitable invest­ ments.^ The maps and writings of Richard Hakluyt and others had familiarized English leaders with the prospects of North American colonies. They had good information regarding some of the resources they would find in North America, particularly the potential for supplying ship timbers, masts, and naval stores. They had good information on setde­ ment locations north of the Spanish colony in Florida. In addition, they stUl had some hope of finding a northwest passage to the Orient. The English had picked up fiirs firom trade with the Indians at temporary fishing camps and abandoned settlements along the northeast coast; fiirs from French trading in Canada also were available in Europe. Many English ship captains had visited the mainland for trading, and, in 1605, the explorer Sir George Weymouth brought back five Indians, who were put on display in London. Despite the earlier failures, there were merchants and other capitalists ready to risk money on colonizing ventures.

The English economy was diversified, but re­ mained predominandy agricultural.'' It was well endowed with both labor and capital, but had rela­ tively smaller quantities of natural resources. If one assumes that manufactured goods were produced under constant costs, then English income levels and population densities were large enough to pro­ vide a dispersed domestic market for manufactured goods at minimum cost.

If, on the other hand, one assumes agricultural goods were produced under increasing cost condi­ tions (i.e., they were subject to diminishing retiu-ns), the English market would incur cost (and therefore price) increases as the demand for them increased. The North American continent was well endowed with natural resources, but had neither capital nor labor the English planned to use. Initially, high costs (including subjective risks and uncertainties) discouraged migration and the development of colonial agriculture. As the demand for British

8 CHAPTER I Overseas Empire

agricultural output increased, however, British costs increased, and the relative cost of colonial agricul­ ture decreased. At some point, a colonial venture proved profitable. Learning by doing (including the knowledge fireely shared by the natives) helped re­ solve the theretofore subjective risks and uncertain­ ties of producing in an unknown land and shipping across a great ocean and led to fiirther reductions in the cost of colonial agriculture. More colonies were established.

These colonies were enclaves in the customary sense of being detached from the domestic econ­ omy. In many ways, the analogy between what de­ velopment economists term "enclave activities and the initial North American colonies is apt. In the modern sense, an enclave typically exists for the removal and, possibly, partial processing of extrac­ tive products in a nonindustrial environment. The establishment of an enclave is profitable because of the high value of the products on the export mar­ ket. This value compensates for the increased pro­ duction -costs attributable to the absence of an industrial sector and a^iiiarket in the host nation and the increased transportation costs to a distant home market. There is little need for the enterprise to adapt to the local environment. Equipment, supplies, and professional-technical labor are im­ ported; the enterprise builds its own transportation and port facilities.

There are, however, significant differences be­ tween an industrial enclave in a developing country now and North American colonization then. English colonization in the 1600s was biased toward agriculture, although raw materials extraction was one expected source of revenue. The attitude of the colonizers was different from that of a corporation establishing an enclave today and different from that of European colonizers in other parts of the New World then. English colonizers assumed that North America could be considered open land and that, as noted, the indigenous labor would not be utilized. Indeed, there were few attempts to develop that labor supply, although the natives played an impor­ tant role in the fiir trade and provided necessary technical information with respect to agriculture. Except for defense, colonizers assumed that their decisions could be made independently of their

"host's" wishes, that they could go about their busi­ ness without courting favor in the native society.

The English organized their overseas ventures in several ways. The first colonies were financed by individuals via an incorporated company. The method used, the joint-stock company with a royal charter, was a form of partnership in which shares were issued to each partner up to the amount of his investment. Many EngHsh com­ panies of this period (e.g., the Hudson's Bay Company, the Royal African Company) adopted practices that seem quite modern.^ A joint-stock company like the Virginia Company of London began with a royal charter, but private capital and initiative motivated it. The charter defined and de­ limited the company's rights, privileges, obliga­ tions, and localities of operation. Merchants and other private individuals assumed the risks and uncertainties of building the British Empire. Later, in Virginia and elsewhere, the government of the colony was taken over and operated directly by the Crown, making each a royal colony.

In some cases, extensive rights and great tracts of land were granted as personal favors by the king to in dividual grant proprietors such as Sir Ferdinando Gorges, Lord Baltimore, and William Penn. Although these proprietary colonies were in some respects like little kingdoms, their citizens enjoyed all the rights of other Englishmen, including institutions of represen­ tative government.

The establishment of a colony involved a substan­ tial capital outlay. If a colony did not survive, such out­ lays had to be duplicated, since litde could be reused. The maintenance of a colony involved additional an­ nual oudays for supplies. Without the discovery of an exploitable mineral resource, colonies were unlikely to be viable commercial propositions until staple produc­ tion could be established. There also had to be invest­ ment in social overhead capital to fiinction as an entrepot (that is, a trading point or a port). The needs of commerce between England and its colonies dic­ tated the immediate installation of an entrepot.

The risks and uncertainties of life in an alien land also demanded the reconstruction of European town life in the New World. The unfamiliar environment peopled by natives whose intentions were often incongruent with an Englishman s sense of fair play

England Overseas 9

led colonists to build enclosed, defensible setde- inents. To ensure a "just and profitable distribution" of the land, to "preserve and promote" their religion, and to resist the lure of "pride and profit" in the new land, they banded together in a few central locations rather than scattering themselves on the abundant land. In short, the town was the mode of setdement; anything less would jeopardize the expected profits from colonizing: "From the beginning, America was an exercise in community settlement, an experiment in social order."^

Public fiinding, either directly or through subsidy, was a possible alternative, but not a likely one. This is not to say that the public interest was ignored.® It has been argued that, even for the chartered English companies, "the creation of a bulwark against the fiirther extension of Spanish colonial power along the Atlantic coast and a base ... for attacks on existing Spanish colonies and the valuable plate- fleets that sailed from them" was an important factor.' A second factor was the establishment of a "new Mediterranean type of agriculture." If North America could produce such goods as wine, olive oil, figs, citrus fruits, and sugar, England could simulta­ neously expand its trade and lessen its dependence on others. Both factors argued for a location to the north of the Spanish colonies.

Whether the merchant adventurers were moti­ vated by a spirit of adventure in the exploration of new land or truly felt they were acting in the best long-run interests of Britain is not clear. The histor­ ical record portrays these merchants as prime exam­ ples of homo economicusr, the payoff for successfiilly assuming risk was profit, but as it turned out, there was probably more risk and less profit than they had anticipated. The period over which even the most farsighted investor could be expected to wait for a return in many cases proved to be less than the period investors had to wait.

The location of the initial Virginia colonies of 1584-1587, 36° north latitude, was free from the threat of constant Spanish attacks, close enough for English attacks on the plate-fleets, and temperate enough for a Mediterranean-type agriculture. The enterprises, however, were poorly planned and financed. The chosen site lacked efficient harbor facilities, a serious weakness since the main financing

apparently was to be derived by plunder from the Spanish. Further, few Englishmen were familiar with the high degree of organization and specialization associated with Mediterranean-type agriculture, al­ though that problem did not manifest itself until later.The Jamestown settlement (1607) began with several advantages over its predecessors, yet that set­ dement survived only because of continued pump- priming from England. There was still much to be learned—and much to do.

The People Especially at the beginning, the English were hard put to find sufficient colonists willing to supply their labor. Early reports home from Virginia and Plymouth cannot have been very optimistic. Those who signed up to sail to America came originally from many walks of life, and they came with very different motives. Some came for religious reasons, seeking freedom to practice faiths that were frowned upon in Europe. The English Puritans, French Protestants, Catholics, Quakers, and Mennonites from Germany were examples of these. Some came as independent settlers with sufficient capital to buy land, then set up as merchants or followed other professions. Possibly half or more of whites came as indentured servants, working off the price of passage by their labor in the New World. Africans came as slaves. Also, some thousands of prisoners of the Crown—debtors, condemned criminals, and prison­ ers of war—came under bonds of indenture, gaining freedom by their labor. We will discuss them all in­ due course.

Free Population, Of those who came to America on their own fiinds, just coming across the Atlantic made them eligible for headright land grants (a grant of land to an individual) in most colonies, and land could be purchased from most colonial governments. Not only farmers came, of course; firom the beginning there was (apart firom the first Virginia settlement) an immigration of artisans of all sorts merchants, sailors, carters and draymen, and scholars. The entire array of developed English commercial life appeared on the colonial scene, especially in the seaports. Those who came independendy were firee, as in

10 CHAPTER 1 Overseas Empire

England, to contract for their services, although, fol lowing English law and custom, there were extensive controls over prices, wages, business licensing, and quality of production (to be discussed in the next chapter).

Indentured Servants. Labor was always in short supply in the colonies. The institutional arrange­ ment developed to increase the migration of white European laborers was indentured servitude. Individuals contracted to do certain work for a term of years (usually between four and seven) in return for transportation across the Atlantic and specified payments, mainly food, clothing, housing, or per­ haps some education or training in a craft or skill. Indenture contracts often included "freedom dues," a specific amount of money or land to be paid upon successfiil completion of the contract. Indentures were an extension and adaptation of the English notion of "service in husbandry," essentially an agri­ cultural apprenticeship.^^ At the end of the contract period, the seryant became part of the free popula­ tion and part of'thTpool of free labor. "Land hunger" was a motive for both the free population and indentured servants.^^

With the rise of the plantation system m the colonies surrounding the Chesapeake Bay, the de­ mand for indentured servants increased dramatically. Indeed, the majority of the over 20,000 servant reg­ istrants in one sample went to the Chesapeake. They were predominantly males in their late teens and early twenties. The most commonly listed occupa­ tions were farmer, artisan, (unskilled) laborer, and domestic servant.

This work shows in detail the extent of the organ­ ized markets available for this form of unfiree labor. Thousands of people came over this way; between 1650 and 1780 the net white migration was estimated to have been 600,000. Estimates of the proportion of indentured servants among the white immigrants to the Chesapeake area range firom one-half to three- quarters. Those who signed indenture contracts of their ovm free will could do so in England with sea captains or merchants in the servant trade. There was a good deal of bargaining between potential servants and those offering contracts. The cost of passage was paid by the holder of the indenture contract in

England, and, upon arrival in American ports, the contracts (and the people) were sold, usually on the ships before the servants disembarked. The purchase price was equal to covered costs plus an approximate 50-percent markup. Generally, the price fetched de­ pended upon the age, sex, and skills of the serv^t, given the market conditions in the colonies. Indenture contracts had status in courts of law, and servants could appeal to the courts for violations of their rights. Children born of indentured servants during servitude were born free, but it was customary, especially in New England, to place teenagers into apprenticeships to leam trades. Edmund Morgan, in m Puritan Family, suggests this was done in part to relieve parents of the problems of coping with their own teenagers!

The rather abrupt shift from reliance on white servants to black slaves at the turn of the eighteenth century has been attributed to the wars of King WiUiam III and, especially. Queen Anne. These wars reduced the supply of prime-aged males, which in turn reduced contract lengths, thereby increasing the effective price.With the return of peace, the market for indentured servants revived, but not to its previous numbers.

Redemptioners. Immigrants from the European continent, especially Germans, came to the colonies with a status different from that of English immi­ grants. Known as redemptioners, they were brought over by ship captains who then allowed them time to arrange to pay for their passage after arrival. Payment was often made by placing one or more of their children into indenture to raise the money Whereas English servants usually came over alone, the Germans came in families, bringing their own supplies and movable property wth them.

Prisoners. A less common, but perhaps more widely known (thanks to Hollywood), method of getting labor to the colonies was to send convicted felons, rpie convicts were sold as indentured servants at dockside. These cases, called "His Majesty's seven-year passen­ gers," were men and women convicted of one of the 300-odd crimes punishable by death in England, who were allowed to live on condition that they would transport themselves elsewhere.

England Overseas I I

This group of immigrants was unpopular in the colonies, but efforts there to legislate against them were thrown out repeatedly by the Board of Trade lawyers who oversaw colonial operations firom England. The shipments stopped during the Revolution, but following the signing of the Treaty of Paris (sometimes confiisingly called the Treaty of Versailles) in 1783, British courts, oblivious to the meaning of American independence, resumed ship­ ments. Finally, in 1788, Congress, by resolution, for­ bade fiirther convict transports fi-om England, and the British turned to Australia as a dumping ground.

There were also the special categories of rebels and prisoners of war. A letter written by the Massachusetts Bay Colony Puritan leader, John Cotton, to his friend Cromwell, provides a glimpse of this particular segment of the early colonial labor supply. Unlike convicts, military prisoners, mainly young males, were particularly desirable:

The Scots, whom God delivered into your hands at Dunbarre, and whereof sundry were sent hither, we have been desirous (as we could) to make their yoke easy. Such as were sick of scurvy or other diseases have not wanted physick and Chyurgery. They have not been sold for slaves to perpetuall servitude, but for 6 or 7 or 8 years, as we do our owne; and he that bought the most of them (I heare) buildeth houses for them, for every 4 an house, layeth some acres of ground thereto, which he giveth them as their owne, requiering 3 dayes in the weeke to worke for him (by turnes) and 4 dayes for. themselves, and promiseth, assone as they can repay him the money he layed out for them, he wiU set them at liberty.^^

Ship captains wanted servants and prisoners as cargo and no doubt traded them directiy for colonial produce to take back on their return voyage. The trade was profitable for aU. Later on, by the mid- eighteenth century, improved conditions at home, natural population growth in the colonies, increasing colonial demand for shipments of European goods, and an increasing abundance of black slaves made white indentured servants less desirable than in ear­ lier times. Black slaves cost more than white servants.

on the average, because their "contract" to the buyer was superior to that of white servants. Thus slaves tended to be more profitable.

Slaves. African slaves were not protected as British subjects; they were human beings without the right to contract their own labor. Their term of service soon came to be for life, and children, if born to a slave mother, were slaves for life—no matter who was the father. The idea that children follow the condition of the mother was of Biblical origin. Thus, the purchaser of a female slave's "life contract" also received the natural increase if the slave was a woman. This rule lasted until the American Civil War ended slavery.

African slaves had no status at aU in court. There were no British laws governing them, and the colo­ nials developed laws of their own that did not allow slaves redress of grievances. The law did allow, how­ ever, dismembering, disfiguring, and, occasionally, death to slaves who "disobeyed." In classical Roman slavery, a master might put to death a disobedient slave; in colonial America, this extreme was not usu­ ally forbidden, but it was assumed that no man would do such a thing, to "destroy his own estate" without sufficient cause.

Much has been written about American slavery, and we wiU discuss it at length in later chapters.^® It is enough to say here that it was considered absolutely necessary to colonial economic develop­ ment. Slavery began in Virginia in 1619 and, as Edmund Morgan says, developed hand in hand with colonial American ideas of freedom. Farming in the North tended to be based upon smaller, family-sized plots of land; labor was mainly supplied by the fami­ lies themselves. Slavery existed in all the colonies, but it was on a larger scale in the South. Although no doubt fiieled by inherent racism from the begin­ ning, labor was needed, especially on the Southern tobacco, rice, and indigo plantations. African slavery was a response to that need.

In Virginia, both land and labor could be had with a single purchase. An imported slave was also good for a headright grant, as in the case of imported servants. Because the net yield from a slave purchase was far superior to that of an indentured servant, slave prices were accordingly higher. Transportation

12 CHAPTER I Overseas Empire

costs for slaves were minimal, food and clothing out­ lays by owners were not subject to legal oversight, and the term, expiring at death, cost no freedom pay­ ments beyond simple graves.

James Kent, the great American jurist, was em­ barrassed by the persistence of American slavery when he wrote his Commentaries in 1826. There is probably no more illuminating description, even in the most lurid writings, of the legal status of the American slave than in Kent's spare lines:

Slaves are considered . . . though not in crimi­ nal prosecutions as things or property, rather than persons, and are vendible as personal estate. They cannot take property by descent or purchase, and all they find, and all they hold, belongs to the master. They cannot make law- fiil contracts, and they are deprived of civil rights. They are assets in the hands of execu­ tors, for the payment of debts, and cannot be emancipated by will or otherwise, to the preju­ dice of creditors. Their condition is more anal­ ogous to that of tM slaves of the ancients than to that of viUeins of feudal times, both in respect to the degradation of the slaves and the fiiU dominion and power of the master.^'

The laws of the colonies, until 1776, could not be repugnant to the laws of England. In 1772, in the Sommersett case heard in London, Chief Justice Lord William Mansfield held that English law did not support slavery. The ruling led ultimately to compensated emancipation in the British Caribbean Islands in the 1830s and to the peacefiil extinction of African slavery in the British Empire. But it came too late for the Americans. Slavery passed through the Revolution, was recognized in the federal Constitution (for congressional apportionment, each slave was worth three-fifths of a person), and, nine decades after the Sommersett case, in a blending of slavery with states' rights, the Americans solved their own problem by a bloody civil war. The inter­ national slave trade had been prohibited by the Constitution since 1808, but statesmanship and ju­ risprudence could not find a peacefiJ. way to root the institution out of American society.

The Land From the outset, the colonists were considered English subjects and the colonies English land. King James was perfectly clear about this in the charter of 1606. He said that the colonists departing for Virginia "shall have and enjoy aU Liberties, Franchises and Immunities, within any of our other Dominions ... as if they had been abiding and born, within this our Realm of England."^®

As we noted, Europeans considered conquest, if it was from non-Christian occupiers of land, a legit­ imate transfer of ownership to Christians. If no non- Christian owner could be identified, then discovery alone was sufficient. Such was as true of any other Europeans as of the English. For example, the English claimed New York by right of discovery and considered the Dutch settlement usurpation. They eventually took New York from the Dutch by war and treaty. As for the Indians living in New York at the time, they either received land from the English (as did the Iroquois), or they were simply driven ofiF or killed.

Property Rights. In theory, all English land be­ longed to the king. He was the sole and absolute owner. Only he, as the Lord Paramount, was be­ holden to no one save God for his property rights. He was the "donor," and without his authority, there were no land ownership rights for his subjects. According to English feudalism, all land ownership was a grant for services from the king. All Englishmen were the king's tenants on their land; Englishwomen generally did not hold title to land. This is most easily under­ stood in the colonial inheritance laws and customs. When a man died, he conventionally willed his real estate to his sons, but his widow was allowed to use some or all of the property until her death or remar­ riage. The widow was granted a right to the flow of income generated by the land, but not a right to the land itself^^ The English developed elaborate tech­ niques for transfers of rights to land, including writ­ ten deeds of ownership after passage of The Statute of Frauds in 1677. Secure property rights in land estab­ lished a precedent for the establishment of secure property rights in general.

England Overseas 13

In the United States today, the role of the king has evolved to that of the state. Thus, if you do not pay your property taxes, your rights are annulled for the amount of the taxes. In other countries, land can be owned allodially—by absolute right—but not in the United States. This is an uncelebrated part of our English heritage. To these authors' knowledge, the American people were never asked by what right they wanted to own their land.

Indian Land. European techniques of land transfer were of crucial importance in the dispossession of the Indians, since they had no tradition of private property, no written evidence of ownership. They might obtain land (their own, or someone else's) from the king (or his agents, including colonial gov­ ernments) by grant or purchase or treaty, but they had no "natural rights" to the land they had long hunted over except the right of "occupancy"—which was feeble indeed, since European law did not recognize the manner in which the Indians "occu­ pied" their lands. In the beginning, indeed into the nineteenth century, this right of occupancy was re­ spected, and Europeans were inclined to acquire the land through trade.^^ All colonial governments at­ tempted (with uneven success) to restrict purchases from the Indians by private settlers. This policy was necessary because claims of specific tribes could not be shown by any written instruments except those acquired from the whites themselves.

Although the Indians farmed a portion of their land (after all, they shared their techniques with the first European settlers), they logically preferred their traditional diet, which included the meat of wild animals. The European preference for the meat of domesticated animals meant that the Indian diet required significantly more land per capita. While Europeans needed about 2 acres per person, the Indians required 1,000 to 2,000 times as much.^ The value of North American land, as Europeans planned to use it, was greater to them than it was to the Indians. This is not an argument that it was acceptable for Europeans to take the land. It simply points out that the acquisition through trade (or purchase) of even a few acres of Indian land at prices an Indian would find reasonable gave rise to the

promise of a long-term capital gain. As the European population grew relative to the Indian, the latter's land-intensive lifestyle was increasingly threatened.^''

Land Acquisition by Individuals. Apart from the acquisition of Indian land, white Europeans acquired original titles to land in America in five major ways: by (1) ownership shares in the found­ ing colonization companies; (2) headright grants; (3) purchase from governments; (4) preemption ("squatters' rights"); and (5) special-purpose grants of governments.

1. Ownership shares. In the cases of Virginia and Plymouth, some land rights were assigned on a per- share basis. In Virginia, land was also granted in large blocks in consideration for subscriptions in cash that did not entitle the subscribers to foil mem­ bership in the company. Thousands of acres origi­ nally were assigned in this manner.

2. Headright grants. In the case of headright land grants, 50 acres were commonly given to, or for, each man, woman, or child who crossed the ocean. (There was considerable variation, especially in Virginia.) If the grant was 50 acres and one man came, he got 50 acres. If he brought over four other people, he would acquire 250 acres by headright. Such was the policy in Virginia, New York, New Jersey, the Carolinas, and to some extent in Maryland, Pennsylvania, and Georgia. Initially, in Virginia, there were few limits on the amount of headright land granted, but this was modified fol­ lowing charges the privilege was being abused. In a country that needed both land settlement and peo­ ple, the headright system was a powerfiil stimulus for colonization.

3. Purchase from governments. All colonies finally developed techniques for outright sales of land by the colonial governments. The first of the colonies to attempt to transfer nearly all of its land by sale alone was Pennsylvania. WiUiam Penn had a grant of 47 million acres and hoped to seU most of it. By the mid-eighteenth century, aU the colonies had developed the practice of land disposal for rash payment only.

14 CHAPTER 1 Overseas Empire

4. Preemption. Attitudes regarding preemption, or land transfers to individuals for actual settlement, varied. In the Southern and Middle colonies, pre­ emption came to be encouraged, but not in New England. The issue of "squatters' rights" came to the fore by the third quarter of the eighteenth century, when a rapidly growing population faced a largely empty vnlderness to the west. This circum stance produced a number of settlers who, for lack of money or knowledge of the law, or because of indif­ ference to the law, began moving into empty lands. By the end of the Revolutionary period, the trickle became a flood.

There had always been squatters, those residing on land to which they had no title In fact there were squatters in Massachusetts before 1630. ihe original settlers of Connecticut were techmcaUy squatters-they had moved into that territory wth- out leave. Vermont, as early as 1752, had a larp population of squatters. The famous militia the Green Mountain Boys was a band of armed squat­ ters prepared to.defen^ their cleared lands. In New England, squatter settlements were resisted by government, but in the Middle colonies and the South, especially in Virginia, squatters were desired as pioneers, and land-rich governments were gener­ ous with preemption land transfers.

5. Special-purpose grants. Colonial governments also granted lands for various special purposes, such as to encourage settlement or industry or bridges or femes or whatever. In Massachusetts, grants were made to form new congregations in frontier townships L^d, called a glebe, was granted to help support churchy. Soldiers were commonly awarded land in payment tor their services. Land was also given to encourage speaal trades or services: Colonel Ephraim Williams, founder of Williams College, received 200 acres to build a fort and grist mill; in Massachusetts, an Indian named Hobbamock received land in payment for his services as an interpreter.

By all such means, the colonial land was slowly filled with people. Their rights in that land are of crucial importance as a background to subsequent American economic development. Colonial land ownership contained the seeds of the American cap­ italism tha^ was to come.

It is customary to think of individual ownership in real property as a "bundle of rights." A buyer has a bundle different from that of a landlord or a share­ cropper. In England, during the centuries after the Norman Conquest,' a complex net of feudal relation ships based upon mutual obligations produced an intricate set of rights in real property. Those rights, the content of ownership, are called the tenure. Fortunately, colonial land laws were relatively simple because the Crown permitted only one tenure to be established in America, free and common socage. In other parts of the New World many more tenures existed; in such places a far more unequd distribu­ tion of land wealth persists to this day. The mam distinguishing characteristics of free and common socage were:

1. It was perpetual (not limited to any term of vc3.rs).

2. It was directly heritable by heirs (it did not need to be regranted by the donor).

3. It could be passed by wiU. 4. All the obligations on it had to be 'fixed and

certain." 5. The right of waste existed fiiUy 6. Socage land was freely alienable (it could be sold)

by its owner.

These characteristics were shared by military tenures in fee simple (that is, the "simple feud, or direct inheritance) in England. In time, Americans came to call their tenure fee simple, and the word socage vanished from common use.

By whichever name it is called, the incidents (the costs) of this tenure generally included fixed pay­ ments on the land alone, known as reserved ground rents, which were annually due to the donor, in colonial America, the bundle of fixed incidents was combined into singular periodic payments called quit rents, which meant that the owner who paid them was "quit and free" of all other obUgations. These rents eventually became the local property taxes of modern America. If the donor (now the state government and its local units) does not receive tax payments for these obligations, the tenure simp y vanishes and ownership reverts to the donor. Some colonists resisted paying these taxes' because they

England Overseas I 5

considered them "foreign" and unjust. In some colonies, the isolation of settlements made collec­ tions difficult.

We need not go fiirther into the complex topic of land law to get the gist of it for our purposes.^^ Americans who bought land could sell it if they wished; buyers had the same rights as sellers. The land could be divided, or its nature changed (trees cut, fields planted, ores mined, wells drilled, ponds constructed). All that was due the seller was the sale price. Sellers could, and still can, reserve certain rights—for example, mineral rights. Since taxes are due in order for the tenure to be maintained, the tenure imposes a cost for holding land idle, and there is an inducement to keep only as much land as wiU yield more than the taxes on it. This force was commonly thought to have favored the development of family farms as the main vehicle of land settle­ ment unless there were sufficient amounts of other exploitable resources on the land—such as timber, minerals, water—or unless the land could be rented, leased, or sharecropped at rates that exceeded the taxes.

Socage tenure made American land a commodity almost from the beginning, one unencumbered by other rights and obligations to it. Active land mar­ kets became characteristic of American economic histoty, and land speculation at times came close to being the main national industty. Individuals pur­ chased land, not because they planned to use it, but because they expected that increased demand would raise its price, thereby creating a capital gain.

The freedom of the tenure also defined the free­ dom of its owners, causing Americans early on to view land ownership and personal freedom as linked. This relationship became a powerful tradition in American economic history, to be eroded slowly in the twentieth century as land became encumbered by the larger needs of society. For the most part, though, from colonial times until the mid-twentieth centuty, the land itself was a major commodity in the developing market economy and the base for exploitation of its natural resources by individual enterprises. At the time of colonization, a fifth of all newly discovered precious metals had been reserved for the Crown, but few such reservations remained for the state when coal, oil, iron, and other minerals

began to be extracted and refined by private owners in the years of American industrialization.

The Colonies The sequence of colonization was more or less a matter of chance, depending upon events in Europe as well as in America. However, there is a problem with the founding dates of the individual colonies. The question is whether the year of the charter or that of the first permanent settlement should be considered. We will follow the custom of dating by the settlement (see Figure 1.1). Virginia, in 1607, was supposed to be a profit-making enterprise for a joint-stock company. The Plymouth Colony (1620) and the Massachusetts Bay Colony (1630) were of religious origins, created by the flight from the per­ secution of the established church in England. Let's take a look at each of these to see at a more detailed level what it took to be successfiil in the New World.

Jamestown. A patent was issued to the Virginia Company of London on 6 April 1606 "to reduce a colony of sondty of or [our] people to yt [that] part of America commonly called Virginia."^^ The advi­ sory paper prepared for the company's officers, simi­ lar to those prepared for the East India Company and other merchant adventures, contains passages that reveal the investors' commercial intentions. The choice of a site was to be such that an entrepot could be established: ". . . you shall do your best endavor to find out a safe port in the entrance of some navi­ gable river making choice of such a one as runs far­ thest into the land . .

On 13 May 1607 the settlement at Jamestown was founded, and, within two years, a second settle­ ment was formed 20 miles from the Jamestown fort. Economic and political control over the colony was vested in a governor, the company's man in Virginia. Between 1607 and 1622 there were two periods when the company's methods were revised to incor­ porate lessons from its learning-by-doing.

The first of these, in 1609, gave the adventurers full political and economic control. The reorgani­ zation reduced expectations of sudden wealth and focused attention on the need for a labor supply to produce staples that would find a market in

16 CHAPTER I Overseas Empire

f figure \A Colonial Cities and Tlieir Founding Dat^

The earliest colonial cities either were seaports or were situate on water routes leading to the sea. St. Augustine was a Spanish settlement. The English settlements began with Jamestown m 1607, followed by Richmond, Plymouth, Salem, and Boston. The final English colony was founded in Savannah m 17 .

Endand. The model became more a plantation and less a pirates' den. Indentured servants supphed the labor; they were expected to draw their food supp y from the company's common land plus the con­ tiguous forests and water. Naval stores (pUch and tar) from the forests were to supply the initial sta­ ple production necessary to provide the company s revenue.

After a slow start, the company's production diminished. Many of the original adventurers dropped out, and few new ones appeared to take their place. As a result, few new and L numbers (350 in 1616 and 400 m 1618) were deemed insufficient for staple production, in 1614, the initial settlers' seven-year indentures expired, and many elected to remain in Virginia. By the end of that year, there were 81 free settlers m the colony It became the practice to allot these peo­ ple tenant farms on the assumption that encouraging private enterprise might develop the colony faster than the existing policy of farming the land as a large plantation. As more settlers fiilfiUed the terms of their indentures, and few new ones arrived to take their place, the number of tenant farms increased dramatically while the company's plantation dimin­ ished. A Royal Investigation revealed there was only one plow in the colony in 1618. If there had been more at an earlier date, they had not been replaced By 1619, the plantation had disappeared tor au intents and purposes.

At the same time, the private sector turned to tobacco production. By 1613, Virginians discovered their tobacco was of marketable quaUty, and a few pounds were taken to England a year laten Mter 1616, the quantity increased dramatically Tobacco appeared to be the staple the colony needed, but more and more labor and land devoted to tobacco production meant less food. As early as 16 , Governor Thomas Dale was forced to require each man to plant two acres with wheat to minimize the degree of dependency on English food supphes. Such edicts were difficult to enforce. The colony economy became one-sided; dependence on supphes from England increased. This was viewed as bad, both economically and politically The colony s pro­ duction was devoted almost exclusively to supplying a vice that the adventurers (and a majority ot Englishmen) condemned at that time. .

The second'revision in 1618, like that m 1609, resulted from the colony's failure to live up to the adventurers' expectations. Reorganization necessi­ tated study of why the colony was failing and wha could be done to accomplish its objectives. Land had to be diverted to the production of food and staples other than tobacco. Adequate food supphes were

England Overseas 17

essential for the existing colonists and the potential colonists who had been dissuaded by conditions within the colony. Public lands had to be reoccupied to generate revenue for the company. All these required an increase in the labor supply This may have been fiitile, for as Edmund Morgan pointed out, "Englishmen simply did not envisage a need to work for the mere purpose of staying alive."^® Colonists' complaints about economic, political, and social conditions suggested the efficacy of a definite and permanent land tenure policy, clearly estab­ lished property rights, the abolition of martial law, and the establishment of the Virginia Assembly.

The first assembly passed laws restricting tobacco production. There were expectations the colony could produce iron, silk, wine, naval stores, salt, and several other items that would help make the colony self-sufficient while producing a profitable trade surplus. These expectations were doomed to disap­ pointment. The company advertised for new set­ tlers, especially those in skilled trades. Six hundred new settlers were sent to Virginia in 1619, and more newcomers arrived over the next few years.

In 1622, the company wrote to the leaders at Jamestown inquiring as to when they could expect a return. The company felt that too much effort was going into agriculture and not enough into com­ merce, that domestic concerns were of greater import to the colonists than was international trade. Although a seif-sufificient entrepot was desired, it was being neglected. The letter "intreats" the Virginians to find a profitable staple; it speaks of necessary urban improvements at the entrepot.

In March 1622, an Indian massacre disrupted the company's reorganization plans as well as the day- to-day life of the colony. Many private settlements were abandoned. Colonists unable to provide for themselves became wards of the essentially bankrupt company. Even without the massacre, it is doubtfiil the reorganization scheme would have proved suc- eessfiil. The massacre's significance was that, had the OQmpany benefited firom learning-by-doing (a dubi- Ws assumption), it was no longer able to use the formation. ' The king and Privy Council began a Royal tovestigation into the Virginia Company in 1623 that became a long political wrestling match between

opposing factions. Jamestown's location was deemed unhealthy; its defenses were deemed inadequate. There was no inn or guesthouse for newly arriving colonists, and the houses themselves provided a min­ imum standard of accommodation. Few staples were produced on the dispersed settlements. The company had transported 6,000—10,000 people (there was disagreement on how many), and, at most, 2,500 remained. Tobacco remained the only profitable sta­ ple, and many people still considered that undesir­ able. Accordingly, the king recalled the Virginia Company's charter, and, in 1624, Virginia became the first royal colony. It was the first government bailout in North America. Thereafter, the colony was permitted to develop as a commonwealth of dis­ persed tobacco plantations. It is debatable whether Virginia would have survived in the absence of gov­ ernment sponsorship.

Plymouth. The Virginia Company's charter pro­ vided for a northern colony. The attempt by the Plymouth (U.K.) Company to estabHsh a settlement at Sagadahoc, Maine, on the Kennebec River, proved unsuccessfld and was abandoned. The Pilgrims were the next group to attempt settlement in New England. Pursuing their religious beliefs, they left England for Holland, but, at the beginning of the Thirty Years' War, they returned to England, then sailed to the New World. The Pilgrims hoped to settle in the northern part of the Virginia Company's territory, but three problems stood in their way: (1) They needed a patent from the Virginia Company granting them permission to set­ tle on its land. (2) They needed the king's permis­ sion, and he was not receptive to the idea. (3) They needed money.

As we have seen, the Virginia Company was anx­ ious to have additional signed-up settlers. The patent granted to the Pilgrims has not survived, but a few sentences in Bradford's history lead to the con­ clusion that the land must have been near the mouth of the Hudson River; the Virginia Company could not offer a patent for land north of the forty-first parallel. It iso could not offer religious toleration vnthout the king's permission. The Pilgrims were forced to "accept" religious principles that were against their beliefs, particularly the supremacy of

18 CHAPTER I Overseas Empire

the king and the Archbishop of Canterbury over their church. Part of the transportation cost was hypocrisy. ' The most important question was who would advance money for the voyage and supplies until the new colony became self-sufficient. All previous experience suggested that a large outlay was re­ quired, and the Pilgrims' resources were barely suffi­ cient to get them back to England. Even in 1619, the Virginia Company could not divert funds to a northern colony. Enter Thomas Weston, citizen of London, ironmonger, and minor merchant adven­ turer, a man who had helped the Pilgrims once be­ fore. Weston headed a 10-year-old company that was looldng for such an investment opportunity. The 70 small subscribers Weston organized were described in Captain John Smith's Generall Historie as . . not a corporation but knit together by a vol­ untary combination vnthout restraint or penalty, aiming to do good and plant religion.'

Westoh's terms.were harsh, but they were similar to those of the Virginia" Company.^' Weston's ad­ venturers would pay for the hiring of a ship, sup­ plies, and transportation. In exchange, the colonists were bound to work for seven years at fur trading, fishing, lumbering, or whatever other profitable employment they could discover. All profit over bare subsistence went to the company. These terms must be viewed as highly speculative. The Pilgrims were predominandy cloth and silk workers; some knew a bit about farming, but they knew nothing about the kinds of employment that might prove profitable in North America.

The Pilgrims reached New England in late 1620, far to the north of their original destination, on land to which they had no title. Too late to gather what had grovra namraUy, the Pilgrims experienced a ter­ rible first vnnter in which as many as half of them died. With a preoccupation on survival, littie was produced. When the Mayflower returned to England in April 1621, and it was learned that the colony had be^n established north of the Virginia grant, Weston and his group immediately obtained a new patent from the Council for New England, a group to whom the king had granted all land in North America between 40° and 48°.^® The fact that

the Mayflower returned empty caused Weston to write a letter of complaint threatening to cease ship­ ments of supplies if the colony failed to ship fiirs promptiy.

In November 1621, the Formne arrived in Plymouth with the new patent, 36 new settiers, and no provisions. Governor William Bradford warned Weston that the combination of additional people and no provisions would prove a severe hardship. By spring 1622, famine struck the colony Meanwhile, the Fortune sailed back to England with a fiiU cargo of cedar clapboard and beaver and other pelts, but the French captured it, and the cargo vras confiscated.^^

For the first two years, the Pilgrims lived com­ munally. AU worked for the company, and aU assets were divided equaUy In 1623, the settlers requested that they be permitted to work for themselves and be taxed. They felt that some had not contributed their fair share of the labor since they could not see any direct return to their personal welfare. As a re­ sult, each family was assigned a plot of land; the size of the plot depended on the size of the famUy. The assignment was for their present use and could not be passed on to heirs.^^ Assets continued to be held communaUy until 1627. The shift to private prop­ erty increased the colony's output, but as a commer­ cial venture, the colony never yielded a dividend on the investment.

Plymouth seemed like a satisfactory site for a plantation, but the bay did not provide good port facUities for ships engaged in the transoceanic trade. The soil near Plymouth was poor. While it was suf­ ficient to grow the colony's food and some surplus corn to trade with the natives, it was too rocky to grow exportable staples that would provide a base for economic growth. Thus, in their search for an ex­ portable staple, the colonists turned primarUy to fishing and the fiir trade.^^

In spite of its location near the North Atiantic fishing grounds, Plymouth never profited from fish­ ing. The colony lacked a source of capital to acquire a fishing fleet. More to the point, most Pilgrims were not sailors and preferred to earn their UveUhood off the land. The beaver trade proved more promising. Within a year of their arrivd, the Pilgrims began to explore the possibihty of trade with the natives. Over

England Overseas 19

the next 15 years, they established several permanent trading posts where factors traded tools and cloth for fUrs. Plymouth came to control the fur trade of New England, but, as more settiers arrived, that trade dwindled. It was successfiil while it lasted; Bradford estimated that beaver and otter pelts valued at ;C10,000 were shipped to England between 1631 and 1636.^''

Such mercantUe operations depended upon English credit, but Plymouth lacked commercial contracts with English trading houses. Plymouth merchants developed some trade with the Caribbean islands, but it was always smaU. After 1630, Plymouth became involved in a coastal trade with the Massachusetts Bay Colony.^^

Weston's original set of adventurers dissolved their partnership in December 1624, after four years of "losses and crosses at sea." The official reason was the colony's religious practice, but the lack of any return had to be just as compelling. A group of sym­ pathetic adventurers bought out those anxious to separate. Plymouth became self-sufficient at an ear­ lier date than did Jamestown, but neither colony could be termed successful.

Massachusetts Bay. In 1624, Captain John Smith gave the name "Massachusetts" to the coast with the rich fishing grounds he explored. The previous year, the Council for New England awarded a patent to the Dorchester Company, which planned to estabUsh a settlement on Cape Ann, near present-day Gloucester. This company was founded to provide a Puritan refuge from reUgious difficulties in England, but it folded in 1626. Only a few colonists remained in 1628 when the Coundl granted a patent to the New England Company, a group of Puritan merchants from Boston in Lincolnshire, who assumed the re­ sponsibilities of the Dorchester Company. This group, aU good businessmen, recognized the area's potential profitabUity. They checked to make sure they had-a vahd patent, and, to make doubly sure, they obtained a Royal Charter confirming the grant of aU land be­ tween the Merrimac and the Charles Rivers, from sea to sea. In the process, they obtained a new titie, "The Governor and Company of the Massachusetts Bay in New England."

The Royal Charter recognized 20 patentees as constituting the company Seven of the 18 "assis­ tants" plus the governor and deputy governor consti­ tuted a quota for business purposes. The company was free to choose how many more "freemen," stock­ holders with voting rights, there would be. The offi­ cers were to be elected by the freemen at meetings caUed the "General Courts." The charter granted the company fiiU executive and legislative power, subject only to the laws of England. It was the company that was given "flUl and absolute power and authority, to correct, punish, pardon, and rule" aU English subjects who inhabited or visited land within its jurisdiction. The charter also required that the company protect its colonists, to adopt protective measures "for their special defense and safety, to encounter, expulse, repulse, repel, and resist by force of arms, as weU by sea as by land, and by aU fitting ways and means whatsoever, aU such persons as shaU at any time here­ after attempt or enterprise the destruction, invasion, detriment, or annoyance of the members of the Massachusetts Bay Company."^^ It was decided that the charter would move with the company to Massachusetts; the General Courts would be held there. Thus, only those stockholders who made the journey would be able to attend the meetings and vote. Consequently, effective power was to be in New England, not in England.^^

The leaders of Massachusetts Bay were wealthy and prominent people; 17 large ships brought over 1,200 settlers during 1630. In spite of superior planning and resources, this group also experienced a hard first winter. This colony was distinctly dif­ ferent from Virginia, a fact that was recognized by the Puritans. In a 1633 lefter to the company's London secretary, a Boston Puritan aUeged that Virginia was settled purely for profit, but the Massachusetts Bay settlers went "some to satisfy their own curiosity in point of conscience, others, which was more general, to transport the Gospel to those heathen that never heard thereof."^® In fact, most of them went to establish a church (and com­ monwealth) on Calvinist principles and to escape from the policies of Charles I and Archbishop Laud. Over the decade 'of the 1630s, thousands of Puritans fled to New England. By 1640, with

20 CHAPTER I Overseas Empire

the outbreak of civil war in Scotland and then England, migration ceased.

The economic success of Massachusetts Bay is well known. The ample means of the founders, the desire to colonize rather than to profit, the large number of colonists compared with earlier settle­ ments, and the celebrated "Yankee ingenuity" of the colonists all contributed to its success. Plymouth and Jamestown, both established on the profit motive, looked like withered oldsters in comparison to this vigorous youth.

Throughout the first year, seven towns, including Shawmut (Boston), were established.^' Originally the main encampment was at Charlestown, direcdy across the Charles River, but Boston became the colony's political center during the first year when Governor John Winthrop moved there. The site of Boston proved ideal for trade. The peninsula was at the center of the network of settlements; it was the crucial link in communication between towns, and between those towns and the rest of the world. While tf3Vel'b){.land was cumbersome, travel by water was easy, and ferry service between the peninsula and nearby towns commenced at an early date. Furthermore, Boston Bay afforded an ideal harbor. Near the shore, the bay was shallow; piers and wharves could be easily constructed. Farther out, the bay was deep; the largest ocean-going ships could find safe anchorage.

By 1640 Boston had grown to almost 2,000 and the colony to 12,000. Boston attracted a merchant class, including several firom London, the vast major­ ity with good connections in England.''® Newcomers typically brought litde but cash wdth them; most of what they needed they could obtain once they arrived, quite the opposite of the experiences of Jamestown and Plymouth. Their cash purchased necessities firom established setders who then used the cash to pur­ chase English goods that were often carried on the same ships as newcomers. Boston became the starting point for new settiers, the marketplace for the goods to initiate settiement, and the entrepot for English goods and the colony's agricultural surplus.

With the arri\^ of the Massachusetts Bay Puritans, the Plymouth Pilgrims received an eco­ nomic boost. The Boston market, 40 miles to the

north, proved more profitable than the Enghsh mar­ ket 3,000 miles to the east. For example, Boston provided an external market for Plymouth livestock and, therefore, a source of monetary income. In time, the value of the Uvestock trade and other agri­ cultural produce surpassed that of Plymouth's beaver trade with the Indians.

During the first decade, the market was focused on newcomers. Demand often exceeded supply, with inflation the inevitable result. As the rate of settlement slackened, the domestic market for the colony's agricultural surplus weakened. Staple agricultural production for the Enghsh market was as infeasible for Massachusetts Bay as for Plymouth. This caused difficulties in the short run, but, in the long run, Boston merchants found other outlets. Three major markets developed in the years after 1640. Contacts with English mer­ chants provided information about a market for wood products in Spain and in the Atlantic islands. These same contacts also provided infor­ mation about a market for the cheap wheat and other grains that made up the bulk of the colony's surplus. A second market developed in outfitting and provisioning ships. This market grew continu­ ously throughout the 1640s as Boston improved its harbor facilities. The third market developed when Caribbean planters began to speciaHze in sugar production and had to import food. By 1650, Massachusetts Bay's exports to the Caribbean were greater than its exports to Europe.

The overseas trade accelerated change within the colony and, less than 20 years after its founding, Boston was a commercial city with tradesmen and craftsmen who transformed the agricultural surplus into leather, flour, and the like. Shipbuilding devel­ oped to complement the outfitting, provisioning, and repairing fiinctions. And, as the Dorchester Company had hoped, the fishing industry developed a firm base. Boston was the political and economic capital not only of the commonwealth, but also of all of New England. In 1691, the Massachusetts Bay Colony was combined with Plymouth to form the "Province of Massachusetts Bay," a province that would find its executive and legislative independence increasingly subjected to the laws of England.''^

England Overseas 21

Other Colonies. Th'e establishment of the colony of Maryland in 1634 was partiy motivated by Lord Baltimore's desire to find a haven for Roman Catholics, but it was also meant to be profitable, the profits to come firom land sales, feudal taxes, and fees of all sorts. The flight of Roger Williams from Puritan Massachusetts (he was banished) to Rhode Island (1644, a charter granted in 1663) was again motivated in part by religious differences, this time exclusively in the New World.

Connecticut was an offshoot of the Massachusetts Bay Colony. In 1639, settiers in New Haven organ­ ized themselves into a permanent government. Then, in an amended constitution of 1643, only "members of some or other of the approved churches of New England" were allowed to vote and hold office. In 1662, Connecticut was granted a more liberal charter by Charles II.

Religion again was the major force behind the proprietary colony of Pennsylvania, founded in

22 CHAPTER I Overseas Empire

1681, the year of Wmiarn Penn's takeover; the Swedes and the Dutch had already been there some four decades. Pennsylvania began as a huge land grant awarded to Penn by Charles II in payment of an old debt owed to Penn's father, Admiral Sir William Penn. The Quaker leader dreamed of a haven for his persecuted co-religionists and other Protestant groups. Penn also hoped, vainly, that he would make a profit from land sales and rents.

Delaware came into existence in 1702 (charter signed in 1701) after separation from Pennsylvania, due in part to a boundary dispute between Penn and Lord Baltimore's heir. Georgia (1773) began mainly as a charitable enterprise, with both slavery and rum forbidden, but ended up as a royal colony with a lowlier end, such as money, on everyone's mind. That was clear when black slavery was introduced in order to make the colony pay To make Hfe there more bearable, rum imports and consumption also came to be allowed.

New York was setded by charter from the Dutch West India Company^The charter was granted in 1621; setdement at Albany dates from 1624, and per­ manent setdement on Manhattan is dated from a fort built there in 1626. The British took over the New York Colony in 1664. It continued as a proprietary colony of James, Duke of York, until he became King of England in 1685.

New Jersey began with Dutch and Swedish set­ ders. Then, for a short time, it had several English proprietary owners. Part of the colony was appended to Penn's grant in 1681. In 1702, the remainder became a royal colony. _

South and North Carolina came from the origi­ nal grants to a group of proprietors for Carolina in a charter of 1663. A permanent settlement was made in 1670. By 1719, South Carolina had a royal char­ ter, and, ten years later, the same was true of the mainly backwoods settiements that would become North Carolina.

The Colonial Empire in Retrospect As we noted earlier, England had the greatest impact on American economic history. While other

European powers estabhshed colonies as ports from which the continent's wealth could be extracted, the Enghsh inhabited the continent. As the experience of Massachusetts Bay reveals, a successful colony required a critical mass of people and of wealth; both were missing in Virginia and Plymouth. As m Plymouth, the settlers of Massachusetts Bay had an incentive that surpassed mercantihsm. Their reli­ gious beliefs made it important to succeed m the New World; they did not want to return to England. The Virginia Company was a quintessential mer- cantihst endeavor, and it failed.

Not one of the original colonies began as a royal colony All were private ventures, either proprietary or joint stock. But by the time of the Revolution, the problems of colonization led to Crown takeovers in all but Rhode Island, Connecticut, Pennsylvania, Delaware, and Maryland. The colonies, for the most part, had existed as so many separate appendages of England, all governed from London. The scheme to unite the northern colonies under Governor Edmund Andros in 1686-1689 died when James II was driven from the throne of England. The earlier Confederation of New England (1643-1684) had come to nothing, and Benjamin Franklin's later plan to unite the colonies in 1754 at the beginning of new troubles with the French and Indians was over­ turned by the Board of Trade.

The British did not want a separate union on the North American continent, even a union of loyal British subjects. The sugar-producing plantation colonies of the Caribbean isles long seemed more valuable to the Crown than the backwoods settie­ ments on the mainland. Sugar and rum were cash- earning commodities in great demand. But by the mid-eighteenth century, much had changed. What was of fundamental importance at the beginning was the mutual tie of the separate colonies to England. This would give the Americans a common pool of language, laws, customs, and business moral­ ity and practice—mutually understood foundations upon which to build their own constitutions and laws when the time came. English institutions, transplanted overseas, would continue to grow, for the most part, changed over time by new challenges met in the American enwonment.

Notes 23

N O T E S

I Francis Newton Thorpe, ed., The Federal and State Constitutions, Colonial Charters and Other Organic Laws (Washington, D.C: U.S. Government Printing Office, 1909), p. 46.

2. Ibid. 3. See Francis Dillon, A Place for Habitation, the Pilgrim

Fathers and their Quest (1973), p. 23, and David Beers Quinn, England and the Discovery of America, 1481-1620 {X97A).

4. James Shepherd and Gary Walton, Shipping, Maritime Trade and the Economic Development of Colonial North America (1972).

5. See, for example, Stephen Lewis, Jr., "Primary Exporting Countries," in Hollis Chenery and T. N. Srinivasan, eds., Handbook of Development Economics, vol. 11 (New York: North-HoUand, 1989).

6. Ann Carlos and Stephen Nicholas, "Giants of an Earlier Capitalism: The Chartered Trading Companies as Modern Multinationals," Business History Review, vol. 62, no. 3, Autumn 1988; and "Theory and History: Seventeenth-Century Joint-Stock Chartered Trading Companies,"/oaraa/ of Economic History, vol. 56, no. 4, December 1996.

7. Kenneth Jackson and Stanley Schultz, eds.. Cities in American History (New York: Alfred A. Knopf, 1972), p. 41.

8. See Wesley Frank Craven, Dissolution of the Virginia Company: The Failure of a Colonial Experiment (1964), pp. 24ff Nearly all the colonies were subsidized to some extent. The remission of taxes for the initial seven years was common, and England bore a significant portion of the cost of government, particularly defense.

9. Quinn (1974), p. 288. 10. Ibid., pp. 289 and 294. 11. Either party to the contract could take the other to

court if the terms of the contract were not fiilfiUed. Abramitzlgf and Braggion demonstrate that, in terms of their unobservable human capital, indentured servants to the American mainland colonies were positively selected. The relatively high quality of indentures to America may well have played a role in the subsequent performance of the American colonies. Ran Abramitzky and Fabio Braggion, "Migration and Human Capital: Self-Selection of Indentured Servants to the Americas,"/£//, December 2006.

12. David Galenson, White Servitude in Colonial America: An Economic Analysis (1981), p. 9.

13. Allan Kulikoff, From British Peasants to Colonial American Farmers (Chapel Hill: University of North

Carolina Press, 2000). Kulikoff also discusses the role of Indians in the development of new communities.

14. David Galenson, "Immigration and the Colonial Labor System: An Analysis of Length of Indentare," EEH, October 1977. See also Robert Heavener, "Indentured Servitude: The Philadelphia Market, 1771—1773, JEH, September 1978.

15. Farley Grubb and Tony Stitt, "The Liverpool Emigrant Servant Trade and the Transition to Slave Labor in the Chesapeake, 1697-1707: Market Adjustments to War," ££•//, July 1994.

16. See Farley Grubb, "The Auction of Redemptioner Servants, Philadelphia, 1771—1805,"/£//, September 1988.

17. Thomas Hutchinson, The Hutchinson Papers, vol. I (Albany, NY: The Prince Society, 1865), p. 264.

18. Kenneth Morgan, Slavery, Atlantic Trade and the British Economy, 1660-1800 (Cambridge: Cambridge University Press, 2000) discusses the impact of the slave trade on the British economy. His Slavery and Servitude in North America, 1607-1800 (Edinburgh: Edinburgh University Press, 2001) presents a short synopsis of this complicated topic.

19. James Kent, Commentaries of American Law (Boston: Litde, Brovra, 1884), vol. II, p. 253.

20. Thorpe (1909), p. 3788. 21. Marylynn Salmon, Women and the Law of Property in

Early America (1986). A possible exception arose if a man died vidthout a vnll. His widow was entitled to a dower's share, but the right was only for her life. She was entided to use her share, but she could not seE or Vifill the land to anyone else. After her death, title reverted to her husband's heirs. See also Carole Shammas, Marylynn Salmon, and Michel Dahlin, Inheritance in America (1987); and Ahce Hanson Jones, "The Wealth of Women, 1774," in Claudia Goldin and Hugh Rockoff, eds., Strategic Factors in Nineteenth Century American Economic History (1992).

22. Terry Anderson and Fred McChesney, "Raid or Trade? An Economic Model of Indian-White Relations,"/Z,£, April 1994.

23. Stanley Lebergott, The Americans: An Economic Record (New York: W. W. Norton, 1984), p. 16.

24. A good survey of the economic position of the native tribes in these years is Neal Salisbury, "The History of Native Americans from Before the Arrival of the Europeans and Afiricans Until the American Civil War," in Stanley Engerman and Robert Gallman, eds., The Cambridge Economic History of the