A Year With George Washington
On March 18, 1766, twenty-eight-year-old King George III gave his assent to the repeal of the Stamp Act following colonial uproar over its passage the previous year.
Prior to the Stamp Act, Parliament passed the Currency Act of 1764, which prohibited the colonies from issuing paper currency and outlawed its use as legal tender. This severely crippled the American economy, already reeling from the French & Indian War. The Currency Act was a response to complaints from London merchants who protested that they were being paid in depreciating colonial bills.
In the wake of the war, the economy teetered as the mother country struggled with its massive war debt. Largely a consequence of military expenditures, Great Britain owed over 130 million pounds, a tremendous sum for the time. The interest payments alone amounted to fully one-half the annual budget for the island nation. This enormous government debt, as it does today, created inflationary conditions that led to the devaluation of all forms of currency, particularly paper and commodity currencies.
Prior to the Act, there were three main types of currency in colonial America: commodity currency (principally tobacco); specie (gold and silver coinage); and fiat money (paper bills backed by a particular asset or a promise to pay).
As the Currency Act had removed paper currency from use, only two forms of exchange remained: commodity and specie. The principal colonial commodity currency was tobacco, but owing to inflation and London-based agents bent on bolstering profits, American farmers were compensated less and less for the golden leaf. Washington, infuriated by the prices paid for his tobacco, didn’t mince words when he began his September 20, 1765, letter to his Agent, Robert Cary and Company, with a complaint.
“It cannot reasonably be imagined that I felt any pleasing Sensations upon the receipt of your Letter of the 13th of February covering accts of Sales for 153 Hhds of Master Custis’s Tobo and 115 of mine. That the Sales are pitifully low, needs no words to demonstrate…”
Later in the letter, Washington argues that, because Americans have for centuries produced raw materials for Great Britain only to purchase back finished products made from those materials, what more could they do? The Crown and Parliament had created the system, not them. He reasons, “…that the whole produce of our labour hitherto has centred in Great Britain—what more can they desire?”
With the prohibition of paper money and the devaluation of tobacco, only specie remained as a means of exchange. Specie was the most problematic of all currencies due to trade imbalances caused by the shipment of raw materials and the subsequent repurchase of finished goods. This meant that all specie, that is to say, gold and silver coins, necessarily made their way back to England, leaving very little circulating in the colonies. Washington correctly predicted that the courts, established to enforce payment of the taxes demanded under the Stamp Act, would have to be shuttered, as there was not enough specie in circulation to pay the newly imposed taxes. He writes…
“As to the Stamp Act taken in a single and distinct view; one, & the first bad consequence attending of it I take to be this—our Courts of Judicature will be shut up, it being morally impossible under our present Circumstances that the Act of Parliament can be complied with, were we ever so willing to enforce the execution; for not to say, which alone woud be sufficient, that there is not money to pay the Stamps there are many other Cogent Reasons to prevent it and if a stop be put to our Judicial proceedings it may be left to yourselves, who have such large demands upon the Colonies, to determine, who is to suffer most in this event—the Merchant, or the Planter.”
Washington, in that same missive to his London Agents, perfectly sums up the future colonial response to the various Acts passed by Parliament in succeeding years. Below is an excerpt from that prescient letter, followed by the full text.
“The Stamp Act, imposed on the Colonies by the Parliament of Great Britain engrosses the conversation of the speculative part of the Colonists, who look upon this unconstitutional method of Taxation as a direful attack upon their Liberties, & loudly exclaim against the violation—What may be the result of this (I think I may add) ill Judgd measure, and the late restrictions of our Trade and other Acts to Burthen us, I will not undertake to determine; but this I think may be said—that the advantages accruing to the Mother Country will fall far short of the expectation’s of the Ministry; for certain it is, that the whole produce of our labour hitherto has centred in Great Britain—what more can they desire? and that all Taxes which contribute to lessen our Importation of British Goods must be hurtful to the Manufacturers of them, and to the Common Weal—The Eyes of our People (already beginning to open) will perceive, that many of the Luxuries which we have heretofore lavished our Substance to Great Britain for can well be dispensed with whilst the Necessaries of Life are to be procurd (for the most part) within ourselves—This consequently will introduce frugality; and be a necessary stimulation to Industry—Great Britain may then load her Exports with as Heavy Taxes as She pleases but where will the consumption be? I am apt to think no Law or usage can compel us to barter our money or Staple Commodities for their Manufacturies, if we can be supplied within ourselve upon the better Terms—nor will her Traders dispose of them without a valuable consideration and surety of Pay—where then lyes the utility of these Measures?”
To Robert Cary & Company
Mount Vernon 20th September 1765.
Gentn
It cannot reasonably be imagined that I felt any pleasing Sensations upon the receipt of your Letter of the 13th of February covering accts of Sales for 153 Hhds of Master Custis’s Tobo and 115 of mine.
That the Sales are pitifully low, needs no words to demonstrate—and that they are worse than many of my Acquaintance upon this River—Potomack—have got in the Out Posts, & from Mr Russel and other Merchants of London for common Aronoko Tobo, is a truth equally as certain—Nay not so good as I myself have got from Mr Gildart of Liverpool for light Rent Tobaccos (shipd him at the same time I did to you) of the meanest sort; such as you once complaind of as the worst of Maryland & not Saleable—Can it be otherwise than a little mortifying then to find, that we, who raise none but Sweetscented Tobacco, and endeavour I may venture to add, to be careful in the management of it, however we fail in the execution, & who by a close and fixed corrispondance with you, contribute so largely to the dispatch of your Ships in this Country shoud meet with such unprofitable returns? Surely I may answer No! Notwithstanding, you will again receive my own Crops this year, & 67 Hhds of Master Custis’s; but Gentlemen you must excuse me for adding (As I cannot readily conceive that our Tobacco’s are so much depreciated in quality as not only to sell much below other Marks of good repute, but actually for less, as I before observd, than the commonest kinds do) that justice to myself & ward will render it absolutely necessary for me to change my corrispondance unless I experience an alteration for the better.
I might take notice upon this occasion also, that my Tobo Netts a good deal less than Master Custis’s, & why it shoud do so, I am really at a loss to discover: his 153 Hhds averaging £7.7.7 and my 115 only £5.17.6—perhaps it may be urged that some of mine was Potomack Tobacco, I grant it, but take these out and the Yorks then average £6.6.5 only—If you had allowed him the benefit of the Bonded Duties I shoud not have wonderd at the difference, but this I perceive is not done, and certain I am, my Tobacco ought not to have been inferior to his— in any respect—the Lands being the same, & my directions for making it good equally as express.
Tobacco I well perceive for a year or two past, had fallen in its value—from what causes I shall not take upon me to determine—and I am not so extravagent as to believe that my own and Master Custis’s Crops shoud fetch their usual prices when other good Tobacco met with abatements; but I am really selfish enough to expect that we ought to come in for a part of the good prices that are going, from a belief that our Tobacco is of a quality not so much inferior to some that still sells well, and that so considerable a Consignment—when confined in a manner to one House, as ours is—woud lay claim to the best endeavours of the Merchant in the Sales, and in the return of Goods, for many Articles of which I pay exceeding heavily. another thing I cannot easily Account for, unless it is on a Presumption that they are bought at very long credits which by no means ought to be the case; for where a Person has money in a Merchants hands he shoud doubtless have all the benefits that can result from that money—and in like manner where he pays Interest for the use of the Merchants shoud he be entitled to the same advantages, otherwise it might well be asked for what purpose is it that Interest is paid? Once upon my urging a complaint of this nature you wrote me, that the Goods ought to be sent back, and they shoud be returnd upon the Shopkeepers hands in cases of Imposition; but a moments reflection points out the Inconveniencies of such a measure unless (the Imposition be grossly abusive, or that) we coud afford to have a years stock before hand; how otherwise can a Person who Imports bear requisites only submit to lay a year out of any particular Article of Cloathing, or necessary for Family use, and have recourse to such a tedious & uncertain way of relief as this, when possibly a Tradesman woud deny the Goods & consequently refuse them—It is not to be done—we are obliged to acquiesce to the present loss & hope for future redress.
These Gentlemen are my Sentiments, fully, and candidly expressd, without any design—believe me—of giving you offence; but as the selling of our Tobacco’s well, & purchasing of Our Goods upon the best Terms, are matters of the utmost consequence to our well doing, it behooves me to be plain and sincere in my declaration’s on these points—previous to any change of measures—that I may stand acquitted of the Imputation of fickleness if I am at last forced to a discontinuance of my corrispondance with your House.
Twenty Hhds of my Tobacco from this River makes up Forty eight which I have in Boyes; the remainder (which is trifling) shall be sent by the first Ship that gives liberty; and as I have not been able to discover any advantages we obtaind by our Tobaccos lying so long upon hand, unsold, I shoud be glad to have the present Crops (& so of others if more be sent) disposd of to the first good Chapmen, & the Sales returnd, unless there is a very probable certainty of a rise of price to warrant the keeping of it.
By this conveyance you will receive Invoices of Goods wanted for our Plantation’s on York; and those for this River, will no longer I hope be sent in by Boyes for when they come into that River we really suffer by the strange mistakes that continually happen—Last year several parcels of Goods designd for York River were sent to this place and others for me left down there & in going backwards & forwards some were lost (things too of no inconsiderable value, for one of the parcels was a Bale of Linnen) and this year all my Plaid hose for this River came in a package to Mr Valentine & I have them to send for 150 Miles—These mistakes & Inconveniencies woud necessarily be avoided if the Goods were to come by Ships to the respective Rivers; and they woud also escape those frequent damages which is the consequence of shifting them from one Vessel to another, and transporting them from place to place—Oppertunities of doing this cannot be wanting as many Vessels comes to this River annually (from London) some of which lye at my Door.
It appears pretty evident to me from the prices I have generally got for my Tobacco in London, & from some other concomitant Circumstances, that it only suits the Interest of a few particular Gentlemen to continue their consignments of this commodity to that place, while others shoud endeavour to substitute some other Article in place of Tobacco, and try their success therewith. In order thereto you woud do me a singular favour in advising of the general price one might expect for good Hemp in your Port watered & prepared according to Act of Parliament, with an estimate of the freight, & all other Incident charges pr Tonn that I may form some Idea of the profits resulting from the growth—I shoud be very glad to know at the sametime how rough & undressd Flax has generally, and may probably sell; for this year I have made an Essay in both, and altho. I suffer pretty considerably by the attempt, owing principally to the severity of the Drought, & my inexperience in the management I am not altogether discouraged from a further prosecution of the Scheme provided I find the Sales with you are not clogd with too much difficulty and expence.
The Stamp Act, imposed on the Colonies by the Parliament of Great Britain engrosses the conversation of the speculative part of the Colonists, who look upon this unconstitutional method of Taxation as a direful attack upon their Liberties, & loudly exclaim against the violation—What may be the result of this (I think I may add) ill Judgd measure, and the late restrictions of our Trade and other Acts to Burthen us, I will not undertake to determine; but this I think may be said—that the advantages accruing to the Mother Country will fall far short of the expectation’s of the Ministry; for certain it is, that the whole produce of our labour hitherto has centred in Great Britain—what more can they desire? and that all Taxes which contribute to lessen our Importation of British Goods must be hurtful to the Manufacturers of them, and to the Common Weal—The Eyes of our People (already beginning to open) will perceive, that many of the Luxuries which we have heretofore lavished our Substance to Great Britain for can well be dispensed with whilst the Necessaries of Life are to be procurd (for the most part) within ourselves—This consequently will introduce frugality; and be a necessary stimulation to Industry—Great Britain may then load her Exports with as Heavy Taxes as She pleases but where will the consumption be? I am apt to think no Law or usage can compel us to barter our money or Staple Commodities for their Manufacturies, if we can be supplied within ourselve upon the better Terms—nor will her Traders dispose of them without a valuable consideration and surety of Pay—where then lyes the utility of these Measures?
As to the Stamp Act taken in a single and distinct view; one, & the first bad consequence attending of it I take to be this—our Courts of Judicature will be shut up, it being morally impossible under our present Circumstances that the Act of Parliament can be complied with, were we ever so willing to enforce the execution; for not to say, which alone woud be sufficient, that there is not money to pay the Stamps there are many other Cogent Reasons to prevent it and if a stop be put to our Judicial proceedings it may be left to yourselves, who have such large demands upon the Colonies, to determine, who is to suffer most in this event—the Merchant, or the Planter.
I am very much obliged to you for your kind advice of corrisponding with Mr Dandridge—it is a piece of respect due to so near a Relation of my Wifes, & therefore I give you the trouble of the Inclosed; but I have not the least expectation of deriving any advantages from it for thô he has no nearer relatives than her, there are some to whom I believe he has given stronger proofs of his Inclinations of serving—but to you my thanks are equaly due, & I return them with cordiality for the goodness of your Intentions. I am Gentn Yr Most Obedt h[umbl]e Servt
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