Sacrificing the Security of the Nation for the Sake of Profit: A Long History
For months, world media has been feasting on reports of highly respected figures in the American business community jeopardizing the economic security of the nation—and the world—for the sake of personal profit. Such behavior has been with us for a long time, predating both the bankruptcy of the Enron Corporation in 2001 and the savings and loan crisis of the 1980s and 1990s. We are, in fact, in the midst of the 250th anniversary of one of the most egregious of these episodes, the high-stakes commerce of New York City and other colonial ports with the French enemy during the Seven Years’ War (known in the United States as the French and Indian War, 1754-1763). In the weeks following King George II’s formal declaration of war in May 1756, British warships and privateers swept the poorly protected French carrying trade from the Atlantic. Without access to provisions and a wide range of naval and “warlike” stores, it would have been impossible for France to mount military operations in America and fulfill its goal of driving the British off the North American mainland. In addition to Canada and the Gulf of Mexico, the French were also vulnerable in the West Indies (Martinique, Guadeloupe, and Saint-Domingue) where plantation agriculture was geared for the production of sugar, not food.
New York figured prominently in this trade, but the city’s commerce with the French was not the work of a few reckless disaffected souls. It strained the resources of an entire city. Dockworkers, carters, warehousemen, packers, butchers, millers: every tradesman associated with the busy life of the port struggled to keep up with the work provided by both sides in the great war for the empire. Even the city’s large and aggressive privateer fleet was employed escorting ships doing business with the enemy.
None of this could have happened without friends in high places. James DeLancey, lieutenant-governor of New York, for example, was the father-in-law of William Walton, Jr., a senior partner in Walton and Company, the city’s preeminent merchant house and a firm active in every stage of wartime trade with the French. Walton’s uncle William Walton, Sr., was a member of the governor’s council; his brother Jacob—even more deeply involved in the trade—was married to the niece of the mayor of New York; and his sister Catharine was married to an Irishman, James Thompson, who was one of the boldest participants. Before the end of the war, Thompson was doing business from Cape François, and Catharine was managing his firm’s affairs in New York (dispatching cargoes, meeting incoming vessels, and disposing of shiploads of French sugar). Similar links within the mercantile and political hierarchy—reaching even into the judiciary—pervaded the city’s illicit wartime commerce.
Trading with the enemy in New York and elsewhere in British America not only strengthened the hand of an obstinate and dangerous foe, it figured in the story of the American Revolution. Britain’s muddled and contradictory response to the wartime commerce bred a distrust of royal authority that became a legacy of the Seven Years’ War. From the beginning the ministry in London had sent mixed signals. Early in the war, the behavior of merchants and ship captains in Great Britain, Ireland, the British West Indies, and British North America had provided ample opportunity to prosecute the most conspicuous offenders. But the government remained silent, important British interest groups became involved, and the trade blossomed. A badly managed law intended to curb trading with the enemy in North America (the highly discriminatory Flour Act of 1757) had little effect other than to breed resentment.
The crackdown in New York in the spring of 1762 was followed by parliamentary legislation intended to discipline colonial commerce and eradicate all forms of illicit trade. Among these laws (passed in the midst of severe postwar recession) was a 1763 statute deputizing officers of the Royal Navy as customs enforcement agents in colonial ports. Another, the Sugar Act of 1764, further restricted colonial trade, attacked abuses in the American customs service, and called for establishment of a North American vice-admiralty court at Halifax, Nova Scotia. The legacy of the 1762 crackdown, together with the impact of harsh postwar legislation and a lingering recession, contributed to the intensity of the New York Stamp Act Riot of 1765 that launched the city onto the path toward revolution. Defying Empire: Trading with the Enemy in Colonial New York (Yale University Press, 2008) tells this story.
The book opens on the autumn evening that New York City celebrated one of the greatest military victories in the history of the British Empire: “Manhattan sparkled in the crisp October night. Two large bonfires on the Common, thousands of candlelit windows, and a sea of ships’ lanterns, like autumn fireflies, lit the tiny city and its harbor. Four weeks earlier, Major-General James Wolfe’s British regulars had defeated a force under the marquis de Montcalm on the Plains of Abraham at Quebec, the key to French control of Canada and the interior of North America. When news reached New York City, Lieutenant-Governor James DeLancey declared Friday, October 12, 1759, a day of public thanksgiving.
Church bells across the city proclaimed the British victory. With colors flying, merchant ships and privateers on the East River answered the cannons of Fort George. Evening brought the illumination of the city and a flood of toasts: To His Majesty’s health, To the might of British arms, To the heroes of Quebec, To final victory. The drawing rooms, coffeehouses, taverns, and streets of the city filled with joyous New Yorkers celebrating the greatest achievement of British arms in North America.
With Wolfe’s victory, as well as recent British successes at Fort Ticonderoga and Crown Point, the expulsion of the French now seemed inevitable. But the war was not yet won. Great Britain and France remained locked in an armed conflict that reached around the world. Armies were colliding in Europe, Africa, the Indian subcontinent, and the Philippines, and there were naval operations with an even longer reach. In the North American and Caribbean theaters, Great Britain and France struggled for control of a vast and rich colonial empire.
Although weakened by its losses, France still held on at Montreal and New Orleans, as well as in the West Indian Islands, that great wealth-producing garden of the eighteenth century. The country’s grip was precarious, however. The Royal Navy, though spread thin, had effectively cut off the flow of French supplies and was blocking the return of colonial sugar, indigo, and coffee to Bordeaux, Nantes, and other home markets. Securing a lifeline to French America was a pressing concern of strategists at Versailles.
All of this seemed far away that October night. New Yorkers were eager to forget the defeat of British regulars and colonial militia at Oswego, Fort William Henry, and Ticonderoga earlier in the war, as well as the carnage of Indian raids along the colony’s sparsely settled frontier. In spite of setbacks, the war had been good to the city, particularly to those New Yorkers who recognized opportunity and had an appetite for risk. That night the homes of the city’s merchant elite glittered with wartime wealth, and in smoke-filled dockside taverns, sailors and privateersmen had money in their pockets to celebrate Wolfe’s victory and compete for women of easy virtue.
Nearby, in the shadow world of New York harbor and the darkened warehouses, storerooms, and cellars of the commercial district, lay the source of the city’s prosperity. Hundreds of barrels of flour, salted provisions, and naval stores, together with vast quantities of lumber, cordage, and dry goods of all kinds, stood ready for shipment--either directly or along clever serpentine paths--to Cape François, Port au Prince, and New Orleans. Wartime New York was growing rich through its trade with the French enemy.”
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