Boston City (part 7 of 67)

It was not until the panic of 1837 that the Boston companies experienced any decided check to their onward progress, and this change was due to circumstances over which their managers had no control. In 1836 there were twenty-five stock companies in operation in this city, having capitals amounting to about seven million dollars. More than half of this sum was invested in bank stocks, and as these depreciated greatly in value, and divi¬ dends ceased to be paid upon them, the assets and incomes of the insurance corporations suffered a corresponding decline. This depression seems to have continued for six or eight years, and in the mean time eight of the com¬ panies were forced to discontinue business, and the insurance capital of Boston was reduced by more than thirty percent. It was not alone the depreciation in the value of their assets that underwriters had to contend with, for fire and marine losses increased in their aggregates to an alarming extent. The worth of property upon sea and land was so far reduced, that the temptation became very strong on the part of its owners to " sell it out " to the insuring companies. Although positive instances of incendiarism and barratry were not frequent, it is not at all doubtful that owners who found their property greatly over-insured were much less careful than they had been in guarding against the possibilities of a loss. In 1838 the Boston stock companies had at risk about $50,000,000 on marine ventures, and $52,000,000 under fire policies; amounts which were respectively reduced in 1844 to $33-000,000 and $42,000,000.

In the year 1838 the companies first began to make returns of their operations to the State. The law directing these reports to be made was passed by the Legislature of 1837, much to the disgust of the under*^ writers, who held that it was quite as unfair to call upon them to exhibit to the public the details of their business affairs as it would be to make the same request of individual merchants. These returns were sent for a num¬ ber of years to the Secretary of State of the Commonwealth, and though crude and imperfect are the only obtainable data of the aggregate experi¬ ence of insurance companies in this country prior to the current half of the present century. The records of these early years would indicate that the marine business of our Boston companies was fully as large, if not larger, in 1835 than it is at the present time. The fire business, on the contrary, has increased during the last forty-five years not less than three hundred per cent; but the Boston capital invested in this business was considerably larger then than it is now.

But if Boston companies did not extend their operations abroad, they held a fairly firm possession of the home field. At the present day much the larger part of the fire-insurance business in Boston is done by com¬ panies that have their main offices outside of our municipal limits, and in quite a number of instances in England; but in 1838, when this first report was made, there were only eight or ten New York and Hartford companies that took risks in this city, and these must have had their operations greatly circumscribed.

In 1835, by an act of the Legislature, Ebenezer T. Andrew, George Bond, Willard Phillips, and others were made corporators of the New England Mu¬ tual Life Company. The Hospital Life Company had then been doing busi¬ ness for twelve years, but had turned its attention more and more to the management of trust estates, so that the field of life insurance in this city was practically unoccupied. It was the intention of the founders of the New Eng¬ land company to raise the money needed as a guarantee capital, and begin business immediately, but the panic of 1837 coming on before they had completed their plans, it was deemed expedient to abandon the attempt until the financial crisis had passed, so that it was not until 1844 that the company issued its first policy. According to its reports it would appear that not a little misunderstanding existed as to the tax upon the business which would be exacted by the Massachusetts General Hospital, and in consequence of this some persons were deterred from taking out policies in the new company; but in time, when the guarantee capital was paid off, it was held that the hospital could no longer collect its annual levy, for as the company was carried on upon a strictly mutual plan there were, in the proper acceptation of the term, no profits arising from the business. For this reason the payments were discontinued, the trustees of the hospital and the directors of the Hospital Life agreeing to this construction. The New England Mutual Company started at a time when the experience of under¬ writers in this country was hardly worth anything as a guide to action. The marine and fire underwriters were repeatedly lowering and raising their rates of premium, in the hope of reaching a satisfactory average ; but it was obvious that where a contract was made for life these frequent fluctu¬ ations could not be indulged in. For this reason the directors of the New England Company believed that their safest course was to establish at the outset a definite line of policy. They had as a guj.de the Carlisle Table, published in England in 1815, and the "Table showing the Probability of the Duration, the Decrement, and the Expectation of Life in the States of Massachusetts and New Hampshire," prepared by Professor Edward Wigglesworth, of Harvard University, in 1782, besides the limited experience of the Hospital Life. Taking these, the first work of the directors was to employ Professor Benjamin Peirce, of Cambridge, and James Hayward, Esq., of Boston, to calculate separately the different parts of the table of pre¬ miums. Probably no company was ever started in which the determination was stronger to establish business upon a scientific basis. Hon. Willard Phillips, for many years the President of the New England Mutual Com¬ pany, was at the time the highest recognized authority upon insurance law of all kinds in this country ; and the annual reports issued by him in his official capacity, as head of this corporation, were received and read every¬ where as standard treatises on the subject of life insurance, and for many years were used as guides by those starting other companies. At the outset the experience of the New England was somewhat similar to that of the Hos¬ pital Life Company; that is, the majority of the insured preferred to take out policies for a term of years instead of life policies ; and it was not until the company had been a number of years in existence that this proportion was reversed, allowing it to enter fully on the life business in the manner as now conducted.

From 1844 to 1854 the marine-insurance business of the Boston com¬ panies was constantly increasing. During that period came the discovery of gold in California, which gave to the shipping interest of this port an im¬ petus such as it had never before and has never since received ; and by this augmentation of tonnage the insuring companies were able to secure large and favorable contracts. But in 1854 a reaction set in, and in that and in the two following years the losses at sea were enormous. The stock of the companies declined in value, and quite a number of them wholly ceased paying dividends. But during the same time the fire-insurance business had been steadily increasing in volume ; though, as the ratio of loss was also enlarged by the growth of the city, the profits to the companies did not ex¬ ceed a reasonable return on the money invested. The number of companies was not, however, materially increased, experience proving that the profits of the business did not admit of its division among a large number of com¬ petitors with any degree of satisfaction to those who invested money in these ventures.

With the outbreak of the Civil War the conditions of business were materially changed. The " Alabama," " Florida," and other rebel cruisers, in driving the American commerce from the seas, inflicted a severe blow on the marine companies of this city, and one from which they have never fully recovered. For a time they were able to make good the diminution in regular marine premiums by the returns which they received for taking war risks; but after the war was over the complete measure of their loss was made apparent, for nearly half the ocean tonnage on which they had been called upon to take risks in i860 had either been sold, destroyed, or con¬ demned; and the character of maritime business was not promising enough to induce merchants to replace it by newly constructed vessels. As an offset to this, the investments made by the companies during the war, in United States bonds and in the stock of national banks, had been to them a source of exceeding profit, so that in 1865 they were financially in a better condi¬ tion than they had ever been before, though the outlook for business in the future was not in the least promising. The fire business - and most of the companies took fire as well as marine risks - continued to grow with great steadiness. In i860 the Boston companies received in fire premiums about $1,300,000; and, as they did but a small agency business at that time out¬ side of the State, it is fair to estimate their Boston receipts at not less than $800,000. But for a number of years the Boston companies had not been sole possessors of the local field. Year after year companies from other cities had established agencies here, so that in i860 the number of non- State companies thus represented was fifty-one. The prestige acquired by our local offices was sufficient, however, to make this outside competition of little moment, for in the year referred to the aggregate premium receipts in Boston of the non-State companies was less than $250,000. By degrees, however, a change took place, and thus in 1866 there were seventy non- State fire and marine companies doing business in our city, and thirtyseven life companies; while, in 1870, ninety-one fire and marine companies from other States and countries made returns to the State Insurance Com¬ missioner of their Boston business. But while these non-State companies came in large numbers to our city, the Boston local companies, with the exception of the life institutions, did very little to extend their business abroad. A few of the fire companies entered to a limited extent into the agency field, but the system of scattering risks over a vast area was not popular with our underwriters. The most thoughtful of them never sup¬ posed for a moment that a fire could occur in Boston of sufficient magnitude to make it impossible for them to pay their losses in full. The home busi¬ ness was one which they thoroughly understood ; and when they compared the experience of their companies with those of other States, they were strengthened in their conviction that the profits in the agency field were altogether too meagre and uncertain to pay for the risk and trouble in¬ volved in entering it. Two or three of them took risks in Chicago, and the others did at times a small business in some of the cities on the Atlantic seaboard; but with the exception of one company, - the National, - none did what is termed an agency business ; and even in this solitary instance the change was an experimental one. In consequence of the confidence reposed in them by the property owners of this city, their business at home was sufficiently large to preclude the necessity of seeking for risks abroad. During the period from i860 to 1871 these companies paid their stock¬ holders dividends which averaged higher than fifteen per cent per annum, and at the same time laid up large surpluses ; and this was almost wholly due to the fire business, as there was a constant decrease in the volume of marine risks taken, and a disproportionate falling off in the premium re¬ ceived for assuming these, - a result doubtless due to the keen competition which the steady diminution of the business occasioned.

In 1871 the Chicago fire occurred, causing the sudden bankruptcy of three of the four Boston companies that had ventured to establish agencies there. If this was a warning to owners of property here not to trust too implicitly in the value of indemnity promised by local companies, it was also looked upon by the officers of these institutions as positive evidence that they were sound in their reasoning that an extended agency business could not be carried on with success through a term of years. After this fire quite a number of the merchants of this city divided their risks, so that they might have the guarantees of non-State as well as local companies; but, in spite of this change, the latter still held the larger part of the business.

In November, 1872, the great Boston fire occurred, and, as a natural result of what has just been said, it found our local companies burdened down so heavily with risks that in all but three instances they were wholly vol. iv. - 25.

incapable of meeting the claims that were presented to them. This fire taught the underwriters and the property-owning classes in this city a very severe lesson. The former were made to realize that though under favor¬ able conditions a highly profitable business could be done by confining their attentions to a limited field of operations, yet, in order to avoid the overwhelming loss resulting from a conflagration, it was necessary to be content with smaller profits, and to take isolated risks covering a wide area of territory. On the other hand, the latter were made to perceive that a company that did not practise this system of dissemination was not in great emergencies a safe company to depend upon.

The consequence of this has been that the fire-insurance business in Boston has, during the past eight years, undergone a complete change. In i860 about two thirds of the risks in this city were protected by policies issued from Boston offices, the companies having agencies here taking the remainder. In 1870 the risks were nearly evenly divided between the two, while in 1880 the non-State companies, numbering one hundred and thirty, were doing more than three fourths of the fire insurance business of Boston. By far the larger proportion of Boston fire underwriters are the agents of non- State companies. A new class of men have sprung up to meet the present demands of the business. Young, active, and progressive, they have in many instances brought with them the results of experience acquired in other cities and States. Forced by the contraction in their local receipts to make good the deficiency elsewhere, the Boston companies have established agencies in hundreds of different places in the Eastern and Western States. The officer of a Boston fire company at the present time is obliged to inform himself as thoroughly of the various hazards connected with the business in St. Louis, Philadelphia, Minneapolis, and San Francisco, as he is to acquaint himself with the risks of his own city. In a like manner the marine com¬ panies of Boston, having found the local field too narrow for them, have been compelled to appoint agents in the various great centres of commerce. Thus, with the life, fire, and marine insurance companies of this city, the business begun upon a small and contracted scale has gradually spread out until it embraces the larger part of the United States. The companies are still Boston companies, and their officers are still Boston men ; but, as ap¬ plied to them, these terms do not convey the significance which they once did, for many of the pleasing features of the so-called provincialism of the past are fast disappearing.

By Hamilton Andrews Hill, M.A.

flourishing town on the North American continent.1 It had a population estimated by different authorities at from sixteen to eighteen thousand, actively and profitably engaged in various industrial and commercial pur¬ suits. Its merchants had dealings with Spain, France, Portugal, Holland, the Canaries, and even with Guinea and Madagascar, and many of them had accumulated large wealth. In fact, it was its commerce, and the persistent determination of its citizens that this commerce should be untrammelled in its movement and unconfined in its scope, which during many years had kept it in a state of almost constant antagonism with the authorities at home,2 and which at last, in the month of December, 1773, had led to the destruction of the tea in Boston harbor.3 The Home Government had been determined to break up the contraband trade of the colonial merchants with Holland and her possessions, and to secure the colonial markets for the sup¬ ply of tea4 to the British East India Company. The risk of seizure for many years had been small, and it is said that not one chest in five hundred of that which was landed in Boston fell into the hands of the officers of the cus¬ toms.5 The despatch of the tea-ships, and their reception, had indicated that the parties on both sides were now in serious earnest, and that the character of the pending controversy was to be changed from angry correspondence to actual and open warfare. The Port Bill followed, by which Boston was to be punished, humiliated, and, if possible, crushed; and it was executed with a rigor, probably, that went beyond the intentions of its authors.

much a liberation from political as from com- 4 Tea is said to have been first introduced mercial thraldom." - Hunt's Lives of American into this country in the year 1721. In 1750 Merchants, ii. 390. a duty on tea and coffee was laid by the Province,

3 [See Vol. III. chap. i. - Ed.] The value of but it was felt to be a burden by the people of the this article annually consumed in America is esti- town.

mated to have been T 300, 000, and " nearly the 6 Sabine's Loyalists of the American Revoluwhole quantity was smuggled." Pennsylvania, tion, i. 8, 9.

The people of Boston had many gloomy forebodings which were not alto¬ gether realized; nor did the war, when it came upon them, bring immediate and utter ruin. As has been said, there was a reserve of wealth to be drawn upon in the time of necessity. During the entire period of the Revolution¬ ary struggle, and particularly as the seat of war came to be more and more distant, an irregular commerce was carried on, and privateering also, which proved very profitable.1 Mr. Sabine says that during the most distressing periods of the contest useless articles of luxury were imported, and that those who remained at home showed themselves able both to maintain themselves and to provide for those who served in the field.2 Indeed, as has been only too plainly and sadly seen in our own day, the period of war became a period also of luxury and of dissipation. Extravagance in living in the year 1782 would seem to have exceeded anything of the kind pre¬ viously known in Massachusetts. Samuel Adams, on his return from the meeting of Congress in that year, sought in co-operation with some of his friends to stem the tide of dissipation then carrying all before it; and pub¬ lic meetings, at which he presided, were held with this end in view. As his biographer says, he was " far from being a bigoted opponent of innocent pleasures, but he was filled with misgivings at the state of things which then prevailed." 3

But the prevailing prosperity was largely fictitious, - the commercial activity as well as the lavish expenditure being the result of a depreciated currency, which is ever the fruitful source of demoralization and social cor¬ ruption. The public debt for those times was enormous, the taxes were wellnigh ruinous, and private debts had accumulated fearfully in the effort to meet the tax payments. In July, 1782, the Tender Act was passed, by which debts were made payable in other property than money, so that executions might be legally satisfied by neat cattle and other enumerated articles. The effect of this, we are told, was to weaken implicit reliance on the inviolability of legal engagements as between debtor and creditor.

With the depreciation of the paper currency, the prices of commodities advanced in more than corresponding ratio. Efforts were made to check the advance, and to maintain an artificial value to the paper obligations of the Commonwealth. At a meeting of merchants and others concerned in trade in Boston, held in Faneuil Hall, June 16, 1779, it was determined that no advance upon any article of merchandise should be made upon the prices then current; that from and after July 15 following, the prices should be as they had been on the previous first day of May; and that after that date there should be a monthly reduction of prices, provided the other towns in the State should adopt similar measures. It was further agreed by the merchants and traders that they would neither buy nor sell silver or

8 In a letter to John Scollay, about this time, main virtuous." - Life and Public Services of he wrote: "I love the people of Boston; I Samuel Adams, iii. 1 56-1 58.

The Trade, Commerce, Etc., Of Boston

gold, that they would not fail to expose any person who, to their knowledge, demanded hard money for goods or rents, and that they would exert them¬ selves to bring to punishment all offenders against an Act of the State " entituled an Act against Monopoly and Forestalling." One of the reso¬ lutions adopted was as follows : -

" Resolved, That all those who shall hereafter dare refuse Continental money, or require hard money for rents or any article whatever, shall not remain among us, but be transported to our enemies as unworthy or dangerous members of society." 1

On the 14th of July of the same year a convention was held at Concord, the object of which was stated to be to regulate prices for the purpose of making "the currency stable ; " and at another meeting held in Faneuil Hall, August 16, at which Samuel Adams presided, it was resolved, "That all holders and retailers of European wares and merchandise shall, from this time forward, sell all such articles at twenty per cent, or one fifth part, less than the prices at which the same articles were sold in the month of July last, that being the average reduction in the prices of West India goods." 2

But the endeavor to keep down the price of commodities and to keep up the value of the paper promises of the Government, by resolutions adopted in town-meeting or elsewhere, failed signally, as all such endeavors must fail ; and the harsher and more violent remedies with reference to those who might demand a full equivalent for their wares were not long persisted in, for in August, 1780, we find various articles of merchandise - English goods, sterling Madeira, Malaga wines, currants, etc. - openly advertised in the papers as for sale by W. & J. Molineux, in State Street, with the announcement that " Hard or paper money, French, Spanish, or Dutch Bills of Exchange," Avould be received in payment for any of the above goods.3

1 The following are some of the prices at wholesale, fixed at this meeting : Windward rum, £7 10s. a gallon ; New England rum, ^5 8s. a gallon ; molasses, 7C5 2s. a gallon ; coffee, i8r. a pound ; brown sugar, 65^. to 80s. a cwt. ; tea (by the chest), 8s. a pound ; cotton wool (by the bag), 363-. a pound ; German steel, 363. a pound ; and salt (until July 15), 15J. a bushel. A com¬ mittee of merchants appointed to carry the action of the meeting into effect consisted of "John Rowe, Esq., chairman; William Cooper, Esq., Deacon Sharpe, Captain Isaac Philips, Colonel Edward Procter, Captain Gustavus Fel¬ lows, Major Thomas Mellvil, Mr. Henry Pren¬ tiss, Mr. William Hoskins, Captain Alexander Wilson, Dr. Nathaniel Noyes, Mr. Samuel Ruggels, Captain John Pulling.'' - Independent Chronicle, June 17, 1779

It was resolved in council in Philadelphia, May 2, 1781, "that the rate of exchange be esti¬ mated at one hundred and seventy-five Conti¬ nental dollars for one dollar in specie."

In the mean time taxation had been bearing heavily on the people, and there seemed to be no prospect of relief from its pressure. In 1782, and for several subsequent years, the taxes were as high as they had been during the six years preceding. Besides the immense debt, the annual instalments and interest of which required a large amount of money, and the arrears of old taxes to be collected, Congress was calling continually for the means with which to discharge pressing demands on the United States, and to make partial payments to the officers and soldiers when they should be dis¬ charged.1 Peace, and the recognition by Great Britain of American inde¬ pendence, came in the winter of 1782-83, but the burden of public and private debt still remained. The debt of Massachusetts for expenses incurred for its own protection during the war was nearly five millions of dollars, without taking into the estimate its liability to pay the demands of those who held the paper money which had been emitted during the war. The available resources of the State were inadequate to discharge this debt, and for several years the interest had not been paid.2

With the advent of peace, every description of merchandise arrived from abroad in large quantities, and prices fell rapidly.3 The newspapers of the time are filled with advertisements of goods just received from British and other European ports.4 Many representatives of English houses made their appearance, and some Boston business men returned who had been residing in England during the war, and all brought speculative ventures with them. Dr. Price, an intelligent writer on economic questions, and a stead¬ fast friend of the newly independent States, in a letter from London, said : "The imports into the United States will probably be much greater this year than for a year or two afterward, through the eagerness of adventurers to introduce goods, whereby the market will be overstocked. It will be some time before trade can get into the regular course of circulation, and the exports be procurable to tally with the imports." These predictions were speedily fulfilled ; supply far exceeded demand ; prices declined to a

1 In 1782 the tax in Massachusetts was ,£200,000. In 1783 it was the same amount. "New loans were obtained, and the law for an impost went into operation and produced no in¬ considerable revenue. An exhibit by Congress stated the sum wanted for the year to be $6,000,- 000, - $4, coo, 000 to be borrowed in Europe and $2,000,000 to be furnished by the States, of which $320,000 would be the proportion of Massachu¬ setts. At the same time, Congress recommended to the States to raise a million and a half annu¬ ally for twenty-five years, the proportion of which for Massachusetts would be $224,000." - Bradford's History of Massachusetts , pp. 302, 303-

8 In the Independent Chronicle of May 16, 1783, David Sears offers goods for sale at his store in State Street, " at peace prices." [This gentleman had gone to England in May, 1775, in the same vessel with Mrs. Copley, and it is prob¬ able that a miniature of him by Copley, now in the family, was painted in London. Terkins's Copley's Life and Paintings , supplement, p. 6. He was the father of the late Hon. David Sears. The Sears genealogy is worked out in an ap¬ pendix to Edmund H. Sears's Pictures of the Olden Time. Boston, 1S57. - Ed.]

4 One announcement is worthy of special mention. Under date of June 5, 1783, we read :- " This morning arrived a ship from Cork, loaded with beef, pork, and butter." ruinous point; failures followed ; and, in the absence of exports, the country began to be drained of its specie. A London paper of March 9, 1784, remarks : -

Two ships are arrived in our river from Boston in New England, both in ballast, not having been able to procure cargoes of any kind, though they had (what is most desirable in that country) specie to pay for all they should have brought away. It appears from hence that the northern parts of the American States are in a much worse situation than the provinces to the southward. Boston was once the most flourishing place in America, and employed near five hundred sail of shipping, besides coasting and fishing vessels, which were numerous to a degree. Besides the trade which subsisted within themselves, they were to America what Holland has been to Europe, - the carriers for all the other Colonies. At present, their distillery is entirely at a stand ; their peltry and fur trade, once so considerable, is entirely over ; the fishery is exceedingly trifling ; instead of the vast exports of hemp, flax, tar, pitch, turpentine, staves, lumber, and provisions, the only thing that offered at Boston, when the above ships sailed, was train-oil, which they got up at a high price." 1

We are indebted to English writers of the day, not only for the sombre but graphic sketch of business affairs in Boston just after the peace, quoted above, but also for a generous estimate of what the commercial capabilities of the country were, and for an intelligent judgment as to what its policy should be. The London Evening Post , commenting on the steady drain of specie from the Lfnited States to pay for importations from Europe, said:

" Can a country want trade who can build ships cheaper than any part of the world ; whose cod fisheries can be carried on with such advantages ; who can manu¬ facture the valuable exports of pot and pearl ashes ; whose produce of lumber, naval stores, tobacco, rice, indigo, and flour are so abundant ; and who lay so convenient to supply the West India Islands with all necessaries? These are the grand objects of America, and the system to be adopted by them is to make their exports exceed the amount of their imports, and instead of being debtors, they may establish themselves

2 Ibid., May 27, 1784. Although the article from which we have given an extract above referred to the country at large, its real signifi¬ cance and force related to Massachusetts. In reference to this province, more than sixty years before, in 1721, the Board of Trade had made a report to the King, in which it was said that its products proper for the consumption of Great Britain were "timber, turpentine, tar and pitch, masts, pipes and hogsheads, staves, whale fins and oil, and some furs ; " that it had a trade to "the foreign plantations in America, consisting chiefly in the exportation of horses to Surinam and to Martinico and the other French islands," whence came in return sugar, molasses, and rum, " which was a very great discouragement to the sugar planters in the British islands." The same report said further, in reference to the people of

Massachusetts : " The branch of trade which was of the greatest importance to them, and which they were best enabled to carry on, was the build¬ ing of ships, sloops, etc." About a hundred and fifty vessels were built in a year, measuring six thousand tons. Most of these were built for sale abroad, but there belonged to the province " about a hundred and ninety sail, which might contain six thousand tons, and were navigated by about eleven hundred men, besides a hundred and fifty boats, with six hundred men, employed in the fisheries on their own coast." - See Pal¬ frey's History of IVew England, iv. 429.

In a foot-note on the same page Dr. Palfrey says : " According to information which the his¬ torian Neale professed to have obtained from the King's Custom House, 24,000 tons of ship¬ ping cleared annually from Boston about the year 1719."

The shipment of specie under the circumstances which have been de¬ scribed could not be maintained for any length of time, and the cessation of remittances, when it came, brought disaster to those who had sold or consigned goods from the other side of the Atlantic. London dates to Aug. 27, 1784, reported: "No less than five great American houses tumbled in the City yesterday, one to the tune of £1 40,000. With regard to American connexions since the peace, it may be safely said, Si populus vult decipi , decipiatur Again, under date of September 3, it was said: "But few large fortunes have been made shipping goods to American houses, even before the war. Those who got money in that country had stores of their own, kept by their partners or factors, who had no separate interest, and were anxious to make early remittances. Where the same plan has been followed (with this difference, that no credit has been given) money was got last year, and to these people the prospects of this summer are by no means discouraging." And later (September 24) : " Very few of the last orders from America will be executed, as the tradesmen are coming to their senses. Very few dollars make their appearance now; indeed, the new States are almost exhausted of specie already." 1

In the winter of 1783-84, some of the leading merchants of Boston took measures for the establishment of a bank of deposit and issue, believ¬ ing that such an institution would have a conservative influence on the trade of the town, by promoting promptness in the payment of debts, and by maintaining the standard of individual credit, while it would facilitate the transaction of legitimate business. In December, 1783, an advertisement appeared in the papers, as follows : " The utility of a bank established on right principles being generally known and acknowledged, a plan has been projected, and is now ready for the patronage of those gentlemen who wish to derive the many public and private advantages which have resulted from such institutions in other countries. Copies of the plan are lodged with, and subscriptions received by, William Phillips, Isaac Smith, Jonathan Mason, Thomas Russell, John Lowell, and Stephen Higginson, Esqrs , and at the offices of Edward Payne, John Hurd, and M. M. Hays, Esqrs." 2 On the 1 2th of February, 1784, the committee reported progress, and advertised for " three or four iron chests." An act of incorporation had been obtained under the name of the Massachusetts Bank; and on the 26th of February William Phillips, Isaac Smith, and Jonathan Mason, by virtue of the powers vested in them by the act, called a meeting for organization " to be holden

1 "The excessive importations of 1784 and 1785, and the drain of specie which followed had the effect of deranging the State finances ; for many who had been extravagant in their purchases thought it first necessary to pay the debts they had thus incurred, so far as they were able, and to leave the payment of their taxes to a future day. Had the taxes from 1781 to 1784 been promptly paid, the pressure in the years which followed would have been

In 1785, Governor Bowdoin proposed the establishment in the interior of the State of a large manufactory of pot and pearl ashes. He believed that by the production of these articles in sufficient quantities to meet the demand for export, the shipment of specie would be checked ; but the plan was not adopted. Ibid. p. 310.

at Colonel Martin's in State Street, on Thursday, the I Sth of March next, at ten o'clock A. M." The call concluded with the following monition: "As punctuality in all respects is of the greatest importance in such an institution, the stockholders or their substitutes will observe the hour fixed, and govern themselves accordingly." 1 The meeting was held pursuant to notice, and the following directors were chosen and announced in alphabetical order, as follows: James Bowdoin, president; Samuel Breck, George Cabot, Stephen Higginson, John Lowell, Jonathan Mason, Samuel A. Otis, Edward Payne, William Phillips, Thomas Russell, Isaac Smith, and Oliver Wendell.2 The directors advertised for a " cashier, accomptant, teller, clerk, and sub-teller," and for a banking house. The bank first occupied the old Manufactory House ; 8 but it purchased the American Coffee House in State Street, in April, 1792, and put up a building there for its own use.4

The citizens of the United States might well have supposed, that, having achieved their independence, their commercial enterprise would now have free play upon the ocean ; and that although they could no longer lay claim to the precise privileges and immunities which they had formerly enjoyed as subjects of the British crown, they would be able to put in exercise on the sea, no less than on the land, all the rights attaching to the citizens of a sovereign State. But if such was their expectation, they were soon to be disappointed. The same mischievous disposition as of old, to prescribe and to limit the channels in which American trade should flow, was mani¬ fested by the British Government, notwithstanding the results of war and dismemberment of the empire which this policy, persisted in, had brought to pass. It had been found impracticable to negotiate a commercial treaty in behalf of the United States with Great Britain, and another course of restric¬ tive legislation was now entered upon by the Government of the latter coun¬ try, more severe in some respects, and certainly more galling to the citizens of the former, than that which previously had driven them into rebellion. The trade with the West India Islands had been very large and remunera¬ tive. In the prosecution of this, the merchants found themselves hampered and crippled, and in imminent danger of being cut off from it altogether. American vessels were forbidden to carry the products of the British West Indies to England ; only American products could be imported direct from the United States into England, not even British ships being allowed to bring West India products as formerly from America.

1 Independent Chronicle , Feb. 26, 1784. [See qualified on the 22d of the preceding month, further on the Massachusetts Bank in the chapter " before His Worship the Mayor, to conduct the on "Finance in Boston" in this volume. - Ed.] business of the bank to the best of their knowl-

3 [For the previous history of the Manufac- the proprietors, and agreeable to the true intent tory House see Vol. II. pp. xxvi., 511, and the and meaning of their constitution." - Independent chapter on "Industries" in this volume. - Ed.] Chronicle, June 10, 1784. The Union Bank of

4 It was announced in June, 1784, that the Boston was incorporated in 1792. It was " pred- Bank of New York would soon commence oper- icated on principles designed and adapted to ations, as the president and directors had been the accommodation of landholders."

The Order in Council of April 17, 1784, permitted only unmanufactured goods (except oil) and pitch, tar, turpentine, indigo, masts, yards, and bow¬ sprits, being the growth or production of any of the United States, to be imported directly from them into any of the ports of the United Kingdom, either in British or American ships, by British subjects or by any of the people inhabiting in or belonging to the said United States, or any of them. The products of the West India Islands could be exported to the United States only in British ships, and the products of the United States could be imported into the West Indies, including the Bahamas and Bermudas, only by " British subjects in British-built vessels, owned by His Majesty's subjects and navigated according to law."

These harsh and indefensible regulations provoked much indignation in the American cities and towns, and led to serious deliberation and con¬ sultation among the merchants as to the course they should adopt in their own defence. It was seen that a general policy of some kind would have to be agreed upon, and that it might become necessary to retaliate.1 A meet¬ ing of merchants, traders, and others was held in Faneuil Hall on the 16th of April, 1785, at which a very spirited and positive preamble and series of resolutions were adopted. The preamble was as follows: "Whereas no commercial treaty is at present established between these United States and Great Britain, and whereas certain British merchants, factors, and agents from England are now residing in this town, who have received large quantities of English goods and are in expectation of receiving further supplies, imported in British bottoms or otherways, greatly to the hindrance of freight in all American vessels." The resolutions called for the appoint¬ ment of a committee to enter into correspondence with other seaports, ordered a memorial to Congress, and pledged the honor of the citizens not to purchase from, or have commercial connections with, the said British merchants, factors, and agents, and not to sell or let to them warehouses, shops, houses, or any other place for the sale of their goods.2

In July, 1785, the Legislature of Massachusetts passed an act for the regulation of navigation and commerce. It prohibited the exportation of any of the products of the United States from the ports of the Common¬ wealth in British ships, until the removal of the restrictions imposed by Great Britain which have been enumerated ; it laid a heavy tonnage duty, a light money tax, and double duties on goods brought into Massachusetts in British vessels. This was followed by similar legislation in Rhode Island and New York.3

1 The Philadelphia merchants addressed cir- forcing them it had shown more severity than cular-letters to the other great trading communi- any other.

ties, urging that restrictions be laid on the trade 2 Independent Chronicle, April 21, 1785. of all the nations which forbade their carrying 3 Ibid., July 7, 17S5. In the same paper, of even the products of their own country into July 21, an extract is given from a letter written their ports; for Great Britain had not been the from Boston, June 17, to a merchant in Halifax, only power which had thus sought to interfere in which it is said: "After August, a British with their commerce, although both in the ex- vessel arriving here will be obliged to pay five tent of its restrictions and in the method of en- pounds a ton, and twenty-five per cent on all

In July, 1785, there was not a single British merchantman in the harbor of Boston, and it was beginning to be understood that no free entry would be granted until there had been an abatement of the rigor of the British navigation system. It began to be seen, also, that the restrictive policy did not make it the more easy to the business men of the United States to meet their engagements with their English creditors. In the month of November London dates were received to September 3, and among other news it was said : " Thursday, three capital houses in the City were obliged to stop pay¬ ment, on account of the remittances from America not arriving according to promise for goods sent to that country."

The intelligence of what had been done by the Legislature of Massa¬ chusetts made a great impression in mercantile circles in England ; but the Government were not to be turned aside from the purpose to which they had committed themselves. A letter from the West Indies reached Boston in April, 1786, in which it was said: "The ministry suppose they have now put a finishing stroke to the building and increase of American vessels ; an act has lately been passed in England, and instructions arrived in February, that no American-built vessel should be employed or owned by British subjects on any pretence whatever, except such as were built before the year 1776; and in case of dispute, the carpenters of the ships of war are to determine the build. American vessels condemned for smuggling are to be burnt hereafter, not sold." It was further stated that three hundred sail of brigs, schooners, and sloops employed in the trade among the Islands would be rendered useless by this legislation.1

Notwithstanding the various drawbacks and hindrances to which we have referred, the merchants of Boston gave way to no feeling of discour¬ agement; and their enterprise, as we shall see, so far from abating in any degree, was at this very juncture pushing toward more distant fields of effort, and reaching toward larger and richer rewards than had yet been attained. While they did not propose to abandon to their rivals the trade of the Atlantic, they determined to participate in the commerce of more distant seas ; and they might well expect that they would thus be able to avoid the vexatious interference with which they had always had to contend nearer home. The Neiv York Gazetteer said : " Thank God ! the intrigues of a Christian court do not influence the wise decrees of the Eastern world."

"The General Court prohibited British ves¬ sels to carry the products of the State ; they were also forbid entering and unlading when they brought cargoes from ports from which American vessels were excluded, and only three places of entry were allowed within the State." Bradford's History of Mass. p. 31 1.

4 Independent Chronicle, April 13, 1786. The American shipping employed in the foreign trade of Great Britain had been a good deal more than half as much as the British, and as ships could be built in New England and sold in Britain for one third less than Brit¬ ish-built vessels, there had been a constant demand there for them. All this was now to be stopped.

to be had at P. Bowen's store, Dock Square.1 American mercantile enter¬ prise was just beginning to venture beyond the Cape, but with doubtful re¬ sults. A London paper of March 16, 1785, said: "The Americans have given up all thought of a China trade, which never can be carried on to advantage without some settlement in the East Indies. The ship they fitted out for China, soon after the peace, has been offered to sale in France for a sum less than the outfit."2 The judgment thus expressed was rather pre¬ mature; as two months later, almost to a day, May 18, the ship " Empress of China," Captain Greene, arrived at New York from the East Indies, after a round voyage of fourteen months and twenty-four days. She had sailed from New York in February, 1784, touched at the Cape de Verdes, and reached Canton in August.3 On the 5th of December, 1785, Elias Hasket Derby of Salem despatched the "Grand Turk," under command of Captain West, on the first voyage from New England to the Isle of France, India, and China. In some of Mr. Derby's later voyages to the East Indies he was joined by Boston merchants, among others by David Sears and Samuel Parkman.4

Mr. Samuel Shaw5 had gone out and returned as supercargo in the "Empress of China," and he had brought with him much valuable informa¬ tion, which he was able to turn to good account. He sailed again from New York, in the ship "Hope," Captain James Magee, Feb. 4, 1786, hav¬ ing been commissioned as American consul at the port of Canton, and being accompanied by Mr. Isaac Sears and Captain Thomas Randall.6 In

3 The " Empress of China " was three hun¬ dred and sixty tons. A large part of the cargo taken by her was ginseng (four hundred and forty piculs), to be exchanged at Canton for teas and manufactured goods. The English ships were then carrying out lead and large quantities of cloth, which latter the East India Company was obliged by its charter to export annually to China for the encouragement of the home wool¬ len manufacture.

4 These new and longer voyages required much more capital than the trade to which the merchants had been accustomed, and it was found convenient by them to combine for the purpose of engaging in it. The following adver¬ tisement appears in the Independent Chronicle of June 23, 1785: -

"Proposals for building and fitting out a ship for the East India trade have been approved of by a considerab'e number of citizens, who met at Mr. Walter Heyer's in King Street, on Thursday evening last. Several gentlemen are named to receive subscriptions, and this is to give notice that another meeting is appointed on Wednesday evening next, at the same house, when any citizen who wishes to be¬ come interested may have an opportunity. A single share is only 5300-" in the army of the Revolution, held the rank of major, and was on the staff of General Knox. At the close of the war he gave himself to com¬ mercial pursuits, for which he had originally been destined. He was a finished scholar and an accomplished gentleman, as well as a sound and able merchant ; and his early death was a public as well as private loss. While at home, in 1792, he married a daughter of the Hon. William Phillips. He died at sea May 30, 1794. The late Robert Gould Shaw was his nephew.

On his arrival in China for the first time, Mr. Shaw was taken for an Englishman, and he had to make it known to the Chinese authorities through the French consul that he and his com¬ panions were Americans, "a free, independent, and sovereign nation, not connected with Great Britain." He says in his Journal : "They styled us the ' New People,' and when by the map we conveyed to them an idea of the extent of our country, with its present and increasing popula¬ tion, they were highly pleased at the prospect of so considerable a market for the productions of their own empire." [See Josiah Quincy's Life of Samuel Shaw, and the note to Mr. Porter's chapter in Vol. III. p. 38. - Ed.]

"The inhabitants of America must have tea, the consumption of which will natu¬ rally increase with the increasing population of our country. And while the nations of Europe are obliged to purchase this commodity with ready money, it must be pleasing to an American to know that his country can have it on easier terms, and that the otherwise useless product of her mountains and forests will in a considerable degree supply her with this elegant luxury. Tire advantages peculiar to America in this instance are striking, and the manner in which her commerce has commenced and is now going on with this country has not a little alarmed the Europeans. They have seen, the first year, a single ship, not one fifth part of whose funds consisted of ready money, procure a cargo of the same article and on equally good terms as those of their own ships, purchased for the most part with specie. They have seen this ship again here on her second voyage, and four others in addition. They see these ships depending, and that too with sufficient reason, upon the productions of their own country to supply them with the merchandise of this ; and though a very small portion of their funds consisted of specie, they see them all returning with full and valuable cargoes. Such are the advantages which America derives from her ginseng.

" Until the American flag appeared in this quarter, it had been generally supposed that forty or fifty piculs (one hundred and thirty-three and one-third pounds) were equal to the annual consumption ; but experience has proved the contrary. Up¬ wards of four hundred and forty piculs were brought here by the first American ship in 1 784, which did not equal the quantity brought from Europe the same season, the greatest part of which must have been previously sent there by citizens of the United States. The present year more than eighteen hundred piculs have been sold, one half of which came in the American vessels. Notwithstanding this increased quantity since 1 784, the sales have not been materially affected by it, and it is probable that there will always be a sufficient demand for the article to make it equally valuable."

Mr. Shaw's expectations in relation to ginseng were not destined to be fulfilled. The article continued to be, and still is, shipped to China in mode¬ rate quantities,1 but other forms of remittance were to be brought to light far more profitable than this could ever have been.

At the session of the General Court in March 1787 it was ordered that a portion of the tax then in process of collection might be paid in public se¬ curities, and this proved a great accommodation to the people, who were able to purchase them at a price far below their nominal value. "Commerce in¬ creased, and afforded a revenue which was a great help ; but the avails were less than if there had been uniform regulations in all the States."2

Ship-building was active in Boston, and the general condition of trade satisfactory, in the summer of 1788, 3 as we learn by way of London, in one of the papers of which city it was said : " Saturday, some despatches were received from Boston, which are dated July 20. They contain an account of the builders going on very fast on the shipping; that four large ships of three hundred tons were to be launched the beginning of August ; that trade continued brisk, and that everything was quiet in that quarter." 1 Under date of November 20, in the same year, we find the ships " Hercules " and " Omphale " advertised for the Isles of France and India; "any person wishing to adventure to that part of the world may have an opportunity of sending goods on freight. The terms may be known by applying to Thomas Russell, at his store in Boston." On the 25th of December the ship " Ad¬ venture " was cleared for the Isles of France, and on the 16th of April, 1789, the ship "Friendship" arrived from Madras.2

The tax in Massachusetts for 1788 was $220,000. In 1789 it was much less. At this period, we are told, " lands rose in value, agricultural pro¬ duce bore a high price, commerce increased and was very profitable, and the labor of mechanics was in demand and well rewarded." Under a judicious management of the finances the amount of the revenue was far greater than had been anticipated, and public securities, which had been often sold at one sixth of their face, rose to par.3

Captain Magee, on his return from China in the " Hope," took command of the ship " Astraea," belonging to Mr. Derby of Salem, and sailed again to the same destination from Boston in February, 1789.4 Mr. Thomas

At this time, or a little later, there were two hundred and forty establishments in the Com¬ monwealth, engaged in the manufacture of pot and pearl ashes, nearly, if not quite, all the pro¬ duct of which came to Boston for exportation. [See the chapter on " Industries " in the present volume. - Ed.]

2 Ibid. April 23, 17S9. Nathan Bond adver¬ tises for sale by auction, at his store in Cornhill, goods ex " Friendship " from Madras, consisting of chintzes, calicoes, book-muslins, ginghams, cottons, sheetings, silks, and saltpetre.

4 "In those days a Canton voyage was a serious undertaking, and as six months were re¬ quired to provide the specie, ginseng, and other cargo, the ship [' Astrsea '] was sent in the spring up the Baltic for iron, a schooner was sent to Madeira for wine, and letters were addressed to

Mr. Derby's correspondents at New York, Phil¬ adelphia, and Baltimore, for ginseng and specie. The 1 Astraea,' on her return, met with stress of weather, and put into Newfoundland. This de¬ tention delayed her voyage until the close of the year. Upon her arrival from Russia, Mr. Derby had her thoroughly repaired, and then submitted her to a survey of three experienced merchants, who reported her to be in fine order for an India voyage. In February, 17S9, he despatched her for Canton with an assorted cargo." - Life of Elias Hasket Derby , pp. 57, 58.

Mr. Nathaniel Silsbee, afterward Captain Silsbee, and later a prominent and successful merchant, and a Senator from Massachusetts in the Congress of the United States, came home as a passenger in the "Astraea." He had gone to China as supercargo of another of Mr. Der¬ by's vessels, the brig " Three Sisters," which had been sold there.

Mr. Silsbee studied navigation on the voyage with Captain Magee, and in December, 1790, he shipped as second mate on board a small brig and made a voyage to Madeira, the West Indies, Baltimore, Madeira again, and back to Philadel¬ phia. In December, 1792, he sailed in command of a new ship belonging to Mr. Derby, the " Ben¬ jamin," one hundred and ninety tons, for the Isle of France and the East Indies. Neither he nor his chief officer, Mr. Cleveland (afterward Cap-

Handasyd Perkins (connected by marriage with Captain Magee), went as supercargo; and both for himself personally, and for the community in which he was to become an eminent merchant and a distinguished citizen, the voyage was to have, as we shall presently see, most important results.

Mr. Shaw having written to his friends at home, urging them to extend their trade with China, a vessel of eight hundred and twenty tons was built at Braintree, larger than any merchant ship previously built in the United States. She was called the " Massachusetts," and was launched (or, as the papers announced the fact, she " slipt into her devoted element") in Sep¬ tember, 1789. in the presence of six thousand people.1 Messrs. M. M. Hays (State Street), Samuel Parkman (Merchants' Row), and William Shaw ("opposite the Golden Ball")2 were, with Mr. Samuel Shaw who had returned to take charge of her, the parties in interest.3 She took her departure from Boston at the end of March, 1789, saluting the fort, as she passed out, with thirteen guns, and was " esteemed as fine a ship of her dimensions as ever went to sea." 4 She touched at Batavia, having mer¬ chandise on board which had been purchased for that market, and on her arrival at Canton was sold, for what reason does not appear.5 Mr. Shaw came back to the United States to procure another ship and prepare for another voyage. From this fourth voyage he did not live to return.6 tain Cleveland) had then attained the age of twenty-one. " It is not probable that the annals of the world can furnish another example of an enterprise of such magnitude, requiring the exer¬ cise of so much judgment and skill, being con¬ ducted by so young a man, aided only by those who were yet younger, and accomplished with the most entire success." - Cleveland's Voyages, I. Introd. p. xxxiv. The only spare canvas for the repair of a sail on board this vessel bound on a voyage of eighteen months' duration or longer, and beyond the C^ipe of Good Hope, was what was on the cover of the log-book. In those days vessels were sheathed with wood ; they were supplied with neither chronometers nor charts ; and lunar observations were unknown. As late as 1827, Mr. Silsbee records in his auto¬ biography (which exists only in manuscript and was in the possession of his son, the late Hon. Nathaniel Silsbee, who has died while these pages have been going through the press) that he made a passage in a brig to Rotterdam, and that then they had no chronometer and knew nothing of lunar observations, but navigated by dead-reckoning.

advertised to sail from Boston for Canton in February, and to return to New York. " Samuel Shaw goes and returns as agent for ship and cargo." His card says that after a second voy¬ age he had resided three seasons in China.

5 Ibid., May 19, 1791. "We are happy in learning that the ship ' Massachusetts ' of this port, Job Prince, Esq., commander, has safe ar¬ rived at Canton, and has been sold there."

6 We glean from the papers of the day ad¬ ditional particulars of the movements of Boston shipping engaged in the East India trade, as follows: -

The ship " Favorite," Captain Cook, cleared for the East Indies, July 16, 1789. The arrival of the ship "Sally," Captain Cleveland, from the East Indies, is reported December 17 ; she left at the Isle of France Captains Folger and Frazier of Boston. The departure of the ship " Rubv," Captain Rich, for the East Indies, is announced, December 24. On the 26th of Au¬ gust, 1790, we read of the arrival of the "Mas¬ sachusetts," under command of Captain Carpen¬ ter, from the Isle of France, after a passage of four months and two days. On the 12th of September it is stated that of twenty-three sail of American vessels which arrived at the Isle of France from the United States in the year 1789, sixteen were from this port and Salem.

The publication in 1784 or 1785 of the journals of the great naviga¬ tor, Captain Cook, called the attention of the commercial world to the immense numbers of sea-otter to be found on the northwest coast of America. " The fur of this animal, which was first introduced into com¬ merce in 1725, is described as a beautiful, soft, close, jet-black." The excitement produced by Cook's discovery was intense, and adventurers from many countries hastened to the Pacific to participate in the trade to which their attention had been directed. The merchants of Boston were among the first to explore this new field of enterprise, and they soon ob¬ tained, and for many years held, almost exclusive possession of it. The first expedition sent out by them consisted of the ship " Columbia," Cap¬ tain Kendrick, and the sloop " Washington," Captain Gray, which sailed Sept. 30, 1787, bound to the Northwest Coast, China, and thence home to Boston. In May, 1790, the ship "Federalist," at New York from Can¬ ton, brought news of the arrival at the latter port of Captain Gray, in the " Columbia," and of the discovery of the great river to which the name of the ship had been given. The assorted cargoes of the two vessels had been exchanged for furs ; these had been carried to Canton in the "Columbia" (which touched on her way thither, "for refreshment and provisions," at the Hawaiian Islands) and disposed of, and a cargo of teas had been taken on board for Boston. Three months later the now celebrated vessel made her appearance in our harbor. She fired a Federal salute as she passed the Castle, and another on coming to her moorings. It is doubtful whether her destination was generally known when she went away; but the announcement of her achievements by the " Federalist" had filled the community with enthusiasm, and the wharves were covered with people who gave her a hearty welcome on her return. Of her voyage it was said: "To Messrs. Barrel, Brown, Bulfinch, Hatch, Derby, and Pintard, who planned the voyage, their country is indebted for this experiment in a branch of commerce before unassayed by Americans. . . . The ' Colum¬ bia ' and ' Washington ' are the first American vessels who have circum¬ navigated the globe; and the 'Washington,' which is only of ninety tons burthen, is the first sloop of any nation ever sent on so great a voyage." 1 Captain Gray sailed in the " Columbia," on a second circumnavigatory voyage, in the month of September following.2 of France and Bourbon, which was continued up to the period of the conquest of those islands by the British, since which it has nearly ceased."

1 Independent Chronicle , Aug. 12, 1790. The smaller vessel may have given her name to Wash¬ ington Territory. Gray's Harbor, so called, lies to the north of the mouth of the Columbia River.

[A medal was struck and taken out by the ships. Its legend read, " Columbia and Wash¬ ington, commanded by J. Kendrick. Fitted at Boston, N. America, for the Pacific Ocean by J. Barrell, S. Brown, C. Bulfinch, J. Darby, C. Hatch, J. M. Pintard, 1787." Mass. Mist. Soc.

2 Canton was the only port in the Chinese empire to which foreign ships were then admit¬ ted. The port dues were very burdensome, and there was a trading company, consisting of ten or twelve native merchants, known as the Cohoang, which had a monopoly of the trade, and which paid a considerable sum to the Govern¬ ment for the exclusive privileges which it en¬ joyed. " Though the first adventures in the fur trade met with a good market at Canton, as the number inci eased the profits diminished, and it

This new opening for trade had not escaped the shrewd observation of Mr. Thomas H. Perkins, during his residence in China. While making himself acquainted with the habits of the Chinese, and collecting a fund of information relating to the trade of the empire in all its branches, he had ascertained the value of sea-otter skins and other furs from the Northwest Coast, " which formed the basis of action for him afterward in planning numerous voyages and directing mercantile operations of great importance between America, Asia, and Europe." On returning home, he found the country united and established under the Constitution of 1789 ; and although under the Federal government it had been found necessary to lay heavy customs duties for revenue, especially upon teas, he was satisfied that the confidence and stability to trade which were given by the new order of things more than compensated for the tax.1 He immediately despatched the brig " Hope," Captain Joseph Ingraham, for the Northwest Coast and China. In April, 1791, Captain Ingraham discovered a cluster of islands in the Pacific, a few degrees south of the equator, to two of which he gave the names of Washington and Adams. The islands are now known as part of the Marquesas group, but the names then given still appear on the maps. The main objects of the voyage of the " Hope " were defeated by untoward circumstances ; but before this could have been known to Mr. Perkins, he and his friend Captain Magee had built another vessel, the " Margaret," for the same trade. A paragraph in the Independent Chronicle of Oct. 27, 1791, informing the public of the departure of this ship, gives us a glimpse at the commercial activity then prevailing in the town : -

" Upwards of seventy sail of vessels sailed from this port on Monday last for all parts of the world. Among them was the ship ' Margaret,' James Magee, Esq., commander, bound on a voyage of observation and enterprise to the northwest coast of this continent. This vessel is copper-bottomed, and is said to be the best provided of any one that ever sailed from this port." 2

1 "No State was more benefited by the adoption of the Federal Constitution than Mas¬ sachusetts. The pursuits of a large portion of her people were directed to commerce and navi¬ gation, and these prospered under the new gov¬ ernment. The debt had been a heavy burden, -and a cause of constant complaint ; this was to be provided for by Congress, except a comparatively small amount which the State was required to take care of." - Bradford's History of Massachusetts,

The arrivals from abroad at the port of Bos¬ ton in the year 1790 were 60 ships, 7 snows, 159 brigs, 170 schooners, 59 sloops ; total, 455. This was exclusive of the vessels employed in the coasting trade, which were supposed to amount to 1,200 sail. The duties on tonnage VOL. IV. - 27.

(foreign and American) collected from Oct. 1, 1789, to Sept. 30, 1790, in the States of Massa¬ chusetts, Pennsylvania, and New York, were as follows : -

2 " Captain Magee carried out the frame of a vessel, with three or four carpenters, and set up the little craft of about thirty tons, under Cap¬ tain Swift, then the chief carpenter ; and the schooner collected some twelve or fifteen hun¬ dred sea-otters during the season, which added

In 1792 Mr. Perkins entered into partnership with his elder brother Janies, who had been in business in the West Indies, under the firm name of J. & T. H. Perkins, and from that time forward the brothers prosecuted the trade with the Northwest Coast and China, as well as with other parts of the world, with the utmost vigor.1

While the enterprise of the business men of Boston was thus pushing toward every port open to them across the seas and beyond the capes, it sought also to increase its facilities for communication with places in the interior of the State and vCith the adjacent States. Nearly one hundred years previously it had been proposed to cut a canal across Cape Cod, to connect the waters of Buzzard's Bay on the southwest with those of Barn¬ stable Bay on the northeast.2 In the autumn of 1790 this project was renewed, and an elaborate report was presented, showing its feasibility. On the 1 2th of May, 1791, the arrival at Springfield is mentioned of " Cap¬ tain John Hills,3 employed by General Knox, secretary at war, to explore the country from Springfield to Charles River, and make accurate survey thereof with a view to ascertain whether an inland navigation would be practicable." The Bridgewater canal, and that between the Forth and the Clyde, had been opened, and similar works were in progress in France. Travellers who had explored China had brought home accounts of canals in that country a thousand miles in length, connecting Canton in the south and Pekin in the north, " with their ten thousand vessels kept at the public expense;" and it was said that by means of these canals the country was rendered "the most fertile and pleasant in the world." In 1793 the Middlesex Canal Company was incorporated, and the work was completed much to the profit of the voyage, as the skins were worth thirty or forty dollars when Captain Magee reached China." - Memoir of Thomas H. Perkins, pp. 43-44.

In a sketch of the life of Ralph Haskins, recently published, we find some interesting par¬ ticulars concerning the Northwest Coast trade. In the year 1800, Mr. Haskins went out as supercargo in the " Atahualpa," Captain Dixey Wildes, owned by Messrs. Theodore Lyman, Kirk Boott, and William Pratt. The ship was of two hundred and nine tons, mounted eight guns, and was loaded with an assorted cargo consisting of broadcloth, flannel, blankets, pow¬ der, muskets, watches, tools, beads, wire, lookingglasses, and other articles. In a letter to Mr. Lyman, Mr. Haskins said : " The navigation here is more hazardous and the business worse than I expected, especially the inland navigation. Sunken rocks, strong tides, fogs, calms, no bot¬ tom for anchoring, and a large proportion of bad weather are among the difficulties we are obliged to combat." - Mem. Biog. New Eng. Hist. Gen. Soc. i. 468-469.

worth on the average from $18 to #20 each. Of this quantity 30,407 were brought in Boston ves¬ sels. During the same period 1,048,750 seal skins were imported, worth from So to 90 cents each. Of the total number of vessels, - 80 ships and 9 brigs and schooners, - 27 ships and 5 brigs belonged to Boston. Pitkin's Com. of the U. S.; Appendix, pp. v-vii.

1 In later years, when the sons of the origi¬ nal partners, and Mr. Samuel Cabot, a son-inlaw, were taken into the business, the firm was James & T. II. Perkins & Sons. Later still, it was Perkins & Co.

2 " By the annals of Prince, it appears that for now about an hundred years it has been meditated to cut off the Cape, or the whole county of Barnstable, by means of a canal through the town of Sandwich." - Independent Chronicle, Dec. 16, 1790.

At the time of writing this chapter, the Cape Cod ship-canal is still only a project. The last company incorporated for its construction re¬ ceived its charter from the Massachusetts Legis¬ lature of 1880.

The coastwise shipping trade was very valuable in itself, and it was an important feeder to the European and East India commerce of the port. During the month of October, 1791, there were two hundred and eightyseven entries coastwise, from different parts of the Union, and ninety clear¬ ances for the same.2

" There are eighty wharves and quays, chiefly on the east side of the town. Of these the most distinguished is Boston Pier, or the Long Wharf, which extends from the bottom of State Street one thousand seven hundred and forty-three feet into the harbor. . . . Here the principal navigation of the town is carried on ; vessels of all burdens load and unload ; and the London ships generally discharge their cargoes. It is the general resort of all the inhabitants, and is more frequented, we think, than any other part of the town."

"The harbour of Boston is at this date (November, 1794) crowded with vessels. Eighty-four sail have been counted, lying at two of the wharves only. It is reckoned that not less than four hundred and fifty sail of ships, brigs, schooners, sloops, and small craft are now in this port." 3

The foreign commerce of those days required not only large capital for its successful prosecution, but general ability of a high order. Compre¬ hensive and authentic information, shrewd and sound judgment, and bold enterprise had to be brought together in combination when voyages were planned which were to compass the globe, and which were to be pro¬ longed during two or three years. All the requisite qualities to this end the merchants of Boston possessed ; but as time went on and their opera¬ tions multiplied and extended, serious complications arose, for which neither they nor their country could be held responsible; and difficulties and dangers presented themselves which no foresight could have antici-

2 Independent Chronicle, Nov. 10, 1791. The total amount of duties collected at all the ports of the United States in the year ended Sept. 30,

Among the exports from Boston in 1792 were 50,000 barrels beef and pork, of which 20,000 barrels, at least, were packed here. Mass. Hist. Soc. Coll. iii. (1794) 287-288.

3 Mass. Hist. Soc. Coll., iii. (1794) 248, 287. The same writer (Mr. Pemberton) gives the for¬ eign entries and clearances at the port during pated, and no prudence averted. In the long wars between Great Britain and France, which seemed to keep the whole world in a turmoil, the com¬ merce of neutrals suffered almost if not quite as severely as that of the belligerents ; and American merchants and shipmasters found themselves constantly and almost hopelessly involved, to their very great loss.1

The Government and the more enlightened portion of the community desired and honestly sought to maintain a strict neutrality as between the combatants. At a meeting of merchants and traders held in Faneuil Hall July 22, 1793, the Hon. Thomas Russell presiding, a committee consist¬ ing of Thomas Russell, Stephen Higginson, John Coffin Jones, Nathaniel Fellows, Samuel Brown, Charles Jarvis, and Eben Parsons reported a series of resolutions, which were adopted by a unanimous vote, sustaining the proclamation of President Washington in favor of neutrality, and pro¬ testing against the fitting out of armed vessels or privateers by American citizens. The sentiment of the meeting was this : the preservation of neu¬ trality is important to the interest and honor of this country.

There was an existing treaty between the United States and France, by which "free bottoms were declared to make free ships; " but this prin¬ ciple was not recognized by the French men-of-war in their interference with American commerce. The Columbian Centincl of Sept. 11, 1793, says: " The prizes taken by the Marseilles privateer, now in this port, are seven in number, besides the ship ' President,' of Baltimore ; " and, in reference to this vessel, it is added : " She is an American built and registered vessel, owned by Americans, sailing under American colors, had American prop¬ erty on board, and has been a constant trader between Maryland and Great Britain. The pretence for her capture was that she had English property on board, which, if every article had been, would not warrant the outrage." On the other hand the British vessels of war captured a large number of American ships with their cargoes, for their alleged violation of the paper blockade of the French ports, and on the suspicion that French property was covered by the American flag; and this suspicion extended to all vessels bound to or from a French port. The decisions of the prize-courts were often arbitrary and flagrantly unjust; and the demeanor of the naval officers was in many instances overbearing and insulting. Much hardship and serious disaster ensued, and excitement and indignation prevailed in every shipping community along the coast. The history of this period of decrees, orders in council, and non-intercourse will be told elsewhere in these volumes,2 and cannot be detailed here.

1 Mr. John Bromfield, writing to his mother life. The decrees of France and England are from London, April 18, 180S, said: " My fears ruinous to American commerce, which is a whipof a bad voyage are completely realized. I have top, scourged by both parties. Though a neubeen obliged to land my cargo, and make a ruin- tral, it is attacked by all the belligerents." - Lives ous voyage for the gentlemen who were good of American Merchants , ii. 472. enough to give me employ. My own loss will 2 [See Vol. III., Mr. H. C. Lodge's chapter, be total of all that I have earned during my past - Ed.]

mittee was appointed, consisting of Thomas Russell, Stephen Higginson, John Coffin Jones, Caleb Davis, and David Sears, to receive and trans¬ mit to the President " authenticated evidence of injuries done to our com¬ merce by the armed vessels of any belligerent power." Soon after this, President Washington sent Mr. John Jay on a special mission to England, for the purpose of negotiating a treaty which should set at rest the vex¬ atious questions in dispute ; but so strong and bitter was the political feel¬ ing then prevailing, that the treaty which Mr. Jay was able to arrange was condemned in this country before its terms had been made known. It was assumed that a weak surrender had been made to the pretensions of England, and serious riots took place among the lower classes in many of the towns, Liberty Square in Boston being one of the scenes of disturb¬ ance. It is to the credit of the merchants that they took a more calm and dispassionate view of the condition of affairs. A meeting had been held in the town, at which resolutions were passed condemning the treaty as injurious to the commercial interests of the United States and deroga¬ tory to the national honor and independence. The Chamber of Commerce, on the contrary, passed a vote expressing its acquiescence in the terms of the treaty, and addressed a memorial to that effect to the President, who, in his reply thereto, expressed " his satisfaction to learn that the commercial part of his fellow-citizens, whose interests were thought to be most deeply affected, so generally considered the treaty as calculated upon the whole to procure important advantages to the country." 1

The rulers of France, jealous of the commercial relations existing be¬ tween the United States and Great Britain, seemed determined to force the two nations into war with each other, if this could possibly be brought to pass. They issued a decree (Jan. 18, 1798) forbidding the entrance into any French port of any vessel which at any previous part of her voy¬ age had touched at an English possession, and declaring good prize all vessels having merchandise on board, the production or manufacture of England or her colonies, whoever the owners of the merchandise might be. This was regarded as being little short of a declaration of war, and authority was given to the American navy to seize vessels under the French flag which had committed encroachments upon American commerce ; com¬ mercial intercourse between France and the United States was suspended; treaties were declared to be no longer binding upon the latter; and letters of marque and reprisal were authorized.2

But notwithstanding the perplexities and perils thus superadded to the ordinary risks of ocean commerce, the merchants of Boston, Salem, and other communities went forward in the prosecution of their plans with all

1 Barry's Hist, of Mass., iii. 332, 333. The 2 John S. Barry's History of Massachusetts, New York Chamber of Commerce concurred iii- 352, 353. " History will record the fact that with the Boston chamber in its estimate of Mr. France has been willing to see us independent Jay's treaty. [See the Life of fohn Warren, ch. of Britain, but not independent of herself." - xxii., and Mr. Lodge's chapter in Vol. III. and George Cabot, in the Columbian Centinel, May references there - Ed.] 31, 1 797.

their accustomed energy and spirit. Captain Cleveland in his journals mentions four Boston ships met by him on the Northwest Coast in the spring of 1799, and says that ten others were to be despatched thither from Boston during that season ; and while at Calcutta, in the following winter, he records: " During the three months of my residence in Calcutta, no less than twelve ships were laden with the produce and manufactures of Hindostan for the United States, whose cargoes would average about two hundred thousand dollars each." 1

In 1798 the Messrs. Perkins bought and sent to Canton direct the "Thomas Russell; " and Mr. Ephraim Bumstead, then the oldest apprentice in their counting-house, went out as supercargo. In 1803 they made an arrangement with this young man to go to China and establish himself there for the transaction of their own business and such other as might offer. Mr. Bumstead took passage in a ship from Providence, belonging partly to merchants there and partly to the Messrs. Perkins, and had as his clerk a nephew of theirs, John P. Cushing, who had also been in their em¬ ploy. Soon after his arrival in China Mr. Bumstead became very ill and embarked on a voyage for the benefit of his health, expecting to return before long; but he died at sea, and Mr. Cushing, at the early age of six¬ teen, found himself in sole charge, with many consignments to care for and important concerns to manage. He had " a good head," and he conducted affairs with so much ability that he was soon after taken into the firm, remaining in it until its dissolution. He visited the United States in 1807, but soon returned to China, and did not leave it until twenty years after that time. " He was well repaid for his undertaking by the result." 2

Mr. Cushing was succeeded in the management of the Canton house by Mr. Thomas T. Forbes, another nephew of the Perkins's, and a young man of much promise, who was lost soon after in the Canton River with his yacht " Haidee." Mr. Cushing was in Europe when the news of this calamity came to hand, and immediately returned to China to protect the interests of his firm. He and Mr. Forbes had been on intimate terms with the firm of Russell & Co., of which Mr. Samuel Russell was then at the head. It was now arranged to reorganize this house, and to transfer the business of Perkins & Co. to it. Mr. Augustine Heard was admitted as a partner, and Mr. Forbes's youngest brother John, then sixteen years of age, as a clerk. Mr. John M'. Forbes subsequently became a partner, and, later, his older brother, Captain Robert Bennet P'orbes, who was the head of the house for several years. Mr. Russell Sturgis, now of Baring Brothers & Co., was admitted to the firm in 1842. Mr. Paul S. Forbes, cousin of the three brothers just mentioned, Mr. W. Delano, Mr. John C. Green, and Mr. A. A. Tow, were also members of this eminent firm.3

" Hancock," Crocker; "Despatch," Breck; and 3 In 1816, Captain Forbes entered the count- " Ulysses," Iamb. ing-house of S. Cabot and James and Thomas

Another youth, who was afterward to become a most intelligent and successful merchant, graduated from the counting-house of the Messrs. Perkins in the early years of their business, and went to sea in one of their ships. This was William Sturgis, who had been with them for a few months only, when it became necessary for him, on the death of his father, to push his fortunes for himself (1798); and he shipped before the mast in the " Eliza," 136 tons, then fitting out for a voyage to the Northwest Coast, San Bias on the western coast of Mexico, and China. The vessel was under the command of Captain James Rowan, who had made several voyages in the same trade, and had been very successful in his intercourse with the Indians. On reaching the coast Captain Rowan advanced young Sturgis to be his assistant in the trading department; 1 and the latter displayed so much industry, ability, and tact in his new position, and had improved himself so much in the study of navigation that he attracted the attention of other ship-masters, and was called from the forecastle of the "Eliza" to be chief mate of the " Ulysses," the officers and crew of which vessel were in revolt against their captain. He proceeded in her to China, where he met the " Eliza," and, by consent of all parties, rejoined her as third mate. On his return to Boston in the spring of 1800 he was engaged as first mate and assistant trader on board the " Caroline," owned by James and Thomas Lamb and others, and fitting out for a three years' voyage to the Pacific and China, under Captain Charles Derby of Salem. The ship touched at the Sandwich Islands on the way out, and Captain Derby died there; whereupon Mr. Sturgis, then nineteen years of age, became com¬ mander of the vessel and sole manager of her business. He came back to Boston in 1803, having made the voyage "to the^great satisfaction and profit of his employers." He made another voyage, terminating in June, 1806. In the autumn of the same year he started on his fourth voyage round the world in the " Atahualpa," belonging to Theodore Lyman and others, with supervision over two other vessels, belonging to the same owners, already on the Coast. Returning in June, 1808, he sailed in the same ship for Canton direct, with an outfit exceeding three hundred thou¬ sand Spanish milled dollars; and accompanied by Mr. John Bromfield, who had an interest in the adventure and a share in the responsibility.2 It was

H. Perkins, Jr., being twelve years of age, and in 1817 he shipped before the mast in a ship belonging to his ancles, the " Canton Packet.'' In 1824 they gave him the command of their favorite ship the " Levant ; " and afterward he commanded the " Nile," the " Danube," and the " Lintin."

"We wrote you the 'Eliza' had succeeded on the Northwest, and had proceeded, to China; that is, she was about leaving the coast for China. We presume from the letters, which are dated off St. Bias, that she would dispose of her dry-goods for about one hundred per cent advance. The collection of skins exceeded that of Magee in the 'Margaret,' or Swift in the ' Hazard,' although they were two years, and the ' Eliza' ninety days."

2 John Bromfield was born in Newburyport, April 11, 1779, and was brought up in the count¬ ing-houses of Larkin & Hurd, Charlestown, and Soley & Stearns, Boston. After making two trading voyages to Europe, he sailed in the " Atahualpa " as supercargo, with Captain Stur¬ gis, being under engagement to remain a year in Canton as Mr. Lyman's factor. He subsequently went into business for himself, and was very suc¬ cessful. Many of his ventures were with his on this voyage that he had a desperate encounter with pirates in the mouth of the Canton River. He reached Boston again in 1810, and then joined Mr. John Bryant in business under the firm name of Bryant & Sturgis. Their business was principally with places on the Pacific and with China, and "from the year 1810 to 1840 more than half of the trade carried on with those countries, from the United States, was under their direction. They occasionally, however, had commercial intercourse with nearly every quarter of the globe." 1

The "Thomas Russell" was despatched in May, 1800, under command of Captain Henry Jackson, to Malaga and ports in the Mediterranean, loaded with teas and nankeens, " the ultimate object of the voyage being the purchase of a cargo in Calcutta, and the speedy conversion of the present lading into dollars to be the governing object in the operations." 2

Passing on to the year 1807, we come to the English Orders in Council, the Milan decrees of Napoleon, and the non-intercourse policy of President Jef¬ ferson. All the industrial interests of Massachusetts, including the agricultu¬ ral, were seriously checked by the embargo laws, and the days of the Boston Port Bill seemed to have come back again. Ship-building was suspended, and the fisheries were abandoned. " The transfer of flour and grain from the Southern States to the northern and eastern ports was interdicted ; and when this was found to be very injurious, the President proposed to grant license to such individuals to transport flour for the necessary consumption of the people, as Governor Sullivan should select or designate. Great com¬ plaints were made against this measure as partial and unjust. A petition was preferred to Congress at this time for liberty to send fish to foreign markets as had formerly been done, and when there were large quantities on hand exposed to decay in a short time ; but the request was not granted, nor was any sympathy expressed for the petitioners." 3 Commissioners were sent to England, and a treaty was negotiated by them ; but this was so unsatisfactory to the President that he declined to submit it to the Senate. At this time the encounter took place between the " Leopard " and the "Chesapeake," near the Capes of Virginia, and the historian says: "The country had never been in such a state since the battle of Lexington." 4 In 1809 there was a temporary relaxation of hostilities, and a thousand vessels were cleared for foreign ports. The Embargo Act was modified, so far as related to provisions and the exclusion of foreign armed vessels, but the

2 In 1794, Pemberton writes: "Our trade to the Mediterranean is at present interrupted by the Barbary corsairs." - Mass. Hist. Coll. iii. (1794), p. 286.

3 Bradford's History of Massachusetts, p. 372. The registered tonnage of the United States engaged in the foreign trade in 1807 was 848,306. Of this, 310,309 tons, or more than one third of the whole, were owned in Massachusetts. Mr. Cabot wrote to Colonel Pickering, in reference to the non-importation law of 1807 : " Our trade with France was comparatively small, and re¬ strictions as to that nation were not so injurious. With reference to England the case was differ¬ ent. Of all the surplus products of the United States, that country bought annually one half, and of all our foreign purchases she supplied two thirds." restrictions upon importations were continued, with a proviso empowering the President to legalize trade with Great Britain by proclamation. In 1810 the Federal Government found itself compelled to relax still further the rigor of its non-intercourse policy; but many intelligent men were coming to see that war with Great Britain was inevitable. In 1812 the declaration of war was made, in opposition, undoubtedly, to the feelings of a majority of the people of this Commonwealth. They were engaged principally in com¬ mercial pursuits; "their spirit of thrift was greater than their thirst for military renown ; and they were inclined to peace, not from cowardice nor from a willingness to sacrifice the interests of their country, but from a pro¬ found conviction that peace was the policy of the nation, and would sub¬ serve its interests better than war." 1

Great suffering followed. A vast amount of capital, and a large number of vessels and seamen were thrown out of employ; the prices of imported articles rose enormously; the produce of the country was held at high rates; work was scarce ; money also was scarce, and it was difficult to supply family wants.2 Mr. Nathaniel Silsbee, in his autobiography,3 says: -

"On the 1 8th day of June, 1812, after an embargo of sixty days, the Government of the United States declared war against England, which had a most depressing effect upon the commercial interests of the country ; the vessels that were at home were generally dismantled and hauled up, except such as were suitable for privateers ; and although a much larger portion of vessels and property which happened to be abroad at the commencement of the war escaped capture than was expected, yet a number of these vessels and a considerable amount of property fell into the hands of the enemy, and caused large losses to the commercial part of the community."