Commerce and Diplomacy

The First Year of American Foreign Policy 1775-1776

By Kenneth D. Hartsoe

European nations established colonies during the seventeenth and eighteenth centuries as methods of increasing economic power.

It was understood in political and diplomatic circles that colonies existed for the sole purpose of supplying the parent country with its exported wealth and resources. Practice dictated that the greater the colony in terms of labor, resources, or manufacturers, the greater the wealth and world influence of the colonizing nation.

Britain's North American colonies had created an incredibly dynamic commercial operation upon which Britain established its empire during the eighteenth century. French and Dutch traders in the Caribbean Islands and West Indies traded sugar for New England rum. English ship manufacturers purchased much of North Carolina's extensive pine and lumber exports for ship masts and planks. France craved Virginia tobacco while southern Europeans paid handsomely for South Carolina's rice and indigo exports.

Furthermore, American colonists were major purchasers of British manufactures. In 1770 alone, British exports to the colonies were worth more than 1.7 million pounds sterling. [1]

Historian Theodore Draper termed the increasing influence of American commerce on Britain as the "Americanization" of British trade. He concluded that the decline of British trade with European nations coincided with an increase in trade with America. "Together," wrote Draper, "these trends pushed the American colonies into the forefront of British economic and political concerns." [2]

However, British efforts to control American commerce became more exclusive and widespread during the early 1770s. These efforts, considered excessive by colonists, motivated colonial leaders to seek trade alternatives. With the outbreak of war in 1775, American colonists were faced with the necessity of having to develop a foreign policy in which to secure their commercial operations.

The diplomatic atmosphere among European nations was a complicated mixture of political intrigue, familial obligations, tenuous economic codependency, and precarious alliances. Diplomacy was a challenging environment for nations with centuries of foreign policy experience from which to draw upon, much less the American colonies whose relative political immaturity must have seemed infantile to the aged monarchies of Britain, France, and Spain. However, what America lacked in diplomatic finesse and experience was compensated by the power of its commercial prowess ñ an enticing attraction to European nations eager to weaken Britain's long-standing commercial and naval dominance.

The foreign policy idea to blossom out of these commercial concerns was simple: allow unlimited access to American commerce to Europeans nation willing to trade in exchange for war materials such as weapons, tents, uniforms, and gunpowder. This foreign policy would not contain agreements of mutual defense, pledges of troop support, or any other potential for entangling alliances, only free trade. Considering their established commercial success, it is easily understood why American leaders considered such a commercially oriented approach to foreign policy. However, historians have criticized their emphasis on commerce. In his overview of American diplomacy during the Revolution, Lawrence S. Kaplan claimed that a policy based on commercialism was "the mouthings of colonial bumpkins innocent of the realities of international politics, or empty bravado of a frightened government pinning its hopes on impossible dreams to divert itself from its perils." [3]

Jonathan R. Dull considered such a policy naÔve, especially when used to acquire French support: "such facile optimism about the attractiveness of a commercial alliance was based on a naÔve overestimation of the importance of American trade." [4] James H. Hutson, in his examination of the powerful influence John Adams wielded on American foreign policy during the Revolution, argued that the only attraction of commerce for European nations was not so much the pure lure of financial gain but subsequently, the potential for American commerce to neutralize Britain and maintain the balance of power in Europe. [5] Even Adams' "Model Treaty," drafted in late 1776 as a blueprint for commercial alliances, was not so much a foreign policy success but rather only "the natural offspring of the union between revolutionary necessity and revolutionary aspiration." [6]

The entrance of France in the war in 1778 as an American ally formally thrust the American colonies from behind the door of covert assistance into the open world of eighteenth-century European diplomacy. Although these criticisms of early American foreign policy take into consideration the colonies' historic commercial success and the encumbering restrictions of British commercial policies, one important question remains. What response did American leaders receive during their first year of diplomatic efforts to encourage such a substantial emphasis on commerce? This examination demonstrates that American leaders received an overwhelmingly favorable response from foreign nations to their commerce proposals during their first year of diplomatic explorations. Such a favorable response encouraged and supported American efforts at defeating British political and military might and securing American independence.

The significant break in the delicate balancing act between Britain and America occurred in 1774 when Britain closed Boston harbor in retaliation for the Sons of Liberty having tossed more than 300 chests of British tea into Boston harbor. A series of subsequent legislation, nicknamed the Coercive Acts and the Intolerable Acts by colonists, further impacted colonial commerce by restricting the destination of American exports to British ports only. These acts increased American suspicion of British objectives and further eroded American-British relations.

Colonists responded to these acts by boycotting goods manufactured in Britain and withholding exports of American goods to British ports. The colonists had previous success with boycotts. In the late 1760s, for example, their non-importation boycott against the Townshend duties created a drop in trade worth 700,000 pounds sterling. [7] This time, however, the boycott and non-export agreement impacted American trade and created hardships for laborers and merchants alike.

Opposition to the boycott increased. Members of the Pennsylvania Committee of Safety, for instance, submitted a proposal to the Second Continental Congress requesting a modification to the non-export agreement to allow local merchants to trade for war materials. [8] Such events raised serious questions among delegates about the future of America's commercial interests.

The American non-exportation agreement meant no commodities except rice destined for re-export was allowed to clear for Britain, Ireland, or the West Indies. [9] Rice was an exception as roughly half of America's annual crop was exported directly to southern Europe, bypassing Britain altogether. [10] Benjamin Franklin, a leading figure in American diplomatic efforts, proposed opening ports to foreign trade for two years if Britain did not repeal the restraining legislation. However, most congressional delegates considered such a concept too audacious when it was first proposed in 1775. Conventional wisdom held that American commerce was in many ways still under Britain's authority.

Ironically, the belief in American commercial subservience was not uncommon. Franklin informed Lord Chatham, a Member of Parliament sympathetic to colonial interests, that Americans were not entirely dissatisfied with the guidance of British navigation laws nor necessarily against commercial regulation by Parliament. [11] Rather, the display of military might by British leaders and the armed conflict being waged on American soil were motivating factors to warrant Americans to entertain ideas of commercial independence.

Franklin wrote to a friend in July 1775 that the Americans "have not yet applied to any foreign power for assistance, nor offered our commerce for their friendship. Perhaps we never may; yet it is natural to think of it, if we are pressed." [12] Nevertheless, discussions on the subject were postponed and for the remainder of the year, American ports would officially remain closed to foreign nations. [13] However, congressional delegates took actions to explore the possibility of trade with foreign nations.

In November 1775, delegates established a committee of five members, known as the Committee of Secret Correspondence, to maintain correspondence with friends in Europe and "know the disposition of foreign powers towards us." [14] Many American statesmen believed commerce would become a leading element in European diplomatic relationships. That was certainly true among the five members of the Committee of Secret Correspondence as it was composed of influential merchants and diplomats such as Robert Morris and Benjamin Franklin. These men had political contacts in Europe, and among the first they wrote to were Arthur Lee and Charles Dumas.

Arthur Lee had been in Britain for several years and most recently had worked with Franklin on various proposals to British administrators prior to Franklin's return to America earlier in the year. In December 1775, he was the only colonial representative living in London.

Charles Dumas was a Dutch intellectual who was sympathetic to America's democratic vision. Dumas' residence in The Hague, Netherlands, was an ideal location for American diplomatic interests. The presence of diplomatic attaches who represented many leading European nations created an environment where the intricacies of affairs of state could be accessed relatively easily and used to forecast the political winds with impressive accuracy.

Franklin informed Dumas that arms and ammunition were much wanted in the colonies and that "any merchants who would venture to send ships laden with those articles might make great profit." [15] This suggestion was a major enticement for Dutch navigators as they were eager to weaken British naval dominance after losing their maritime influence to the British in the middle of the seventeenth century. Both Lee and Dumas agreed to explore European attitudes toward the colonies. Foremost among potential commercial partners was France.

Prior to the Seven Years' War (1756-1763), France entertained strong hopes of controlling the wealth of Britain's thirteen colonies but French resources in America were sorely inadequate for such a task. The isolated nature of French settlements along the St. Lawrence River basin and in the Hudson River Valley and Mississippi River Valley severely inhibited any capacity for an effective military defense, population expansion or foundation for economic stability.

Unlike their English neighbors, French settlers did not receive any consistent or organized support from their leaders. French colonial policy in the New World lacked a defined course without any achievable objectives. These conditions, in conjunction with their defeat in the Seven Years War, permanently extinguished any dreams of French control in the New World.

However, whatever spark of hope for revenge that lay smoldering beneath the surface of French diplomacy was certainly fanned by America's congressional delegates and foreign agents. Julien-Alexandre Achard de Bonvouloir, a French nobleman on an unofficial visit to Philadelphia in late 1775 on behalf of the French ambassador, informally assured American leaders that his nation was taking a particular interest in America's struggle.

By the end of the year, two French commercial agents signed contracts with Congress for the purchase of munitions and powder to be paid for by exports of American produce. [16] Forty American merchants had also signed contracts with the committee to deliver gunpowder and other supplies for American troops. [17] Within a few months, French ships arrived in Philadelphia loaded with foreign goods, [18] and agent Arthur Lee assured the Committee of Secret Correspondence "that the French Government will wink at the exportation of arms and ammunition." [19]

In early 1776, news of additional British acts aimed at restraining American commerce formally convinced many congressional delegates of Britain's firm intention to destroy American trade. [20] Coinciding with this news was the publication of Thomas Paine's Common Sense. Paine was able to argue a convincing case for complete independence from Britain that American leaders had failed to articulate adequately among the colonial population. The widespread popularity of Common Sense assisted congressional delegates in their hand wringing discussions over the wisdom and practicality of opening American ports to foreign nations.

The impact of Common Sense in terms of advocating complete American independence was felt in Parliament. One member warned, "ÖAmerica aimed at independence. It was plain, from the pamphlet called Common Sense." [21] More importantly, Paine underlined the importance of diplomacy in winning the war against Britain. [22] He declared that "our plan is commerce, and that, well attended to, will secure us the peace and friendship of all Europe." [23] The impact of Paine's impassioned pleas on the American populace and the threatening actions of British policy makers persuaded congressional delegates of the need for commercial opportunities other than Britain. On April 6, 1776, America formally opened its ports to foreign nations. [24]

Playing into the hand of American foreign policy leaders was a strong belief that British citizens were sympathetic to America's cause, and that they understood America's struggle was against corruption in the British government, not against the British people per se. American overseas agents routinely forwarded information based on conversations, observations, and intelligence that widespread support existed for Americans among several members of Parliament and the English people. [25] After all, British merchants directly benefited from American trade and traditionally, eighteenth-century parliaments and commercial boards were sensitive to the political views of merchants. [26] British merchants had already played an important role in defending American commercial interests. The Society of Merchant Venturers in Bristol helped repeal the Stamp Act due to their financial loss. [27] Franklin even cited various expressions of support America had received from British merchants in a defense he wrote against accusations that American merchants neglected their financial obligations to British creditors. [28]

Furthermore, the Committee of Secret Correspondence had been informed that British troops boarding ships for the colonies were reluctant to go and were generally unenthusiastic about fighting rebelling colonists in America. [29] Arthur Lee had reported that members in Parliament who were sympathetic to America had tried on various occasions to discern possible terms of reconciliation but reported that "unconditional surrender is the language and intention of the court." [30]

This uncompromising attitude was particularly evident in British commanders stationed in North America. Lord Howe, for example, informed Franklin that Britain sought to establish some semblance of a reconciliation with its errant children except that "the deep rooted prejudices of America and the necessity of preventing her Trade from passing into foreign Channels, must keep us still a divided People." [31] Franklin responded in a language that elevated the struggle from a commercial dispute to an issue of principle:

To me it seems that neither the obtaining or retaining of any trade,
how valuable soever, is an Object for which Men may justly Spill each
other's Blood; that the true and sure means of extending and securing
Commerce is the goodness and cheapness of Commodities; and that
the profits of no trade can ever be equal to the Expence [sic]of compelling
it, and of holding it, by Fleets and Armies. [32]

Despite these differences between America and Britain in terms of resolving their differences, growing interest in American commerce by some European nations began to make discussions of possible reconciliation irrelevant.

In the spring of 1776, Dumas reported that both French and Spanish officials were interested in trading with America as Britain's "enormous maritime power fills them with apprehension." Dumas spoke with the French minister as to the possibility of his nation mediating a solution to America's conflict with Britain. France was unwilling to mediate the conflict while Americans were still subjects of Britain. Dumas then inquired as to French interest in commerce. Since France was theoretically at peace with England, French officials were unwilling to enter into the fray as an ally, knowing full well that such an action would commit France to open conflict with England.

However, French diplomats suggested that Americans should apply to France for exports of needed materials, as these nations would consider secretly encouraging and tolerating war materials shipped to the colonies via French and Spanish ports in the West Indies. [33] France even stationed a naval squadron off the Channel Ports and the French West Indies to help American ships in distress. [34] Dumas forwarded a list of desperately needed items for America's war effort. [35] The French minister reminded Dumas at a later meeting that "the Colonies have no need that either France or Spain should enter into this war. Commerce alone will furnish to the Americans all that they want to defend themselves." [36]

The Committee of Secret Correspondence sent Silas Deane to Europe in the spring of 1776 to assist Lee in his negotiations with France. Deane's instructions reflect the hope placed in French support in the event that America gained independence:

France would be looked upon as the power, whose friendship
it would be fittest for us to obtain and cultivate, That the commercial
advantages Britain had enjoyed with the Colonies had contributed
greatly to her late wealth and importance. That it is likely great part of
our commerce will naturally fall to the share of FranceÖand that as our
trade was rapidly increasing with our increase of people, and in a
greater proportion, her part of it will be extremely valuable. [37]

Deane posed as a merchant in Paris to buy military supplies on credit and inquire about political and military support. Deane met with the chief secretary of the French ambassador who informed Deane that "the importance of American commerce was well known and that no country could so well supply the Colonies and in turn receive their produce, as France." [38] Deane reminded the secretary that an enormous surplus of American produce existed as a result of the cessation of Anglo-American trade and that the Americans were exploring how to dispose of it. [39]

Some French officials warned the French foreign minister that American failure in the war against Britain would eventually lead to a joint Anglo-American assault on the French sugar islands in the West Indies. Nevertheless, France agreed to secret assistance and convinced King Charles III of Spain to contribute support as well. The French established a commercial house to handle transactions with America and assigned a correspondent in each French port to provide storage for any American goods destined to other nations in Europe. The chief secretary promised that he would "remove all obstacles that may oppose your wishes from the politics of Europe" and that "my indefatigable zeal shall never be wanting toÖfacilitate all operations of a commerce which my advantage, much less than yours, has made me undertake with you." [40]

To further assist in these efforts, France created the "Rodrigue Hortalez and Company," a sham trading company through which war materials could be shipped. American tobacco was the one commercial export the French repeatedly made application for through this company. The tobacco market was worth twenty-four million livres to France and British interference with American shipping had frustrated French efforts to procure this export. Lee informed the Committee of Secret Correspondence that France was likely to tell British officials that if they could not furnish tobacco to the French market that the French would send for it themselves. Lee prompted the committee to consider "what an important instrument that is in your hands." [41]

An example of the role that French demand for tobacco played in securing American war materials is evident in the following case. Under the shipping umbrella of Rodrigue Hortalez and Company, a French vessel arrived at the island of San Domingo in the West Indies loaded with munitions and other merchandise valued at more than 25,000 pounds sterling destined for America. In return, France requested that America "send a ship loaded with good Virginia tobaccoÖwhich I can no more do without than your friend can do without what I send him." [42] France would eventually ship 200,000 livres worth of arms and ammunition through "Monsieur Hortales." [43]

However willing a nation sought to support America through trade, it was the prospect of interfering with internal British colonial policy and contending against British naval power that sent European diplomats scurrying to the shelter of supporting America through covert trade. [44] The fact that the colonies had not formally declared independence from Britain weighed heavy in the decision discussions of European courts. Once America formally declared its independence, advised France's chief secretary, the colonies "may obtain all the countenance and assistance they wish for in the most open and public manner and the most unlimited credit with the merchants of this kingdom." [45]

Although some Americans expressed concern that trading with France would lead to entangling alliances, John Adams reminded them that "I am not for soliciting any political connection, or military assistance, or indeed naval, from France.

I wish for nothing but commerce, a mere marine treaty with them." [46] Furthermore, American leaders could not deny their need for French war materials to conduct operations against the British. For example, Franklin assured General Horatio Gates in August 1776 that "arms and ammunition are also continually arriving, the French having resolved to permit the exportation to us, as they heartily wish us success; so that in another year we shall be well provided." [47] Once French assistance began to arrive, Dutch aid was not far behind.

Deane had cautioned Dumas in his negotiations with Dutch officials that "The United Colonies ask no aid or alliances." [48] Such a diplomatic warning was unnecessary as the potential for quick profits was the major enticement for Dutch merchants. [49] The Netherlands had pursued a policy of neutrality since the Treaty of Utrecht with France in 1713. However, exactly what neutrality entailed was subjective as it depended on which country defined it.

The English blockade of major American ports as a result of the Boston Port Act had interrupted Dutch commercial interests in America. [50] Some Dutch merchants were able to supply war materials directly to the North American colonies even though sailing directly to American harbors defied British prohibitions. Dutch merchants creatively counteracted this restriction by shipping to their various colonies in the West Indies and in the Caribbean, a practice considered legal by British authorities. [51] However delicate the political and diplomatic maneuvering was in this region due to this precarious arrangement, British officials were more than displeased that Governor Johannes de Graaf of the Dutch island of St. Eustatius openly supported American ships entering its harbor and allowed them to use the harbor facilities. [52]

The British navy had investigated Dutch ships that traded with France during the Seven Years War and Dutch merchants received the same harassment by English privateers in 1775 and 1776. These merchants demanded protection from Prince William V of Orange, the Stadholder of the Netherlands and a strong supporter of English interests. [53] The governing board of the Dutch West India Company made the first complaints to the Netherlands' ruling assembly, the States General, about pressuring Britain to lift its blockade of American ports. New England products were in high demand in the Dutch colonies in the Caribbean, and the governing board warned that famine was possible. [54] This debate between the pro-English Stadholderians and the pro-American merchant class as to whether to increase the Dutch navy and army in response to British harassment became a "burning issue" after the French formally entered the war in 1778. Until then, Dutch merchants were considered not to be in breach of any treaty agreement - so long as war did not break out. [55] As the Netherlands and France began to reap profits form their commerce with America, other nations expressed interest in American trade.

Writing from Paris, Deane was able to encourage Dumas and the Secret Committee of Correspondence that "our commerce is now on as good a footing in this kingdom and in Spain as the commerce of any other nation, and I trust will very soon have an important preference." [56] Shipmasters in Spain offered services to profit from gun running and trade. [57] Although Portugal was reliant on England for much of its trade and protection, Deane was granted an interview with the proposed ambassador of Portugal on commercial affairs. [58] Deane learned that the King of Prussia possessed ports around the Baltic Sea but that "he is ambitious of becoming a maritime powerÖbut without commerce it is impossible to effect the design, and no commerce can put him so directly in the road as the American." [59]

The demand for coffee, sugar, and other products originating from the West Indies was increasing fast in northern Europe and "an application to the King of Prussia will do no harm." [60] Another agent proposed acquiring military stores from Prussia. [61] Russia, which had been a minor market for American naval stores, provided commodities such as hemp, iron, and masts on Dutch and French ships, much to the annoyance of British observers. [62] Britain demanded that Spain, France, and Portugal deliver American ships at anchor in their ports.

European authorities dragged their feet in response to this demand. Franklin advised agents to remind these nations that "the time has been when they stood much in need of American Supplies, that such time may come again" and that "it is evidently their interest to encourage our Commerce, so we hope you'l [sic] be able to influence them by One Means or other to protect and License it in the utmost extent." [63] Only Hungary remained aloof from American commercial enticements. Empress Queen of Hungary issued a strong edict against the export of arms and munitions to America from her states. [64] Despite such a resistance, however, American leaders had secured the commercial opportunities they sought.

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References