Smuggler Nation (5 page)

Figure 1.1 South-East view of the town of Boston 1723 (American Antiquarian Society).

Molasses had many uses in colonial America. It was a popular ingredient for cooking; it was commonly used in a soft drink called “beverige” (molasses and ginger-flavored water); and it was used for home-brewed beer.
²⁴
But its most important use was for rum production. Fueled by illicit imports of Caribbean sugar and molasses, business boomed for New England rum distilleries (heavily concentrated in Massachusetts and Rhode Island).
²⁵
By 1770, there were as many as 143 distilleries in the colonies producing nearly five million gallons of rum annually.
²⁶
British molasses suppliers could not have possibly kept up with this demand: “The entire molasses output of the British islands did not equal two-thirds of the quantity imported into Rhode Island alone, and was estimated to amount to only about one-eighth of the quantity consumed annually by all the provinces.”
²⁷

Most New England rum was consumed in the mainland colonies.
²⁸
The colonists were heavy drinkers by any standard, and rum was the drink of choice.
²⁹
Some of this domestic supply was also diverted—often in violation of colonial prohibitions—to the “inward” trade with American Indians. But although exports were small compared to mainland consumption, rum was nevertheless an essential ingredient in the infamous Triangle Trade: American merchants exchanged barrels of rum for slaves on the West coast of Africa (with slave prices denominated in gallons of rum); slaves were then shipped to work on West Indies plantations; and these plantations then resupplied New England rum distilleries with sugar and molasses. And the cycle would repeat itself. Rum was thus the “currency of the slave trade, which in turn was the backbone of New England commerce.”
³⁰
The rum trade also enabled the importation of slaves to the Southern colonies: “Rum was practically the only commodity that could have been exchanged for the African slaves and it is this consideration that the Southern colonies became dependent on the trade between the Northern colonies and the West Indies.”
³¹

Newport, Rhode Island, was the epicenter of the rum trade in colonial America. Today we tend to associate Newport with yacht racing and gilded-age mansions, but the origins of this northern port’s fortunes were less glamorous. The tiny colony of Rhode Island produced little of trading value—with the notable exception of rum. And no
town exploited this commercial niche more successfully and aggressively than Newport. By the mid-1760s, twenty-two of the thirty Rhode Island distilleries were based in Newport.
³²
As one historian has remarked, “If merchants from all the American seaports evaded the navigation laws to some extent, those from Newport stood alone as the greatest offenders.”
³³
No wonder then that the inhabitants of the town—and of the rest of the colony, for that matter—were denounced by the British Admiral John Montagu as “a set of lawless piratical people … whose sole business is that of smuggling and defrauding the King of his duties.”
³⁴

Figure 1.2 The “Triangle Trade” between Britain, the American colonies, and Africa in the seventeenth and eighteenth centuries (Granger Collection).

Producing large volumes of rum required large-scale smuggling, carried out through all sorts of creative methods to hide illicit cargoes. As Sydney James describes it, this could include clandestinely landing an entire shipment, paying duties on part of a shipment while secretly off-loading the other part, or use of false papers (bought from customs agents in the Caribbean) for the entire shipment to disguise its non-British origins. Bribing of local customs officials also helped to ensure that they would not pry too much. It is perhaps no surprise then
that during its thirty-one years in existence the Molasses Act generated “only a trickle of revenue” for the crown.
³⁵

But even while defying official British trade rules, this and other illicit colonial trades had an economic upside for Britain: the profits from smuggling helped the colonies pay for their growing appetite for British manufactured goods. The official balance of trade heavily disadvantaged the colonies and thus should also have greatly restricted their purchasing power. But even though the official balance of payments was lopsided, this was unofficially “balanced” through smuggling.
³⁶
More purchasing power in the colonies, even if illicitly generated, translated into more British imports—which grew by more than 600 percent between 1700 and 1770.
³⁷
Illicit trade did not simply undermine licit trade: rather, the two grew up and expanded together. In a sense, the breaking of British trade laws made it possible for the colonists to afford to live like the British.

Smuggling helped to create a consumer society in the colonies.
³⁸
The historian Cathy Matson suggests that smuggling even gained a certain amount of respectability by feeding new and growing consumer tastes, ranging from tea to silks.
³⁹
Other illicitly imported luxury goods included coffee, chocolates, wines, and French brandies. William Bollan of New England wrote in 1742 to “The Lords of Trade” in London that from Holland his area was illicitly supplied with “Reels of Yarn or spun Hemp, paper, Gunpowder, Iron, Goods of various sorts used for Men and Women’s Clothing.” To underscore his point, he finished by noting that “I need only to acquaint you that I write this clad in a Superfine French Cloth, which I bought on purpose that I might wear about the Evidence of these Illegal Traders having already begun to destroy the Vital parts of the British commerce; and to Use as a Memento to Myself and the Customhouse Officers to do everything in our power towards cutting off this Trade So very pernicious to the British Nation.”
⁴⁰

Merchant correspondence reveals some of the tricks of the illicit trade with Holland. Thomas Hancock, for instance, wrote to one of his ship captains in Holland instructing him to divert and clandestinely unload his Boston-bound cargo at Cape Cod: “[W]hen you have finished your Business proceed for Cape C[od] New England, speak with nobody upon your passage if you c[an] possibly help it.”
⁴¹
The off-loaded cargo would then be quietly transported to Boston. This type of smuggling scheme was not limited to New England. New York Governor Charles Hardy described the situation in the colony in 1757: it was routine for ships “to come from Holland, stop at Sandy Hook, and smuggle their Cargoes to New York, and carry their Vessels up empty.” He complained that smugglers who countered his efforts to curb this practice “took another Course, by sending their Vessels to … Connecticut”—from where the cargo was sneaked into nearby New York.
⁴²

Treasonous Trade

Unauthorized colonial trade with Britain’s rivals violated the Acts of Navigation and Trade and undermined imperial revenue collection. But in wartime such illicit trade was also treasonous trade. Providing “aid and comfort” to the enemy was prohibited by English statutory law. This did not, however, dampen colonial enthusiasm for smuggling—and indeed, the shortages induced by war conditions simply furnished a greater incentive to smuggle. Given the frequency of war between Britain and its European rivals, “trading with the enemy” was common practice in the American colonies and elsewhere.
⁴³
But this form of clandestine commerce reached new heights during the Seven Years War (1756–1763) between France and England; the conflict played out in their North American colonies as the French and Indian War, which started two years earlier. Even though Britain won the war, smuggling added greatly to its cost and longevity by keeping French forces supplied and neutralizing British efforts to starve them into submission. A captured letter from a Frenchman on one of the Caribbean islands explained the dire wartime situation in September 1758: “Every day we are on the verge of great want; without the help of our enemies we would be obliged to live, as you told us, on what the colony produces. Our condition is hard … we know very well that it is not within the power of French commerce to aid us.”
⁴⁴

American merchants profitably played both sides. As British subjects, they formally contributed to the war effort by supplying troops and serving as deputized privateers (essentially legalized piracy) on
the high seas to attack French supply lines. Informally, they also supplied the French and used privateering to facilitate illicit provisioning. Such disloyalty was not a self-conscious political act of rebellion; there was little sympathy for the French cause, and indeed a French victory was not in the interests of the American colonies. Rather, it was simply a pragmatic response to a business opportunity. For colonial merchants long accustomed to smuggling as a routine and “normal” form of commerce, trading with the French during wartime was merely a continuation of past practice—even if it was viewed far less benignly in London.

Wartime illicit trading with the French primarily took two forms: directly through “flags of truce,” and indirectly through neutral islands in the Caribbean. The official purpose of the flags-of-truce permits, issued by colonial governors to ship captains, was to enable exchange of prisoners with the French. In practice, much more than prisoners was “exchanged.” Sometimes the prisoners were entirely imaginary, with fictional names written in the paperwork for the sake of appearances. The pretense of prisoner exchanges was such a useful cover for illicit trade that some colonial governors, most notably in Rhode Island and Pennsylvania, set up a lucrative business selling flags-of-truce permits to merchants.

William Denny, Pennsylvania’s lieutenant governor, was a particularly notorious seller of blank permits.
⁴⁵
A November 1760 letter to William Pitt from Deputy-Governor James Hamilton (who had recently replaced Denny) described the situation in blunt terms:

Mr. Denny, now in England … about the Month of May in the year 1759, began the practice of selling flags of truce; at first indeed in small numbers, and under the pretence of transporting French prisoners, of whom, tis well known we have not had more during the whole War more than might have been conveniently embarked in one, or at most, two small ships: Yet Mr. Denny or his agents received for each flag so granted, a Sum not less than from three to four hundred pistolen, and having once relished the sweets of this traffick, he became more undisguised, and as it were open’d a shop at lower prices to all Customers, … [including those] of the neighboring provinces, to which they came and purchased freely.

The business peaked during Denny’s last months in office:

Towards the end of his administration, the matter was carried to such a pitch, that he scrupled not to set his name to, and dispose of great numbers of blank flags of Truce, at the low price of twenty pounds sterling or under; some of which were selling from hand to hand at advanced prices, several months after my arrival. In consequence of this iniquitous conduct, by which he amassed a great sum of money, I found at my arrival … a very great part of the principal merchants of this city, engaged in a trade with the French islands in the West Indies.
⁴⁶

Rhode Island was the New England hub of the “flags of truce” illicit trade. Massachusetts Governor Francis Bernard complained to the Board of Trade in London: “These practices will never be put an end to, til Rhode Island is reduced to the subjection of the British Empire; of which at present it is no more a part than the Bahama Islands were when they were inhabited by the buccaneers.”
⁴⁷
In September 1758, Virginia Governor Francis Fauquier reported on one prisoner exchange scheme by Rhode Island merchants: “The Rhode Island Men knowing there were 60 French prisoners at Boston, sent four Ships from Providence to Boston at their own Expense, and put fifteen on board each ship by which they skreen’d four cargoes of provisions … to Port au Prince.”
⁴⁸