the founding fathers were saddled with debt -- 5/11/20
Today's selection -- from The Founding Fortunes by Tom Shachtman. The 1768 Townshend Acts underscored the fact that colonists were becoming enslaved by debt. Since colonists had been prevented from establishing banks, these debts were largely to overseas creditors in England and Scotland. This increasingly unequal relation was part of what led to revolution:
"The belief that things had returned to normal after the rescinding of the Stamp Act was shattered by the 1768 Townshend Acts. Conceived as a way to avoid colonial objections to imposts but still generate money, the Townshend duties were touted as indirect -- a distinction rejected by the pavestone throwers defending [John] Hancock's Liberty. When British marines moved the Liberty out of range, the crowd turned on the customs officials, badly beating one and chasing another to his home and smashing its windows. Hancock, Adams, and Warren appealed to the crowd to stop. It did, demonstrating that appeals to reason could sway crowd members. Yet the Massachusetts governor beseeched Gen. Thomas Gage in New York to send troops to protect Boston from anarchy.
"Anarchy was not threatening the colonies: subjugation was. The shift toward extracting tax moneys from Americans had begun with the 1760 ascension to the throne of George III. To date the colonists had avoided blaming him; they attributed the Stamp Act and the Townshend Acts to his malevolent counselors. Benjamin Franklin, in London, traced them to the 'extream Corruption prevalent among all Orders of Men in this old rotten State [and the] Numberless and needless Places, enormous Salaries, Pensions, Perquisites, Bribes, groundless Quarrels, foolish Expeditions, false Accompts or no Accompts, Contracts and Jobbs [that] devour all Revenue and produce continual Necessity in the Midst of natural Plenty.' He and the British Whigs -- members of the Parliamentary Opposition -- blamed the corruption on the nouveau riche who used their wealth to influence legislation. That, to Franklin and friends, signified a government drained of all civic and personal virtue, a potent reminder of what had caused the declines of ancient Greece and Rome.
"The Liberty was seized on a Friday. Over the weekend James Otis and Samuel Adams pressured Hancock to use the incident to reinflame the populace; but he was also importuned by fellow merchants to simply pay the arrears so that he, and they, could resume profitable trade. The British port commissioners agreed that Hancock could post a bond, retrieve the Liberty, and sail it until a court resolved the issue. On Saturday, Hancock said he would go along with the merchants, but on Sunday, Otis and Adams persuaded him to leave the Liberty in British hands as a symbol for resistance. He would lose a substantial sum, in addition to the nine-thousand-pound fine, but he had five other ships for trade.
"In this period, Hancock, as well as the Manigaults and Laurens and any other wealthy American merchants, reluctantly reach the conclusion that the mercantile system was slowly digging them deeper and deeper into debt. To obtain British goods to sell in America, these merchants had to borrow from their British suppliers, at 2.5 percent for a year; and then had to extend their own credit to retailers and artisans. American export-crop farmers had become similarly overdependent on British credit. Washington had sizable debts to the London factor who handled his tobacco, most of the debt attributable to bad trade balances but some of it stemming from his luxurious tastes. Even before marrying Mrs. Custis, Washington had purchased through his factor a fancy coach emblazoned with his coat of arms, a sword, ceiling ornaments, brass fittings, bed linens and matching wallpaper, tailored suits, and statuary for Mount Vernon's entrance hall. But three years later George Washington had to beg an American court to extend a ninety-pound debt he owed a fellow Virginian because he did not have the cash to pay the man. The historian T. H. Breen argues that Virginia's tobacco planters were troubled by their debt, not because they were afraid of insolvency but because it 'threatened to undermine the Virginians' personal autonomy. [And so] to achieve personal independence -- indeed, to restore personal honor and virtue -- they had to break with the economic and political system that threatened to enslave them.'"