Money and Mercantilism in the 17th-cent. English Atlantic


A review of Money, Mercantilism and Empire in the Early English Atlantic, 1607-1697, by Jonathan Barth.

Historians of the seventeenth-century English Atlantic have in recent years taken up the project of “rethinking mercantilism”; its definition, its applicability as a description of the Atlantic political economy, the nature of the seventeenth-century theories that pass by that eighteenth-century term, the relationship between those theories and actual commercial practice, and so on.   The concept of a “mercantilist consensus” – in which the English at home and in the colonies alike assented to a specific state policy program aimed at maximizing the trade balance and bullion inflows of the home economy – has become the subject of a vigorous historiographical debate about the constantly unfolding negotiations among economic interests all around the Atlantic Basin that shaped the actual practice of mercantilism in a highly contingent fashion.  Jonathan Barth’s dissertation enters into this debate as it regards one particularly far-reaching aspect of the Atlantic political economy: the nature and value of money.  His point of departure, as stated in his abstract, is the simple yet provocative recognition that, regardless of the “monetary interests of England” that loomed so large in the machinations of state policymakers, “the colonists too wanted money” (v).  From there, Barth presents the manifold ways and means by which the English colonial governments in America, and the interests they represented, sought to get and keep money circulating within their developing economies.

This was not simply a matter of running the printing presses, as it is in our days of paper currency, central banks, and quantitative easing.  Money in the seventeenth century was valued largely for its intrinsic value, giving pride of place to gold and silver coinage.  Indeed, the initial economic rationale for the earliest English colonial ventures was the one laid down by the Spanish in America in the sixteenth century: the search for mines that would introduce into the English economy precious metals in unimaginable amounts, making the English state able to purchase all the things that made for ultimate political power – or if I may be allowed this colloquialism, “specie would buy stuff.”  Only in the 1610s as the colonists of Virginia struggled their way towards a tobacco-producing monoculture did the shortcomings of the Spanish way come into focus: first, that the new English colonies contained no silver deposits to rival Potosí or Zacatecas, and second, that the value of specie for purchasing stuff diminished just as rapidly as its supply expanded.

The English response to this realization, worked out over a century in political-economic tracts by the likes of Thomas Mun, Charles Davenant, William Petty and Daniel Defoe, was to reverse the priority of “stuff” and “specie.”  These theorists did not depreciate the value of bullion, instead continuing to view it as the ultimate measure of a nation’s wealth; but rather than seeking sources of bullion with which to afford all other things, they argued that the way to wealth was through state policy that would encourage exports and discourage imports, thus drawing bullion into the realm to make up the difference.  “Stuff would buy specie,” rather than the other way around as the Spanish had tried.  In fact, the twin goals of a positive balance of trade and consequent inflows of bullion are for Barth the fundamental tenets of a new sort of “mercantilist consensus”; the English throughout the Atlantic World, he argues, agreed with these as the ends of economic policy, but sharply disagreed over the proper means to achieve them (69-80).

This was all theory, of course; the actual practice as presented by Barth was intensely regional, in keeping with the observation of Christian Koot (himself a member of Barth’s dissertation committee) that “the specific character of empires emerged out of negotiations to resolve the tensions between local conditions and imperial policy.”  Early Virginia, rich in tobacco but poor in everything else including silver, by 1619 had turned to using tobacco as money, with the exchange value of a pound of high-grade tobacco fixed at three shillings a pound; all public debts and fines being payable in tobacco as legal tender; and even the governor receiving his salary from the House of Burgesses in the form of tobacco (120-121).

“Stuff” similarly became “specie” throughout the plantation-monoculture colonies, with Barbados using tobacco for the first two decades after English settlement in 1627 until the eventual transition to sugar prompted its colonial legislature to change over the island’s commodity money as well.  Yet the results of the English experience with staples-as-specie proved painfully similar to the Spanish experience with specie itself: overproduction led to inflation, eroding the ability of the plantation colonies to import both non-staple goods and silver coins (122-123).  Jamaica was a special case in this respect: its position in the western Caribbean near the Spanish Main gave it privileged access to silver “pieces of eight” through privateering and piracy in the immediate aftermath of the island’s 1655 English conquest, and increasingly through the legal transshipment of enslaved Africans and the clandestine trade in manufactured goods to the Spanish possessions (310-315).  Yet even Jamaica experimented with commodity money.  The diverse agricultural products produced on the island prior to the full development of the sugar plantation economy circulated in a crudely calibrated system of exchange rates – a pound of cocoa was worth fourpence, a pound of tobacco threepence, et cetera – that rose above the level of mere barter and that went by the name “country pay” (290).

But the real home of country pay was New England, the most peculiar region of the wider English Atlantic in monetary matters as in so many other regards.  Barth broadly accepts James T. Lemon’s argument, in his well-known debate with such historians as James Henretta and Daniel Vickers, that the economic modalities of early New England could most aptly be characterized as market-oriented.  Despite the good will he offers to Lemon’s position, Barth argues that the shortage of silver nevertheless sent the colonists hunting for alternative media of exchange, including beaver pelts, musket balls, and Native American belts of wampum, and various grains, with the General Court of Massachusetts singling out bushels of maize as legal tender for public debts (142-146).  Ironically, the lack of a single staple crop that could be either exported or monetized actually fostered modest inflows of Spanish silver coin into New England, where it primarily circulated among the emerging merchant elite of the region while farmers, craftsmen, and smaller traders continued to make do with country pay (198-199).

Massachusetts went even beyond this in 1652, taking advantage of the diversified regional economy, the relative permissiveness of the Massachusetts Bay Company charter, and the political uncertainty in old England following the abolition of the monarchy to establish its own mint.  This institution existed well into the 1680s, coining the silver “Bay shilling” that bore a pine tree rather than the visage of any English ruler along with the date 1652 (regardless of issue date) in commemoration of the mint’s establishment.  Barth analyzes this episode in great detail not only for its strict economic significance, but also for its impact as a stark assertion of the colony’s pretensions to sovereignty, and even as a sign of the emergence of expressly commercial values among the growing and increasingly Anglican merchant elite, in competition with the communitarianism that still characterized the Puritan political and spiritual leadership (237-243).  Barth’s research into the affair of the Massachusetts Bay mint allows him to propose a fundamental alteration in the standard timeline of the English Atlantic mercantilist system.  With the Navigation Acts of 1651 funneling English colonial trade to England alone, thus codifying the economic subordination of colonies to metropole, the 1650s usually are portrayed as a significant advance in Parliamentary oversight of English oceanic trade.  By instead focusing on what colonial authorities were up to in the realm of monetary policy, Barth converts the decade into a high-water mark of the periphery’s resistance to central control (16).

Though circumstances specific to Massachusetts assisted its attempts at monetary autonomy, it was by no means alone among the colonies in attempting a semi-independent policy.  Every colony struggled to keep hold of whatever Spanish “pieces of eight” happened to enter its markets, prone as they were to exit straightaway as payment for imported goods.  By fixing the value of the Spanish dollar above its actual silver content as measured in English shillings, the government of a colony could offer potential importers of Spanish silver dollars “more stuff for their specie,” thus encouraging their inflow (182-186).  Colonial governments therefore engaged in competitive overrating of pieces of eight, though English policymakers gave the plantation colonies less leeway in this regard, worried about damaging the sugar and tobacco traffic that contributed so powerfully to the State fisc (410-413).  The colonists also brought in Spanish coin by contravening the Navigation Acts and selling their goods to smugglers; the Dutch especially offered good prices in silver, taking advantage of their extreme efficiency in the provision of shipping services by which they themselves had acquired so much Spanish specie in the first place (482-484).  A further monetary tool available to mainland North American governors was connivance with the same pirates who had brought so much coin into early Jamaica prior to the 1670s, when the growth of the sugar economy made them surplus to Caribbean requirements (444-453).  Barth carefully juxtaposes these government-induced monetary artifices at the periphery with related events in England, such as the introduction in 1663 of the 22-shilling gold guinea, the Stop of the Exchequer in 1672, the currency shortage that plagued England throughout the 1670s, and the foundation of imperial oversight bodies such as the Lords of Trade (in 1675) that subjected the workings of the entire system to increasing scrutiny.

The climactic chapter focuses on the 1680s with especial regard for the ill-fated attempt to abrogate the New England charters and amalgamate the northernmost colonies into a single Dominion of New England under a royal governor.  Here Barth showcases his mastery of the class interests within each colony and their differing approaches to monetary questions, which together with his attention to the variations among the colonies is a hallmark of his analysis throughout the dissertation.  Barth convincingly demonstrates that the region’s elite merchants, by organizing themselves in a number of land syndicates, had largely cornered the market on the lands recently made available in the wake of Metacom’s (or King Philip’s) War and the subsequent near extermination of several Native American groups in the mid-1670s.  The profitability of the syndicators’ scheme depended on a monetary innovation that had attracted the attention of several English and colonial theorists since mid-century, but had yet to be attempted in practice: a land bank that would emit circulating paper currency to those who took out one of its mortgages on their lands (516-527).  Sir Edmund Andros, erstwhile governor of New York and viceroy of the Dominion of New England from 1686, effectually opposed the scheme on the grounds that it would enrich the speculators at the expense of humbler landowners (who still dealt largely in country pay), and compounded the offense to the big merchants by blocking a new monetary manipulation aimed at drawing in more Spanish coin.  While this less-known aspect of the Andros supremacy might have made him out as a man of the people, his challenge to all land titles under the old charters, not just those of the speculators, canceled out any populist goodwill he might have garnered (533-540).

An epilogue surveys the situation after the Revolution of 1688, which Barth singles out as the determining event in the long-running contest between “Tory” and “Whig” versions of mercantilism.  Famously, the Bank of England in 1694 symbolized the Whig triumph, with its emission of banknotes on a fractional-reserve basis backed by its promise to pay the bearer silver on demand, which combined with the recoinage of 1696 to create the basic imperial monetary order thenceforth.  Yet the more Tory-oriented idea of a land bank, issuing circulating notes to less than the value of the lands on deposit, found a home in the North American colonies, where the availability of practically unlimited land encouraged this approach to the political economy of paper money (582-588).  Aside from this significant variation, the colonists mostly acquiesced to the new state of mercantilist affairs imposed by metropolitan policymakers – in part, Barth suggests, because they felt they could repose more trust in William and Mary not to abuse their interests as James II had.  The stronger impetus, however, seems to have been the unprecedented security pressures brought to bear by the expanding empire of Louis XIV of France after 1689 (593-594).  Before that date the colonists seemed to feel that they could handle most threats they faced; even Metacom’s War in 1675 with its bloody raids and counterraids on both sides’ population centers ultimately proved manageable with the help of a massive tax raised in bushels of maize (375).

Despite the chronological decade-by-decade organization of the chapters, the greatest value of Barth’s dissertation is its attention to the regional- and class-based variations in how, exactly, “the colonists too wanted money.”  Neither this formulation in the abstract nor any other elsewhere in the introductory material hints adequately at the interpretive weight that these lines of analysis will bear in the main body of the dissertation.  Indeed, they arguably could have borne more than they did.  For instance, Barth on a few occasions notes demands by hired laborers in New England, the Middle Colonies, or even the Chesapeake for payment in coin even in cases where it was likely that their work would receive compensation in country pay (123-124).  The potential role of such modest economic actors in agitating for a proper coinage nevertheless does not come in for any extended analysis.  Properly followed up, this point represents an opportunity to draw an instructive contrast with the situation in the prevailing plantation-monoculture economies farther south.  Here Spanish coin was even harder to maintain in circulation; planters were all too prone to export what coin they acquired, together with their staple crops, in order to finance the accoutrements of luxurious living.  What’s more, the planters made consumption decisions not only for themselves, but also for the vast majority of the population that comprised their indentured and later enslaved workforces, leaving no alternative decision-makers to balance the planters’ export of specie and import of stuff.  The proposition that “the colonists too wanted money” thus becomes less than straightforward in the case of Barbados, Jamaica, the Chesapeake or the Carolinas.

There is also ample room to qualify Barth’s thesis for the more northerly colonies, which not only wanted money but more ambitiously sought control over money as well.  If anything, they adhered only too well to the “mercantilist consensus” around the twin goals of a positive balance of trade and inflow of specie.  Ignoring imperial policymakers’ desire for the colonies to support England’s trade balance, colonial governments used competitive currency devaluation – and Massachusetts used its extraordinary minting privileges – to institute their own policies of mercantilism and augment their own trade balances and specie stocks.  A formulation such as this, audacious though it is, yet is well warranted by Barth’s findings and clarifies the full scope of the post-1689 bargain between the northerly colonies and the metropole.  In exchange for the imperial protection the colonies received from the rising threat of French imperialism, the colonists had to accept nothing less than subordination within a transatlantic mercantilist order from which they had previously stood aloof, at least in a monetary sense.  Up to that moment of security-induced convergence, the great Atlantic mercantilism debate may not have been over the broadly shared twin ends of positive balance of trade and specie inflow, but neither was it primarily about the means to achieve these ends so much as it was about who should benefit from their achievement.

In short, just as the recent travails of the Eurozone have underlined in our own time, Barth’s dissertation shows us that the value of money in the seventeenth century English Atlantic was profoundly rooted in the physical, economic, cultural, and even religious and military geography of its constituent regions.  By laying bare these connections, and how they informed peculiar regional approaches to monetary policy, Barth has opened up an important new dimension in the reinvigorated debate over the nature of mercantilism.

Matthew David Mitchell
Assistant Professor
Department of History
Sewanee: The University of the South

Primary Sources
Numerous contemporary tracts on political economy and mercantilism.  Travelogues and ethnographic material on the colonies.  Official records of the various colonial governments.

Dissertation Information
George Mason University, Fairfax, VA, 2014. v +654pp. Primary Advisor: Cynthia A. Kierner.

Image: A twelve-pence pine-tree shilling from Massachusetts, issued sometime between 1667 and 1674. Image courtesy of Stack’s Bowers Galleries.

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