Chapter 8

THE FIRST PERIOD OF COMMERCIAL ANTAGONISM, 1783-1795

While the United States had been undergoing the important changes of the period, 1783-1793, England had passed through an almost equally significant political transformation, in course of which the two countries entered upon a long history of difficult and unfriendly diplomatic relations. The treaty of peace ended the political union of the two communities, but it left the nature of their commercial relations to be settled; and this, for the United States, was a problem second only in importance to that of federal government. If the prosperity of the thirteen States was to be restored, the old-time trade routes of the colonial days must be re-established. The West India market for fish, grain, and lumber, the British or European market for plantation products must be replaced on a profitable basis, and the United States must be prepared to purchase these privileges by whatever concessions lay in its power to grant. It rested chiefly with England to decide whether to permit the former colonies to resume their earlier commercial system or begin a new policy, for it was with Britain and the British colonies {150} that seven-eighths of American commerce naturally was carried on.

Unfortunately for the people of the United States, and unfortunately for the harmony of the two countries, the prevailing beliefs of English merchants, shipowners, naval authorities, and, in general, the official classes were such as to render a complete resumption of the former trade relations almost impossible. According to the political and economic doctrines underlying the Acts of Trade, the moment that the two countries became separated their interests automatically became antagonistic. American shipping, formerly fostered when under the flag, now assumed the aspect of a formidable rival to the British merchant marine and, as such, ought to be prevented from taking any profit which by any device could be turned toward British ships.

The treaty of peace had scarcely been signed when there appeared a pamphlet by Lord Sheffield, early in 1783, which won instant success, passing through several editions. This announced that henceforward it was the duty of the British government to discourage and crush American navigation to the extent of its power in order to check a dangerous rival, taking especial care to reserve the West Indies for exclusive British control. At the possibility of losing the {151} profitable American market through retaliatory measures, Sheffield laughed in scorn. "We might as reasonably dread the effect of combinations among the German as among the American States," he sneered, "and deprecate the resolves of the Diet as those of Congress." There were elements, of course, to whom these arguments of Sheffield were unwelcome, particularly the West India planters themselves, and to a degree the British manufacturers, who would gladly have resumed the trade of the years before 1776; but, so far as the great majority of Englishmen was concerned, it seems impossible to doubt that Lord Sheffield was a true spokesman of their convictions.

In addition to the economic theories of the time, the temper of the British people was sullen, hostile, and contemptuous toward the former colonies. The bulk of the nation had come to condemn the policy of the North Ministry which had led to the loss of the plantations, but they did not love the Americans any the more for that. The sharp social distinctions, which prior to 1776 had rendered the nobility, the gentry, the clergy, and the professions contemptuous toward the colonists, still reigned unchecked; and the Tories and most of the ruling classes, regarding the Americans as a set of ungrateful and spiteful people, whom it was well {152} to have lost as subjects, ceased to take any interest in their existence. The United States was dropped, as an unpleasant subject is banished from conversation; and the relations of the two countries became a matter of national concern only when the interests of shipowners, merchants, or naval authorities were sufficiently strong to compel attention from the governing classes.

The Whig leaders should, of course, be excepted from this general statement, for they and their followers--both their parliamentary coterie and their middle-class adherents outside--retained a friendly attitude, and tried to treat the United States with a consideration which usually had no place in Tory manners. But Whigs as well as Tories held the prevailing conceptions of naval and economic necessities, and only scattered individuals, like William Pitt, were affected by the new doctrines of Adam Smith. Their commercial policy tended to differ only in degree from that of the more rigid Tories.

To make it certain that the United States should fail to secure favourable commercial rights, the ascendancy of the Whigs came to a sudden end within a year from its beginning. The Shelburne Ministry, which made the peace, had to meet the opposition not only of the Tories but of the group led by Fox. In the session of 1783, the Whig party {153} was thus openly split, and presently all England was scandalized to see Fox enter into a coalition with no less a person than Lord North for the purpose of obtaining office. Shelburne resigned on February 24, after the passage of a resolution of censure on the Peace; and George III, after trying every expedient to avoid what he considered a personal disgrace, was forced, on April 2, to admit Fox and North as Ministers under the nominal headship of the Duke of Portland. So Tories were restored to a share in the government, since nearly half of the coalition majority depended upon Tory votes. In December, 1783, the King, by a direct exercise of his influence, caused the Lords to throw out a Ministerial bill for the government of India and, dismissing the coalition Ministers, he appealed to William Pitt. That youthful politician, who had first entered office as Chancellor of the Exchequer under Shelburne, succeeded, after a sharp parliamentary contest, in breaking down the opposition majority in the House, and in a general election in March, 1784, won a great victory. Then, at the head of a mixed Cabinet, supported by Tories and King's Friends as well as by his own followers from among the Whigs, Pitt maintained himself, secure in the support of George III, but in no sense his agent or tool. In the {154} next few years, he made his hold secure by his skill in parliamentary leadership and his success in carrying financial and administrative reforms. This was the first peace Ministry since that of Pelham, 1746-1754, which won prestige through efficient government. It was, however, mainly Tory in temper, and as such distinctly cold and unfriendly toward America. Pitt himself was undoubtedly in favour of liberal commercial relations; but in that respect, as in the question of parliamentary reform, he followed the opinions of his supporters and of the nation.

The British policy toward the United States, under the circumstances, was dictated by a strict adherence to the principles set forth by Lord Sheffield. Pitt, while Chancellor of the Exchequer under Shelburne, introduced a very liberal Bill, which, if enacted, would have secured full commercial reciprocity, including the West India trade. This failed to pass, however, and was abandoned when Pitt left office in April, 1783. The Fox-North Ministry followed a different plan by causing Parliament to pass a Bill authorizing the Crown to regulate the trade with the West Indies. They then, by proclamation, allowed the islands to import certain articles from the United States, not including fish or lumber, and {155} only in British bottoms. It was hoped that Canada would take the place of the United States in supplying the West India colonies, and that British vessels would monopolize the carrying. In 1787 this action was ratified by Parliament, and the process of discouraging American shipping was adopted as a national policy. American vessels henceforward came under the terms of the Navigation Acts, and could take part only in the direct trade between their own country and England. When John Adams, in 1785, arrived at London as Minister, and tried to open the subject of a commercial treaty, he was unable to secure the slightest attention to the American requests and felt himself to be in an atmosphere of hostility and social contempt. The British policy proved in a few years fairly successful. It reduced American shipping trading with England, it drove American vessels from the British West Indies, and, owing to the impossibility of the States retaliating separately, it did not diminish the British market in America. Up to 1789, when the first Congress of the United States passed a navigation act and adopted discriminating duties, America remained commercially helpless. The profit went to British shipowners and merchants.

The American government naturally {156} turned to the other powers having American possessions, France and Spain, hoping to secure from them compensating advantages. So far as France was concerned, the government of Louis XVI was friendly; but its finances were in such confusion and its administration so unsteady after 1783 that Jefferson, Minister to France, could secure no important concessions save one. In 1784, as though to step into the place left vacant by the English, the French crown, by royal order, permitted direct trade between the United States and the French West Indies in vessels of less than sixty tons burden. The result was striking. In a few years the American molasses trade, driven from the British islands, took refuge at San Domingo, building up a tremendous sugar export and more than filling the place of the British trade. In 1790 the commerce of San Domingo surpassed that of all the British Islands together. Here again, French friendship shone in contrast to English antagonism. Every American shipowner felt the difference, and remembered it.

With Spain the United States was less successful. Jay, Secretary for Foreign Affairs, undertook negotiations through Diego Gardoqui, a Spaniard who, during the Revolution, had furnished many cargoes of supplies. He {157} found that country sharply dissatisfied over the boundary assigned to the United States. The British, in ceding Florida to Spain, had not turned over all of their province of 1763, but had handed that part of it north of thirty-two degrees to the United States, and, further, had granted the latter the free navigation of the Mississippi, through Spanish territory. Gardoqui offered in substance to make a commercial treaty provided the United States would surrender the claim to navigate the Mississippi for twenty years. Jay, to whose mind the interests of the seaboard shipowners and producers far outweighed the desires of the few settlers of the interior waters, was willing to make the agreement. But an angry protest went up from the southern States, whose land claims stretched to the Mississippi, and he could secure, in 1787, a vote of only seven States to five in Congress. Since all treaties required the consent of nine States, this vote killed the negotiations. Spain remained unfriendly, and continued to intrigue with the Indian tribes in the south-western United States with a view to retaining their support.

Further north, the United States found itself mortified and helpless before British antagonism. After 1783 the country had Canada on its northern border as a small but actively hostile neighbour, for there {158} thousands of proscribed and ruined Tories had taken refuge. The governors of Canada, Carlton and Simcoe, as well as the men commanding the frontier posts, had served against the Americans and regarded them as rivals. To secure the western fur trade and to retain a hold over the western Indians was recognized as the correct and necessary policy for Canada; and the British government, in response to Canadian suggestions, decided to retain their military posts along the Great Lakes within the boundaries of the United States. To justify them in so doing, they pointed with unanswerable truth to the fact that the United States had not carried out the provisions of the Treaty of 1783 regarding British debts, and that Tories, contrary to the letter and spirit of that treaty, were still proscribed by law. The State courts felt in no way bound to enforce the treaty, nor did State legislatures choose to carry it out. British debts remained uncollectible, and the British therefore retained their western posts and through them plied a lucrative trade with the Indians to the south of the Great Lakes.

In the years after the war, a steady flow of settlers entered the Ohio valley, resuming the movement begun before the Revolution, and took up land in Kentucky and the Northwest territory. By 1792 Kentucky {159} was ready to be admitted as a State, and Tennessee and Ohio were organized as territories. These settlers naturally found the Indians opposing their advance, and the years 1783-1794 are a chronicle of smouldering border warfare, broken by intermittent truces. During all this time it was the firm belief of the frontiersmen that the Indian hostility was stimulated by the British posts, and hatred of England and the English grew into an article of faith on their part. Ultimately, the new government under Washington undertook a decisive campaign. At first, in 1791, General St. Clair, invading Ohio with raw troops, was fearfully defeated, with butchery and mutilation of more than two-thirds of his force; but in 1794 General Wayne, with a more carefully drilled body, compelled the Indians to retreat. Yet with the British posts still there, a full control was impossible.

The new constitution, which gave the United States ample powers of enforcing treaties and making commercial discriminations, did not at once produce any alteration in the existing unsatisfactory situation. Spain remained steadily indifferent and unfriendly. France, undergoing the earlier stages of her own revolution, was incapable of carrying out any consistent action. The Pitt Ministry, absorbed in the game of European politics and in internal {160} legislation, sent a Minister, Hammond, but was content to let its commercial and frontier policies continue. But when, in 1792, the French Revolution took a graver character, with the overthrow of the monarchy, and when in 1793 England joined the European powers in the war against France, while all Europe watched with horror and panic the progress of the Reign of Terror in the French Republic, the situation of the United States was suddenly changed.

In the spring of 1793 there came the news of the war between England and France, and, following it by a few days only, an emissary from the French Republic, One and Indivisible, "Citizen Edmond Genet," arrived at Charleston, South Carolina, April 15. There now exploded a sudden overwhelming outburst of sympathy and enthusiasm for the French nation and the French cause. All the remembered help of the days of Yorktown, all the tradition of British oppression and ravages, all the recent irritation at the British trade discrimination and Indian policy coupled with appreciation of French concessions, swept crowds in every State and every town into a tempest of welcome to Genet. Shipowners rushed to apply for privateers' commissions, crowds adopted French democratic jargon and manners. Democratic clubs were formed on the model of the Jacobin {161} society, and "Civic Feasts," at which Genet was present, made the country resound. It looked as though the United States were certain to enter the European war as an ally of France out of sheer gratitude, democratic sympathy, and hatred for England. The French Minister, feeling the people behind him, hastened to send out privateers and acted as though the United States were already in open alliance.

It now fell to the Washington administration to decide a momentous question. Regardless of the past, regardless of the British policy since the peace, was it worth while to allow the country to become involved in war at this juncture? Decidedly not. Before Genet had presented his credentials, Washington and Jefferson had framed and issued a declaration of neutrality forbidding American citizens to violate the law of nations by giving aid to either side. It was not merely caution which led to this step. The Federalist leaders and most of their followers--men of property, standing, and law-abiding habits--were distinctly shocked at the horrors of the Reign of Terror, and felt with Burke, their old friend and defender in Revolutionary days, that such liberty as the French demanded was something altogether alien to that known in the United States or in England. And as the {162} news became more and more ghastly, the Federalists grew rapidly to regard England, with all its unfriendliness, with all its commercial selfishness, as the saving power of civilization, and France as the chief enemy on earth of God and man. The result was to precipitate the United States into a new contest, a struggle on the part of the Federalist administration, led by Hamilton and Washington, to hold back the country from being hurled into alliance with France or into war with England. In this, they had to meet the attack of the already organizing Republican party, and of many new adherents who flocked to it during the years of excitement.

The first contest was a short one. Genet, his head turned by his reception, resented the strict neutrality enforced by the administration, tried to compel it to recede, endeavoured to secure the exit of privateersmen in spite of their prohibition, and ultimately in fury appealed to the people against their government. This conduct lost him the support of even the most sanguine democrats, and, when the administration asked for his recall, he fell from his prominence unregretted. But his successor, Fauchet, a less extreme man, was warmly welcomed by the opposition leaders, including Madison and Randolph, Jefferson's {163} successor as Secretary of State, and was admitted into the inmost councils of the party.

Hardly was Genet disposed of when a more dangerous crisis arose, caused by the naval policy of England. When war broke out, the British cruisers, as was their custom, fell upon French commerce, and especially upon such neutral commerce as could, under the then announced principles of international law, be held liable to capture. Consequently, American vessels, plying their lucrative trade with the French West Indies, were seized and condemned by British West India prize courts. It was a British dogma, known as the Rule of 1756, that if trade by a neutral with enemies' colonies had been prohibited in peace, it became contraband in time of war, otherwise belligerents, by simply opening their ports, could employ neutrals to do their trading for them. In this case, the trade between the French West Indies and America had not been prohibited in peace, but the seizures were made none the less, causing a roar of indignation from the entire American seacoast. Late in 1793, the British Ministry added fresh fuel to the fire by declaring provisions taken to French territory to be contraband of war. If an intention to force the United States into alliance with France had been guiding the {164} Pitt Ministry, no better steps could have been devised to accomplish the end. As a matter of fact, the Pitt Ministry thought very little about it in the press of the tremendous European cataclysm.

When Congress met in December, 1793, the old questions of Hamilton's measures and the "monarchism" of the administration were forgotten in the new crisis. Apparently a large majority in the House, led by Madison, were ready to sequester British debts, declare an embargo, build a navy, and in general prepare for a bitter contest; but by great exertions the administration managed to stave off these drastic steps by promising to send a special diplomatic mission to prevent war. During the summer the excitement grew, for it was in this year that Wayne's campaign against the western Indians took place, which was generally believed to be rendered necessary by the British retention of the posts; and also in this same summer the inhabitants of western Pennsylvania broke into insurrection against the hated excise tax. This lawlessness was attributed by the Federalists, including Washington himself, to the demoralizing influence of the French Revolution, and was therefore suppressed by no less than 15,000 militia, an action denounced by the Republicans--as Randolph confided to the French Minister--as an example of {165} despotic brutality. Men were fast coming to be incapable of cool thought on party questions.

The special mission to England was undertaken by the Chief Justice, Jay, the most experienced diplomat in America since the death of Franklin. Upon arriving in England, he found the country wild with excitement and horror over the French Revolution, and with all its interest concentrated upon the effort to carry on war by land and sea. The Pitt Ministry was now supported by all Tories, representing the land-holding classes, the clergy, and the professions, and by nearly all the aristocratic Whigs. Burke, one-time defender of the American Revolution, was exhausting his energies in eloquent and extravagant denunciations of the French. Only a handful of radicals, led by Fox, Sheridan, and Camden, and representing a few constituents, still dared to proclaim liberal principles. In all other classes of society, democracy was regarded as synonymous with bestial anarchy and infidelity. Clearly the United States, from its very nature as a republic, could hope for no favour, in spite of the noticeably English prepossessions of Hamilton's party.

Jay dealt directly and informally with William Grenville, the Secretary for Foreign Affairs, and seems rapidly to have come to {166} the conclusion that it was for the interest of the United States to get whatever it could, rather than to endeavour to haggle over details with an immovable and indifferent Ministry, thereby hazarding all success. On his part, Grenville clearly did his best to establish a practicable working arrangement, agreeing with Jay in so framing the treaty as to waive "principles" and "claims" and to include precise provisions. The up-shot was that when Jay finished his negotiations he had secured a treaty which for the first time established a definite basis for commercial dealings and removed most of the dangerous outstanding difficulties. British debts were to be adjusted by a mixed commission, and American claims for unjust seizures in the West Indies were to be dealt with in similar fashion. The British were to evacuate the north-western military posts, and, while they did not withdraw or modify the so-called "rule of 1756," they agreed to a clear definition of contraband of war. They were also ready to admit American vessels of less than seventy tons to the British West Indies, provided the United States agreed not to export West India products for ten years. Here Jay, as in his dealings with Gardoqui, showed a willingness to make a considerable sacrifice in order to gain a definite small point. On the whole, the treaty {167} comprised all that the Pitt Ministry, engaged in a desperate war with the French Republic, was likely to concede.

The treaty left England in the winter of 1795 and reached America after the adjournment of Congress. Although it fell far short of what was hoped for, it still seemed to Washington wholly advisable to accept it under the circumstances as an alternative to further wrangling and probable war. Sent under seal of secrecy to the Senate, in special session, its contents were none the less revealed by an opposition senator, and a tempest of disappointment and anger swept the country. In every seaport Jay was execrated as a fool and traitor and burned in effigy. Washington watched unmoved. The Senate voted ratification by a bare two-thirds, but struck out the West India article, preferring to retain the power of re-exporting French West India produce rather than to acquire the direct trade with the English islands. Washington added his signature, the British government accepted the amendment, and the treaty came into effect. The West India privilege was, in fact, granted by the Pitt Ministry, as in the treaty, owing to the demands of the West India planters. In America the storm blew itself out in a few weeks of noise and anger, and the country settled down to make the best of the privileges {168} gained, which, however incomplete, were well worth the effort.

So the Federalist administration kept the United States neutral, and gave it at last a definite commercial status with England. It did more, for in August, 1795, the north-western Indians, beaten in battle and deprived of the presence of their protectors, made a treaty abandoning all claims to the region south of Lake Erie. The Spanish government, on hearing of the Jay treaty, came to terms in October, 1795, agreeing to the boundaries of 1783, granting a "right of deposit" to American trades down the Mississippi at or near New Orleans, and promising to abandon Indian intrigues. The diplomatic campaign of the Federalists seemed to be crowned with general success.

But in the process the passions of the American people had become deeply stirred, and by the end of 1795 the Federalist party could no longer, as at the outset, count on the support of all the mercantile elements and all the townspeople, for, by their policy toward France and England, Washington, Hamilton, and their associates had set themselves against the underlying prejudices and beliefs of the voters. The years of the strong government reaction were at an end. The time had come to fight for party existence.

{169}