A Merchant's Republic: Crisis, Opportunity, and the Development of American Capitalism, 1760-1807

The American colonies stood among the wealthiest societies on earth when revolutionary sentiment burst into rebellion in 1775. While the struggle for independence ultimately succeeded, the war wrought widespread physical devastation, inflation, and economic collapse. While the new United States possessed vast natural resources, relative constitutional stability, and global markets eager to consume American agricultural commodities, historians have confused these opportunities for growth with guarantees of it, casting a deterministic vision that omits the characters that turned growth potential into a dynamic economic culture. Merchants and entrepreneurs led a reformation of American business following the Treaty of Paris. Spurred by depression-era declining imports, falling prices and wages, and rising debts, post-Revolutionary merchant-entrepreneurs made subtle yet radical changes to the way they allocated capital, mitigated risk, formed trade networks, and exerted political power. These changes, and the businessmen that initiated them, sparked a vital economic culture defined by flexible and specialized entrepreneurialism.

The Confederation-era business reformation touched almost every part of the American economy. Novel financial institutions and instruments like banks, commercial paper, and asset-backed contracts drove the rapid expansion and integration of the domestic economy and financed exports to previously prohibited markets in Europe, the East Indies, and South America. Increasingly sophisticated capital markets converted booming slave populations into new sources of liquid capital, which underwrote new enterprises. As goods and information began to flow more freely, merchants streamlined antiquated colonial-era business structures. Increasingly sophisticated firms overhauled management and principal-agent relationships to boost trade efficiency and increase profits. At the same time, American merchant-entrepreneurs formed institutions like the New York Chamber of Commerce and the Buttonwood group—the precursor to the New York Stock Exchange—to expand commercial relations and facilitate trust. This dissertation focuses on a cast of approximately 10 merchant-entrepreneurs in Boston, Providence, Philadelphia, New York, Charleston, and the southern agricultural hinterlands, tracing the evolution of their business practices and the capitalist culture they inaugurated.