Trading with the Enemy: An American Tradition

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Murray N. Rothbard March 19, 2022 SNB & CHF

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Summary:
During the French and Indian War (1754–1763), Americans continued the great tradition of trading with the enemy, and even more readily than before. As in King George’s War, Newport took the lead; other vital centers were New York and Philadelphia. The individualistic Rhode Islanders angrily turned Governor Stephen Hopkins out of office for embroiling Rhode Island in a “foreign” war between England and France. Rhode Island blithely disregarded the embargo against trade with the enemy, and redoubled its commerce with France. Rhode Island’s ships also functioned as one of the major sources of supply for French Canada during the war. In the fall of 1757, William Pitt was told that the Rhode Islanders “are a lawless set of smugglers, who continually supply the enemy

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During the French and Indian War (1754–1763), Americans continued the great tradition of trading with the enemy, and even more readily than before. As in King George’s War, Newport took the lead; other vital centers were New York and Philadelphia. The individualistic Rhode Islanders angrily turned Governor Stephen Hopkins out of office for embroiling Rhode Island in a “foreign” war between England and France.

Rhode Island blithely disregarded the embargo against trade with the enemy, and redoubled its commerce with France. Rhode Island’s ships also functioned as one of the major sources of supply for French Canada during the war. In the fall of 1757, William Pitt was told that the Rhode Islanders “are a lawless set of smugglers, who continually supply the enemy with what provisions they want…”

The Crown ordered royal governors to embargo exports of food and to break up the extensive traffic with the West Indies, but shippers again resorted to flags of truce and trade through neutral ports in the West Indies. Monte Cristi, in Spanish Hispaniola, proved to be a particularly popular intermediary port.

The flags-of-truce device particularly irritated the British, and the lucrative sale of this privilege—with the prisoners’ names left blank—was indulged in by Governors William Denny of Pennsylvania and Francis Bernard of New Jersey. French prisoners, for token exchanges under the flags, were rare, and therefore at a premium, and merchants in Philadelphia and New York paid high prices for these prisoners to Newport privateers. The peak of this trade came in 1759, for in the following year, with the end of the war with New France, the Royal Navy was able to turn its attention to this trade and virtually suppress it.

However, in the words of Professor Bridenbaugh, “Privateering and trade with the enemy might have their ups and downs … but then as now, government contracts seemed to entail little risk and to pay off handsomely.”1 Particularly feeding at the trough of government war contracts were specially privileged merchants of New York and Pennsylvania. Two firms of London merchants were especially influential in handing out British war contracts to their favorite American correspondents.

Thus, the highly influential London firm of John Thomlinson and John Hanbury (who was deeply involved in the Ohio Company) received a huge war contract; the firm designated Charles Apthorp and Company its Boston representative, and Colonel William Bayard its representative in New York.

In addition, the powerful London merchant Moses Franks arranged for his relatives and friends—David Franks of Philadelphia, and Jacob Franks, John Watts, and the powerful Oliver DeLancey of New York—to be made government agents, New York, furthermore, was made the concentration point for the British forces and the general storehouse of arms and ammunition, thus permitting “many merchants to amass fortunes as subcontractors if they enjoyed the proper family connections.” By 1761, however, all the great ports in America were suffering badly from the severe dislocation of trade wrought by the war.

Smuggling and trading with the enemy were not the only forms of American resistance to British dictation during the French and Indian War. During the French wars of the 1740s, Boston had been the center of violent resistance to conscription for the war effort, an effort that decimated the Massachusetts male population. During the French and Indian War, Massachusetts continued as the most active center of resistance to conscription and of widespread desertion, often en masse, from the militia.

Thomas Pownall took over as governor of Massachusetts in early 1757, and cracked down bitterly on Massachusetts’ liberties: he sent troops outside Massachusetts without Assembly permission, threatened to punish justices of the peace who did not enforce the laws against desertion (hitherto interpreted with “salutary neglect”), and threatened Boston with military occupation if the Assembly did not agree to the arrival and quartering of British troops. In November, English recruiting officers appeared in Boston, and the Assembly and the Boston magistrates forbade any recruiting or any quartering of troops in the town. Pownall vetoed these actions as violations of the royal prerogative, especially in “emergencies.”

The magistrates then countered by detaining recruiting officers in order to investigate them as potential carriers of disease. When Pownall tried to frighten the Massachusetts Assembly with the French threat, it cogently replied that the real threat was the English army, and that if that army marched on Massachusetts, as their commander-in-chief Lord Loudoun was threatening, Massachusetts would resist the troops by force. The legislature insisted on the natural rights of the people of Massachusetts, to defend which they would “resist to the last breath a cruel, invading army.”

Lord Loudoun was threatening to send his army from Long Island, Connecticut, and Pennsylvania to compel the quartering of troops in Boston. In exasperation, Lord Loudoun wrote to Governor Pownall in December 1757: “They [the Massachusetts Assembly] attempt to take away the King’s undoubted prerogative;… they attempt to take away an act of the British Parliament; they attempt to make it impossible for the King either to keep troops in North America, or…to march them through his own dominion….” The Massachusetts legislature finally agreed to permit the quartering of troops, but formally insisted that this quartering come under its own authority and not that of England or its governor.

So few citizens of Massachusetts volunteered for the 1758 campaign that Governor Pownall resorted to the hated device of conscription. Resentment among the people was intensified by such British recruiting methods as dragging drunken men into the army. The people erupted angrily in a series of riots, attacking and beating up recruiting squads, all of which required the British to retain a large troop in Massachusetts to crush an imminent rebellion. The Massachusetts draftees then resorted to the silent but effective nonviolent resistance of mass desertions, refusal to obey the hated officers, and going on sick call.

Lieutenant Governor Thomas Hutchinson was appointed to round up deserters, and hundreds were betrayed by the government’s network of paid informers. The people’s resentment and resistance were intensified by the economic depression in Massachusetts caused by high taxes for the war effort.

Following the disastrous Ticonderoga campaign in 1758, the English general James Wolfe wrote in vehemence arid despair that “the Americans are in general the dirtiest, most contemptible cowardly dogs, that you can conceive. There is no depending upon them in action. They … desert by battalions, officers and all.” Other officials and observers remarked wonderingly of the individualistic spirit of the militiamen: “Almost every man his own master and a general.” With the militia officers democratically elected by their men, “the notion of liberty so generally prevails, that they are impatient under all kind of superiority and authority.”

Moreover, the Americans added a new concept to the age-old European peasant and yeoman practice of desertion: the assassination of officers who would not cooperate.

Even in the following years of English victory, the Massachusetts militia continued its resistance. In 1759, it refused to remain at Lake Champlain for the winter, mutinied against its officers, and returned home. The following year, the Massachusetts militia refused to go from Nova Scotia to Quebec, and mutinied again. General Jeffery Amherst had high-handedly decided, in late 1759, to keep the Massachusetts troops in Nova Scotia over the winter of 1759–60, despite the fact that their terms of enlistment had expired. The men unanimously announced their refusal to serve any longer, and wrote to the commander demanding that they be sent home. The Americans were all placed under guard thereafter.

The British decided to shoot the mutinous colonists, but bloodshed was averted at the last minute when the Massachusetts General Court extended the terms of enlistment to six months, and sweetened the pill with an extra bonus of four pounds per soldier. By spring, however, the men and the General Court remained firm: the troops unanimously decided to leave and the General Court refused to extend their terms in the army. So anxious were the Massachusetts soldiers to leave to go home that a party of them commandeered a ship and set sail for home. It was wholly in vain that Amherst demanded British-style discipline for these rebellious, democratically governed militiamen.

Large numbers of deserting sailors, furthermore, left to join the merchant marine for large-scale smuggling and trade with the enemy. New York City was a lively center for deserting sailors, and New York merchants systematically hid the sailors from the British troops. The British compelled their return in 1757 by threatening to conduct a deliberately brutal and thorough house-to-house search, and to treat New York as a conquered city. British troops were quartered upon New York against the vehement opposition of the citizens they were supposedly “protecting.” In Philadelphia, pacifist mobs repeatedly attacked recruiting officers and even lynched one in February 1756.

In general, continuing conflict raged between English commanders, who wanted complete control over the colonial militia, and the Assemblies, which insisted on definite limitations on militia service. American disaffection with the war effort was particularly marked after 1756, when the limited campaign to grab Ohio lands was succeeded by full-scale war against French Canada.

If Americans, during the Seven Years’ War, pursued a policy of trading with the enemy, the British bitterly alienated the other countries of Europe by repudiating all the cherished principles of international law on the sea that had been worked out over the past century. The developed and agreed-upon principle of international law was that neutral ships were entitled to trade with a warring country without molestation by any belligerent (“free ships make free goods”), unless the goods were actual armaments. After finally agreeing to this civilized principle of international law in the late seventeenth century, England now returned to the piratical practice of attacking neutral ships trading with France and of stopping and searching neutral ships on the high seas.

England had long been the major opponent of rational international law, and of the great libertarian concept of “freedom of the seas,” which formed an integral part of that law. Neutrals’ rights were a corollary of that concept, as was the doctrine that no nation could claim ownership or sovereignty of the seas—that, in fact, the citizens of any nation could use the open seas to trade, travel, or fish where they would.

During the sixteenth century, Queen Elizabeth had not accepted the grandiose claims of the mystic astrologer Dr. John Dee, of England’s claim to ownership of the surrounding seas. After all, England was then engaged in asserting freedom of the seas against the presumed Spanish and Portuguese monopolies of the newly discovered oceans. But after the accession of the Stuarts, Spain was no longer a grave threat to the seas, and England’s overriding maritime interest was to destroy the highly efficient and competitive Dutch shipping. Very early in his reign, James I claimed ownership of the surrounding seas and the fish therein, and Charles I arrogantly claimed sovereignty over the entire North Sea.

In opposition to the Stuart pretensions, the great Dutch “father of international law,” the liberal Hugo Grotius, laid down the principle of freedom of the seas in his Mare Liberum in 1609, and integrated the principle into the natural-law structure of international law in his definitive treatise of 1625, De jure belli ac pacis. Grotius was able to build upon the sixteenth-century writings of the great liberal Spanish jurists and scholastics Francis Alfonso de Castro, Ferdinand Vasquez Menchaea, and Francisco Suârez, who flourished even in a time when the Spanish interest was in proclaiming its sovereignty of the seas.

Grotius’ libertarian view of freedom of the seas could expect to meet stern opposition in many countries, but the greatest opposition was in England, where the Stuarts mobilized scholars in their defense. The leading opponents of Grotius and celebrants of governmental and especially English sovereignty over the seas were the Scot professor William Welwood (1613); the Italian-born Oxford regius professor Albericus Gentilis (1613), who proclaimed absolute English ownership of the Atlantic as far west as America; Sir John Boroughs, royal bureaucrat (1633); and John Selden (1635).

England continued its grandiose claims during the seventeenth century, but with its shipping ever more extensive by the end of the century, it began to consent to be bound by international law on the high seas. England had also been the major opponent of neutral rights in time of war and the Dutch their major advocate. However, in the Treaty of 1674 with Holland, England finally agreed to the vital rule of “free ships, free goods” in protection of neutral shipping, a principle that France and Spain had at least formally ratified two decades before.

America before the Declaration

But now, on the opening of the Seven Years’ War, England arrogantly informed the Dutch and other neutrals that any of their ships trading with France would be treated as enemy vessels, under a specious, newly coined “rule” outlawing neutral shipping that the enemy had permitted in its ports in time of peace. Chief theoretician of this British reversion to official piracy was the Tory Jacobite Charles Jenkinson.

Britain’s arrogant attacks on neutral shipping and violations of international law during the Seven Years’ War alienated all the neutral countries of Europe, who soon raised a cry to return to “freedom of the seas.” Particularly harassed was the highly efficient Dutch shipping, and fellow sufferers from British policy were Spain, Portugal, Sweden, Russia, Naples, Tuscany, Genoa, and Sardinia.

This is an excerpt from Murray N. Rothbard’s Conceived in Liberty, 4 vols. (Auburn, AL: Ludwig von Mises Institute, 1999), 2:250–54.