Britain was accumulating great wealth from the triangular trade. The increase of consumption goods called forth by that trade inevitably drew in its train the development of the productive power of the country. This industrial expansion required finance. What man in the first three-quarters of the eighteenth century was better able to afford the ready capital than a West Indian sugar planter or a Liverpool slave trader? We have already noticed the readiness with which absentee planters purchased land in England, where they were able to use their wealth to finance the great developments associated with the Agricultural Revolution. We must now trace the investment of profits from the triangular trade in British industry, where they supplied part of the huge outlay for the construction of the vast plants to meet the needs of the new productive process and the new markets.
Many of the eighteenth century banks established in Liverpool and Manchester, the slaving metropolis and the cotton capital respectively, were directly associated with the triangular trade. Here large sums were needed for the cotton factories and for the canals which improved the means of communication between the two towns.
Typical of the eighteenth century banker is the transition from tradesman to merchant and then the further progression from merchant to banker. The term “merchant,” in the eighteenth century context, not infrequently involved the gradations of slaver captain, privateer captain, privateer owner, before settling down on shore to the respectable business of commerce. The varied activities of a Liverpool businessman include: brewer, liquor merchant, grocer, spirit dealer, bill-broker, banker, etc. Writes the historian: “One wonders what was covered by that ‘etc.’”1 Like the song the sirens sang, that “etc.” is not beyond all conjecture. It included, at some time or other, some one or more aspects of the triangular trade.
The Heywood Bank was founded in Liverpool in 1773 and endured as a private bank until 1883, when it was purchased by the Bank of Liverpool. Its founders were successful merchants later elected to the Chamber of Commerce. “They had their experience,” the historian writes, “of the African trade,” besides privateering. Both appear in the list of merchants trading to Africa in 1752 and their African interests survived up to 1807. The senior partner of one of the branches of the firm was Thomas Parke, of the banking firm of William Gregson, Sons, Parke and Morland, whose grandfather was a successful captain in the West Indian trade. Typical of the commercial inter-relationships of the period, the daughter of one of the partners of the Heywoods later married Robertson, son of John Gladstone, and their son, Robertson Gladstone, obtained a partnership in the bank. In 1788 the firm set up a branch in Manchester, at the suggestion of some of the town’s leading merchants. The Manchester branch, called the “Manchester Bank,” was well known for many years. Eleven of fourteen Heywood descendants up to 1815 became merchants or bankers.2
The emergence of Thomas Leyland on the banking scene was delayed until the early years of the nineteenth century, but his investments in the African slave trade dated back to the last quarter of the eighteenth. Leyland, with his partners, was one of the most active slave traders in Liverpool and his profits were immense. In 1802 he became senior partner in the banking firm of Clarkes and Roscoe. Leyland and Roscoe: curious combination! Strange union of the successful slaver and the consistent opponent of slavery! Leyland struck off on his own in 1807, in a more consistent partnership with his slave partner Bullins, and the title of Leyland and Bullins was borne proudly and unsmirched for ninety-four years until the amalgamation of the bank, in 1901, with the North and South Wales Bank Limited.3
The Heywoods and Leylands are only the outstanding examples of the general rule in the banking history of eighteenth century Liverpool. William Gregson, banker, was also slave trader, shipowner, privateer, underwriter, and owner of a rope-walk. Francis Ingram was a slave trader, member of the African Company in 1777, while he also had a share in a ropery business, and embarked on a privateering enterprise in partnership with Thomas Leyland and the Earles. The latter themselves had amassed a huge fortune in the slave trade, and remained slave traders right up to 1807. The founder of Hanly’s bank was Captain Richard Hanly, slave trader, whose sister was herself married to a slave trader. Hanly was a prominent member of the “Liverpool Fireside,” a society composed almost entirely of captains of vessels, slavers,- and privateers, with a sprinkling of superior tradesmen. Robert Fairweather, like Hanly, was slave trader, member of the Liverpool Fireside, merchant and banker.
Jonas Bold combined both slave and West Indian trades. One of the Company of Merchants trading to Africa from 1777 up to 1807, Bold was a sugar refiner, and became a partner in Ingram’s bank. Thomas Fletcher began his career as apprentice to a merchant banker who carried on an extensive trade with Jamaica. Raised to a partnership, Fletcher later became successively Vice-Chairman and Chairman of the Liverpool West India Association, and at his death his assets included interests in mortgages on a coffee and sugar plantation, with the slaves thereon, in Jamaica. Charles Caldwell, of the banking firm of Charles Caldwell and Co., was a partner in Oldham, Caldwell, and Co., whose transactions were principally in sugar. Isaac Hartman, another banker, owned West Indian plantations; while James Moss, banker and prominent citizen in the eighteenth century, had some very large sugar plantations in British Guiana.4
What has been said of Liverpool is equally true of Bristol, London and Glasgow. Presiding over the meeting of the influential committee set up in Bristol in 1789 to oppose abolition was William Miles. Among the members of the committee were Alderman Daubeny, Richard Bright, Richard Vaughan, John Cave and Philip Protheroe. All six were bankers in Bristol. Cave, Bright and Daubeny were partners in the “New Bank” established in 1786. Protheroe was partner in the Bristol City Bank. William Miles bought a leading partnership in the old banking house of Vaughan, Barker and Company; two of his sons were mentioned in 1794, and “Miles’s Bank,” as it was popularly called, had a lengthy and prosperous career.5
For London only one name need be mentioned, when that name is Barclay. Two members of this Quaker family, David and Alexander, were engaged in the slave trade in 1756. David began his career in American and West Indian commerce and became one of the most influential merchants of his day. His father’s house in Cheapside was one of the finest in the city of London, and was often visited by royalty. He was not merely a slave trader but actually owned a great plantation in Jamaica where, we are told, he freed his slaves, and lived to find that “the black skin enclosed hearts full of gratitude and minds as capable of improvement as the proudest white.” The Barclays married into the banking families of Gurney and Freame, like so many other intermarriages in other branches of industry which kept Quaker wealth in Quaker hands. From the combination sprang Barclay’s Bank whose expansion and progress are beyond the scope of this study.6
The rise of banking in Glasgow was intimately connected with the triangular trade. The first regular bank began business in 1750. Known as the Ship Bank, one of the original partners was Andrew Buchanan, a tobacco lord of the city. Another was the same William Macdowall whose meeting with the sugar heiresses of St. Kitts had established both the fortunes of his house and those of the city. A third was Alexander Houston, one of the greatest West Indian merchants of the city, whose firm, Alexander Houston and Company, was one of the leading West Indian houses in the kingdom. This firm itself only grew out of the return of the two Scotch officers and their island brides to the city. For three-quarters of the century the firm carried on an immense trade, owning many ships and vast sugar plantations. Anticipating the abolition of the slave trade, it speculated on a grand scale in the purchase of slaves. The bill, however, failed to pass. The slaves had to be fed and clothed, their price fell heavily, disease carried them off by the hundreds. The firm consequently crashed in 1795, and this was the greatest financial disaster Glasgow had ever seen.
The success of the Ship Bank stimulated the formation of other banks. The Arms Bank was founded in the same year, with one of the leading partners Andrew Cochrane, another tobacco lord. The Thistle Bank followed in 1761, an aristocratic bank, whose business lay largely among the rich West Indian merchants. One of the chief partners was John Glass-ford, who carried on business on a large scale. At one time he owned twenty-five ships and their cargoes on the sea, and his annual turnover was more than half a million sterling.7
Heavy industry played an important role in the progress of the Industrial Revolution and the development of the triangular trade. Some of the capital which financed the growth of the metallurgical industries was supplied directly by the triangular trade.
It was the capital accumulated from the West Indian trade that financed James Watt and the steam engine. Boulton and Watt received advances from Lowe, Vere, Williams and Jennings—later the Williams Deacons Bank. Watt had some anxious moments in 1778 during the American Revolution when the West Indian fleet was threatened with capture by the French. “Even in this emergency,” wrote Boulton to him hopefully, “Lowe, Vere and Company may yet be saved, if ye West Indian fleet arrives safe from ye French fleet... as many of their securities depend on it.” 8
The bank pulled through and the precious invention was safe. The sugar planters were among the first to realize its importance. Boulton wrote to Watt in 1783: “. . . Mr. Pennant, who is a very amiable man, with ten or twelve thousand pounds a year, has the largest estate in Jamaica; there was also Mr. Gale and Mr. Beeston Long, who have some very large sugar plantations there, who wish to see steam answer in lieu of horses.”9
One of the leading ironmongers of the eighteenth century, Antony Bacon, was intimately connected with the triangular trade. His partner was Gilbert Francklyn, a West Indian planter, who later wrote many letters to the Lord President of the Committee of Privy Council emphasizing the importance of taking over the French sugar colony of Saint Domingue in the war with revolutionary France.10 Bacon, like so many others, ventured into the African trade. He began a lucrative commerce in first victualling troops on the coast and then supplying seasoned and able Negroes for government contracts in the West Indies. During the years 1768–1776 he received almost £67,000 under this latter heading. In 1765 he set up his iron works at Merthyr Tydfill which expanded rapidly owing to government contracts during the American war; in 1776 he set up another furnace at Cyfartha. The iron ore for his furnaces was exported from Whitehaven, and as early as 1740 Bacon took a part in improving its harbor.
Bacon made a fortune out of his artillery contracts with the British government. He retired in 1782 having acquired a veritable mineral kingdom. His ironworks at Cyfartha he leased to Crawshay, reserving for himself a clear annuity of £10,000, and out of Cyfartha Crawshay himself made a fortune. He sold Penydaren to Homfray, the man who perfected the puddling process; Dowlais went to Lewis and the Plymouth works to Hill. The ordinance contract had already been transferred to Carron, Roebuck’s successor. No wonder that it was stated that Bacon considered himself as “moving in a superior orbit.”11
William Beckford became a master ironmonger in 1753.12 Part of the capital supplied for the Thorncliffe ironworks, begun in 1792, came from a razor-maker, Henry Longden, who received a bequest of some fifteen thousand pounds from a wealthy uncle, a West Indian merchant of Sheffield.13
In the eighteenth century, when the slave trade was the most valuable trade and West Indian property among the most valuable property in the British Empire, the triangular trade occupied an important position in the eyes of the rising insurance companies. In the early years, when Lloyd’s was a coffee house and nothing more, many advertisements in the London Gazette about runaway slaves listed Lloyd’s as the place where they should be returned.14
The earliest extant advertisement referring to Lloyd’s, dated 1692, deals with the sale of three ships by auction. The ships were cleared for Barbados and Virginia. The only project listed at Lloyd’s in the bubbles of 1720 concerned trade to Barbary and Africa. Relton, the historian of fire insurance, states that insurance against fires in the West Indies had been done at Lloyd’s “from a very early date.” Lloyd’s, like other insurance companies, insured slaves and slave ships, and was vitally interested in legal decisions as to what constituted “natural death” and “perils of the sea.” Among their subscriptions to public heroes and merchant captains is one of 1804 to a Liverpool captain who, on passage from Africa to British Guiana, successfully beat off a French corvette and saved his valuable cargo. The third son of their first secretary, John Bennett, was agent for Lloyd’s in Antigua in 1833, and the only known portrait of his father was recently discovered in the West Indies. One of the most distinguished chairmen of Lloyd’s in its long history was Joseph Marryat, a West Indian planter, who successfully and brilliantly fought to maintain Lloyd’s monopoly of marine insurance against a rival company in the House of Commons in 1810, where he was opposed by another West Indian, father of the famous Cardinal Manning.15 Marryat was awarded £15,000 compensation in 1837 for 391 slaves in Trinidad and Jamaica.16
In 1782 the West Indian sugar interest took the lead in starting another insurance company, the Phoenix, one of the first companies to establish a branch overseas—in the West Indies.17 The Liverpool Underwriters’ Association was formed in 1802. Chairman of the meeting was the prominent West Indian merchant, John Gladstone.18
Thus it was that the Abbé Raynal, one of the most progressive spirits of his day, a man of wide learning in close touch with the French bourgeoisie, was able to see that the labors of the people in the West Indies “may be considered as the principal cause of the rapid motion which now agitates the universe.”19 The triangular trade made an enormous contribution to Britain’s industrial development. The profits from this trade fertilized the entire productive system of the country. Three instances must suffice. The slate industry in Wales, which provided material for roofing, was revolutionized by the new methods adopted on his Carnarvonshire estate by Lord Penrhyn,20 who, as we have seen, owned sugar plantations in Jamaica and was chairman of the West India Committee at the end of the eighteenth century. The leading figure in the first great railway project in England, which linked Liverpool and Manchester, was Joseph Sandars, of whom little is known. But his withdrawal in 1824 from the Liverpool Anti-Slavery Society is of great importance, as at least showing a reluctance to press the sugar planters.21 Three other men prominently identified with the undertaking had close connections with the triangular trade—General Gascoyne of Liverpool, a stalwart champion of the West India interest, John Gladstone and John Moss.22 The Bristol West India interest also played a prominent part in the construction of the Great Western Railway.23
But it must not be inferred that the triangular trade was solely and entirely responsible for the economic development. The growth of the internal market in England, the ploughing-in of the profits from industry to generate still further capital and achieve still greater expansion, played a large part. But this industrial development, stimulated by mercantilism, later outgrew mercantilism and destroyed it.
In 1783 the shape of things to come was clearly visible. The steam engine’s potentialities were not an academic question. Sixty-six engines were in operation, two-thirds of these in mines and foundries.24 Improved methods of coal mining, combined with the influence of steam, resulted in a great expansion of the iron industry. Production increased four times between 1740 and 1788, the number of furnaces rose by one-half.25 The iron bridge and the iron railroad had appeared; the Carron Works had been founded; and Wilkinson was already famous as “the father of the iron trade.” Cotton, the queen of the Industrial Revolution, responded readily to the new inventions, unhampered as it was by the traditions and guild restrictions which impeded its older rival, wool. Laissez faire became a practice in the new industry long before it penetrated the text books as orthodox economic theory. The spinning jenny, the water frame, the mule, revolutionized the industry, which, as a result, showed a continuous upward trend. Between 1700 and 1780 imports of raw cotton increased more than three times, exports of cotton goods fifteen times.26 The population of Manchester increased by nearly one-half between 1757 and 1773,27 the numbers engaged in the cotton industry quadrupled between 1750 and 1785.28 Not only heavy industry, cotton, too—the two industries that were to dominate the period 178 3–1850— was gathering strength for the assault on the system of monopoly which had for so long been deemed essential to the existence and prosperity of both.
The entire economy of England was stimulated by this beneficent breath of increased production. The output of the Staffordshire potteries increased fivefold in value between 1725 and 1777.29 The tonnage of shipping leaving English ports more than doubled between 1700 and 1781. English imports increased fourfold between 1715 and 1775, exports trebled between 1700 and 1771.30 English industry in 1783 was like Gulliver, tied down by the Lilliputian restrictions of mercantilism.
Two outstanding figures of the eighteenth century saw and, what was more, appreciated the irrepressible conflict: Adam Smith from his professorial chair, Thomas Jefferson on his plantation.
Adam Smith denounced the folly and injustice which had first directed the project of establishing colonies in the New World. He opposed the whole system of monopoly, the keystone of the colonial arch, on the ground that it restricted the productive power of England as well as the colonies. If British industry had advanced, it had done so not because of the monopoly but in spite of it, and the monopoly represented nothing but the sacrifice of the general good to the interests of a few, the sacrifice of the interest of the home consumer to that of the colonial producer. In the colonies themselves the ban on colonial manufactures seemed to him “a manifest violation of the most sacred rights of mankind . . . impertinent badges of slavery imposed upon them, without any sufficient reason, by the groundless jealousy of the merchants and manufacturers of the mother country.” British capital had been forced from trade with neighboring countries to trade with more distant countries; money that could have been used to improve the lands, increase the manufactures, and extend the commerce of Great Britain had been expended in fostering a trade with distant areas from which Britain derived nothing but loss (!) and frequent wars. It was a fit system for a nation whose government was influenced by shopkeepers.31
The Wealth of Nations was the philosophical antecedent of the American Revolution. Both were twin products of the same cause, the brake applied by the mercantile system on the development of the productive power of England and her colonies. Adam Smith’s role was to berate intellectually “the mean and malignant expedients”32 of a system which the armies of George Washington dealt a mortal wound on the battlefields of America.