Harvesting Power: Transatlantic Merchants and the Anglo-American Grain Trade, 1795-1890 Thomas David Finger Flagstaff, Arizona Bachelor of Arts, State University of New York at Binghamton, 2003 Master of Arts, University of Arizona, 2006 A Dissertation presented to the Graduate Faculty of the University of Virginia in Candidacy for the Degree of Doctor of Philosophy Department of History University of Virginia May, 2015 1 “Harvesting Power” Thomas D. Finger Harvesting Power: Transatlantic Merchants and the Anglo-American Grain Trade, 1795-1890 Thomas D. Finger Abstract Between 1795 and 1889, the Anglo-American grain trade grew to provide Great Britain with most of its food imports. At first, bottlenecks in transportation and markets limited trade.
Between the 1820s and 1870s, merchants built infrastructure by mobilizing business associations, capital, technology, and nature. British and American merchants invested in American transportation and participated in free trade debates during the 1840s. Following the repeal of the British Corn Laws in 1846, American and British merchants stitched together regional markets to send American wheat to Britain. By the 1870s, three key American regions supplied Britain with grain: the Great Lakes Corridor, California, and the Spring Wheat Region of the northern plains.
In the late 1870s, American exports increased as British crops failed. Between 1875 and 1890, American wheat exports rose further as British merchants invested in American milling and transportation. By 1890, the American and British wheat markets converged. This convergence encouraged large commercial agriculture in the United States and a reliance on imports to feed industrial Great Britain.
2 “Harvesting Power” Thomas D. Finger Acknowledgements When it comes to a multi-year research project spanning three countries, deep debts accrue. Countless librarians and archivists in the United States, Great Britain, and Canada have hounded sources on the nineteenth century that had long since fallen into disuse and had been misplaced entirely. The frequency at which lost documents entailed multi-person searches convinced me that I had a long-ignored topic that deserved a thorough accounting.
In particular, the staff at the Liverpool Records Office, The University of Liverpool Special Collections, the ING Baring Corporate Archive, The Buffalo and Erie County Historical Society, and the Minnesota Historical Society have all assisted greatly in that effort. In similar fashion, a score of colleagues and friends have provided great insight into a story I was equally sure I wanted to told and unsure how to tell it. The comments and suggestions of Jaime Allison, Kathleen Brosnan, Mike Caires, Bart Elmore, Sterling Evans, Chris Jones, Dolly Jorgensen, Finn-Arne Jorgensen, Tait Keller, Laura Kolar, Kairn Klieman, Andrew McGee, Marty Melosi, Joe Pratt, Sara Pritchard, George Vrtis, and Chris Wells. My enduring thanks to John K.
By far those with the greatest influence in shaping this story are W. Bernard Carlson, Peter Onuf, Edmund Russell, and Mark Thomas. As members of my committee, each encouraged me to separate the wheat from the chaff in this narrative. Much work remains, but their comments during successive revisions helped this draft immensely.
My eternal gratitude goes to Ed Russell, who patiently and delicately challenged my thinking and writing at all stages. I dedicate this dissertation to him, a constant in a time of change. 3 “Harvesting Power” Thomas D. Finger Table of Contents Introduction The Anglo-American Epic of Wheat.6 Chapter 2 Envisioning an International Grain Trade: English Merchants, Domestic Shortage, and the Rise of Comparative Advantage.28 Chapter 3 The Nature of Exchange: British Merchant Networks, Transatlantic Flows of Capital, and Visions for the American Landscape.69 Chapter 4 This Mighty Instrument of Concord: Wheat in the Transatlantic Free Trade/Free Labor Debate, 1830-1846.105 Chapter 5 Organizing a Trade: Western Water, British Food Crises, and the Rise of the Great Lakes-Empire Corridor, 1846-1865.145 4 “Harvesting Power” Thomas D.
Finger Chapter 6 Bonanza: California’s Wheat and the Liverpool Market, ca 1850-1890.190 Chapter 7 Convergence: The Spring Wheat Region and the British Grain Market, ca 1860- 1890.225 Epilogue How America Came to Feed the World.283 5 “Harvesting Power” – Chapter 1 Thomas D. Finger Chapter One – Introduction: The Anglo-American Epic of Wheat In 1899, Progressive author Frank Norris sat down to write his magnum opus. In it, he hoped to tell the story of America, how conquering the frontier led to unheard-of growth in business enterprise. He hoped to tell this story by focusing on the behavior of humans and the array of social forces that exerted profound influence of the will of the individual.
He wished to write a book that showed how humans were indeed a force within nature, struggling against the indifferent and gigantic processes animating the larger world of which they knew little. Norris yearned to not only write the great American novel, he strove to produce a profound sociological study that could point to the center of human existence and ambition. To tell this story, Norris chose wheat as his main character.1 Frank Norris wrote his best-known work, The Octopus, to describe the power that railroads and financiers enjoyed over grain farmers in the late nineteenth century. In his other great work, The Pit, Norris described the speculation of businessmen in the grain markets of Chicago.
Scholars of American literature consider these books among the most influential Progressive works of literature. What you may not know, however, is that Norris considered them to be the first two volumes in a three-part Epic of Wheat. Norris never completed the third and final volume, The Wolf, due to his early death. While we can only speculate on its exact content, we do know that it focused on the consumption of American wheat in Europe.
2 The complete Epic of Wheat would thus have told the story of a crop of wheat “from the time of its sowing as seed in California to the time of its consumption as bread in a village of Western 1 Franklin Walker, Frank Norris: A Biography (New York: Russell & Russell, 1963), 239–255. 2 Frank Norris, The Epic of the Wheat: The Pit, The Complete Works of Frank Norris (Doubleday, Page & Co. 6 “Harvesting Power” – Chapter 1 Thomas D.” 3 Taken together as a whole, the Epic of Wheat would connect the production, distribution, and consumption of wheat within a wide geographic swath into the same frame, connecting people and environments to show “how the resources of one continent could be used to feed another.”4 For Norris, this was “an idea as big as all outdoors.”5 This dissertation shows that Norris was right. One of the major stories of the late nineteenth century was the transfer of American wheat to Europe.
This dissertation focuses on the largest of those markets: Great Britain. It shows that this trade grew from an unpredictable trickle in 1800 to comprise over 60 percent of Britain’s vital wheat imports in 1890. The reason this trade grew so quickly was a transatlantic network of merchants who came together between 1820 and 1870 to bring large quantities of wheat from the United States to Great Britain from 1870 into the twentieth century. Merchants stand at the center of this story.
It describes how they mobilized four key elements to bring wheat in growing quantities from the United States to Great Britain over the course of the nineteenth century. First, individuals employed a network of business associations across the North Atlantic economy in order to engage in long-standing business deals rather than opportunistic single purchases of securities or trade goods. Second, merchants used this social network to invest capital to develop the American economy. Third, merchants in the United States used this largely-British investment to build transportation and storage technologies to move wheat cheaply over increasingly long distances.
Finally, merchants at all points in the system had to shape nature to allow them to make educated guesses on the supply, demand, and price across various markets. In order to mobilize the four key elements of human networks, capital, technology and nature, these merchants sent a constant stream of information about the 3 Ibid. 4 Walker, Frank Norris, 243. 7 “Harvesting Power” – Chapter 1 Thomas D.
Finger state of harvests, prices, demand, and general market conditions across a growing number of locations in the Anglo-American world. The four main elements mobilized by British merchants to create the Anglo-American grain trade also correspond to the bodies of literature this dissertation builds upon: economic and business history, the history of technology, and environmental history. Business associations were for general and wheat-specific merchants in the nineteenth century the central way to limit personal risk. In these associations, merchants aggregated their capital and using collective information to decide the best prospects for investment.
As economic historians have shown, merchants who engaged in risky overseas trade throughout the history of the Atlantic World banded together in associations of varying durability and length to pool money, information, and resources in an attempt to limit individual liability. 6 Natural processes were a significant cause of risk. There were perils in relying overwhelming on unpredictable agricultural goods who’s amount could be reduced in the field, ship, warehouse, and market by a number of factors including pest infestation and inclement weather.7 Ships could very well sink on the open ocean or wet conditions could spoil or reduce the value of cargo.8 National, state, or local policy could change unpredictably and dramatically influence individual long term plans or even the destination of cargos afloat at the time of passage. 9 Finally, dramatically fluctuating markets at the point of purchase or sale could leave a single merchant liable for loss if he had predicted 6 K.
Davies, The Royal African Company (London: Longmans, Green and Co. Miller, Way of Death: Merchant Capitalism and the Angolan Slave Trade, 1730-1830 (Madison: The University of Wisconsin Press, 1988); David Hancock, Citizens of the World: London Merchants and the Integration of the British Atlantic Community, 1735-1785 (Cambridge: Cambridge University Press, 1995). 7 Percy Bidwell and John I. Falconer, History of Agriculture in the Northern United States, 1620-1860 (Washington: Carnegie Institution of Washington, 1925).
8 Basil Lubbock, The Colonial Clippers (Charles E. Lauriat Company, 1921); Al Miller, “Workhorses and White Flyers: The Northern Steamship Company,” Inland Seas 55, no. 9 Morton Rothstein, “American Wheat and the British Market, 1860-1905” (PhD Diss. 8 “Harvesting Power” – Chapter 1 Thomas D.
Finger different conditions when contracting for a good. The most successful merchants of the eighteenth and nineteenth century protected themselves from these risks by trading in a number of different commodities and forming associations and partnerships with other individuals across the economic spectrum, from crop brokers to insurers, and from bankers to politicians.10 By the early nineteenth century, a few merchant houses on both sides of the Atlantic had come to manage risk better than others. In large ports throughout the Atlantic world, these family dynasties engaged in general trade by brokering deals in wheat, tobacco, cotton and a host of other commodities at the same time they brokered the sale of American securities in Europe through a network of agent houses controlled either by a family member or a trusted associate merchant.11 Agent houses centered in New York City, Philadelphia, and Baltimore would be keystone merchant houses in the Anglo-American grain trade and a crucial node in a larger web of international capital that connected British merchants with investments in the United States.12 While the association between agent and home offices lasted considerably longer than merchants relationships in the earlier Atlantic economy, business historian Alfred Chandler has shown conclusively that these agent and house associations transitioned over time to the even more 10 Jonathan Levy, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Cambridge, MA and London, England: Harvard University Press, 2012). 11 John Kouwenhoven, Partners in Banking: An Historical Portrait of a Great Private Bank, Brown Brothers Harriman & Co.
Perkins, Financing Anglo-American Trade: The House of Brown, 1800-1880 (Cambridge, MA: Harvard University Press, 1975). Hidy, “The Organization and Functions of Anglo-American Merchant Bankers, 1815-1860,” The Journal of Economic History 1, Supplement: The Tasks of Economic History (December 1941): 53–66; R.