There is no doubt that the first British empire was Atlantic, maritime and commercial. However, compared to the other European states, England (Great Britain after 1707) was late on the scene in the early-modern Atlantic.

MCKNIGHT & MCILWRATH'S comment highlights the fact that there were many wars during this period; and that many merchants were used to, and comfortable with, coping in a war economy. Indeed, the Treaty of Amiens in 1801, to which this quote refers, created only a temporary lull in the French Wars. McKnight & McIlwrath were trading from Ayr, Scotland, but John Perhouse of Philadelphia noted a similar attitude a few weeks later, commenting that the merchants there were in despair having planned for a long war. Clearly, some merchants were more prepared, willing, or able to conduct business in a difficult business environment. Moreover, some such as McKnight & McIlwrath and Andrew Clow, positively thrived on these situations or involved themselves in speculation. In contrast, others such as James Lawson were clearly uneasy trading during periods of conflict.

Whilst war was a major phenomenon throughout the eighteenth century, there were other types of crises as well. These included imagined crises, natural crises, economic crises and financial crises. Often financial crises were caused by ‘real’ crises. These had both positive and negative features and outcomes, all of with which merchants had to cope. Personal trust was an extremely important element of the business culture at such times. Communications were even slower and less reliable than usual, levels of institutional and general trust were low, and uncertainty high. An existing good reputation was important during these periods, and many tried to keep to their obligations in order to enhance that reputation and thereby enable them to trade in the future. In these difficult times networks were retrenched, but at the same time, merchants created various institutions which helped them to combat the challenges facing them.

This chapter first explores what constitutes a crisis, before discussing ‘imagined’ crises, natural crises, war, and financial crises. Three case studies are then investigated: the American War of Independence, the abolition of the British-Atlantic slave trade, and the build-up to the Anglo-American War. These case studies facilitate a discussion of how the business culture helped both individuals and business communities cope with, and react to, such events.

WHATEVER THE ORIGINAL MOTIVATIONS behind British expansion and colonialism in the Atlantic, there is no doubt that the character of this empire was ‘commercial’. Furthermore, during the eighteenth century the ‘cult of commerce became an increasingly important part of being British’, enhancing the role and reputation of merchants as a group. If we think in terms of informal maritime empire, one based on the economy rather than sovereignty or dominion, there is no doubt that the British Empire was the most successful at this point in time. Even after Independence the United States continued to be Britain's largest single trading partner. This success was largely due to a business culture which facilitated trade despite long-term structural changes and short-term crises. As Malachy Postlethwayt opined in the quote above, commerce had made Britain rich and powerful, and its merchants had facilitated this. Using socio-economic theory has provided a nuanced understanding of how these merchants conceived of, and dealt with, their complex and interdependent commercial relationships. Moreover, applying that theory to the business records and actions of those men has shown how those attitudes shaped the reality of their everyday decisions and experiences. This is important because it highlights their sophisticated understanding and management of their businesses. There is no doubt that these merchants wanted to make as much money as possible, but they were not pure ‘economic men’. This is not to say that they were not rational, but neither were they atomized individuals; they had to work in the world around them. As Granovetter would argue, this approach lets us thread through over- and under- socialized interpretations of economic relations.

Risk, trust, reputation, obligation and networks were the ‘institutional elements’ of this successful business culture. Of course all these elements were interdependent. It was not possible to take risks without some level of trust; some aspects of trust were reliant on a good reputation; which was in turn dependent on fulfilling obligations. All these elements were both dependent on, and played out in, the networks of which these men were all a part. Importantly, these merchants were nuanced in their conception, and management of, these issues.

WHILST THE BUSINESS CULTURE of the merchants was shaped by the wider economic, social, and cultural milieu in which they functioned, Joshua Johnson's riposte in 1772 demonstrates that the long-term goal was to make a profit. As Isaac Wikoff noted two years later, ‘The Design of Trade is to make a profit in the End. I am sure I would have Quit a business immediately in which no Evident profit should arise.’ Johnson's reference to weighing the pistoles and the ‘Johannes’ or ‘Joe’ conjures a wonderful image of an avaricious merchant, but it also underscores the wider Atlantic context in which these merchants interacted with the Spanish and Portuguese, and indeed, other empires. This chapter therefore sets the wider context for this study. It first outlines the Atlantic world, and in particular, Britain's approach to the Atlantic economy viz-à-viz that of Portugal, Spain, the Netherlands and France. It then outlines the institutional framework in which British merchants traded, and the major ports and commodities involved. Lastly, it outlines some of the major characters that appear in this book. Some of these men did not earn enough to wear out the elbows of their coats in counting their profits, but most did come into contact with pistoles at one time or another.

SPACE: THE EUROPEAN ATLANTIC ECONOMIES

THE ATLANTIC OCEAN is a huge expanse of water. The north Atlantic touches Britain, Spain, France and Portugal, the north west coast of Africa, and from Greenland, by Nova Scotia, down the eastern seaboard of the United States to the West Indies. The southern Atlantic stretches along western Africa, down the coast of Brazil, Uruguay and Argentina to the Falkland Islands. Some would argue that the Atlantic world does not end there, so ensconced in Atlantic trade was the silver from Potosí (present-day Bolivia) for example. The Atlantic ocean itself encompasses 26 per cent of the world's surface – over 36,000,000 square miles – and its depth ranges from just over 4,000 metres to more than 10,000. Despite this vast expanse, it was already a space in which everything was on the move by the early-modern era, whether this was people, ideas or commodities. Vast numbers of people traversed this ocean, some by choice, many more by force.

METCALF BOWLER OF PROVIDENCE wrote this rather begging letter to elite merchants Brown & Benson in early 1784. By this time, the post-war slump was already in progress and lesser merchants and shopkeepers all along the eastern seaboard were experiencing financial difficulties. During 1784 Bowler paid what he could in a number of instalments of cash, but by 1785 he was reduced to paying Brown & Benson with various goods such as molasses. In the end, he assigned all his real estate including his shop and home to Brown & Benson as security for his debts, and his wife even had to sign away her dower rights. The tone of his letters is obsequious, and conformed to statements regarding the settling of all his debts to all his creditors as discussed in the previous chapter. He played on their generosity, kindness and reputation throughout. Only once did he complain that they had ‘crouded [sic] me rather too hard’. Brown & Benson managed to gain security for Bowler's debts (which no doubt made them unpopular with the remainder of his creditors), but they did not pursue the collection of his debts through the legal system. This story demonstrates the extraordinary measures merchants took to be conciliatory, and to avoid the hassle and expense of legal procedures which might in turn taint their own reputation. Bowler's plight, however, reveals more than this. He played on the fact that Brown & Benson were an elite, reputable mercantile house, and by being so, they owed obligations not only to him as a customer, but to the wider business community by not forcing lesser traders into bankruptcy. Bowler was asking for what Muldrew has described as ‘forgiveness of debt’. He pointed out that the security they had asked him for was ‘trifling and of no consequence’ to ‘Person[s] of your multiplicity of Business’, and that if they were kind he would be extremely grateful to such ‘worthy men’. Bowler's language demonstrates a clear sense of hierarchy and esteem, but he used this to stress Brown & Benson's responsibility as elite merchants to indulge him.

ALEXANDER JOHNSTON wrote this comment about New York to a correspondent in Scotland in 1783. Johnston had decided to set up in business there having travelled around the Atlantic sorting out his financial affairs. He obviously saw that new opportunities would be available to men like him following the American War of Independence. In order to organise his new trading venture as best as possible, he had set up a new partnership in St. Kitts where he had been in business for some time with his brother and a Mr Moore, and another house, under the name of John Stewart & Co., in St. Eustatia. Johnston had also visited London, Baltimore and Philadelphia in the previous two years, but he clearly sensed, quite prophetically, that New York's role as a port city was going to be increasingly important. Johnston reasoned that because many established merchants were leaving the city, it would be easier to construct new networks. Interestingly, he also noted that the habits, manners and customs of people in New York were quite European, and that this was agreeable to him. Presumably this common cultural ground made it easier to trust people.

Johnston's comments raise many of the issues covered in previous chapters. He was prepared to risk establishing a new business despite the changing institutional framework. He had constructed personal trust with enough people in order to set up in business and clearly general levels of trust were returning. Johnston needed to build up his own reputation, no doubt using existing ties with people he had met during his travels, but the fact that many established merchants were leaving New York meant that many old obligational relationships were being severed in the city, giving him the chance to build up his own. The whole situation highlights the constantly changing nature of networks. They are dynamic and instrumental.

This chapter is the first of two, based around case studies, which bring the themes of risk, trust, reputation and obligation together. The term network(s) is the most often borrowed by historians from socio-economics, but much of the analysis remains broadly positive.

MISFORTUNES may be sure to happen! Merchants such as James Clemens understood that risk was an everyday part of their work; it was frequent and pervasive. More importantly, they realised that some risks could not be guarded against, but that prudence and attention to detail could help to manage others. Benjamin Franklin noted in 1760 that whilst the needs of life were fixed and determined, ‘The Variety of Losses a Trader is liable to, by Trusting at Land, and Adventuring by Sea, by perishable commodities, and Perils from Thieves and Fire, make it manifest, that he is set in the midst of Contingencies’ [emphasis in original]. Franklin clearly perceived that risks were of different types: trusting at land we can understand to be the moral hazard of other people; the risk of the sea and fire we can take to be natural hazards; and in perishable commodities we can think of technical hazard or knowledge aspects of the market. Moreover, the ever-present nature of these risks caused constant anxiety. In another advice book of 1763 William Gordon noted that ‘No profit is equal to the anxiety a man must be under, who hath perhaps as much at risk as he is worth in the world.’ Coping strategies varied: some merchants were risk averse, whilst others fully embraced risk, thriving in times of war, or being involved in the slave trade for example. Risks, however, are socially constructed, and it is therefore important to place the perception and management of risk in historical context.

This chapter first considers the socio-cultural construction of risk before discussing risk and risk management in terms of natural, moral, and technical hazard. It will argue that although eighteenth-century merchants did not use terms such as natural, moral or technical hazard, they did perceive these types of risks separately and differently. Moreover, their nuanced understanding of these risks meant that they were mostly able to manage them extremely well.

IF THERE WAS ONE CLEAR SIGNAL to start asking questions about a merchant's financial viability, it was one of their bills of exchange being protested for non-payment. This usually meant that the payer did not have enough funds with the drawee, and whilst this did not necessarily mean the payer was insolvent, it certainly started rumours. Joshua Johnson noted in 1771 that Hanbury & Co. had protested Barnes & Ridgate's bills, which had hurt their credit. A merchant's ability to get credit was so tied up with reputation, that it was his reputation, hence the term credibility. Credit was an ‘intensely social fact’ [emphasis in original], but also an emotive one. A reputation could take years to construct, yet a small piece of gossip, a sniff of scandal, a rumour of a bill protested, and the merchant's reputation could be deconstructed in seconds. As William Gordon noted in 1763, ‘a merchant ought constantly to have in view, the support of his personal credit, which if is but once blown upon, is not without great difficulty achieved’.

It is therefore very unlikely that William Wilson in the quotation above would really sooner have had his bills protested. His correspondent in Philadelphia, Arthur Jones, had asked him about the prospects of a cargo of wheat he was sending to Wilson at Alexandria (Virginia). Wilson was not prepared to comment in advance for fear that he would be wrong and his judgment subsequently questioned. Nor were ‘the Creatures who are generally buyers of wheat’ prepared to risk their reputation on speculating about possible prices and the market for wheat; they would ‘freeze with terror to be asked the question’. During another transaction in which it had taken a long time to sell some flour sent by Jones to Wilson, Jones had expressed his worries over his cash flow problems. Frustrated, and feeling that Wilson did not care about his predicament, he wrote:

that is, his ‘honor’ being his reputation.