In the early 1750s, the surveyors Joshua Fry and Peter Jefferson sent a map of Virginia and Maryland to a printer in London. Virginia was still a tobacco colony, and their map shows a fastidious attention to every creek on the rivers that floated tobacco into the Atlantic: the Rappahannock, the York and the James. An inset shows a scene at a harbour: gentlemen negotiate the terms of trade while enslaved Black men serve wine and roll hogshead barrels of tobacco on to an Atlantic ship.
This map is on show as part of an exhibition celebrating the 250th anniversary of American independence, at the Grey Art Museum in New York, presented by the Berkley Collection. It is possible to see, with the help of some of the documents on display, how Americans understood their wealth at the time.
We think of wealth now as a portfolio, a collection of impersonal financial assets. Under British rule, Americans didn’t have chartered joint-stock companies or even banks; what they thought of as wealth is visible on Fry and Jefferson’s map: land, personal credit and human beings.
The best picture we have of colonial wealth comes from Alice Hanson Jones, a historian who, in the 1960s and 1970s, compiled a vast database of probates from the year 1774. A probate was a list, written upon death, of everything the deceased owned, owed and was owed. For the American colonists, money sat mostly on shop ledgers and promissory notes. Death was a moment of settlement, and ads in colonial newspapers often urged readers to clear all their credits and debts with the dead.
Land was the single largest source of wealth in all colonies. That share was higher in the scattered townships of New England and the wheat and rye belts of the Middle Colonies. The southern tobacco colonies of Maryland, Virginia and North Carolina were much wealthier, but land itself was a smaller portion of that wealth.
The difference in the southern colonies was made up by the value of enslaved people, assessed neatly on every probate. The privately owned Virginia Company had floundered until its leaders figured out an economic model of tobacco exports, grown by a mix of enslaved Africans and indentured servants from England. By the beginning of the 18th century, Virginia had become a Crown colony and had tightened its Black Code, ensuring that the children of enslaved people remained enslaved. Such codes turned slavery into a form of intergenerational wealth, helping among others Peter Jefferson’s son Thomas, who wrote the Declaration of Independence, an original printing of which is also on show at the Grey Art Museum.
Land in the colonies was a different kind of asset than in Britain. The legal historian Claire Priest has pointed out that, in the colonies, land sales were registered locally, at the county courthouse, to make them easier to manage. By the middle of the 18th century, land in the colonies was also alienable — it could be seized by creditors. This made credit easier to get in the colonies, since both land and enslaved people could serve as collateral.
America had no domestic source of gold or silver, and no chartered banks to issue bank notes. Instead, colonial assemblies over the 18th century had learnt how to issue bills of credit — printed notes backed by land taxes, mortgages on land or port duties. These notes circulated as cash. But as Hanson Jones discovered, there was little cash of any kind in the till when colonists died, less than 5 per cent of their net worth.
What they held instead was credit, the basic form of liquidity for any purchase. Shopkeepers, barmen and the trades all kept ledgers with local customers, which they cleared periodically — sometimes with cash, sometimes with goods. Colonists also wrote promissory notes, which circulated as a kind of cash. Much earlier than in Britain, colonial laws allowed notes to be transferred with a signature to someone else.
Credit was tied to status and personal reputation. The colonies did not have inherited titles, but they did have gentlemen, men who lived from their assets, drank imported Madeira wine and read English works on courtesy and conduct. A gentleman might have been expected to extend credit as a patron, but he would have expected to receive it as well.
The historian Ellen Hartigan O’Connor pointed out that the poor were without reputation, and therefore more likely to have to scrape together cash for purchases, relying on the bills of credit from the colonial assemblies. Women also lost access to credit if they became estranged from their husbands, who ran ads in newspapers instructing tradesmen to cut them off.
Probates showed that, on average, colonists died with more debt than credit, but this varied by region. Those in the southern colonies, who tended to live from next year’s tobacco sales, died with debts. In the Middle Colonies, probates showed a surplus of financial assets, almost all of them held as book credits. Book credits weren’t liquid. They had to be cleared after death, customer by customer, over time.
More recently, the historian Daniel Mandell has suggested that exactly the mercantile values Americans cherish today were sources of frustration for colonists. In the early years of the revolution, towns in New England organised to control the prices of goods as costs rose in the ports. In Philadelphia, Robert Morris, the Atlantic merchant who kept finding ways to fund the war, fought a losing battle to keep the Pennsylvania assembly from regulating prices.
Merchants such as Morris were the outliers hiding in Hanson Jones’s carefully compiled regional averages. They became even wealthier during the war and then after, as Britain lost its ability to impose restrictions on trade. Merchants had access to the silver and gold coins that moved in the Atlantic economy, and they preferred what Americans now take for granted as wealth: bank money and tradeable financial assets.
The American revolution did not make land any less important, and it did not end slavery. The Declaration of Independence itself was partly an argument for more land; the Virginians in particular chafed at the way Britain had prevented them from expanding beyond the Blue Ridge mountains so clearly laid out on Fry and Jefferson’s map. But independence did change the way Americans managed their financial relationships. America’s constitution forbade the states from issuing the bills of credit that were so useful to farmers and the poor for money. Instead, America’s new states began chartering banks to issue notes and deposits.
Alexander Hamilton, champion of urban merchants, rewrote federal finance to create the safe, reliable assets we now think of as Treasurys. That map of Virginia, a clear depiction of the value gentlemen placed on tidewater tobacco land, became less important. By the early 19th century, wealthy Americans begin to assemble something we still recognise today: cash deposits and financial portfolios.
‘The Declaration of Independence: Long Trail to Liberty’ runs to July 10 at the Grey Art Museum, New York University, theberkley.org
Brendan Greeley is an FT contributing editor. His book ‘The Almighty Dollar: 500 Years of the World’s Most Powerful Money’ is published by Crown
