Byzantine Empire, Bosporus, Silk Road, Dutch East India Company, English East India Company, Tea Act and Opium Wars

Posted by PITHOCRATES - March 11th, 2014

History 101

(Originally published May 15th, 2012)

To encourage Risk Takers to Travel Halfway around the World Mercantile States granted Monopoly Charters

The modern world began because Europeans had a penchant for silk and spices.  Something they enjoyed during Roman times.  When the Romans ruled the world.  And the Mediterranean Sea was nothing more than a Roman lake.  But when the empire stopped conquering new lands and sending the spoils of war home they had to turn to other means to pay for the cost of empire.  Taxes.  To pay for the Roman government and their public spending.  And the Roman legions.  This excessive government spending led to the fall of the western half of the empire.  But the eastern half lived on for another 1,000 years or so.  Why?  Because the capital of the Byzantine Empire was Constantinople.  On the Bosporus.  Trade crossroads of the world.

This city was so rich everybody wanted to conquer it.  So they could have all those riches.  For everything that came along the Silk Road from China crossed into Europe at the Bosporus.  Soon Muslims fought Christians in the Holy lands.  Then more Christians came.  The Crusaders.  Those who didn’t die went back to Europe with some of those Chinese luxuries.  Spices.  Silk.  Porcelain.  Etc.  Sparking a renewed interest in these finer things in Europe.  Especially the spices.  For European cooking was horribly bland at the time.  The Ottoman Turks eventually took Constantinople.  Renamed it Istanbul.  And controlled that lucrative trade.  Making those much sought after Asian goods rather expensive in Europe.  Which they had no choice but to pay.  Because if you wanted those luxuries you had to go through Istanbul.  Until the Portuguese sailed around Africa and found a direct route to those cherished goods, that is.

It was the Commercial Revolution.  A new age of international trade.  A trade even more profitable than what the Ottoman Turks controlled.  Because big ocean-going vessels can carry more cargo than anything coming over land on the Silk Road.  And these new European maritime powers wanted that wealth.  And the power it would provide.  To encourage risk takers to get into those wooden ships and travel halfway around the world they granted monopoly charters.  The Dutch East India Company (VOC) was one of the largest.  And one of the wealthiest.  But this was not your typical company.  The VOC established overseas colonies.  It waged war.  Established treaties.  Even coined its own money.  Because of this thousands of VOC ships stuffed full of valuable cargoes sailed to Antwerp and Amsterdam, making the Dutch very wealthy.  And powerful.

The Tea Act allowed the Company to Ship their Tea Directly to America and exempted them from any Duties

Of course the Dutch weren’t the only ones doing this.  They had competition.  Portugal.  Spain.  France.  And England.  Who would bump into each other numerous times fighting for control of this trade.  And those colonies.  The English and the Dutch would fight 4 wars.  Which is how Dutch-founded Manhattan became part of the British Empire and, subsequently, one of America’s greatest cities.  The English East India Company gave the VOC a run for its money.  Parliament even passed legislation to give the English a monopoly on all trade with their American colonies.  The Navigation Acts.  Which stated that all trade to and from America had to be on English ships.  And all trade had to go through an English port.  Where the ships were unloaded and the cargoes inspected.  And taxed.  Then they could reload their cargoes and continue on their journey.  All tenets of mercantilism.  This kept the lower-priced Dutch goods out of America.  And prevented the Americans from selling to the Dutch directly for higher prices.  So it shut down the Dutch from all American trade (except for a prosperous black market). And brought in some lucrative tax revenue for England.  While extending shipping times and increasing prices for the Americans.  Which they were not happy about in the least.

The English East India Company (the Company) was similar in structure to the VOC.  And soon made the Indian subcontinent a wholly owned subsidiary of the Company.  But it wasn’t cheap.  Waging war was costly.  As was managing those conquered territories (something the Romans had also learned).  Then a famine in Bengal in 1770 claimed about one-third of the local population.  Making laborers more scarce.  And more expensive.  All at a time when the sales of their imported goods were falling in Europe.  There were warehouses full of unsold Chinese tea that they couldn’t sell.  Making for a bad time for the Company.

Higher costs and lower sales spelled trouble.  And that’s what the Company had a lot of.  Trouble.  So the Company turned to Parliament for help.  And Parliament helped.  By allowing the Company to ship their tea directly to America without having to unload it in a British port.  Or pay a duty on that tea.  Which would greatly reduce their costs.  And allow them to sell it in America cheaper than they did before.  So Parliament passed the Tea Act in 1773.  Making life better for all involved.  But the Tea Act left in place another tax in the previous Townshend Acts.  Which was a bigger problem than getting cheaper tea (which they could get on the black market from the Dutch).  These taxes on the British subjects in America were unconstitutional.  Because there were no Americans sitting in Parliament.  This was taxation without representation.  A much bigger issue than cheap tea.  So they threw that first ‘cheap’ tea into Boston Harbor.  The Boston Tea Party being a major step towards war with the mother country.  And American independence.

Britain became the Lone Superpower after Abandoning their Protectionist Mercantile Policies and Adopting Free Trade

The American Revolutionary War was not the only headache the British got from their mercantile policies.  Part of those policies required maintaining a positive balance of trade.  So there was always a net inflow of bullion into the mother country.  That’s why raw materials shipped into Britain from America.  And finished goods shipped out to America.  Finished goods are more valuable than raw materials.  So the Americans had to make up for this balance of trade in bullion.  Resulting in a net inflow of bullion into the mother country.  Very simple.  As long as you can manufacture higher valued goods that other people want to buy.

And this is the problem they ran into with the Chinese.  For though the British wanted those Chinese spices, silk and porcelain the Chinese didn’t want anything the British manufactured.  Which meant Britain had to pay for those luxuries with bullion.  Including all that Chinese tea they craved.  Which resulted in a net outflow of bullion to the Chinese.  The British fixed this problem by finding the one thing that the Chinese people wanted.  Indian opium.  Grown in Bengal.  Of course, this turned a lot of Chinese into opium addicts.  The addiction problem was so bad that the Chinese banned opium.  But the British were able to smuggle it in.  They sold so much of it that they used the proceeds to buy their tea.  Thus reversing the bullion flow.

Not the finest hour in the British Empire.  The Chinese and the British would go on to fight a couple of wars over this opium trade.  The Opium Wars.  Which the British did all right in.  Even gaining Hong Kong in the bargain.  They didn’t build any long-lasting love with the Chinese people.  But Hong Kong turned out pretty nice under the British.  Especially after they abandoned their protectionist mercantile policies and adopted free trade.  Which made the British the lone superpower for about a century as they modernized the world by leading the way in the Industrial Revolution.  And the Chinese in Hong Kong were very happy indeed to be there when the communists took over the mainland.  And caused a famine or two.  For they lived comfortably.  In a state founded on mercantilism.  That achieved its greatest prosperity during the free trade of capitalism that followed Britain’s mercantile ways.

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It wasn’t an Anti-Government Tea Party Nut that sent Ricin to President Obama

Posted by PITHOCRATES - June 8th, 2013

Week in Review

After the Boston Marathon bombings the liberal media was quick to point out the symbolism surrounding that day (tax day, anniversary of Waco, anniversary of Oklahoma City bombing, Patriots’ Day, etc.) pointing to an anti-government Tea Party nut.  Some even commented that they hoped it wasn’t a Muslim.  Because they wanted it to be an anti-government Tea Party nut.  To justify further oppression of the Tea Party.  And not to bring up issues about the war on terror.  Or immigration reform.  But it had to be some Muslim.  Greatly dismaying those on the left.

The same thing happened when someone sent letters with ricin to President Obama and New York City Mayor Bloomberg.  It was all over in the news when there was a chance it was some anti-government Tea Party nut.  But now you hardly hear anything about it.  Because it was not an anti-government Tea Party nut (see Bit-part actor charged over plot to frame husband for ricin letters by Paul Harris posted 6/8/2013 on the guardian).

It is a story that reads like the plot of a cheap, pulp thriller – except perhaps not quite as believable.

On Friday, a pregnant bit-part actor in Texas was charged with sending letters to President Barack Obama and New York mayor Michel Bloomberg laced with the deadly nerve poison ricin in an apparent bizarre bid to frame her husband for the crime.

Shannon Richardson, who has had small roles on TV shows like the Walking Dead and Vampire Diaries, is a mother of five, who first went to the police with her concerns that her husband, Nathaniel Richardson, might have mailed the letters – which were intercepted before they reached their intended recipients.

But as investigators studied the case the focus of their questioning instead began to settle on the person who had made the outrageous claims in a scenario that on its face value saw a marital spat develop into a full blown bio-terrorist attack on the White House…

Amazingly this is not the first case of its kind this year. In April letters laced with ricin were sent to Obama, a Mississippi senator and a local judge. Paul Kevin Curtis of Corinth, Mississippi, was quickly arrested but charges were dropped and another man was picked up. That man, J Everett Dutschke, was later charged with mailing the letters, but also with trying to frame Curtis – who was described as a local rival.

As much as they want these attacks against America to be from disgruntled anti-government Tea Party nuts so they can further marginalize the Tea Party and get more sympathy for using the IRS to harass them they’re not.  These people breaking the law aren’t law-abiding Tea Party people.  They are anti-American Islamist terrorists.  Or just some nut doing something stupid.

But that doesn’t fit the narrative.  So the left continues to belittle and marginalize the Tea Party.  And uses all the powers of their office to attack them.  Or any of their other political enemies.  While urging everyone not to jump to any conclusions that the Boston Marathon bombers were radical Muslims who hated America.  No.  That didn’t mean anything.  But the symbolism of April 15?  We should all fear the law-abiding people of the Tea Party on that day.  For they may do something crazy like throw tea bags into Boston Harbor.

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2012 Endorsements: John Adams

Posted by PITHOCRATES - October 24th, 2012

2012 Election

John Adams was descended from the Puritans who landed at Plymouth Rock

John Adams was the Rodney Dangerfield of the Founding Fathers.  He got no respect.  However deserving he was of respect.  The man was brilliant.  Well read.  Honest.  Virtuous.  But irascible.  And vain.  He knew he was right when he was right.  And was more than eager to argue with anyone that was wrong.  Which was most of the time.  Tending to make most people not love him.  A lot.  Earning him monikers like His Rotundity.  Because he was portly.  Irascible.  And not really loved.  Which bothered Adams.  For he was one of the greatest of the Founding Fathers.  But others got all the love.  Such as Thomas Jefferson.  The junior Congressman they delegated the writing of the Declaration of Independence to after Adams did all the heavy lifting in Congressional debate to lead the nation to declare their independence.  While Jefferson sat through all those heated debates silently.  For, unlike Adams, Jefferson did not like public confrontations.  He preferred stabbing people in the back through surrogates.  Or in the press.  As Adams would learn firsthand during the 1800 presidential election.

Adams was a very religious man.  His family descended from the Puritans who landed at Plymouth Rock.  Who stressed filling your day with hard work and going to church.  And if you had any time left in the day you might get a little eating or sleeping in.  Adams was a farmer.  And had the hands of a working man.  But he was also a lawyer.  A very good lawyer.  Who had as much reverence for the law as he did for his religion.  So much so that he represented the British soldiers involved in the Boston Massacre.  After the Stamp Act (1765) things were getting a little heated in Boston.  Adams then wrote the Braintree Instructions in response to the Stamp Act.  Stating that there should be no taxation without representation.  Calling for trial by jury.  And an independent judiciary.  Things the British denied the good people in the American colonies.  But things Adams insisted that the Americans shouldn’t deny to the British soldiers who shot those Americans in Boston.  So he represented the British on trial when no one else would take the case.  And he got a jury of Bostonians to acquit all but two who they found guilty of manslaughter.

Just about every Bostonian wanted the British soldiers found guilty of murder and hung.  Bu the rule of law prevailed.  As Adams convinced  the jury that the British did not just open fire on innocent bystanders.  There was a mob harassing the British.  Throwing snowballs and chunks of ice.  And other projectiles.  Someone knocked a British soldier to the ground.  While the mob grew in size.  And in intensity.  Provoking the British to discharge their weapons.  As much as the British killing these Americans bothered Adams so did an unruly mob.  His religious teachings emphasized hard work and prayer.  Not drunkenness and mob violence.  However, Boston had always had drunken, unruly mobs.  But they didn’t always get shot by British redcoats.  So why did they this time?  Because British redcoats were quartered within the city of Boston.  This was the kindling that led to the mob action.  Which was yet another British violation of the good people of Boston.

A Strong enough Naval Force acts like an Impregnable Fortress Wall to any Hostile Power

When the British marched to Lexington and Concord to seize some weapons in 1775 and exchanged shots with the Americans a state of war existed.  The Revolutionary War had started even though their declaration of independence was another year away.  Up to this time most of the trouble with the British was in Massachusetts.  And some states wanted to leave it in Massachusetts.  Which was a problem for Massachusetts.  For they couldn’t take on the British Empire by themselves.  But if the states united together they had a chance.  Adams understood this.  So when it came time to choose a commander for the Continental Army he looked to a Virginian.  George Washington.  After they voted to declare their independence he looked at another Virginian to write the Declaration of Independence.  Thomas Jefferson.  Understanding that they had to make this an American Revolution.  Not just a Massachusetts one.  For only a union of their several states could withstand the mightiest military power on the planet.  But not just any union.  One that would release all the latent energies of the several states.  A republican union.

After declaring their independence the first order of business for the states was to replace the British governing structure.  And that started with the writing of new constitutions.  To make those new state governments.  That could join in a republican union.  Something Adams had given much thought and study to.  He believed in the separation of powers between the executive, the judicial and the legislative branches.  To provide checks and balances.  And a bicameral legislature.  A lower house to represent the common people.  And an upper house to represent the rich people.  With an executive to represent the state.  Such that the interests of the many, the few and the one were all represented.  Similar to Great Britain’s two houses of Parliament (House of Commons and House of Lords) and the king.  Though, of course, having versions of these that weren’t corrupt.  Thus not allowing one group of people (or person) to dictate policy to the other group of people (or person).  Thereby avoiding a pure democracy and mob rule.  A characteristic of a single-house legislature.  As France would demonstrate during their French Revolution.

After delegating the busy work of writing the Declaration of Independence to the junior member from Virginia, Thomas Jefferson, Adams dove into the work of building a navy.  What he liked to call ‘wooden walls’.  For a strong enough naval force acted like an impregnable fortress wall to any hostile power.  The British Empire ruled the world because the Royal Navy was the most powerful navy in the world.  She could protect her coasts.  Prevent the landing of armies.  Keep foreign warships out of canon range of her cities.  And even protect her trade routes.  In a day of competing mercantile empires dependent on their shipping lanes having a navy to protect those shipping lanes made the difference between empire and former empire.  As few picked fights with the nations with the big navies.  Adams understood this.  And he believed in it.  Peace through strength.  For a strong navy was a deterrent to aggressive nations.

If John Adams were Alive Today he would Likely Endorse the Republican Candidates Mitt Romney and Paul Ryan

But Adams was no warmonger.  During his presidency Napoleon came to power in France and was waging war across Europe.  And against American shipping.  Once again Adams fought to build up the navy.  To erect those wooden walls.  To be able to protect American shipping on the open seas as France and Great Britain returned to war.  President Washington maintained a policy of neutrality in their latest war.  Adams continued that policy.  Which infuriated the French.  And the American people.  As the French had helped the Americans win their revolution the French and the American people believed the Americans should help the French win theirs.  So the French seized American shipping.  And demanded tribute from the American ambassadors in France before beginning any peace discussions.  When news of this leaked out to the American people (known as the XYZ Affair) the public sentiment on France changed.  And soon everyone was demanding a declaration of war on France.  Adams tried one more peace commission while at the same time the growing American navy fought back against French naval aggression in an undeclared war.  The Quasi-War.  Eventually peace came.  Through strength.

Adams was pretty much everywhere in the making of the American nation.  From the Braintree Instructions to supporting George Washington to winning the debate for independence to the writing of states’ constitutions to building a republican union.  He helped build American naval power.  And he avoided war with France when just about everybody wanted war with France.  But one place he was not was in Philadelphia in 1787.  Even though his constitution writing skills were second to none he did not help draft the U.S. Constitution.  For he was busy in Holland.  Getting the first foreign power (the Netherlands) to recognize the United States following their victory in the Revolutionary War.  He negotiated a Dutch loan.  Negotiated a treaty of amity and commerce with the Dutch.  And established the first American-owned embassy on foreign soil.

If Adams were alive today he probably would not be a fan of the Democrat Party.  And their constant use of class warfare.  Especially when the top 10% of earners pay about 70% of all federal income taxes.  While about 50% of the population pays no federal income taxes.  This does not represent the interests of the many, the few and the one.  The few pay the majority of tax revenue and have the least say in how that money is spent.  Taking the nation closer to a pure democracy.  And mob rule.  While at the same time the Democrats use the courts to write unpopular legislation they want but can’t pass in Congress.  Where a few judges can write law through court opinions.  A great offense to a pure jurist like Adams.  And transforming ‘the one’ into a leviathan of special interests and cronyism.  Knowing how hard it was to secure loans to pay the nation’s war debt in his day he would be appalled at the size of the annual deficits and the accumulated debt today.  And the constant refrain that the rich need to pay their fair share even though about 10% of all Americans are already paying approximately 70% of the tax bill.  The character assassination of Mitt Romney by the Obama Campaign would be too reminiscent of the abuse he suffered through in the 1800 election.  And as a firm believer in the policy of peace through strength he would not like the massive cuts in defense spending.  Which will only encourage more attacks like the one on the American embassy in Benghazi.  An obvious sign that our enemies don’t fear us.  And are not deterred by our strength.  No, if John Adams were alive today he would likely endorse the Republican candidates Mitt Romney and Paul Ryan.

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Benedict Arnold, Fort Ticonderoga, Quebec, Battle on Lake Champlain, Freeman’s Farm, Bemis Heights, West Point and Major André

Posted by PITHOCRATES - June 14th, 2012

Politics 101

Arnold prevented a British Drive down the Hudson Valley to separate New England from the Rest of the Colonies

There was a fine line between Patriot and Loyalist.  And between Patriot and traitor.  For Benedict Arnold, at least.  Who went from Patriot to hero to traitor.  Some would argue that if it weren’t for Benedict Arnold we may not have won the American Revolutionary War.  And they may be right.  Yet at the same time he almost single-handedly lost the Revolutionary War. 

Benedict Arnold was both the best and the worst of Americans during the Revolution.  For he was a complex man.  And a flawed man.  After hostilities broke out at Lexington and Concord Arnold led his company from New Haven to Boston.  One of the first to answer the call of duty after that fateful day when a shot was fired that was heard ’round the world.  He was in it from the get-go.  A Patriot.  When it became apparent that the Americans lacked the artillery to attack the British in the fortified Boston they looked west.  To Fort Ticonderoga.  The Massachusetts Committee of Safety directed Arnold to raise a force and march on Fort Ticonderoga.  Capture it.  And bring back their cannon for action on the British fortifications at Boston.  The Connecticut Committee of Safety, not knowing of the orders given to Arnold, gave similar orders to Ethan Allen.  These two leaders met on the way to Ticonderoga.  Argued a little.  Then shared command.  Captured Ticonderoga.  Ethan Allen dragged the captured cannon back to Boston while Arnold went on and captured Crown Point.  Captured a British ship.  Sailed it to St. John.  And captured it.

Right from the beginning Arnold was what the Americans needed.  An aggressive leader who took the initiative.  And he would again.  But Arnold was also a prima donna.  He yearned for glory.  Shortly after Ticonderoga Congress decided on a Canadian campaign.  To conquer the British in Montreal and Quebec (City) so the Canadians could join the Americans as the fourteenth colony.  While a campaign was put together for Montreal Arnold persuaded General Washington for another campaign he would lead through Maine to Quebec.  Washington approved. 

Arnold’s Action around Saratoga brought the French into the War and Changed everything for Britain 

So Arnold gathered his force.  Including one Daniel Morgan.  And marched through the inhospitable wilderness of Maine in some unpleasant weather.  His men were wet, hungry, cold and miserable.  They made it to Quebec and assaulted the fortress in a January blizzard.  It did not go well.  Richard Montgomery, coming to join Arnold after conquering Montreal, was killed in the attack.  Arnold was wounded.  The Americans retreated.  First to Montreal.  Then all the way back to Ticonderoga.  Battling the British in a rearguard action.  While smallpox decimated the American ranks.  British General Carleton was in hot pursuit coming down to Lake Champlain.  Where Arnold would meet him.  He threw together a small makeshift squadron and met Carleton in battle on Lake Champlain.  Arnold lost his fleet.  But he delayed Carleton a month.  Unprepared for a winter campaign, Carleton retreated.  Thus Arnold prevented a British drive down the Hudson valley to separate New England from the rest of the colonies.

About a year later British General John Burgoyne launched a three-pronged attack consisting of a force attacking east from Oswego through the Mohawk valley.  A force attacking north up the Hudson River from New York.  And a force led by Burgoyne taking the same route Carleton had a year earlier.  Down through Lake Champlain and into the upper Hudson valley.  All three prongs to converge around Albany.  To cut off New England from the rest of the colonies.  The southern prong coming out of New York never materialized, though.  For General Howe was busy running around in Pennsylvania.  While the other two prongs got bogged down before reaching their objectives.  Burgoyne himself was having some trouble around a little town called Saratoga.  Burgoyne’s lines of communications were stretched dangerously long.  He was getting into trouble.  At the same time, though, political intrigue changed the American commander.  Horatio Gates replaced General Schuler.  Gates was content to trust his defenses and wait for the British assault.  Arnold saw the British were going to attempt to turn a weak American flank at Freeman’s Farm.  He argued with Gates to counter that move.  He finally gave in and agreed to send a force that included Daniel Morgan’s riflemen.  As that battle ebbed and flowed Arnold led a force against the British center. 

Arnold saved the day.  Had he received reinforcements he may have defeated the British army that day.  Instead Gates relieved Arnold of his command.  And marginalized him in his report to Congress.  At the subsequent battle at Bemis Heights Arnold, without a command, gathered some men and assaulted some British fortifications as the British retired behind them.  Breached the fortifications.  Sending the British in retreat all the way back to Saratoga.  Getting a horse shot out from underneath him in the process.  And taking another bullet in the leg.  Because of Arnold’s action around Saratoga Burgoyne had no choice but to ask for terms of surrender.  And he surrendered to General Horatio Gates.  Who got all the glory.  While his part in this victory was marginal at best.  But this victory was big.  It brought the French into the war.  Which changed everything for Britain.  Who now had a world war on their hands.  And the Spanish would later join that war against the British.  As allies to the French.  Then Catherine the Great of Russia led a drive for an armed neutrality of the other nations not taking sides in this new world war.  Which isolated Britain further.  Making it more difficult to interdict supplies going to the American rebels on neutral ships.

We remember Benedict Arnold not for the Hero he was but for the Traitor he Became

You could say that Benedict Arnold made this all possible.  By saving New England twice.  First by delaying Carleton on Lake Champlain.  Then winning the battles at Freeman’s Farm and Bemis Heights.  But did he get the glory?  No.  Some respected him.  General Washington did.  But the politics of the Congress were against him.  Which was a problem for a man like Arnold.  Who had a huge ego.  Was arrogant.  A bit of a hothead.  And had a gambling problem.  Put it all together and it caused this Patriot to become a traitor.  Because he was not given the proper respect for his glorious achievements.  And saving the American cause time and again.  If the American political elite would not give him the proper respect the British would.  And made a deal with him.  Money and security for the rest of his life for him and his family.  In exchange for information.  And control of the Hudson River via the forts of West Point. 

Arnold asked for and got command of West Point from General Washington.  And then started feeding the British inside information.  And began making plans for the handover of West Point to the British.  To finally sever New England from the rest of the colonies.  And it might have happened as planned if not for his British contact, Major André, being caught behind the American lines out of uniform with plans of how to capture the forts of West Point.  Arnold was to meet General Washington that day who by then knew of André’s capture.  Arnold did not.  But he found out just in time to escape to the British lines.  André was not so lucky.  For the Americans hanged him as a spy.

Arnold would return to America.  As a British general.  Landing in Virginia and leading an army of Loyalist Tories near the end of the war.  Doing some damage.  But he would never recapture past glories.  He would retire to England.  Pretty much a footnote in the British history of the American Revolutionary War.  For their investment in Arnold delivered little.  So Arnold would live out his remaining days a man with no real country.  He could never return to America.  And the British never really accepted him.  Americans and British alike lamented the death of Major André.  Who died because of Arnold.  A death he nevertheless faced with honor and courage.  But Arnold would suffer a worse fate.  Indifference.  He mattered to no one.  He had no honor.  Lived another 20 years or so.  Insignificant.  And died a traitor.  Which is the only thing we remember him for.  Not the hero he was.  But the traitor he became.

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Byzantine Empire, Bosporus, Silk Road, Dutch East India Company, English East India Company, Tea Act and Opium Wars

Posted by PITHOCRATES - May 15th, 2012

History 101

To encourage Risk Takers to Travel Halfway around the World Mercantile States granted Monopoly Charters

The modern world began because Europeans had a penchant for silk and spices.  Something they enjoyed during Roman times.  When the Romans ruled the world.  And the Mediterranean Sea was nothing more than a Roman lake.  But when the empire stopped conquering new lands and sending the spoils of war home they had to turn to other means to pay for the cost of empire.  Taxes.  To pay for the Roman government and their public spending.  And the Roman legions.  This excessive government spending led to the fall of the western half of the empire.  But the eastern half lived on for another 1,000 years or so.  Why?  Because the capital of the Byzantine Empire was Constantinople.  On the Bosporus.  Trade crossroads of the world.

This city was so rich everybody wanted to conquer it.  So they could have all those riches.  For everything that came along the Silk Road from China crossed into Europe at the Bosporus.  Soon Muslims fought Christians in the Holy lands.  Then more Christians came.  The Crusaders.  Those who didn’t die went back to Europe with some of those Chinese luxuries.  Spices.  Silk.  Porcelain.  Etc.  Sparking a renewed interest in these finer things in Europe.  Especially the spices.  For European cooking was horribly bland at the time.  The Ottoman Turks eventually took Constantinople.  Renamed it Istanbul.  And controlled that lucrative trade.  Making those much sought after Asian goods rather expensive in Europe.  Which they had no choice but to pay.  Because if you wanted those luxuries you had to go through Istanbul.  Until the Portuguese sailed around Africa and found a direct route to those cherished goods, that is.

It was the Commercial Revolution.  A new age of international trade.  A trade even more profitable than what the Ottoman Turks controlled.  Because big ocean-going vessels can carry more cargo than anything coming over land on the Silk Road.  And these new European maritime powers wanted that wealth.  And the power it would provide.  To encourage risk takers to get into those wooden ships and travel halfway around the world they granted monopoly charters.  The Dutch East India Company (VOC) was one of the largest.  And one of the wealthiest.  But this was not your typical company.  The VOC established overseas colonies.  It waged war.  Established treaties.  Even coined its own money.  Because of this thousands of VOC ships stuffed full of valuable cargoes sailed to Antwerp and Amsterdam, making the Dutch very wealthy.  And powerful.

The Tea Act allowed the Company to Ship their Tea Directly to America and exempted them from any Duties

Of course the Dutch weren’t the only ones doing this.  They had competition.  Portugal.  Spain.  France.  And England.  Who would bump into each other numerous times fighting for control of this trade.  And those colonies.  The English and the Dutch would fight 4 wars.  Which is how Dutch-founded Manhattan became part of the British Empire and, subsequently, one of America’s greatest cities.  The English East India Company gave the VOC a run for its money.  Parliament even passed legislation to give the English a monopoly on all trade with their American colonies.  The Navigation Acts.  Which stated that all trade to and from America had to be on English ships.  And all trade had to go through an English port.  Where the ships were unloaded and the cargoes inspected.  And taxed.  Then they could reload their cargoes and continue on their journey.  All tenets of mercantilism.  This kept the lower-priced Dutch goods out of America.  And prevented the Americans from selling to the Dutch directly for higher prices.  So it shut down the Dutch from all American trade (except for a prosperous black market). And brought in some lucrative tax revenue for England.  While extending shipping times and increasing prices for the Americans.  Which they were not happy about in the least.

The English East India Company (the Company) was similar in structure to the VOC.  And soon made the Indian subcontinent a wholly owned subsidiary of the Company.  But it wasn’t cheap.  Waging war was costly.  As was managing those conquered territories (something the Romans had also learned).  Then a famine in Bengal in 1770 claimed about one-third of the local population.  Making laborers more scarce.  And more expensive.  All at a time when the sales of their imported goods were falling in Europe.  There were warehouses full of unsold Chinese tea that they couldn’t sell.  Making for a bad time for the Company.

Higher costs and lower sales spelled trouble.  And that’s what the Company had a lot of.  Trouble.  So the Company turned to Parliament for help.  And Parliament helped.  By allowing the Company to ship their tea directly to America without having to unload it in a British port.  Or pay a duty on that tea.  Which would greatly reduce their costs.  And allow them to sell it in America cheaper than they did before.  So Parliament passed the Tea Act in 1773.  Making life better for all involved.  But the Tea Act left in place another tax in the previous Townshend Acts.  Which was a bigger problem than getting cheaper tea (which they could get on the black market from the Dutch).  These taxes on the British subjects in America were unconstitutional.  Because there were no Americans sitting in Parliament.  This was taxation without representation.  A much bigger issue than cheap tea.  So they threw that first ‘cheap’ tea into Boston Harbor.  The Boston Tea Party being a major step towards war with the mother country.  And American independence.

Britain became the Lone Superpower after Abandoning their Protectionist Mercantile Policies and Adopting Free Trade

The American Revolutionary War was not the only headache the British got from their mercantile policies.  Part of those policies required maintaining a positive balance of trade.  So there was always a net inflow of bullion into the mother country.  That’s why raw materials shipped into Britain from America.  And finished goods shipped out to America.  Finished goods are more valuable than raw materials.  So the Americans had to make up for this balance of trade in bullion.  Resulting in a net inflow of bullion into the mother country.  Very simple.  As long as you can manufacture higher valued goods that other people want to buy.

And this is the problem they ran into with the Chinese.  For though the British wanted those Chinese spices, silk and porcelain the Chinese didn’t want anything the British manufactured.  Which meant Britain had to pay for those luxuries with bullion.  Including all that Chinese tea they craved.  Which resulted in a net outflow of bullion to the Chinese.  The British fixed this problem by finding the one thing that the Chinese people wanted.  Indian opium.  Grown in Bengal.  Of course, this turned a lot of Chinese into opium addicts.  The addiction problem was so bad that the Chinese banned opium.  But the British were able to smuggle it in.  They sold so much of it that they used the proceeds to buy their tea.  Thus reversing the bullion flow.

Not the finest hour in the British Empire.  The Chinese and the British would go on to fight a couple of wars over this opium trade.  The Opium Wars.  Which the British did all right in.  Even gaining Hong Kong in the bargain.  They didn’t build any long-lasting love with the Chinese people.  But Hong Kong turned out pretty nice under the British.  Especially after they abandoned their protectionist mercantile policies and adopted free trade.  Which made the British the lone superpower for about a century as they modernized the world by leading the way in the Industrial Revolution.  And the Chinese in Hong Kong were very happy indeed to be there when the communists took over the mainland.  And caused a famine or two.  For they lived comfortably.  In a state founded on mercantilism.  That achieved its greatest prosperity during the free trade of capitalism that followed Britain’s mercantile ways.

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Mercantilism

Posted by PITHOCRATES - May 14th, 2012

Economics 101

Wealth is the Stuff we use our Talent and Ability to Make

Mercantilism gave us the United States.  For it was because of these policies that the British established colonies in North America.  And it was those same policies that led to American Independence.  Because those polices pissed off the Americans. 

The mercantile system came into being as nation states arose from feudal estates.  Kings arose and consolidated these estates into larger kingdoms.  Then one king arose to consolidate the kingdoms into a nation.  Creating Spain, France, the Netherlands, England, etc.  Enlightened thinking and better technology created food surpluses.  With food surpluses a middle class of artisans arose.  And manufactured goods.  People met in markets to trade their food and goods.   These markets grew into cities.  All of this economic activity created wealth.  Food.  And manufactured goods.  That we bought with money.  Often silver and gold. 

There was wealth.  And there was money.  Two different things.  Wealth is the stuff we use our talent and ability to make.  Food and manufactured goods, for example.  And the more food and manufactured goods a nation has the wealthier that nation is.  This is a critical point.  And the mercantile policies ultimately failed because those policies mistook money for wealth.  But money is not wealth.  It’s a temporary storage of wealth.  To make our trading of food and manufactured goods easier.  By reducing the search costs to find people to trade with.  Which is why the barter system failed in a complex economy.  It just took too long to find people to trade with.  Money solved that problem.  Because you could trade what you had for money.  Then trade your money for what you wanted.

England used the Positive Flow of Bullion to Finance the Building of the Royal Navy

Mercantilism focused on the money.  And used wealth to accumulate it.  Instead of the other way around.  The way most advanced nations do today.  These European nations accumulated money with international trade.  Beginning in the 15th century they started looking at the balance of trade between nations.  And did everything they could to maintain a positive balance of trade.  Meaning they tried to export more than they imported.  Why?  Well, nations often did trade with each other.  So they owed each other money.  And when you settled your account if other nations owed you more than you owed them there was a net flow of money to you.  Bullion.  Silver and gold.  Which is what they wanted.

To maintain a positive balance of trade the government actively intervened into the economy.  It set up monopolies.  It provided subsidies for manufacturers who exported their goods for bullion.  It placed tariffs on imports.  Or simply blocked the importation of any goods that they produced domestically.  They set up colonies to harvest raw materials to ship back to the mother country.  Which would use those raw materials in their factories to produced higher valued finished goods.  That they would export.  Especially to their colonies.  Which were convenient captive markets for their finished goods.  On the mother country’s ships.  Through the mother country’s ports.  Where they, of course taxed it.  Guaranteeing that at every step of the way they added to the positive bullion flow back to the mother country.

And it worked.  To a certain extent.  England used that positive flow of bullion to finance the building of the Royal Navy.  Which proved invaluable in the wars that followed in the mercantile world.  For mercantilism is a zero-sum game.  For every winner there had to be a loser.  Which is why this era was an era of world war.  To wrest control of those colonies.  And those sea lanes.  Great Britain came out the victor.  Thanks to their Royal Navy.  But it wasn’t all good.  For Spain found gold in the New World.  And they took it.  Shipped it back to the Old World.  Just like a good mercantilist would.  Which caused problems in the Old World.  Because money is not wealth.  It’s a temporary storage of wealth.  And when they inflated their money supply it took more of it to hold the same amount of value it once did.  Because there was so much of it in circulation.  And what happens during inflation?  Prices rise.  Because the money is worth less it takes more of it to buy the same things as it did before.  So by hording bullion to create wealth they actually destroyed wealth.  With wealth-destroying inflation.

With the Boston Tea Party the Americans Renounced Mercantilism and Demanded Free Trade

Spain was one of the greatest mercantile nations of the era.  But they quickly became a shadow of their former self.  Even though they had more bullion than their European neighbors.  For it turned out that those mercantile policies hindered economic growth.  Which is the true source of wealth.  Economic growth.  Where people use their talent and ability to create things.  That’s where the true value lay.  Not the money that held that value temporarily.  All those mercantilist policies did was raise domestic prices.  And allocated scarce resources poorly. 

It turned out free trade was the secret to wealth.  For free trade can increase wealth.  For both nations.  Thanks to something we call comparative advantage.  Instead of both nations manufacturing all of their goods they should only manufacture those goods that they can manufacture best.  And trade for the goods they can’t manufacture best.  This more efficiently allocates those scarce resources.  And produces a greater total amount of wealth.  By allowing people to buy lower cost imports they have more money left over to buy other stuff.  Increasing the overall amount of economic activity.  Which is why when Great Britain adopted free trade in the 19th century the British Empire went on to rule the world for a century or so.  And led the Industrial Revolution.  By creating wealth.  Goods and services people created with their talent and ability.  That changed the world.  And ushered in the modern era.  Something no amount of bullion could do.

But before Britain adopted free trade they were struggling with one of their belligerent colonies.  Their British American colonies.  Who were unhappy over taxation without representation in Parliament.  And the mother country forcing them to buy only British tea shipped on British ships at higher prices than they could get from the Dutch.  The British thought they found a solution to their problem.  By permitting their British East India Company monopoly to ship their tea directly to America without passing through an English port.  The tea was cheaper because of this.  But it also would set a precedent for taxation without representation.  Something the Americans weren’t about to accept.  So they threw that tea into Boston Harbor.  What we affectionately call the Boston Tea Party.  Renouncing mercantilism.  And demanding the right to engage in free trade.  Which they got after winning their independence.  And the mother country would follow suit in a few decades.  Because they, too, would learn that free trade was better than mercantilism.

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Treason, Benjamin Franklin, William Franklin, Reconciliation, Hutchinson Letters, Boston Tea Party, The Cockpit, Patriot and Loyalist

Posted by PITHOCRATES - May 10th, 2012

Politics 101

The Hutchinson Letters and the Tea Act put the Americans firmly on the Path to Independence

There’s a fine line between treason and loyalty.  Some people cross that line.  Some people don’t.  Some people wait to see which side of the line their best interests lay.  Some like to straddle the line.  Either unable to commit.  Unwilling to commit.  Or unwilling to give up profiting from both sides of that line.  Such it was during the American Revolutionary War.  A very unique conflict.  That pitted colony against mother country.  New World against Old World.  American against Brit.  Brit against Brit.  And American against American.

The American Revolutionary War was a smorgasbord of antagonism.  What started out as a dispute over taxation escalated into world war.  And into civil war.  To settle old scores.  And to settle new ones.  Upon the signing of the Declaration of Independence the American colonies were in open rebellion against their sovereign.  The ultimate act of treason.  Yet they committed this act of treason to live a more British life.  For Britain’s constitutional monarchy gave unprecedented rights to British subjects.  And the highest standard of living then known to a middle class.  Most knew what the rest of the world was like.  And they wouldn’t trade their British way of life for any other.  So rebellion undoubtedly made a great many nervous.  For many were happy and comfortable living under the British sovereign.  Benjamin Franklin, for one.

Franklin was a Loyalist.  At first.  He knew how to work the system.  And did.  Even achieving the post of American postmaster.  And he made it profitable.  Very profitable.  Even his son, William Franklin, was governor general in New Jersey.  So he was very connected to the British Empire.  And saw it as the best system of government ever developed.  Which is why he sought reconciliation.  He was in England when tensions were increasing between the colonies and the mother country.  He then came into the possession of some private correspondence that he passed along to his contacts in Massachusetts.  The Hutchinson letters.  As in governor general of Massachusetts Thomas Hutchinson.  Which basically said that the way to subdue the unrest over recent Parliament actions (i.e., taxation without representation) was to deprive the colonists of some of their English liberties.  Franklin asked that they not publish these letters.  His intent was to calm the more radical in America.  Proving that these misguided policies were the result of some bad advice from a few people.  There was no general animosity towards the American colonies in Great Britain.  And that reconciliation was possible.  Which is what Franklin wanted.  But they published the Hutchinson letters.  And the Americans were not pleased.  Then one thing led to another.  After Parliament passed the Tea Act Franklin was anxious of the American response.  Hoping for calm.  But the response was anything but calm.  And did nothing to aid reconciliation. 

The Humiliation in the Cockpit helped Push Franklin from Reconciliation to Independence

When the first tea arrived following the Tea Act the Patriots threw it in Boston Harbor.  Forever known thereafter as the Boston Tea Party (1763).  This destruction of private property shocked Franklin.  For this was not an act against Parliament.  But an act against a private company.  The East India Company.  This did not go over well in England.  Which was pretty agitated over the publication of those private Hutchinson letters.  People accused each other of being the source of the leak.  It got so bad that two men dueled in Hyde Park.  Each blaming the other for the dishonorable act of leaking those private letters.  Not being a very good duel both men survived.  When they were going to have at it again Franklin publically stated that he was the leak.  Explaining his intentions. 

Though Franklin sought reconciliation he had his enemies in England.  Who thought he was more of rabble rouser on the other side of the pond.  And pounced on this opportunity to disgrace him.   They summoned him to appear before the Privy Council.  On the pretense to hear testimony on the petition from the Massachusetts Assembly to remove Hutchinson as governor general.  But when Franklin arrived in the ‘Cockpit’ he found that he was on trial.  For leaking the Hutchinson letters.  News of the Boston Tea Party had by then reached England.  And the newspapers attacked Franklin without mercy.  All of England was turning against the man who wanted reconciliation more than any American.  It even looked like Franklin could end up in an English jail. 

It was an all out assault on Franklin in the Cockpit.  Where his enemies packed the room.  While few of his friends sat in.  Such as Edmund Burke.  Lord Le Despencer.  And Joseph Priestly.  One after another his enemies took their turn lambasting Franklin.  Blaming him for the agitation in the American colonies against British rule.  They attacked him personally.  And besmirched his honor.  Humiliated him.  During it all Franklin stood silent.  Refusing to partake in this farce.  When Wedderburn called Franklin as a witness his counsel stated that his client declined to subject himself to examination.  In the end they rejected the Massachusetts petition.  And his friend Lord Le Despencer had no choice but to relieve Franklin from his post as American postmaster.  He wrote his son William and urged him to quit his post as governor general of New Jersey in order to pursue more honorable work.  He would not, though.  And thus began the breach between father and son.

Franklin and William were no longer Father and Son but Patriot and Loyalist

William would stay loyal to the crown.  While Franklin was moving closer to the side of the Patriots.  In response to the Boston Tea Party Britain planned a blockade of Boston Harbor.  In response the colonies united behind Boston and formed the First Continental Congress.  Which William said was a mistake.  And that Boston should make good on the tea they destroyed.  Which would be the best way to calm the situation.  And reopen Boston Harbor.  Exactly what Franklin had earlier suggested.  But after the Cockpit and the loss of his post as postmaster Franklin was losing his love for the British Empire.  But he still tried while he remained in England with no official duties.  He even played chess with Caroline Howe.  Sister of Admiral Richard Howe and General William Howe.  Who would later command the British naval and military forces in the opening of the Revolutionary War.  But at the time they were both sympathetic to the American cause.  Despite of his shameful treatment in the Cockpit she and other friends urged him to put pen to paper.  And try to mediate a peaceful solution to the breach between the American colonies and Great Britain.  He tried. 

But all efforts came to naught.  He worked on a bill with Lord Chatham.  Which Lord Sandwich attacked with a fury when introduced into the House of Lords.  And they publicly attacked Franklin again.  They rejected the bill.  And Franklin booked passage home.  He met with Edmund Burke before leaving.  Discussed with him one last plea for reconciliation.  He spent his last day in London with his friend Joseph Priestly.  And discussed the future.  The coming war.  Reading the papers.  Priestly later wrote that the thought of that dismal future brought Franklin to tears.  After Franklin was on a ship sailing west Burke rose in Parliament and gave his famous speech On Conciliation with America. Where he said, “A great empire and little minds go ill together.”

The move to independence accelerated after arriving home.  Thomas Paine, who Franklin helped to bring to America, wrote Common Sense.  Which Franklin read before it was published.  Even offered a few revisions.  As he would offer later to Thomas Jefferson’s Declaration of Independence.  Then the Continental Congress scheduled a vote for independence.  General Washington was preparing to fight General William Howe on Long Island.  Supported by his brother Admiral Lord Richard Howe.  Who made one last attempt at conciliation with Franklin.  But things had already progressed too far.  Franklin had crossed that fine line.  The time for peace had passed.  On June 15, 1776, the new American provincial government in New Jersey ordered the arrest of William Franklin.  On the day of his trial Benjamin Franklin wrote General Washington.  He did not mention William.  Nor did he say anything when the Continental Congress voted to imprison him in Connecticut.  The breach between father and son was complete.  No longer father and son.  But Patriot and Loyalist.  As families throughout the colonies similarly tore asunder.  Setting the stage for the civil war within the world war that was the American Revolution.

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Continental Army, Continental Congress, Inflation, Wage & Price Controls, Paper Money, Specie, IOUs, Impressment and Repudiation

Posted by PITHOCRATES - May 3rd, 2012

Politics 101

The Articles of Confederation made the United States of America a Confederacy of Sovereign States that had Little Power to Raise Revenue

By the time the Continental Army left Valley Forge they could hold their own against the British Army.  The British couldn’t push them around any longer.  They became so good that they fought the war to a standstill.  They came close to some major wins on the field of battle.  But close didn’t diminish the staying power of the British Army.  And they stayed.  On the battlefield.  And in their cities.  Dragging the conflict out for a total of 8 years.  And no matter what era of warfare you use to measure war-years 8 years of war is very costly.  Someone has to pay for it.  And, ultimately, it’s the people.  Either through taxation.  Or the loss of wealth through inflation.  Or simply the loss of wealth through the losing of your stuff.  And going without.  Because the army fighting for your liberty had no choice but to take what was yours.

This made the Revolutionary War unlike other wars.  For this war was about liberty.  Property rights.  The tyranny of a distant power.  And unjust taxation.  In other words this war was against all the things that made fighting a war possible.  You can’t really draft men to fight in a country that stands for liberty.  You just can’t confiscate the things you need to wage war from your people in a country built upon the principle of property rights.  You can’t declare martial law and suspend the rule of law on people you deem not to be patriotic enough in supporting the cause when you’re fighting the tyranny of a distant power that does.  (Even the Americans gave British soldiers a fair trial for the Boston Massacre).  And taxes?  The people that dumped tea into Boston Harbor over the principle of no taxation for revenue purposes without representation in Parliament was not going to be able to tax their people on a federal level.  Which proved a big obstacle in paying for the war to win their liberty.

The Articles of Confederation made the United States of America a confederacy of sovereign states.  And those sovereign states held the real power.  Virginia.  Massachusetts.  Pennsylvania.  New York.  And the other 9 sovereign states.  Not the United States of America.  That confederation that was waging war against the mightiest power in the world.  Which made raising funds difficult.  For without the power to levy taxes all they could do was ask.  Just like George Washington did all of the time.  Especially during that horrible winter at Valley Forge when his army was naked and starving.  He asked the Continental Congress for provisions.  And the Continental Congress asked the several states for their apportioned funds raised by their state legislatures.  Per the Articles of Confederation.  If they didn’t pay these funds timely or in full (or at all) they could ask again.  And that’s all they could do.  Which is why George Washington’s army suffered through that horrible winter.  Because the funds weren’t there to buy Washington the provisions his army needed.

Thanks to Inflation the Continental Army often had No Choice but to Take what they Needed from the People they were Fighting For 

The Americans never had enough money.  Which makes it amazing that they held off losing for 8 years.  Eight very costly years.  And won.  Especially considering how bad the economy was during the war.  Unable to tax or get sufficient loans from Europe they had little choice but to print money.  Which caused a whole lot of trouble.  For the more money they printed and put into circulation the more the value of their currency fell.  And soon a Continental was “not worth a Continental.”  And when the currency lost its value it took more of it to buy things.  Which led to price inflation.  The price of material and parts grew so high that it increased the cost of American manufactured muskets over the cost of imported French muskets.  Which they had to bring in through a British blockade.  Giving what should have been a cost advantage to the Americans.  Had it not been for the inflation.

To try and keep prices under control they implemented wage and price controls.  Which didn’t work.  The continued devaluation of the currency forced sellers to raise their prices to cover their rising costs.  Forcing them to sell below their costs would just put them out of business.  Voluntarily.  Or involuntarily.  Creating shortages in the market place.  Some offered lower prices for specie (gold and silver coins).  You can’t print hard money (specie).  So it held its value.  Unlike the paper money.  So a little of specie went a long way compared to paper money.  Of course, this didn’t help their wage and price controls.  It just made the paper more worthless.  And raised prices further.

There was yet another ugly side to this sordid business.  High prices and shortages created opportunity to profit handsomely.  There was speculation and market manipulation (hoarding, cornering the market, etc.) to take advantage of those highly priced items that were in scare supply.  Further raising prices for the people.  And compounding the problems of provisioning the army.  Which infuriated the low-paid soldiers.  Who the Continental Congress paid in that worthless paper money.  Angry mobs arose to address this profiteering.  As well as new laws and enforcement.  But they helped little.  The army often had no choice but to take what they needed from the people they were fighting for.  Either outright.  Or in exchange for IOUs.   Promises that the Continental Congress of the United States of America would make good on.  Just as soon as the several states paid their apportioned funds raised by their state legislatures. 

If you Violate the Ideals you’re Fighting for while Fighting for those Ideals it can Complicate the Peace

Fighting for an ideal makes war complicated.  If you’re just a tyrannical dictator looking to rape and pillage it makes things easier.  You don’t have to worry about liberty.  Property rights.  Debt.  Or taxes.  In the short term.  Or the long term.  Which made the American Revolutionary War a very difficult war to fight.  Because at the heart of the United States of America were those ideals.  To win this war to grant liberty to the people required taking their liberty away.  A little.  To win this war to guarantee property rights you had to violate property rights.  A little.  To win this war against tyranny you had to use excessive force against your people.  A little.  To win this war to establish taxation only with representation caused the destruction or personal wealth.  A lot.  Through impressment (taking things from the people).  Borrowing from foreign countries.  Or through inflation.

When the French joined the Americans in 1778 inflation was already out of control.  They printed twice as many Continentals in 1778 as they did in the last three years combined.  And there was serious discussion about doing the unthinkable.  Repudiation.  To simply escape the inflation by escaping the currency.  To retire the bills from circulation.  At a fraction of their value.  And that’s what they did in 1780.  Issuing new currency based on specie for the old currency at a 40 to one ratio.  The states were to tax their people to raise the funds for the new currency.  So the people took a huge short-term loss.  For a stable long-term future.  Based on specie.  That they couldn’t inflate.  This hard money would come from in large part the Spanish and the French.  The Spanish in Cuba buying American flour with specie.  And French aid.  As well as their army and navy spending their hard money in the American economy.

Wars are costly.  And they are rarely nice.  Trying to make them nice can make them last longer.  Which will make them more costly.  Of course, if you violate the ideals you’re fighting for while fighting for those ideals it can complicate the peace.  Luckily, for the Americans, they won their peace.  Their allies, the French, were not so lucky in their revolution.  The French Revolution.  Fought less than a decade after the American Revolution came to a close.  And unlike the Americans the French peace that followed was a bloody one.  That would eventually replace the king they executed with an emperor.  Napoleon Bonaparte.  Who the Americans helped bring to power in part due to the crushing debt King Louis XVI incurred supporting the Americans in their revolution.

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Benjamin Franklin, Bon Homme Richard, John Paul Jones, Whitehaven, Dominica, Rhode Island, Count d’Estaing, Anti-French Riots and Serapis

Posted by PITHOCRATES - April 26th, 2012

Politics 101

The First French Action in the New World that was in Support of their New American Allies was in Rhode Island

The French loved Benjamin Franklin.  He was America personified.  They loved his science.  And his Poor Richard’s Almanac.  In 1779 King Louis XVI of France bought a merchant ship from the French East India Company and gave it to the Americans to use in their common war with Great Britain.  The U.S. captain fittingly named the Duc de Duras the Bon Homme Richard.  Which translates to Good Man Richard.  Richard as in Poor Richard’s Almanac.  To make it a favorite of the French.  Who were already quite enthused by this young American captain.  Who was a Scotsman by birth.  John Paul Jones.  From his actions off (and on) the British coast the previous year.  In the first year of the Franco-American alliance in the American Revolutionary War (1775–1783).

With the French on board Benjamin Franklin wanted to capitalize on this new alliance.  With friendly ports on the far side of the Atlantic Franklin instructed John Paul Jones to harass the British coast.  To bring the war home to the British people.  And that’s exactly what Jones did.  Then in command of the Ranger.  Coming ashore at Whitehaven in April of 1778.  A seaport on the north east coast of England.  His intent was to set fire to the ships and port facilities.  To disrupt British shipping.  He didn’t do the great damage he had hoped.  But it really brought the American Revolutionary War to British soil.  And the British were not amused.  But the French were.

The French were eager to get some payback for their embarrassing defeat in the Seven Years’ War (1756–1763).  And to recover some of their lost New World territories.  Beginning in the West Indies.  On the island of Dominica in September of 1778.  The first of a series of victories in the West Indies where the French navy began helping the Americans in their War of Independence.  By taking these islands from the British.  Which helped the Americans by keeping the British busy.  And depriving the Royal Navy of some useful ports.  But these actions benefited the French more than the Americans.  Which was keeping with French interests in joining this war.  Payback for their prior defeats at the hands of the British.  And regaining lost territory.  The first French action in the New World that was in support of their new American allies was in Rhode Island.  In the first Franco-American combined action in the war.  Which didn’t go well.  Or end well.

The French arrive with a Fleet Including some 16 Warships and about 4,000 French Soldiers

1777 ended well for the Americans.  They defeated a British Army at the Battle of Saratoga.  Because of this the French joined in alliance with the Americans in their war against Great Britain.  Valley Forge followed.  Which was pretty horrible.  But Baron von Steuben drilled the Continental Army.  Made them as good as any European Army.  And when General Clinton was moving his army from Philadelphia back to New York in the Spring Washington wanted to go on the offensive.  His chance came at the Battle of Monmouth.  Washington ordered an attack on the rearguard of Clinton’s army.  General Charles Lee hesitated.  Then ordered a retreat.  Which Washington turned around.  As had the British in their retreat to New York.  The Americans and the British then engaged in a long day of attacks and counterattacks.  Stopping only after exhaustion set in.  Von Steuben’s trained Continental Army fought the British Army to a draw.  As impressive a feat as the win at Saratoga.  Perhaps more so.  And so close to a win.  Had Lee followed Washington’s orders perhaps it would have been.  But, alas, it wasn’t.  And in the morning the British were gone.

The French were on their way.  But they did not arrive early enough to prevent Clinton from getting his army across to Manhattan.  But the appearance of the French fleet did paralyze the British into inaction.  The French fleet included some 16 warships and about 4,000 French soldiers.  With some 50,000 British regulars in New York surrounded by a fleet of 100 or so made New York NOT the best place to test the grand Franco-American alliance.  Instead the first test of that grand alliance would be in Newport, Rhode Island.

The plan was to land the French soldiers to join an American force to assault the British forces with the support of the guns of the French fleet.  What happened was a tragic comedy of errors.  A militia force arrived late.  While the Franco-American force was waiting a British naval squadron appeared.  Count d’Estaing, the French naval commander, re-embarked the French troops and prepared for battle.  Then a violent storm blew in.  Scattering the opposing naval forces.  The British then limped back to New York to refit.  And the French limped to Boston to refit.  The American commander was furious at the French.  He published an order condemning the French.  American morale fell.  Militia went home.  The British seeing this decided to attack.  The Americans held their ground.  Fought to another draw.  Then slipped away under the cover of night.  Yet another missed opportunity.

When the Serapis asked the crippled Bon Homme Richard if she was striking her colors Jones replied, “I have not yet begun to fight.” 

The Americans were not amused with the French actions.  Anti-French riots broke out in Boston where the French fleet was refitting.  All the old animosities from the previous war resurfaced.  When the Americans fought alongside the British against the French.  It took the combined efforts of d’Estaing, John Hancock, Nathanael Greene and Alexander Hamilton to maintain the peace between the Franco-American alliance in Boston.  Their counterparts in Charlestown, South Carolina, were not so successful.  Where the French and the Americans fired upon each other with cannon and small arms.  And there was blood.  Dead and wounded.  Not the greatest of beginnings between the grand alliance.

While the French fleet failed to pay any dividends for the Americans some other naval action was.  Harassing the sea lanes between London and the West Indies.  Causing great headaches to British commerce.  Harassing the fisheries off of Nova Scotia.  Capturing enemy ships.  And who was doing all of this damage to the British fleet?  And to British pride?  That Scotsman fighting for America.  John Paul Jones.  Who did not know the meaning of the word ‘surrender’.

In September of 1779 Jones came into contact with a convoy of 40 British merchant ships coming from the Baltic under the protection of the 44-gun Serapis and the 28-gun Countess of Scarborough.  Jones commanded a 4-vessel squadron including the Bon Homme Richard and the Alliance captained by French Captain Pierre Landais.  And engaged.  The battle lasted some three and a half hours.  And into the night.  The Bon Homme Richard and the Serapis rammed into each other yet still continued the fight.  The Alliance fired broadside after broadside into the Bon Homme Richard and yet Jones continued the fight.  When the captain of the Serapis asked the crippled Bon Homme Richard if she was striking her colors (surrendering) Jones reportedly replied, “I have not yet begun to fight.”  And he kept fighting until the captain of the Serapis struck his colors sometime after 10 PM.

Again, not an auspicious start for the Franco-American grand alliance.  But a pretty impressive one for a nearly nonexistent U.S. Navy.

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Suffolk Resolves, Galloway Plan of Union, Olive Branch Petition, Proclamation of Rebellion, Prohibitory Act, Common Sense and Declaration of Independence

Posted by PITHOCRATES - March 8th, 2012

Politics 101

In Response to the Declaration of Rights and Grievances George III condemned Massachusetts and the Suffolk Resolves

The Boston Tea Party (1773) and the subsequent passing of the Intolerable/Coercive Acts (1774) brought the several states together in Congress.  John Adams, Samuel Adams, Joseph Galloway, Patrick Henry, Richard Henry Lee, George Washington and other delegates from every state (except Georgia) convened the Continental Congress in Philadelphia in September of 1774.  It sat for two months.  And began with a vote to endorse the Suffolk Resolves.  The Suffolk Resolves opposed the British oppression entailed in the Intolerable/Coercive Acts.  In Massachusetts.  (Other colonies passed similar resolves.)  The resolves included a boycott of British goods.  Demanded the resignation of the Crown’s representatives that displaced the elected colonial government.   They supported a new colonial government free from the Crown.  Refused to pay any further taxes until this happened.  And urged for the several states to raise militias.  But they did not talk of independence.  The Resolves even declared their loyalty to the British Crown.  Still, after learning of this action King George III said, “The die is cast.”

Joseph Galloway introduced the Galloway Plan of Union.  Calling for a federal union of the several states.  Where the king would appoint a president general.  Advised by a grand council.  With a representative from each state.  Chosen by each state’s legislative body.  A system of self-government.  But one still loyal to the Crown.  A move that made the British colonies more independent of the British Crown.  But not independent from the British Crown.  The Americans were to remain British Americans.  Subjects of the greatest country in the world.  The present trouble in Boston notwithstanding.  For Great Britain was the only constitutional monarchy at the time.  And the bastion of individual liberty.  Which the Americans were looking forward to enjoying once the present misunderstandings passed.  After a lengthy debate, the Galloway Plan of Union failed to pass.  But it wouldn’t be the last talk of union.

They then adopted a Declaration of Rights and Grievances.  Full of a lot of language the English used years earlier to redress previous issues with the Crown.  And some of the same words of the Enlightenment thinkers they used.  From Thomas Hobbes they wrote of their ‘right to life’.  From John Locke the ‘right to liberty and property’ and ‘ruling by the consent of those governed’.  From Baron Charles de Montesquieu the ‘separation of powers’ that eventually found its way into our Constitution.  They sent off their declarations and petitions to London.  Adjourned Congress.  Agreed to reconvene the following May if necessary.  And waited for King George to reply.  He gave it in Parliament in November.  In a speech to Parliament.  Where he condemned Massachusetts.  And the Suffolk Resolves.  Not the answer they were hoping for.  No.  Their king was not going to save the Americans from the hostile acts of Parliament.  Instead he was going to present a unified British opposition (King and Parliament) against these British subjects.  The once loyal British Americans were running out of reasons to remain loyal to the British Crown.  All they needed was one more push.

Thomas Paine’s Common Sense provided the Final Push towards Independence

The following April the battles of Lexington and Concord took place.  There was a shooting war, now.  With the Americans following the British back to Boston and laying siege.  The patriotic spirit was high.  And such was the spirit when the Second Continental Congress convened in Philadelphia in May of 1775.  Independence was in the air.  John Adams wanted it.  But kept quiet.  They prepared for war.  Choosing George Washington to lead them in war.  But this was plan ‘B’.  Plan ‘A’ was still reconciliation.  And to remain British.  Which is what many wanted.  Even Washington wasn’t all that keen on independence.  He detested the acts of Parliament.  But he and his officers were still toasting the health of the King at this time. 

John Dickinson led the reconciliation group in Congress.  And they drafted (with the help of Thomas Jefferson) the Olive Branch Petition.  Addressed to the King.  Expressing their desire to remain loyal to His Majesty.  All that they wanted was to redress these tax and trade issues.  That’s all.  Dickinson had hoped with the bloodshed at Lexington and Concord and a little bit of groveling the King would at least meet them halfway.  Open up the channels of dialog.  Settle their differences without additional bloodshed.  Which just exasperated John Adams.  He thought it was a waste of time.  That  independence was inevitable.  And he vented these feelings in a private letter.  That the British got hold of.  Arriving in London about the same time as did the Olive Branch Petition.  And after reading Adams’ letter George III refused to even read the petition.  His response was the Proclamation of Rebellion.  Issued in August.  Declaring that some of the British American colonies were in a state of ‘open and avowed rebellion’.  And followed that up with the Prohibitory Act in December.  Which placed a naval blockade against all American ports.  And declared all American shipping enemies of the British Crown.  An act of war.  To which the Americans responded by issuing letters of marque to privateers, authorizing them by an act of Congress to capture British ships.  John Adams declared that King George had declared what the Americans had not yet declared.  That the American colonies were independent.  Putting the Americans ever closer to declaring their independence.

Then came that final push.  In the form of a pamphlet.  Very popular reading during the time.  It was because of these pamphlets that most Americans knew of the ideas of Hobbes, Locke and Montesquieu.  Where their ideas were presented in the language of the common man.  Then came along an author who wrote from the get-go in the language of the common man.  Thomas Paine.  Who wrote Common Sense.  Published in January 1776.  Which tore into the King.  And the whole system of hereditary monarchy.  Blamed George III for all the wrongs done to the Americans.  Making a strong and impassioned case for independence.  Without further delay.  That fired up Patriots everywhere.  Providing that final push.

The Several States united in Treason and became the United States of America

During the spring of 1776 states began discussing independence.  Some authorized their delegates in the Continental Congress to vote for independence.  Others need more prodding.  On June 11, 1776 the Continental Congress appointed John Adams of Massachusetts, Benjamin Franklin of Pennsylvania, Thomas Jefferson of Virginia, Robert R. Livingston of New York and Roger Sherman of Connecticut to draft a declaration of independence.  The Committee of Five.  The committee (including Jefferson) wanted Adams to write it.  Adams wanted Jefferson to write it.  Because he was a Virginian.  Someone more distant from the passions in Massachusetts.  And was rather likeable.  Unlike Adams.  And Jefferson was pretty good with the quill.  Eloquent.  And had a flair for words.

John Dickinson still argued for reconciliation.  Adams argued for independence.  The debate heated up. The New York legislation had to flee from the British advance in New York.  So they could not authorize their delegates to vote for independence.  Dickinson couldn’t agree to let Pennsylvanian vote for independence.  But he agreed to abstain.  It came down to a tie.  Until Caesar Rodney rushed in from Delaware just in time to vote for independence.  And on July 2, 1776, they committed the final act of treason.  And voted the American colonies independent of the British Crown.  Then put their name to the Declaration of Independence on July 4th, 1776.  Or some of them.  The others adding their names some time thereafter.

The several states became united.  In treason.  A confederacy of independent states joined in union.  Not quite along the lines of the Galloway plan.  But in union nonetheless.  Now locked in mortal combat with the world’s greatest superpower.  To escape their oppression.  In order to win the same liberty and freedom enjoyed by the subjects of that very same superpower.  For in the end that’s all the Americans wanted.  And had King George redressed their grievances instead of choosing to punish them everyone would have lived happily ever after as British subjects.  But he didn’t.  And we now remember him as the British king that lost America.

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