An Empire on the Edge

by Nick Bunker

  They might make such a case in Parliament, but if they did, the Rockingham Whigs would court political suicide. With public opinion so angry with the company, who would listen to anything they said? “Many men of tender feelings, on the dismal accounts of oppression by the company’s servants in Bengal, join the cry that some stop must be put to it,” the marquess wrote to Burke. If the Whigs said anything different, the public would assume that they had sordid motives of their own to support the East India profiteers. And then, as the Rockinghams dithered, Lord North played the kind of masterstroke that made him so valuable to the king.5

  On November 26, after the monarch opened Parliament, North rose to speak himself. He might instantly have introduced a new bill to reform the company, but instead he did something far more effective. He moved for the creation of a small committee of secrecy, composed of members of Parliament with expertise in finance. They would be given confidential access to all the East India Company’s most sensitive papers and accounts. Their task was to find reasons for the company’s distress and report back to the house by the end of March.

  No reasonable person could object to this. When the Rockinghams did so, they went down to a crushing defeat. Edmund Burke “spoke incomparably,” said one observer, but his party lost the debate by seventy votes. By the time the session broke for Christmas, the Whigs had fallen into utter disarray: “panic struck, in whatever concerns the East India Company,” as one of the Rockingham Whigs put it at the time.6

  In due course the committee’s report turned out to be a model of its kind, lucid and penetrating. In the meantime, the embarrassment of the Whigs had a fateful consequence for the genesis of the American Revolution. With the Rockinghams rendered impotent, the baton of opposition to Lord North passed to another faction, a group of dissidents in London who came up with the scheme for shipping tea straight to the colonies. They were Scotsmen; but far from being mediocre adherents of the Crown, as so many Scottish politicians were, they formed a dynamic little party of their own.

  The Scotsmen in question owned shares in the East India Company, they occupied a few seats in Parliament, and they had their own connections in America. In William Crichton they found a combative advocate. From the city of London, Crichton and his compatriots set the agenda for what happened next. They displayed a degree of energy that the Rockinghams could rarely match, but they were outmaneuvered by Lord North.

  THE HERRIES PLAN

  Not every Scottish businessman teetered on the brink of ruin. At the age of thirty-nine, William Crichton belonged to a group of northern entrepreneurs who were thriving in the booming trade with the colonies. The son of a prosperous maker of saddles from Edinburgh, Crichton had moved south to London, where he became an importer of sugar, an insurance broker, and a player with stocks and shares. Each year the Thames received hundreds of ships from Jamaica and the other Caribbean islands. The merchants who dealt in sugar formed a rich and energetic lobby, with Crichton among them.

  He acted as London partner of the most powerful mercantile house in Glasgow, Alexander Houston & Company, whose wealth had originated in the tobacco trade. They would ship stores across the Atlantic—bricks, boots, and Scottish herrings—to the planters in the British West Indies and bring back sugar, rum, and cotton. They also lent the slave owners money on mortgage. When the planters could not pay their debts, the Houstons would foreclose. Over time, therefore, Crichton and his partners became slave owners themselves, with plantations on Nevis and Grenada.7

  In his leisure hours, Crichton developed political ambitions in the capital, where he later served as alderman and sheriff. Like many other London merchants with interests in the Caribbean, he loosely aligned himself with John Wilkes. He did so, we can reasonably assume, because the Wilkesites were fiercely anti-Catholic and anti-French. For any Briton in the Caribbean, the French in Haiti remained a lingering threat. As we saw, the Wilkesites found natural allies in the colonial assemblies in Grenada and elsewhere. And for another reason the movement led by Wilkes made an obvious home for men like Crichton: he came from outside the landed elite.

  By the beginning of 1772, Crichton had become a member of a pressure group called the Society of West India Merchants, which met every month to discuss what favors it might seek from the government. On March 3 it received a deputation from some of London’s largest wholesalers in tea. Men who dealt only in the legal product, with all the duties paid, the tea merchants stood to lose heavily from the thriving contraband trade in New England and elsewhere.*3 For their part, the West India merchants resented the Dutch, who used their islands in the Caribbean as staging posts for smuggling molasses and rum in and out of North America. The two groups of businessmen had interests in common. So the West India society agreed to lobby Lord North, asking him to help eradicate the smuggling trade by bringing down the price of tea exported to the colonies.8

  And so when the tea crisis began in the autumn, Crichton had every reason to intervene. He wanted to rescue the East India Company, to keep it free from government control, to protect his partners in the West Indies, and to build his own political reputation. But with the Rockingham Whigs so clearly incompetent, he needed other allies to help him achieve his goals. He found them in the autumn of 1772 in the shape of a vocal little dynasty from his native land. They were a Scottish family called Johnstone, with whom he made common cause in the debates at India House. Together with the Johnstones, Crichton developed the notion that the surplus tea should be sent to America: not as a weapon of imperial oppression, but as a means to fulfill their own business agenda.

  On the British side of the water, it is hard to find political heroes from this period of history. From time to time, however, a few activists appeared who, for all their faults, possessed at least the virtue of insubordination. A family of such a kind, the Johnstones came from a distant valley in the county of Dumfries. In the 1745 rebellion, they had allied themselves with the Jacobites, and so for many years they were viewed with suspicion. Their estates in Eskdale were barren moors, fit only for goats and sheep. That being so, the Johnstones were compelled to be creative. A clan with an appealing streak of anarchy, the family gave birth to a hyperactive trio: three brothers called William, John, and George. From Bengal to the Gulf of Mexico, they left a deep and lasting mark on the life of their time. To their credit, they were among the very small number of members of Parliament who foresaw the American Revolution and tried to prevent the war that followed.

  Like so many other Scotsmen, John Johnstone had gone to Bengal in the service of the East India Company. Sent to collect the land tax at Dacca, the modern capital of Bangladesh, he did rather too well, making a fortune by diverting the revenue into his own pocket. He came home at risk of prosecution for fraud. With a view to clearing his name, the family began a long feud with the company’s board, led by his abrasive brother George, a former naval officer with a record of reckless bravery at sea. “Irascible, intemperate, violent, he was a warm and zealous friend, but an implacable enemy,” said a contemporary. George won election to Parliament, where he could pursue his family’s vendetta. There he also enjoyed the rare distinction of knowing the colonies firsthand. Until he was recalled for inciting an Indian war, George Johnstone had served as governor at Pensacola in the new colony of West Florida. On the rare occasions when America was debated, he would always intervene.9

  Close beside him in the House of Commons sat his brother William, the richest of the three. After marrying an heiress, he took her family name, became Sir William Pulteney, and began to build another fortune as a real estate developer in London and Bath, with Robert Adam as his architect. He also bought land in the West Indies on the islands taken from the French. Like so many other people at the time, Sir William and his brothers played for the highest of stakes, and they saw the financial crash as a splendid opportunity.

  As the year drew to a close, the crisis appeared to be entering a new and perhaps an uglier phase, but one which the Johnstones hoped to turn
to their advantage. In late November, two days after Parliament reassembled, the press carried word of a devastating hurricane, the most severe in living memory. It had struck the Windward Islands at the end of August before circling back across the Atlantic, carrying the rain that ended the English drought. On Antigua, the storm wrecked every ship in the harbor, whipped the sugarcane to shreds, blew down houses, factories, and sheds, and killed slaves in the fields. The Dutch islands also suffered grievously, and for this the timing could not have been worse. In Amsterdam, the largest banks were still reeling from the shocks that began in June. Some had lent heavily to sugar planters, and now their plight was desperate. In England, with the East India Company’s stock down to £160 and still falling, business confidence had begun to ebb away once more.10

  At this difficult moment the Johnstones stepped forward with their own scheme to rescue the company. The concept came from a close friend of William Pulteney’s. A neighbor from Dumfriesshire, he was a wily, controversial financier called Robert Herries. His firm were “damned rascals,” said one rival, and they also carried the stigma of old Jacobite sympathies. The Herries family knew the smuggling trade firsthand. Their home, a moorland estate near Lockerbie, lay close to the Solway Firth, an infamous den of contraband, and Robert’s elder brother ran a tea-smuggling ring out of Ostend, with Jacobites as partners. Trained in banking in the Netherlands, Robert Herries made his first fortune in Barcelona in his early twenties, buying brandy for illegal shipment to Scotland via the Isle of Man.

  Moving to London he became a banker, and while Lord Sandwich invented the sandwich, Robert Herries invented the traveler’s check. By 1772, his firm had a chain of agencies all over Europe where young men away on the grand tour could present a voucher and collect their allowance from home. After coming unscathed through the banking crash, Herries scored a great coup when he won a huge contract from the French government to buy tobacco in Glasgow on its behalf. Rich and famous—the king soon gave him a knighthood—he began to make his name on the political scene.11

  Early in December, Herries and William Pulteney appeared in Parliament to propose a scheme to help the stricken planters in the Caribbean raise money in London to rebuild their estates. And then, just before Christmas, they published their own manifesto for the reconstruction of the East India Company. On December 21, a pamphlet appeared on the streets of London, under a long and ponderous title that began, The Present State of the English East-India Company’s Affairs. It opened with a brief but devastating attack on the board of directors and Lord North.

  “Shall our fate be national bankruptcy, poverty, oppression and slavery?” the author inquired. Permit the company to fail, and the country would be ruined; but on the other hand, if the government took the revenues of Bengal, then Great Britain and India alike would lie abject at the feet of tyranny. A way had to be found to save the company without relying on help from the government that would come with strings attached.

  The pamphlet was anonymous, but anyone who followed the news could tell that it came from the Johnstones or someone very close to them. For weeks, with Crichton in close support, George Johnstone had been appearing at one angry East India Company meeting after another to challenge the board and to organize resistance to Lord North. The brothers had their own motives for defending the company against the Regulating Act for India that North would eventually propose. John Johnstone still lay under a cloud, which they hoped to lift. Intensely ambitious, the Johnstones had risen from almost nowhere, and they wanted to keep the company free as a field for their own endeavors. In order to do so, they had to rebuild its balance sheet.

  Halfway through the pamphlet, readers came to a set of proposals to dispose of the company’s tea, described as those of Mr. Herries. Whoever wrote the text clearly knew the tea trade intimately, because he filled its pages with facts and figures. Like the “Fair Consumer” in September, the author made the obvious point: that because of the burden of taxes imposed by the government, tea was far too expensive in London. Go to Amsterdam or Lorient, and you could buy it for far less: hence the profit for the smuggler. But if the duties were removed, the tea from England would sweep the board. And so the Herries plan was simply this: Lord North should permit the company to export all its surplus tea directly to Europe, duty-free, and put the continentals out of business. Sell the tea abroad, even at a loss, and the cash would keep the company alive until times improved. If not, the mountain of unsold tea in London would continue to rise inexorably.*4

  In the weeks that followed, the Herries plan became the talk of the city. Two days after it appeared, the company’s shareholders met for another stormy session. Once again William Crichton called for a reduction in the dividend, at last the board agreed, and the dividend was cut in half. Even so the situation remained very grim. With cash running very low and the Bank of England growing ever more impatient, the Herries plan seemed to offer the only hope of financial salvation. With the newspapers snapping at their heels, the directors agreed to discuss it at the first opportunity.

  They scheduled a committee meeting for January 5, 1773, to hear not only from Robert Herries but from anyone who objected to his scheme. At this point, we have to cross the Atlantic to New England, where Thomas Hutchinson, the governor of Massachusetts, had his own motives to be worried about the price of Bohea. His family dealt in tea. And when his London agent heard about the Herries plan, he hurried down to India House to lodge a protest on Hutchinson’s behalf.

  THE FOOLISHNESS OF THOMAS HUTCHINSON

  Another tall, thin man, Governor Hutchinson thought of himself as the voice of George III in Boston. An American by birth, from old Puritan stock, he was already sixty-one. Behind him lay a lifetime of public service, and all the bother it brought with it.

  A Harvard graduate, highly intelligent, and a fine writer, Hutchinson worked hard and spoke well. Even some of his opponents praised him for his diligence and his commitment to the Commonwealth of Massachusetts. But like Lord North, he suffered agonies in private. Tense and highly strung, Thomas Hutchinson spent sleepless nights worrying about the British Empire. He never stopped writing letters to England, often very indiscreet, and by doing so he caused no end of trouble.

  Governor Thomas Hutchinson at thirty, by Edward Truman. Bridgeman Art Library

  In Boston, his family enjoyed the benefits of rank. They also endured the envy that power attracts. For that Thomas Hutchinson had only himself to blame. Along with his kinsmen, a family called Oliver, Hutchinson had come to dominate the imperial hierarchy in his colony. While he served as governor, his brother-in-law Andrew Oliver acted as his deputy, and Peter Oliver held the post of chief justice. Given the mood in New England, and the wide support for ideas like those of John Wilkes, at best it was unwise to concentrate so much power in the hands of a local oligarchy. Hutchinson’s two predecessors had been Britons, sent out to the colonies to serve a term and then come home. That was a far more sensible arrangement, since they were better able to remain aloof from feuds between local factions. At worst the Hutchinson-Oliver axis created damaging conflicts of interest between their role as representatives of the king and their need to look after their own families. Just such a conflict occurred in 1773.

  Thomas Hutchinson had many virtues, beautifully described in the great biography by Bernard Bailyn. In particular he was a loving father, but this helped to bring about his downfall. After generations of mercantile success, the Hutchinsons owned not only a great slice of the waterfront in Boston, but also a fine estate inland at the little town of Milton. But in colonial New England wealth was more precarious than in Britain. In the mother country, property in land was almost indestructible, and rents very rarely fell. In the colonies, where soil was relatively cheap, wealth depended on the vagaries of commerce. A fortune of that kind was hard to build and apt to vanish, thanks to fire, storm, shipwreck, or a sudden slump in trade. Especially in Boston, where for a generation the economy had been sluggish and bankruptcy commonplace.12<
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  In 1765, during the postwar recession on both sides of the Atlantic, an epidemic of insolvencies occurred in Massachusetts. It helps to explain the furious reaction to George Grenville’s stamp tax. Keen to protect his family fortune, Hutchinson knew that he needed to find a secure livelihood for his three sons, all of whom were approaching maturity. And so at about this time he decided to set up his eldest son, Thomas Hutchinson Jr., as a dealer in tea. Of course they would need a London supplier, but the family had close friends who could send them all the Bohea they required.

  Many years earlier, the governor’s kinswoman Abigail Hutchinson had married an Englishman called Palmer from a family of landed gentry in Leicestershire. In 1740, when Thomas Hutchinson visited England on official business, he met the London branch of the Palmers—they were lawyers and merchants—and they became firm friends. The family’s members included Thomas Palmer, a grocer who dealt in tea wholesale. By the end of the 1760s, his son William had taken over the family business. He rose to become one of the largest buyers of tea at the East India Company auctions, making money enough to build a fine mansion in Essex, thirty miles from London, where he later served as sheriff of the county. William Palmer shipped tea to the Hutchinsons in Boston in consignments of sixty chests at a time, to be sold by agents as far afield as New Hampshire.13

  For a while, the enterprise prospered. And then, in 1767, news arrived in America of the Townshend duties, including the threepenny tax on every pound of tea. Boston soon became a very angry town. In the summer of 1768, the people rioted again, to defend John Hancock’s sloop the Liberty against a raid by customs men in search of smuggled wine. It was this incident that caused Lord Hillsborough to send in the army to patrol the streets and prevent a repetition. From that moment forward, any Bostonian who dealt in legal tea from England became a potential target for insult and abuse. The atmosphere grew darker still in 1769, when Boston led a national boycott of English goods in protest at the Townshend taxes. Imports of legal tea fell away sharply, by about a third. By the autumn of that year, Thomas Hutchinson Jr. was running out of cash and writing to his agent in Portsmouth, complaining about “the unwearied pains of enemies” who were trying to put him out of business.14