Harvesting Power: Transatlantic Merchants and the Anglo-American

324 Pages·2015·2.18 MB·English

by  Thomas Finger

Harvesting Power: Transatlantic Merchants and the Anglo-American Grain Trade,
1795-1890

Thomas David Finger
Flagstaff, Arizona

Bachelor of Arts, State University of New York at Binghamton, 2003
Master of Arts, University of Arizona, 2006

A Dissertation presented to the Graduate Faculty
of the University of Virginia in Candidacy for the Degree of
Doctor of Philosophy

Department of History

University of Virginia
May, 2015

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“Harvesting Power” Thomas D. Finger
Harvesting Power: Transatlantic Merchants and the Anglo-American Grain
Trade, 1795-1890

Thomas D. Finger

Abstract
Between 1795 and 1889, the Anglo-American grain trade grew to provide Great Britain
with most of its food imports. At first, bottlenecks in transportation and markets limited trade.
Between the 1820s and 1870s, merchants built infrastructure by mobilizing business
associations, capital, technology, and nature. British and American merchants invested in
American transportation and participated in free trade debates during the 1840s. Following the
repeal of the British Corn Laws in 1846, American and British merchants stitched together
regional markets to send American wheat to Britain. By the 1870s, three key American regions
supplied Britain with grain: the Great Lakes Corridor, California, and the Spring Wheat Region
of the northern plains. In the late 1870s, American exports increased as British crops failed.
Between 1875 and 1890, American wheat exports rose further as British merchants invested in
American milling and transportation. By 1890, the American and British wheat markets
converged. This convergence encouraged large commercial agriculture in the United States and
a reliance on imports to feed industrial Great Britain.
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Acknowledgements
When it comes to a multi-year research project spanning three countries, deep debts
accrue. Countless librarians and archivists in the United States, Great Britain, and Canada have
hounded sources on the nineteenth century that had long since fallen into disuse and had been
misplaced entirely. The frequency at which lost documents entailed multi-person searches
convinced me that I had a long-ignored topic that deserved a thorough accounting. In particular,
the staff at the Liverpool Records Office, The University of Liverpool Special Collections, the
ING Baring Corporate Archive, The Buffalo and Erie County Historical Society, and the
Minnesota Historical Society have all assisted greatly in that effort.
In similar fashion, a score of colleagues and friends have provided great insight into a
story I was equally sure I wanted to told and unsure how to tell it. The comments and
suggestions of Jaime Allison, Kathleen Brosnan, Mike Caires, Bart Elmore, Sterling Evans,
Chris Jones, Dolly Jorgensen, Finn-Arne Jorgensen, Tait Keller, Laura Kolar, Kairn Klieman,
Andrew McGee, Marty Melosi, Joe Pratt, Sara Pritchard, George Vrtis, and Chris Wells. My
enduring thanks to John K. Brown.
By far those with the greatest influence in shaping this story are W. Bernard Carlson,
Peter Onuf, Edmund Russell, and Mark Thomas. As members of my committee, each
encouraged me to separate the wheat from the chaff in this narrative. Much work remains, but
their comments during successive revisions helped this draft immensely. My eternal gratitude
goes to Ed Russell, who patiently and delicately challenged my thinking and writing at all stages.
I dedicate this dissertation to him, a constant in a time of change.
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Table of Contents

Introduction
The Anglo-American Epic of Wheat.........................................................................6

Chapter 2
Envisioning an International Grain Trade: English Merchants, Domestic Shortage,
and the Rise of Comparative Advantage.................................................................28

Chapter 3
The Nature of Exchange: British Merchant Networks, Transatlantic Flows of
Capital, and Visions for the American Landscape..................................................69

Chapter 4
This Mighty Instrument of Concord: Wheat in the Transatlantic Free Trade/Free
Labor Debate, 1830-1846......................................................................................105

Chapter 5
Organizing a Trade: Western Water, British Food Crises, and the Rise of the Great
Lakes-Empire Corridor, 1846-1865..................................................145
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Chapter 6
Bonanza: California’s Wheat and the Liverpool Market, ca 1850-1890..........190

Chapter 7
Convergence: The Spring Wheat Region and the British Grain Market, ca 1860-
1890.......................................................................................................................225

Epilogue
How America Came to Feed the World................................................................267

Bibliography.........................................................................................................283
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Chapter One – Introduction: The Anglo-American Epic of Wheat

In 1899, Progressive author Frank Norris sat down to write his magnum opus. In it, he
hoped to tell the story of America, how conquering the frontier led to unheard-of growth in
business enterprise. He hoped to tell this story by focusing on the behavior of humans and the
array of social forces that exerted profound influence of the will of the individual. He wished to
write a book that showed how humans were indeed a force within nature, struggling against the
indifferent and gigantic processes animating the larger world of which they knew little. Norris
yearned to not only write the great American novel, he strove to produce a profound sociological
study that could point to the center of human existence and ambition. To tell this story, Norris
chose wheat as his main character.1
Frank Norris wrote his best-known work, The Octopus, to describe the power that
railroads and financiers enjoyed over grain farmers in the late nineteenth century. In his other
great work, The Pit, Norris described the speculation of businessmen in the grain markets of
Chicago. Scholars of American literature consider these books among the most influential
Progressive works of literature. What you may not know, however, is that Norris considered
them to be the first two volumes in a three-part Epic of Wheat. Norris never completed the third
and final volume, The Wolf, due to his early death. While we can only speculate on its exact
content, we do know that it focused on the consumption of American wheat in Europe.2 The
complete Epic of Wheat would thus have told the story of a crop of wheat “from the time of its
sowing as seed in California to the time of its consumption as bread in a village of Western

1 Franklin Walker, Frank Norris: A Biography (New York: Russell & Russell, 1963), 239–255.
2 Frank Norris, The Epic of the Wheat: The Pit, The Complete Works of Frank Norris (Doubleday, Page & Co., 1903),
ii.
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Europe.” 3 Taken together as a whole, the Epic of Wheat would connect the production,
distribution, and consumption of wheat within a wide geographic swath into the same frame,
connecting people and environments to show “how the resources of one continent could be used
to feed another.”4 For Norris, this was “an idea as big as all outdoors.”5
This dissertation shows that Norris was right. One of the major stories of the late
nineteenth century was the transfer of American wheat to Europe. This dissertation focuses on
the largest of those markets: Great Britain. It shows that this trade grew from an unpredictable
trickle in 1800 to comprise over 60 percent of Britain’s vital wheat imports in 1890. The reason
this trade grew so quickly was a transatlantic network of merchants who came together between
1820 and 1870 to bring large quantities of wheat from the United States to Great Britain from
1870 into the twentieth century.
Merchants stand at the center of this story. It describes how they mobilized four key
elements to bring wheat in growing quantities from the United States to Great Britain over the
course of the nineteenth century. First, individuals employed a network of business associations
across the North Atlantic economy in order to engage in long-standing business deals rather than
opportunistic single purchases of securities or trade goods. Second, merchants used this social
network to invest capital to develop the American economy. Third, merchants in the United
States used this largely-British investment to build transportation and storage technologies to
move wheat cheaply over increasingly long distances. Finally, merchants at all points in the
system had to shape nature to allow them to make educated guesses on the supply, demand, and
price across various markets. In order to mobilize the four key elements of human networks,
capital, technology and nature, these merchants sent a constant stream of information about the

3 Ibid.
4 Walker, Frank Norris, 243.
5 Ibid., 240.
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state of harvests, prices, demand, and general market conditions across a growing number of
locations in the Anglo-American world.

The four main elements mobilized by British merchants to create the Anglo-American
grain trade also correspond to the bodies of literature this dissertation builds upon: economic and
business history, the history of technology, and environmental history. Business associations
were for general and wheat-specific merchants in the nineteenth century the central way to limit
personal risk. In these associations, merchants aggregated their capital and using collective
information to decide the best prospects for investment. As economic historians have shown,
merchants who engaged in risky overseas trade throughout the history of the Atlantic World
banded together in associations of varying durability and length to pool money, information, and
resources in an attempt to limit individual liability.6 Natural processes were a significant cause
of risk. There were perils in relying overwhelming on unpredictable agricultural goods who’s
amount could be reduced in the field, ship, warehouse, and market by a number of factors
including pest infestation and inclement weather.7 Ships could very well sink on the open ocean
or wet conditions could spoil or reduce the value of cargo.8 National, state, or local policy could
change unpredictably and dramatically influence individual long term plans or even the
destination of cargos afloat at the time of passage.9 Finally, dramatically fluctuating markets at
the point of purchase or sale could leave a single merchant liable for loss if he had predicted

6 K.G. Davies, The Royal African Company (London: Longmans, Green and Co., 1957); J.C. Miller, Way of Death:
Merchant Capitalism and the Angolan Slave Trade, 1730-1830 (Madison: The University of Wisconsin Press, 1988);
David Hancock, Citizens of the World: London Merchants and the Integration of the British Atlantic Community,
1735-1785 (Cambridge: Cambridge University Press, 1995).
7Percy Bidwell and John I. Falconer, History of Agriculture in the Northern United States, 1620-1860 (Washington:
Carnegie Institution of Washington, 1925).
8 Basil Lubbock, The Colonial Clippers (Charles E. Lauriat Company, 1921); Al Miller, “Workhorses and White Flyers:
The Northern Steamship Company,” Inland Seas 55, no. 1 (1999): 18–30.
9 Morton Rothstein, “American Wheat and the British Market, 1860-1905” (PhD Diss., Cornell University, 1960),
158–183.
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different conditions when contracting for a good. The most successful merchants of the
eighteenth and nineteenth century protected themselves from these risks by trading in a number
of different commodities and forming associations and partnerships with other individuals across
the economic spectrum, from crop brokers to insurers, and from bankers to politicians.10
By the early nineteenth century, a few merchant houses on both sides of the Atlantic had
come to manage risk better than others. In large ports throughout the Atlantic world, these
family dynasties engaged in general trade by brokering deals in wheat, tobacco, cotton and a host
of other commodities at the same time they brokered the sale of American securities in Europe
through a network of agent houses controlled either by a family member or a trusted associate
merchant.11 Agent houses centered in New York City, Philadelphia, and Baltimore would be
keystone merchant houses in the Anglo-American grain trade and a crucial node in a larger web
of international capital that connected British merchants with investments in the United States.12
While the association between agent and home offices lasted considerably longer than merchants
relationships in the earlier Atlantic economy, business historian Alfred Chandler has shown
conclusively that these agent and house associations transitioned over time to the even more

10 Jonathan Levy, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Cambridge, MA and
London, England: Harvard University Press, 2012).
11 John Kouwenhoven, Partners in Banking: An Historical Portrait of a Great Private Bank, Brown Brothers
Harriman & Co., 1818-1968 (Garden City, N.Y.: Doubleday, 1968); Edwin J. Perkins, Financing Anglo-American
Trade: The House of Brown, 1800-1880 (Cambridge, MA: Harvard University Press, 1975).
12 R.W. Hidy, “The Organization and Functions of Anglo-American Merchant Bankers, 1815-1860,” The Journal of
Economic History 1, Supplement: The Tasks of Economic History (December 1941): 53–66; R.W. Hidy, The House of
Baring in American Trade and Finance: English Merchant Bankers at Work, 1763-1861 (Cambridge, MA: Harvard
University Press, 1949); Ralph W. Hidy and Muriel E. Hidy, “Anglo-American Merchant Bankers and the Railroads of
the Old Northwest, 1848-1860,” The Business History Review 34, no. 2 (July 1, 1960): 150–69,
doi:10.2307/3111545; Dolores Greenberg, Financiers and Railroads 1869-1889 (Newark, NJ: University of Delaware
Press, 1980).
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permanent employer-employee relationships as the pace of trade quickened with the advent of
steam transport.13
Merchant associations were the primary mechanism through which European capital
entered the American economy in the nineteenth century. Just as economic historians have
noticed a change over time in the structure of merchant associations, so too have they noticed the
nature of foreign investment shift over the course of the nineteenth century from portfolio
investments with no decision-making control to direct investments implying involvement in a
firm’s decision-making process.14 While British investment always accounted for the largest
share of foreign investments in the United States during the nineteenth century, the actual
amount invested by British grew over time as associations among Anglo-American merchants
encouraged a greater flow of capital.15
Economic historians have also shown how associations and capital worked to increase the
volume of grain moving between Great Britain and the United States. As C. Knick Harley and
Paul Sharp have demonstrated, convergence within the Anglo-American grain trade was not a
simple supply versus demand equation; it came about as a “push” from the American market met
a “pull” from the British market and development of the transportation corridors that connected
them.16 These markets connected through a web of associations and investments that sprang

13 Alfred D Chandler, The Visible Hand: The Managerial Revolution in American Business (Cambridge Mass.:
Belknap Press, 1977).
14 Mira Wilkins, The History of Foreign Investment in the United States to 1914 (Harvard University Press, 1989).
15 L.H. Jenks, The Migration of British Capital to 1875 (New York: Alfred A. Knopf, 1938); P.L. Cottrell, British
Overseas Investment in the Nineteenth Century (London: Macmillan, 1975); P.L. Cottrell, Industrial Finance, 1830-
1914: The Finance and Organization of English Manufacturing Industry (London: Methuen, 1980).
16 C. Knick Harley, “Western Settlement and the Price of Wheat, 1872-1913,” The Journal of Economic History 38,
no. 4 (December 1, 1978): 865–78; C. Knick Harley, “Transportation, the World Wheat Trade, and the Kuznets
Cycle, 1850-1913,” Explorations in Economic History 17, no. 3 (July 1980): 218–50; C. Knick Harley, “Ocean Freight
Rates and Productivity, 1740-1913: The Primacy of Mechanical Invention Reaffirmed,” The Journal of Economic
History 48, no. 4 (December 1, 1988): 851–76; ibid.; Paul Sharp, “‘1846 and All That’: The Rise and Fall of British
Wheat Protection in the Nineteenth Century,” Agricultural History Review 58, no. 1 (May 2010): 76–94; Paul Sharp
and Jacob Weisdorf, “Globalization Revisited: Market Integration and the Wheat Trade Between North America
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