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city’s inhabitants. Unlike Boston, New York, and other colonial towns, Philadelphia would have no walls or fortifications; Penn’s enlightened Indian policy would provide all the protection necessary.
Reality on the American frontier did not immediately match Penn’s vision. Early inhabitants dug dwellings out of the steep banks of the Delaware River, living alternately amid the mud and dust of wet seasons and dry. Pigs, goats, chickens, dogs, and the occasional cow ran loose through the streets of the town, feeding on, in some cases, and contributing to, in all cases, the garbage and filth that made the summer air excruciatingly pungent. Front Street was a standing cesspool.
But time softened the rough edges, and by the beginning of the eighteenth century the town was starting to approach Penn’s blueprint. The inhabitants numbered somewhat more than two thousand, and they gave evidence of having been busy. A recent arrival from Sweden declared, “If anyone were to see Philadelphia who had not been there, he would be astonished beyond measure that it was founded less than twenty years ago…. All the houses are built of brick, three or four hundred of them, and in every house a shop, so that whatever one wants at any time he can have, for money.”
Money, however, was a problem. Philadelphia—like Boston, New York, and other North American cities—suffered from the chronic affliction of colonial commerce: a lack of money. The early eighteenth century was the heyday of mercantilism in British imperial thought and practice; according to the mercantilists, the measure of imperial power was ready cash (to build navies, outfit privateers, and pay mercenaries, besides less martial purposes). The function of colonies was to foster a favorable trade balance, which would funnel cash—most liquidly (or solidly, rather) in the form of gold and silver—into the treasury ofthe monarch, and into the pockets of his inhabitants in the metropolis (from whom it could be extracted when necessity arose). The maturity of the English economy relative to that of the American colonies, augmented by the navigation (that is, trade) laws passed by Parliament during the seventeenth century, ensured that money would flow into England with ease, in payment for high-value manufactured goods, and flow out, in payment for low-value raw materials, with difficulty. The result was a perennial shortfall of cash among colonial merchants and their customers.
As a result the colonists were often reduced to barter. One Philadelphia shipbuilder, James West, recorded charging £39 for building a sloop. His customer lacked cash, so West accepted payment in flour, butter, sugar, raisins, and beer. Partly because this was a recurrent problem, he had gone into the sideline of operating a tavern; he served the proceeds from his ship contract to his patrons. As part of this redefinition of liquidity, West boarded his boatwrights at the tavern and paid them their wages in beer.
In good times the dearth of money was merely annoying; in bad times it threatened to strangle the colonial economy. And times were rarely worse than following the collapse of the South Sea bubble in 1720. The South Sea Company had been chartered in 1711 and granted a monopoly of British trade with South America and the islands of the Pacific Ocean (formerly and still sentimentally the “South Sea”). During the next several years this monopoly rewarded shareholders handsomely, prompting wealthy and influential individuals, including King George I and many close to the court, to purchase stock. To tighten the company’s connections to the Crown still further, the directors made George a governor of the company in 1718. A year later the directors concocted a scheme to privatize the national debt; they would assume the Crown’s obligations in exchange for an annual payment—and, most significantly, the chance to persuade the Crown’s creditors to exchange their notes for stock in the
Reality on the American frontier did not immediately match Penn’s vision. Early inhabitants dug dwellings out of the steep banks of the Delaware River, living alternately amid the mud and dust of wet seasons and dry. Pigs, goats, chickens, dogs, and the occasional cow ran loose through the streets of the town, feeding on, in some cases, and contributing to, in all cases, the garbage and filth that made the summer air excruciatingly pungent. Front Street was a standing cesspool.
But time softened the rough edges, and by the beginning of the eighteenth century the town was starting to approach Penn’s blueprint. The inhabitants numbered somewhat more than two thousand, and they gave evidence of having been busy. A recent arrival from Sweden declared, “If anyone were to see Philadelphia who had not been there, he would be astonished beyond measure that it was founded less than twenty years ago…. All the houses are built of brick, three or four hundred of them, and in every house a shop, so that whatever one wants at any time he can have, for money.”
Money, however, was a problem. Philadelphia—like Boston, New York, and other North American cities—suffered from the chronic affliction of colonial commerce: a lack of money. The early eighteenth century was the heyday of mercantilism in British imperial thought and practice; according to the mercantilists, the measure of imperial power was ready cash (to build navies, outfit privateers, and pay mercenaries, besides less martial purposes). The function of colonies was to foster a favorable trade balance, which would funnel cash—most liquidly (or solidly, rather) in the form of gold and silver—into the treasury ofthe monarch, and into the pockets of his inhabitants in the metropolis (from whom it could be extracted when necessity arose). The maturity of the English economy relative to that of the American colonies, augmented by the navigation (that is, trade) laws passed by Parliament during the seventeenth century, ensured that money would flow into England with ease, in payment for high-value manufactured goods, and flow out, in payment for low-value raw materials, with difficulty. The result was a perennial shortfall of cash among colonial merchants and their customers.
As a result the colonists were often reduced to barter. One Philadelphia shipbuilder, James West, recorded charging £39 for building a sloop. His customer lacked cash, so West accepted payment in flour, butter, sugar, raisins, and beer. Partly because this was a recurrent problem, he had gone into the sideline of operating a tavern; he served the proceeds from his ship contract to his patrons. As part of this redefinition of liquidity, West boarded his boatwrights at the tavern and paid them their wages in beer.
In good times the dearth of money was merely annoying; in bad times it threatened to strangle the colonial economy. And times were rarely worse than following the collapse of the South Sea bubble in 1720. The South Sea Company had been chartered in 1711 and granted a monopoly of British trade with South America and the islands of the Pacific Ocean (formerly and still sentimentally the “South Sea”). During the next several years this monopoly rewarded shareholders handsomely, prompting wealthy and influential individuals, including King George I and many close to the court, to purchase stock. To tighten the company’s connections to the Crown still further, the directors made George a governor of the company in 1718. A year later the directors concocted a scheme to privatize the national debt; they would assume the Crown’s obligations in exchange for an annual payment—and, most significantly, the chance to persuade the Crown’s creditors to exchange their notes for stock in the
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