Why is it so hard to talk about personal finance?
Bhu Srinivasan came to this country as a wide-eyed eight-year-old, his head filled with all the possibilities America evoked. His educated parents had found upward mobility to be unachievable in India.
Now an entrepreneur who remains fascinated by American innovation and industry, Srinivasan has written a narrative history of the U.S. economy.
- Bhu Srinivasan Entrepreneur and author of "Americana: A 400-Year History of American Capitalism"
Read An Excerpt Of "Americana"
Adapted from Americana: A 400-Year History of American Capitalism by Bhu Srinivasan (September 26; Penguin Press). Copyright © 2017 by Bhu Srinivasan.
On September 5, 1620 with 102 passengers on board, the Mayflower started its journey to the New World. As much as the Pilgrims are recorded as religiously motivated, it should be noted that fully half of the Mayflower’s passengers were not members of the church in Leyden but rather settlers added to the journey by the investors. Living in Holland with relative freedom, then sailing to the New World under an English flag, with English financing, on a chartered English vessel with an English crew—all this seems an especially unlikely way to flee English persecution. Political refugees generally do not spend the final days before departure negotiating financial considerations and distribution of assets seven years into the future. But the Pilgrims were never refugees to begin with; they were critical instruments in a speculative venture, one that equally served to expand the Crown’s sovereignty to the New World. Religious liberty was but one component of the overall enterprise.
But this venture got off to a rough start. The Mayflower arrived off the coast of America in late November. Compounding this late-season arrival, the ship had missed its destination. The original charter granted by the Virginia Company called for landing near the mouth of the Hudson River. Instead, the Mayflower anchored within a peninsula 220 miles to the north. After sending an expedition to explore the coastline and find a place to build the settlement, the majority of the Pilgrims remained on the Mayflower awaiting the men’s return. Simultaneously, while the Mayflower was en route, officials in England separated the northern parcel of the Virginia Company and placed it under the Council for New England. Without knowing it, the Pilgrims were preparing for the first winter in the history of New England.
William Bradford labeled this section in his history Of Plymouth Plantation “The Starving Time.” While the voyage itself saw the death of one member of the ship’s crew, and no passenger deaths until the ocean was crossed, death made it onto the ship as the Pilgrims waited for the return of the expedition. Bradford returned to the ship to find that his wife had died. It was a prelude to the harsh winter that awaited them. By the end of February, the new colony had seen deaths reach “two or three a day” for a stretch of time. At the depth of their misery, Bradford noted that “there was but six or seven persons” able bodied enough to care for the rest. By March, almost half of the Mayflower’s passengers had died.
After staying in Cape Cod for the winter, the chartered Mayflower began its voyage back to England in April. The economically motivated adventurers had expected the return voyage to bring wood, furs, or other commodities from the New World. But given the calamity of the first winter, the Mayflower returned home largely empty.
Mortality rates were no excuse. The investors were displeased, Thomas Weston most of all. Weston sarcastically and bitterly wrote to John Carver, who had been voted into leadership as governor by the Pilgrims: “That you sent no lading in the ship is wonderful, and worthily distasted. I know your weakness the cause of it, and I believe more weakness of judgment than weakness of hands.” Weston’s letter to Carver was sent on a new ship, Fortune, headed for Plymouth. In the event Carver missed the message, Weston added his exhortations that this ship be returned full of goods this time, threatening to cut off further financing if Carver failed. But in the time between the return of the Mayflower to England and the arrival of Weston’s letter via the Fortune, Carver died.
Arriving to great relief after the winter’s misery, the Fortune brought a replenishment of supplies along with an additional thirty- five settlers. It was left to Plymouth’s new governor, William Bradford, to open Weston’s scathing letter. But by that time, circumstances were slowly changing for the better. Starting with the first warmth of the spring, the colonists had spent several months building their community. More important, the settlement made direct contact with its first Native American, a man introducing himself as Samoset. Remarkably, having had some familiarity with English-speaking fishermen who operated seasonally off Cape Cod, Samoset spoke some broken English and had even offered an assuring
“Welcome, Englishmen” as he strode to first greet them.
A few days following this approach, the Pilgrims were visited by Massasoit, the leader of the local tribe. This meeting marked the start of a personal relationship that would continue for another two decades, with the local Indian tribes being crucial to Plymouth’s financial salvation. Namely, the Indians had access to a valuable interior commodity that commanded high prices in Europe: beaver skins. Universally desired by the wealthy in their target markets, beaver skins quickly became the commercial link between New England and the Old World. At the same time, the transatlantic trade created symbiotic economic bonds between the Native Americans and the early colonists. Rather than becoming alarmed at sharing territory, as the colonists seemed ill equipped to venture inland, the Indians looked at the English settlements as trading posts. Adept at hunting beaver over the ages as part of their own winter clothing, the Native Americans had a competitive advantage in procuring a valuable commodity that the colonists were willing to trade for. Tracking the remote beaver in distant ponds and rivers was a labor-intensive task that the colonists left to experts.
This dynamic led to an early trading opportunity for the Plymouth colonists. Even before the arrival of the Fortune, the colonists had managed to exchange simple goods—likely items such as blankets, glass beads, knives, and utensils—for fur. The Indians, without the technical ability to forge shining knives or intricate metallic objects, were able in turn to procure such luxuries in exchange for what was to them the simple act of hunting and preparing beaver. This intersection of competencies, the comparative advantages of nations, remains the fundamental basis for all global trade.
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