hide captionA Founding Father and signatory of the Declaration of Independence, Robert Morris helped bankroll the American Revolution. It arguably couldn't have been won without him.
There are a few things we're all taught to notice about the Declaration of Independence: the famous preamble, the phrase "all men are created equal," the defiantly large signature of John Hancock. But off to the right of Hancock's name is the cramped signature of a man few Americans have ever heard of. His name was Robert Morris, the nation's founding capitalist and the financier of its revolution.
Morris was a self-made merchant and entrepreneur from Philadelphia, so he stood out from his fellow Founding Fathers, who ranged from firebrand Boston activists to slave-owning Southern planters.
Author and journalist Charles Rappleye explores Morris' involvement in independence in a new book, Robert Morris: Financier of the American Revolution. He tells NPR's Steve Inskeep that while the other delegates were fiercely in favor of independence, Morris tried to stop it.
"He opposed it in the debate in Congress, and then when the vote came up, he absented himself," Rappleye says. "This was sort of an act of falling on his sword, because by stepping out of the hall he allowed the Pennsylvania delegation to make it a unanimous vote."
Rappleye says Morris didn't believe the colonists would prevail against England.
"He thought it was a very dangerous and wrong-headed move to actually make the break," he says.
But when the Declaration of Independence was signed two months later, Morris set his personal opposition aside and went with the majority opinion. He soon became indispensable in the Revolution.
America's Founding Capitalist
Born and raised in Liverpool, England, Morris was tall, wide and by all accounts larger than life.
"Philadelphia was a great place for feasting," Rappleye says, "and he was often the guy throwing the banquet."
Robert Morris: Financier of the American Revolution By Charles Rappleye Hardcover, 640 pages Simon & Schuster List price: $30
Rappleye says that Morris was just as comfortable interacting with dock workers as he was with his fellow merchants and traders.
"He seemed to have that sort of gregarious, common touch, as well as being very successful — and at times in his career very rich," he says.
Morris made his fortune as a global capitalist in 1776, well before capitalism had been described and accepted as an economic system.
"It was at the dawn of the whole idea of global enterprise," Rappleye says. "He was very much a free market, laissez-faire capitalist — he talked about trade being as free as the air."
According to Rappleye, Morris was thinking in terms of global commerce at the same time the Scottish economist Adam Smith was describing it in his groundbreaking book, The Wealth of Nations.
Global capitalism was a risky business in a time before e-mail, or any form of reliable international communication. Morris effectively made a gamble by sending goods overseas and hoping that the profits would eventually come back to him.
"The primary [means of finance] for the international traders [were] called 'bills of exchange,' which were debts and foreign currencies that you could then buy and sell in foreign capitals, and in your own country, to other traders who needed capital," he explains. "A lot of it was based on personal relationships, so correspondence was critical and reputation was fundamental."
During the Revolution, Morris used his reputation and business connections to effectively bankroll American forces. He was active in supplying Washington's army with gunpowder, which he smuggled in under the noses of British authorities in Europe and the Caribbean. Rappleye argues that the Revolution couldn't have been won without Morris.
"He certainly came through at critical times for George Washington, who, with his army in the field, needed money to keep them clothed, keep them on the road — and get them to Yorktown in particular," Rappleye says.
In 1781, Yorktown was the climactic battle of the American Revolution. Washington needed to march his army down to surprise and besiege British forces. And while Washington orchestrated the plan and the attack, Morris took care of everything else.
"He was getting the cattle from Connecticut, he was getting the flour from Pennsylvania and Virginia," Rappleye says, "and he was getting it all to the soldiers on the road."
Before Yorktown, the United States' fledgling new currency had all but failed, and the only medium of exchange with which to finance the revolution was Morris' own personal credit. So four years after opposing the Revolution, Morris had effectively become America's treasury and banker.
hide captionCharles Rappleye is a writer and editor in Los Angeles. His previous work includes Sons of Providence: The Brown Brothers, the Slave Trade, and the American Revolution, which won the George Washington Book Prize in 2007.
Charles Rappleye is a writer and editor in Los Angeles. His previous work includes Sons of Providence: The Brown Brothers, the Slave Trade, and the American Revolution, which won the George Washington Book Prize in 2007.
"They were Morris notes," Rappleye says. "And that had become the sole currency of the government."
A Congressional Inquiry
Despite Morris' instrumental role in the Revolution, he has gone down in history as something of a crook. According to Rappleye, this was because of the backroom dealings he resorted to in order to fund the war.
In addition to smuggling gunpowder in for the American army, Rappleye says, Morris was also in charge of a secret committee that organized an arms trade with European agents. Most of the arms contracts the secret committee signed with its European partners were to its own members — primarily, Morris.
He was still a member of Congress at the time. In modern-day terms, it would have been equivalent to a defense contractor getting himself elected to Congress, then using his position to appropriate money to his own company as a no-bid contractor.
"There was a lot of accusation that these people were enriching themselves in this secret trade," Rappleye says. "We have to take into account that the secrecy involved required that these people do business only with people that they knew, only with people that they could take into confidence. However, it did come out soon after that this had been going on, and there was a very modern sort of outcry against the idea that there was self-dealing here."
Morris was the subject of perhaps the first congressional inquiry into self-dealings. He was exonerated by Congress when he was able to show that he had not profited inordinately from the arms contracts, though he actually had.
It was one of the many ways in which Morris didn't always get along with his fellow Founding Fathers.
"There were people in Congress who through their whole careers considered Morris to be everything the Revolution was against. He was about commerce, he was about self-interest," Rappleye says. "There was an ideological divide within the revolutionaries from the very beginning. It was between the ideologues, who believed that we should set up a society based on ideas, that people should act a new way; and then there were pragmatists, Morris primary among them, who took self-interest into account. He believed that to expect people to act in any other way was naive."
America's First Real Estate Bubble
After the war and the creation of the American government, Morris stepped out of public life. With the fortune he had amassed over the course of a career in trade, he attempted to make his biggest move yet and invested heavily in land. According to Rappleye, he ultimately attained the title to 6 million acres, stretching from New York all the way down to Georgia.
Morris was convinced that the masses of Europe would soon be flocking into the American hinterland — something that wouldn't happen for at least another century. It was America's first great land boom, a real estate bubble.
"He was banking on the price going up. It didn't, and he went bankrupt," Rappleye says. "In those days, when you went bankrupt you went all the way down. He spent three years toward the end of his life in debtor's prison in Philadelphia."
Despite Morris' role in the Revolution, no one at the time had thought to help him.
"America was a very tough place at that time," Rappleye says. "You rose and you fell, and if you fell, nobody was there to catch your fall."
Excerpt: 'Robert Morris: Financier Of The American Revolution'
by Charles Rappleye
Robert Morris: Financier Of The American Revolution By Charles Rappleye Hardcover, 640 pages Simon & Schuster List price: $30
Morris' position with the firm, and his bond with Thomas Willing, were altered dramatically with the death of Charles Willing in 1754. There was an element of irony in the circumstances of his demise: the thousands of indentured servants arriving in Philadelphia, many of them on Willing's ships, had introduced "jail or ship fever" to the local population, the "sickness spreading in the town… owing to the unhealthiness of the vessels and the Palatine passengers." Obliged as mayor to make rounds of the "pest house," Charles Willing contracted the fever and died on November 29. This left Thomas, twenty-three years old, in charge of the family business.
Thomas quickly assumed his father's public functions as well. He took a seat on the City Council in 1755, and held a variety of offices for the next twenty years, including stints on the Assembly, two terms as mayor of Philadelphia, and ten years as an associate justice on the colony's Supreme Court. As his responsibilities multiplied, Willing came to rely more and more upon Robert Morris. When Morris turned twenty-one, in 1756, his seven-year apprenticeship was complete, and he became a full-fledged employee, a virtual partner with Thomas. In the spring of 1757, Willing decided to make it official, dissolving the old firm and creating "Willing Morris & Company." It marked an extraordinary leap for Morris: his rapid transition from apprentice clerk to vested partner was an unprecedented ascent at a time when rank of birth was largely determinative, especially in staid Philadelphia.
Announcing his decision, Willing credited Morris as a "sober honest lad," and declared that the two of them would team up "to more advantage than either could do singly." That Morris brought a rare degree of acumen and vigor to the partnership is evident; his sobriety, however, appears to be a bit of an embellishment. Letters Morris received from friends around this time suggest that he was a young man who enjoyed a drink and a night on the town. One such correspondent, a friend and trading partner in Jamaica, boasted to Morris that, "drunk I shall be today, having a half dozen friends and a batch of true London claret. This town is turned devilishly debauched…" There's no record of Morris' answer to his friend, but in the years to come he gained a reputation for grand parties and a bountiful wine cellar. At a time when business was routinely conducted by "a numerous body of twelve o'clock punch drinkers," when Philadelphia boasted more than one hundred taverns, and a hundred more houses licensed to sell rum by the quart, Robert Morris was a first class carouser.
On at least one occasion, Morris' revelries led to more than just a hangover. That is to say, sometime around 1763, Morris sired a baby girl. She was born out of wedlock, like Morris himself, and little is known about the mother. The child was named Mary, and known to her family and friends as Polly; she did not live with Morris, but he appears to have provided for her room and board, and she apparently obtained a good education in Philadelphia. Polly was married in 1781, around age 18, and remained in touch with Morris during her adult life. Robert was also managing the affairs of his half-brother Thomas; he enrolled him in school and, around the time the boy turned sixteen, took him on as a clerk in the counting house.
Morris' family life, then, was a bit chaotic, but his focus was on business. He lived close by the docks on Front Street, just a short stroll from the Willing business complex. His day entailed drudgery at his writing desk in the counting house, attending arrivals and supervising the lading of outgoing vessels, and meeting with vendors and other merchants at the City Tavern, at the India Queen, or at any of a dozen other dens where merchants did their business. Working days were long, varied and convivial, and perhaps best captured in this observation by a foreign traveler of the life of the American merchant:
They breakfasted at eight or half-past; and by nine were in their counting houses, laying out the business of the day; at ten they were on their wharves, with their aprons around their waists, rolling hogsheads of rum and molasses; at twelve, at market, flying about as dirty and diligent as porters; at two back again to the rolling, heaving, hallooing, and scribbling. At four they went home to dress for dinner; at seven, to the play; at eleven, to supper, with a crew of lusty Bacchanals who would smoke cigars, gulp down brandy, and sing, roar, and shout in the thickening clouds they created like so many merry devils, till three in the morning.
The next morning, of course, it started all over again.
In pursuing the day-to-day business of the trading house, Robert Morris was performing the same duties as most of the other traders on the Philadelphia waterfront. What set the firm of Willing & Morris apart, what helped elevate them above their competitors, was their spirit of creativity.
Underwriting insurance was one such innovation; with rates in England high and sometimes prohibitive, Willing in 1756 pooled eighty thousand pounds with five other Philadelphia merchants to insure their own vessels and offer policies to other traders. The firm's advance position in the Indian trade gave rise to another fiscal innovation. This substantial line of business was regulated by the colony to prevent abuses and the frontier violence that resulted; Willing was named to a nine-member Indian Affairs board that was empowered to raise funds by borrowing private capital at six percent interest. This opened a whole new practice of financing government projects through bonds and other promissory notes, and Willing took a direct hand in most of the early negotiations.
It's hard to say what role Morris played in designing these financial experiments; most of the paperwork that survives is subscribed by Willing. But Morris was working closely with his partner, gaining hands-on insights into the process of credit and capital formation at a time when most entrepreneurs engaged only in those operations they could finance from their own funds. Even as a passive observer, he may have recognized the same creative spirit at work that his father had introduced to the Maryland tobacco trade. In retrospect, these early projects look seminal: Morris later put the same principles to work on a grand scale, endeavoring to restore the finances of a beleaguered national government. It was a mercantile world, but Morris and his partner were practicing capitalism.
Excerpted from Robert Morris: Financier Of The American Revolution by Charles Rappleye. Copyright 2010 by Charles Rappleye. Excerpted by permission of Simon & Schuster.