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Peele's pepper

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Title:
Peele's pepper the role of the Peele family and Salem, Massachusetts in the American pepper trade with Sumatra in the period 1795-1815
Creator:
Schwartz, Donald Kenneth
Place of Publication:
Denver, CO
Publisher:
University of Colorado Denver
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Language:
English
Physical Description:
77 leaves : ; 28 cm

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Subjects / Keywords:
Pepper (Spice) industry -- History -- Massachusetts -- Salem ( lcsh )
Pepper (Spice) industry ( fast )
Massachusetts -- Salem ( fast )
Genre:
History. ( fast )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )
History ( fast )

Notes

Bibliography:
Includes bibliographical references (leaves 76-77).
Thesis:
Submitted in partial fulfillment of the requirements for the degree, Master of Arts, Department of History
Statement of Responsibility:
by Donald Kenneth Schwartz.

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Source Institution:
|University of Colorado Denver
Holding Location:
|Auraria Library
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
19783399 ( OCLC )
ocm19783399
Classification:
LD1190.L57 1988m .S38 ( lcc )

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Full Text
PEELE'S PEPPER
THE ROLE OF THE PEELE FAMILY AND SALEM, MASSACHUSETTS
IN THE AMERICAN PEPPER TRADE WITH SUMATRA
IN THE PERIOD 1795-1815
by
Donald Kenneth Schwartz
B.S., (Cum Laude) School of Commerce, Accounts and Finance,
New York University, 1942
A thesis submitted to the
Faculty of the Graduate School of the
University of Colorado in partial fulfillment
of the requirements for the degree of
Master of Arts
Department of History
1988


This thesis for the Master of Arts degree by
Donald Kenneth Schwartz
has been approved for the
Department of History
by


Ill
Schwartz, Donald Kenneth (M.A., History)
Peele's Pepper
The Role of the Peele Family and Salem, Massachusetts in the
American Pepper Trade with Sumatra in the period 1795-1815
Thesis directed by Associate Professor Myra L. Rich
The decades following the American Revolution were times of
economic dislocation. Salem, Massachusetts' maritime community ex-
plored for new sources and markets to serve. The Peele family,
merchants, with their Captain Jonathan Carnes, found pepper on
Sumatra's west coast. From 1795 to 1815, Salem became the world's
pepper emporium, bringing employment and wealth to the community.
The backgrounds and nature of pepper, Sumatra and Salem are discussed
together with the economic and commercial factors involved. Much of
the information furnished comes from the Peeles and their colleagues
ships'papers, made available in manuscript form, from the Essex Institute
and the Peabody Museum, both of Salem. Finally, the causes of the
decline of Salem's activity in this trade together with the transfer of its
business energies to new areas of success are mentioned.
The form and content of this abstract are approved. 1 recommend its
publication.
Signed
Faculty member in charge of thesis


CONTENTS
CHAPTER
I. INTRODUCTION.............................
II. THE CHARACTERISTICS AND HISTORY
OF PEPPER..................................
III. THE NATURE AND BACKGROUND OF SUMATRA . .
IV. THE ECONOMIC AND COMMERCIAL ASPECTS
OF SALEM AND THE PEPPER TRADE..............
V. DECLINE OF SALEM'S PEPPER TRADE AND
MOVEMENT TO NEW ACTIVITIES.................
FOOTNOTES.........................................
BIBLIOGRAPHY


V
TABLES
TABLE
PEPPER EXPORTS FROM SUMATRA
YEARS 1803-1808 .............................. 14
PEELE FAMILY GENEALOGICAL TABLE................25
CARNES FAMILY GENEALOGICAL TABLE...............27
WATCH BILL.................................... 32
TABLE OF CREW'S ROSTER
1ST VOYAGE OF RAJAH............................38
OWNERSHIP OF DEEP-SEA VESSELS IN
SALEM REGISTER, 1800 AND 1810..................54


CHAPTER I
INTRODUCTION
By the middle of the 18th Century, Salem, Massachusetts had
grown from a tiny village to a bustling port town, numbering 3452 soulsJ
Handsome homes lined the main thoroughfare and more occupied the
adjacent streets. Stores and businesses were thriving. Salem's evident
prosperity had been built on the foundations of the West Indies trade,
supplemented by the produce of a fertile hinterland and the profits of an
active coasting commerce. This traffic had enabled the building of
merchant fortunes and had created a demand for related businesses and
trades: such as sail and shipmaking, cordage, carpentry, iron making and
storekeeping. Salem's population grew steadily as commerce created jobs
for seamen and laborers as well as artisans, craftsmen, businessmen,
merchants and professionals.
Even the outbreak of war in 1775 did little to dampen this busy
course. Certainly the hostilities disrupted normal trade but privateering
kept vigor in the activities. Salem's citizens confidentially anticipated the
return of peace and the resumption of trade within the orbit of the British
Empire. The British Orders In Council of 1784, however, upset those
expectations. By closing the West Indies to Americans, the British removed
at one stroke the principal source of Salem's prosperity, and that of dozens
of other similar towns. Trade languished, businesses suffered, jobs dis-
appeared, and residents moved elsewhere in search of employment.


2
Confronted by adversity, Salem merchants and captains, like those
of other towns sought new avenues of trade. Their ships entered waters and
tried markets never before explored by Americans. No journey was too
long, no port too far, few risks too great for these people searching for a
substitute for the West Indies trade. Salem merchants tried whaling,
voyages to European ports, even going as far as China on several occasions.
But the connection that brought them renewed prosperity was the trade to
the West Coast of Sumatra where they purchased pepper.
During the 18th century, pepper from India and the East Indies had
been brought into Europe and the New World by the British East India
Company and the Dutch. Their pricing at European and American des-
tinations reflected substantial markups to provide for administrative costs
and needed dividends to shareholders. Although their purchase prices to
Sumatra planters were low, nevertheless the high European values indicated
a monopoly-type policy that would invite new competitors to buy and trade
in an advantageous market.
Colonial Americans had purchased and used pepper but had not
entered the trade until the last decade of the 18th century. Why? Because
the British and Dutch were in it with larger ships and more capital than the
colonies could amass. Moreover, pepper was not a commodity in which they
were permitted to trade, (for British subjects, the East India company was a
Crown monopoly).
Thus, the Port of Salem, in the new United States republic, found
one answer to the question of survival in the uncertain economic times of
the last two decades of the 18th century, the decades which saw the end of
the Colonial Era, pepper voyages to Sumatra. The year 1795 marked the


3
first verified American journey to purchase the spice. It marked the
beginning of Salem's role as a world pepper emporium. The height of this
venture continued (with some interruptions for the Jefferson Embargo
against the American international shipping trade and the War of 1812) for
two decades, ending with the cessation of hostilities in 1815. European
peace brought maritime shipping into full sail on the seas and deeply cut
into American foreign trade.
The workings of the pepper trade are exemplified by the Peele
family, whose known records date back to 1753; they had been active in
commerce and shipping during the 18th century. Trading at first with the
West Indies, they had built a thriving mercantile enterprise. When the
coming of the American Revolution interrupted their normal trade, the
family turned to privateering. At the end of hostilities, the British closed
the West Indian market to their former American colonies. A time of
severe economic adjustment ensued for the new nation and its maritime
activities. The Sumatran pepper trade reflected one attempt at diversi-
fication by Americans (and Salem merchants in particular) to meet the
demands of commercial change. Trade during the period 1795 to 1815 will
be described with particular relation to the members of the Peele family
and their Salem colleagues.
Because business is dynamic in nature, this interim period of
successful pepper trade was, in fact, a prelude to Salem's decline as activity
moved elsewhere both in industrial and land development. The Peeles, too,
changed their location and emphasis. Successful, ongoing business adapts to
new needs and environments and the Peeles moved with the times. They are


4
an application of our thesis people can handle uncertain times by adapting
to change.
Much of the material in this paper can be and has been illustrated
from over 1400 pages in unpublished manuscript form, in the Peele family
papers, located at the Peabody Museum and Essex Institute, both of Salem,
Massachusetts. To date, but one scholarly paper on Salem and the pepper
trade has been written. Prepared by J. W. Gould in 1956, it covers in great
detail the background of the venture but makes no mention of the Peele
2
papers or their contents.
Though this paper will focus on the Salem captains and merchants,
it will begin by describing the cultivation of pepper, the characteristics and
background of Sumatra, and the position established there by the British
East India Company. The ensuing chapters will turn to Salem's merchants
and seafarers, the way they organized and carried on the pepper trade, the
risks involved and the methods developed to cope with those risks. Finally,
the paper will analyze the reasons for the decline of the pepper trade and
assesses its function in Salem's history.


CHAPTER II
THE CHARACTERISTICS AND HISTORY OF PEPPER
Though pepper had been known and used by Americans for 165
years, the Salem merchants and captains after 1795 had an opportunity to
learn about it and Sumatra at first hand.
Pepper vines thrive in a moist, hot climate from sea level to
altitudes of 1500 feet. The vines can climb 30 feet or more, bearing fruit in
2 to 5 years but full production is not attained before 7 years. Crops
continue up to 40 years, although yields can diminish after 20 years.
Cultivation practices have a strongly positive effect on yields and quality
although pepper can and does grow wild. As a result, there are recognized
grades and types of pepper that have commanded varying price structures
within the spice trade.
The pepper season began in January with the small pepper at the
bottom of the vine. However, the height of the season does not arrive until
March through May when the best berries are gathered at the top of the
vine. "Best" means each berry is larger and more solid than that which has
been picked earlier.
Pepper cuttings have been successfully interplanted on tea and
coffee plantations, permitting the mixed or alternate cargoes brought out
from the growing areas.
The pepper berries are harvested 9 months after flowering. They
are picked when not fully ripened and are then green in color. Left in heaps


6
for a few days to ferment, they are then spread on a concrete surface to dry
in sunlight for I day. After shriveling and turning black, the spice known as
black pepper has been formed. If ground, the powdered pepper is a
combination of dark particles from the outer hull and light-colored bits
from the core.
Black pepper, more properly known as true pepper or piper nigrum,
is believed to have originated in ancient India. Originally, the fruit of the
sacred fig tree was known as pippali. When the long black pepper was
discovered it, too, was called pippali, possibly because its shape suggested
the fig. Whatever the reason, with the passage of centuries, our English
word pepper was derived from pippali, the ancient Indian name.
Black pepper and evidence of its uses have been found in diggings
that are dated as early as 1000 B.C. Here, they appear to have been used in
sacrificial formulas prepared for varying ceremonies. In the 4th century
B.C., Susruta the Elder, an Indian surgeon, used pepper as an ingredient in
potions to remove fat, cure urinary complaints, hemorrhoids, and jaundice.
Indian trading vessels and colonists traveled south to Sumatra as
early as 100 B.C. and brought with them black pepper seedlings. The
cultivation of this spice was then introduced, but at the same time, was
permitted to grow wild in the new but hospitable island environment.
For centuries Arab traders sailed into the Arabian Sea and then to
India and Sumatra. There, they acquired spices, coffee, sugar and wealth.
In turn, with the coming of Islam, many areas of the Indies were converted
and exposed to a new culture. The Arabs had discovered the full power of
the wind systems in the Indian Ocean. Allowing for rapid travel from the
southwest (outbound to India) from April to October and northeast (inbound


7
to Arabia) from October to April, timing their trips with the monsoon winds
(derived from the Arabic word mansim, meaning season), the Arabs were
able to conceal this navigational knowledge from other nations and were
soon in a monopoly position to move spices to the European markets. The
City of Sana'a in Yemen became a distribution point with caravans of more
than 1,000 camels supported by the spice trade, routinely moving along the
trail. The first university in Arabia was started at Al Asha'er, where Ahmed
Abu Musa Al-Jaladi developed a mathematical system which he called
Al-Jabr, from which comes the word Algebra.
North and west the caravans and ships made their way to Egypt
and Istanbul where profits again were taken on pepper. (An example of
the added high costs was the Sultan of Egypt, taking as tariff 1/3 of the
value of every cargo that entered his domain.) Then ships transported the
spice to Venice and Genoa where merchants distributed it throughout
Europe. The profits and greed were so great that European consuming
nations began to seek a suitable direct sea route to the Indies. Moreover,
the Arabs had kept secret too long the source of their spices, and the
journeys of Marco Polo helped to lift the veil and led to the breaking of
3
the powerful Muslim domination. Discovery of the monsoon secret,
together with this accumulated information about the East gradually
displaced the Arab trade with Europe but not until large quantities of gold
had been sent to the Islamic countries in payment for spices. The
European gold shortage was an important factor in the search for the
wealth of the Indies and the mercantilism credo of non-exportation of
bullion.


3
8
The dearth of gold caused by purchase of spices from Islamic
merchants permitted pepper to become a medium of exchange. Pepper-
corns were counted out, one by one, and accepted as currency to pay
taxes, tolls and rents. A number of European towns kept their accounts in
pepper with some brides' families giving pepper as a dowry. Black pepper
was considered so valuable and so much a prestige item that the green,
yellow and red plants of the nightshade family, as well as allspice berries
were termed pimienta (Spanish for pepper).
Throughout the years, the laws of supply and demand applied to the
European pepper trade. When the sea route did not seem to furnish the
greater demand, the overland route from India to Istanbul and Alexandria
again operated as a supplementary route. Then, European syndicates
charged higher prices to wholesalers and retailers, who in turn raised the
costs to the European public. Demand then slackened, prices dropped and
some dealers had heavy financial losses. At times, pepper prices in Antwerp
were used as a barometer for commodities and business in general. The long
range effect of greater pepper supplies was to lower its cost to consumers
and thus bring it down from a luxury item to that of common use. This
could be another way of stating how the standard of living had improved
throughout European countries during the 18th and 19th centuries.
Some of the uses for pepper have changed with time, others remain
the same throughout the centuries.
When pepper was considered a luxury, in times of Arab-control led
supply as noted above, it commanded payments in gold. Further, it became
a medium of exchange with payments made by reference to the individual
peppercorn. It is interesting to note that as a substitute for gold, a


9
commodity with limited shelf or usable life competed with an enduring
precious metal in public acceptance. The appearance of adequate supplies
meeting normal demands eliminated pepper as a luxury item and allowed it
to later assume a mass market use with little if any monetary exchange.
Pepper has been used as a payment of tribute by the vanquished to
the victor. Alaric the Visigoth, laying siege to Rome in 410 A.D., demanded
and received 3,000 pounds of pepper as ransom with a further requirement
of 300 pounds annually to keep his Army's provisions of meat fresher. This
lessened his supply problem and contributed to the final collapse of the
western Roman empire.
In addition to the medicinal uses noted above, recently, pepper
blended with powdered ginger has proven effective in preventing motion
sickness. Health studies in hot climates have shown pepper to be an
effective stimulant. Thus, pepper has had a significant effect on both the
economy as well as health aspects in the development of backwards
societies throughout history.
The preservation of food has long been a concern of nutrition and
health authorities. When refrigeration or other protecting procedures have
not been available, pepper and other spices have been used. These processes
have enhanced flavor and retained food values for extended time periods.
Moreover, the aroma of pepper has affected the choice of food and the
creation of dishes, thus influencing the cuisine of a culture.
Church services have allowed many people find purpose and solace
in their lives. Central to many rituals has been the use of incense to signify
purification. While a number of perfumes and spices have been used, blends
utilizing pepper are well known.


10
Because of the use of spices, European cultures were able to enter
the age of exploration, allowing for discovery of new worlds with yet
additional valuable foodstuffs. Today, black pepper remains the world's
most important spice. The intense Malayan-Sumatran production that led to
the American and British trade in the early 19th century is in part
responsible for this result. London became the world's spice center in the
middle of the 19th century, distributing the increased production, bringing
down prices and thus increasing consumption.^ Pepper had now permanently
and finally lost its restricted use by the wealthy.
Pepper is not a product that can be grown worldwide. It requires
the climatic conditions found in Sumatra. To better understand Salem's
activities there, let us consider the island and its people.


CHAPTER III
THE NATURE AND BACKGROUND OF SUMATRA
Sumatra, called by Marco Polo "Java Minor," is the 3rd largest
island of Indonesia (formerly known as the East Indies.) The equator almost
bisects it, traveling 248 miles across its width. In spite of its location, the
climate is not extremely torrid. Cooling winds and an average annual
rainfall of up to 173 inches, with a mean daily range of only I3F, keep
temperatures at an average mean of 80F.: maximum recorded tempera-
tures at Padang, a typical and mid west coast town, is 90F. As one climbs
the mountains of the interior, a temperature drop of lF per 300 feet of
altitude is encountered. Along the west coast, fresh water streams and
rivers are in profusion. Marsden's classic text, published during the height
of the pepper trade, describes it best: "No country in the world is better
supplied with water than the western coast of the island. Springs are found
wherever they are sought for, and the rivers are innumerable."^ Humidity is
as high as 97% and is seldom less than 75%.^ The abundance of moisture
had a negative side. Malaria was prevalent, due in large part to the great
mosquito-bearing swamps.^ The fever hazard had a significant effect upon
the operations of the British East India Company. At their west coast
station, Fort Marlborough, illness, death and alcoholism resulting from
attempts to avoid fevers (and to cope with the hazards of life "beyond the
line") aided the continuance of bad decisions made in pepper cultivation and
export efforts. There are but two slightly distinguishable seasons, the hot


12
and the wet. Both climatologists and wags agree the only differences
between seasons are that the hot season is slightly hotter and not quite so
wet as the wet season, while the wet season is slightly wetter and not quite
so hot as the hot season. While much of Sumatra, including the Highlands, is
covered with forests and wild grasslands, the low-lying lands are swampy.
The grasslands permit the growing of two varieties of wild sugar cane. The
cane, considered a variety of wild grass, grow to heights of 3 to 12 feet and
is so strong that forests regain this land with ease.
Five groups of people have been native to Sumatra, the Bataks,
Achinese, Palembangese, Minangkabaus, and coastal Malays.
All five groups spoke languages belonging to the same Malayo-
Polynesian linguistic family with many sub-type languages and/or dialects
prevalent. Ethnologically, except for the foreign immigrant in groups listed
below, all Indonesians are Malayan in origin with a diversity of cultures
based upon religion, language and Adat the customary law governing lives
g
in the various communities. The basis for the differences just stated are
often found in the past history of the different groupings.
Bataks were divided into warring tribes, who, as cannibals, ate
their criminals as a form of punishment. Achinese were a merchant and
trading society who acquired salt and textiles in return for raw silk, pepper,
sulphur, camphor, gold dust, benzoin and betel nuts. Palembangese, too,
were committed to international trade where merchants from India, Persia
and Arabia exchanged their goods in a series of South Eastern Sumatran
markets for items from China and the Spice Islands. Minangkabaus, in the
west Sumatran Highlands, were an agricultural people growing coffee,
indigo, maize, sugar cane and the oil- growing plants.*^
They were


13
somewhat unique in that their customary law was based upon matrilineal
descent (inheritance passed from mother to daughter, rather than from
father to son.) As for the coastal Malays, they had constructed a
trade-based empire, at first located in southeastern Sumatra that moved
over to southwestern Malaya. Their biggest gift to posterity was their
language which became the lingua franca of all Indonesia.
Over the centuries other ethnic groups have settled in coastal
regions. Arabs, Chinese, Hindus, Bengalis, Portuguese and Eurasians have
all left their influences upon the culture. The strategic location of Sumatra
at the northeast end of the Indian Ocean coupled with a main route between
India and China has accounted for the confluence of these many cultures.
Any marketable crop, such as pepper, would soon find worldwide interest.
To this day, the Malaysian area remains the earth's prime producer of
pepper. As with most commodities and as noted above, Sumatran pepper has
been subject to cyclical supply and demand. For a portion of our period of
interest, the following table furnishes an interesting example of its
Sumatran export to American vessels or traders.* *


PEPPER EXPORTS FROM SUMATRA
YEARS 1803-1808
AVERAGE PURCHASE
YEAR QUANTITY IN PECULS U.S.A. TOOK PRICE PER PECUL
1803 60,000 1/2 of all shipments $8 per Pecul
1804 80,000 2/3 of all shipments $ 11 per Pecul
1805 80,000 70,00 Peculs $10 per Pecul
1806 80,000 60,000 Peculs $7 per Pecul
1807 70,000 30,000 Peculs $6.50 per Pecul
1808 46,000 6,000 Peculs $6 per Pecul


15
The decline in exports from 1805 to 1808 correlated with the
decreasing average purchase price per Pecui, both owing to the oversupply
on the European and American markets. Continuance of this as a long term
trend contributed to America's gradual withdrawal from the trade in the
early 19th century.
Prior to the 18th century for the most part, pepper had been in
short supply in Europe due mainly to marketing practices of the Arabs and
then the Dutch. However, as noted above, there were periods of glut. In
the era of 1680-86, an employee of the V.O.C. ^ (Dutch East India
Company) reported that pepper was so plentiful in Indonesia that it was
sometimes used as ballast or with shiploads either thrown into this sea or
burnt. Christopher Fryke, ship's surgeon with the V.O.C. reported "yet dares
13
no man in the service of the company take one single corn of it."
The involvement of British East India Company with the economy
of Sumatra spanned more than 100 years and involved a counter influence
against the Dutch along a substantial portion (some 300 miles) of the west
coast, from Indrapura in the north to Krui in the south. From the beginning,
directors of British East India Company realized the importance and
intertwining of Empire, pepper and Sumatra. In a bitter struggle in 1680
between their company and the rival Dutch East India Company for control
of the West Java pepper trade, they commented that: "If the present
misunderstanding between the two nations should ferment to an open war, it
would be thought by the vulgar, but a war for pepper which they think to be
a slight thing, because each family spends but a little on it. But at the
bottom it will prove a war for the dominion of the British as well as the
Indian Seas, because if ever they come to be sole masters of that


16
commodity, as they already are of nutmegs, mace, cloves and cinamon [sic],
the sole profit of that one commodity, pepper, being of general use, will be
more to them, than all the rest and in probability sufficient to defray the
constant charge of a great Navy in Europe."*^
At first, the British acquired the seaport at Benkulen and two miles
of ground from the native rulers for creation of a pepper-growing monopoly
on condition they protect the inhabitants against Dutch aggression from the
south. Further, the British were to pay I I Spanish silver dollars to the local
ruler for each 3 Peculs delivered. In addition, the native Pengeran (senior
government official) was to receive an annual stipend of 400 dollars.
Plans for production and export of pepper never met expectations.
Rising administrative costs were not met by increased production in spite of
rapidly extending territorial commitments. Complaints from the Madras
government, to which Benkulen was subordinate, became more frequent.
This created pressure upon the local British administrators who, in turn,
introduced coercive and repressive measures. Several Sumatran rulers were
placed in stocks "for no other reason but because they had not brought down
to the Fort [Marlborough] such an quantity of pepper as the Governour
had sent for."*'* Undoubtedly, the failure to deliver pepper was attributable
to the natives' lack of motivation. Payments below market prices, and then,
at times, in paper instruments of credit, did little to interest growers.
Forced measures of production did not sustain desired results. The measures
employed by the British appeared more in line with Dutch behavior than
theirs. In addition, use of harsh measures increased costs of administration.
Slaves from Madagascar were brought in as garrison troops but could not be
fully trusted. Moreover, "Topaz" soldiers (dark skinned, half-caste


17
claimants of Portuguese descent) were stationed there. Finally, the main
military force was drawn from the ranks of Sepoys and British in India. At
least one 18th century Sumatran revolt forced the British to flee to India, to
return later, with newly imposed quotas for native pepper production. East
India Company continued to have insufficient specie available for payment
to growers. At times, another inducement was introduced. Opium was
imported as a payment in part for crop production. Marsden reported 21,000
pounds annually were being brought in from Bengal by East India Company
16
but consumption totals and destinations are unknown. Although probably
in local demand, it did little to motivate additional labor and larger crops.
All of the foregoing insured declining production, paving the way for Salem
ships and their hard money purchases at low but equitable price levels.
Meanwhile, much of the pepper grown, sold and collected had been sent on
to Canton, China along with the shipments of opium. These commodities
paid for tea exported to Europe and America. In this way, Britain avoided a
bullion outflow and hoped for a large profit structure for the East India
Company, permitting continued payment of its high dividend structure.
As stated above, slavery existed on the holdings of the East India
Company in Sumatra. Blacks from Madagasgar were used as early as 1695,
and the supply of African slaves continued until 1765 when the contract for
their supply terminated. Later, additional Africans were brought in, by way
of Bombay, to augment the labor force. In 1770, the Company directors,
impressed by the "advantages which must attend the breeding up the
Company's slaves to handicraft professions" were motivated "readily to
comply with the allowance of ten dollars, which you have settled as a
gratuity to artificers for each slave they shall train up and perfect in their


18
respective business."^ The directors felt if individual slaves, on their own,
had the potential of, and did actually produce pepper in required quantities,
they then should be freed and enjoy planter status. This intention alarmed
the local administration and they actively opposed the proposal affecting
some 1,100 souls. Not until 1818 when Lieutenant Governor Thomas S.
Raffles issued each slave a certificate of freedom was the practice finally
terminated.^
In spite of its then remote location and difficult environment, the
East India Company's station did produce at least two already referred to,
notable British administrators. Thomas Raffles served there from 1818 to
1824 as Lieutenant Governor of Fort Marlborough. He did not succeed in
turning around an unprofitable operation, that was based upon forced quotas
from inadequately paid planters along with an East India Company's too high
administrative cost structure.
William Marsden began his career with the East India Company's
station in Sumatra at the age of 17 in a clerical capacity. He advanced to
secretary and then returned to Britain where in 1783 he published a first
edition of "The History of Sumatra." His book, going through three editions,
is still considered a valuable reference by modern historians. In 1804 he was
appointed First Secretary to the Admiralty. Prior to that, he had estab-
lished an East India agency business in London, and acted on behalf of a
number of the Company's officials at Benkulen. As a scholar, elected
member of several learned societies, lecturer at Oxford University, and
author whose works have been translated into French and German, his
business talents nevertheless were not unused. He remains unknown to many
19
as, to date, no detailed biography exists.


19
From the earliest years of the American colonies, there was some
involvement of its native born with pepper and Sumatra. Of particular
interest was Elihu Yale, benefactor of the university bearing his name.
Starting as a writer or clerk with the East India Company, he rose to
Governor and President of Madras in 1687. Private fortunes were to be
made and issues such as conflicts of interest were not of concern. Yale,
through his brother Thomas, engaged in constant and heavy trade in pepper
from Sumatra. Estimates of his amassed fortune, gained through private
transactions at Company expense, were estimated at £ 175,000. Before he
could be relieved of charges of corrupt practices and released from
imprisonment, he was "compelled to disgorge at least ^3,000, for which he
later petitioned the Company, and he was not permitted to sail for England
until I699."20
Another American, Nathaniel Higginson of Salem, joined Yale at
Madras in 1684 and became Deputy Governor. Both Yale and Higginson
were involved in the Sumatran pepper trade and dissension between them
soon arose. Higginson was involved in instigating the Madras Council's
revolt against Yale and his private trading. However, the former was
interested in having a brother in Salem setting up an East India goods
21
business there. His plan did not come to fruition.
Succeeding Yale as President and Governor of Madras in 1694,
Higginson became the First Lieutenant General of India. It is safe to say
that one of America's great universities owes its origin, if not existence, to
pepper and Sumatra as well as to the aggressive nature of its benefactor.


20
As noted above, there was intermittent American contact at the
company station in Benkulen. As competitors in the pepper trade, Salem
captains were much interested in British activity in the harsh environment.
Leavitt Pickman commented in his journal that: "Bencoolen [ sic] has the
reputation of being very unhealthy, tho' I believe not with perfect justice.
The Europeans here are extremely dissipated, and to this cause may be
traced almost every death which takes place among them. Excessive hard
drinking is all the fashion with the young gentlemen. The disorder prevalent
here is a fever of a bilious kind, which carries off the patient in a very few
days, or renders him an invalid for many months. Pulo Bay, a few miles
below Bencoolen, [ sic ] where ships occasionally go to refit, and in very
severe weather, is surrounded with swamps and marshes, and is consequently
22
very subject to fevers."
At times in the first decade of the 19th century, the Company did
trade with American ships, furnishing them with pepper, not from East
India's stores but from the SooSoo district, which London officials thought
somewhat inferior in quality. The Americans were transporting a number of
these cargoes to Mediterranean ports where such pepper sold for only one
farthing (1/4 of a penny) per pound less than that of so-called Company's
quality pepper. The motivation of the British to trade with Americans at
the company's station was the American's ability to pay in Spanish silver
dollars. These transactions aided in preventing the outflow of bullion, so
important to the British.
The table above documented the declining price of pepper being
exported by the Americans from Sumatra during the period 1806-08. The
Company, too, was affected by the weak (oversupplied) European and


21
American markets. On February 24, 1806, the East India Company's Court
of Directors advised Fort Marlborough as follows: "The present price of
pepper at the Company's sales, together with the large stock on hand,
renders it expedient for them to reduce their importations. The Court
would therefore be well pleased if their whole annual investment of pepper
to be provided on the west coast could during the ensuring two or three
23
seasons be disposed of at Canton." There, the pepper could be sold or
bartered for tea, that maintained a steady demand and could later be sold
for needed goods or hard money. The decline in demand continued and, by
1824, Sir Thomas Raffles had transformed the Benkulen district into a
coffee growing area. More than a half million trees had been planted and
were producing beans for the world's roasting markets. Pepper had thus
passed its prime at Benkulen, affecting Salem's shipping activity.
While many ethnic and racial groups came to Sumatra over the
centuries, nothing could compare with the "melting pot" at Benkulen.
Benjamin Heyne, surgeon and naturalist of the Company's Madras estab-
lishment visited West Sumatra in 1812. His "Tracts Historical And Stat-
istical, On India" and "An Account of Sumatra, In A Series of Letters," tell
much about the varied population of Benkulen. He described Europeans of
differing origins, "gentlemen of color, from yellow to jet black the
descendents of Jews and Christians of all nations, by Malay or Bengal
women,. . Chinese who live separated from the rest of the inhabitants, in
an area called "China Bazar [sic] Bengalese tailors and washermen, and
24
African slaves who live dispersed amongst the settlers."
This polyglot British stronghold, ultimately to be given back to the
Dutch after European post-Napoleonic Peace Treaty arrangements, re-


22
fleeted an inefficient if not corrupt attempt to market pepper in a changing
competitive world. Raffles, in an opening attempt to explain to the
company's directors why their Sumatran pepper venture was so expensive
and unproductive, argued that the company's administrators were not to
blame. "The evil seems to be of a deeper root than generally imagined. It is
not a simple question of finance whether the company will consent to lose
£50,000 or £80,000 a year, and regulate their establishment ac-
cordingly but it is in the principles of government, and in the management
25
of the country that the evil lie." By 1820, Sumatra's annual production
had reached a peak of 150,000 Peculs (about 200,000 lbs.), one-half of the
world's output, the bulk of this not from the East India Company but handled
26
by Salem and Boston merchants.
As with views of other peoples, varying impressions of Sumatran
natives have existed. Marsden felt that, in general, mankind was by nature
prone to imitation, but not so amongst the islanders. He stated they are
strongly attached to their own habits, but sensible of their inferiority to
European manners and arts. He contrasted Malays with other Sumatrans,
finding significant differences. To the former he ascribed low cunning,
plausible duplicity with lack of veracity, gratitude and integrity. In the
others he found patience, modesty, courtesy in company with indolence,
carelessness, servility and dishonesty when dealing with strangers.
27
All
native groups grew Indian hemp or Cannabis (known to us as marijuana),
28
which they called "bang." Other British views of the natives cited
indolence in planting pepper as an excuse for local authorities to blame
29
them for failures to increase production. The importance of proper
motivation was neither discussed nor considered.


23
On the other hand, Captain John Crowninshield of the Salem ship
America in his journal entry of July 18, 1801, noted that West Sumatrans'
hospitality and kindnesses to mariners exceeded that of European and
30
American Christian ports. He wrote very positively of their blunt
simplicity that surmounted any language barriers.
The contacts and relationships with Europeans and Americans were
exposing Sumatra to a changing outside world. One such effect, involving
the value of specie, will be mentioned in the next chapter.


CHAPTER IV
THE ECONOMIC AND COMMERCIAL ASPECTS OF SALEM
AND THE PEPPER TRADE
As has been mentioned earlier, the Peele family was typical of
Salem's activity in the pepper trade. Not only were they credited with
exploring and finding its Sumatran location, but its development can be laid
on their ships decks and holds. Before dealing with the details of the
voyages, let us consider the family's significance to Salem's story.
The Peele family papers, comprising thousands of pages in manu-
script form, covering more than a century in time (1753-1871) have not, as
yet, been opened, touched, or published in any historical form. They contain
sources of value in assessing new views and insights in American history. A
typical example is found in the papers of Rajah's first voyage to Sumatra
which show that in preparation for the voyage, Jonathan Peele Jr. engaged
Daniel Webster's father for fabrication of the ship's iron work. Several
receipts show young Daniel's signature (at age 13) acknowledging Peele's
31
payments "for my father." It is not surprising, therefore, to find amongst
Willard Peele's private papers, an 1822 letter from Webster, urging Peele to
run for Congress. Webster's close association with Salem shipowners
opposing Jefferson's shipping embargo of 1807 and war with the British in
1812 too, is better understood in light of this evidence.
The following table of genealogy shows the Peele family succession
32
with short biographical activity sketches.


PEELE FAMILY GENEALOGICAL TABLE
JONATHAN PEELE JR. (married Margaret Mason)
(1731 -1809) = son of Jonathan and Sarah (Willard) Peele
Salem mariner and merchant. Engaged
in West Indies trade before American
Revolution. Owner of ship Hector,
commanded by brother-in-law Jonathan
Carnes. Father of Willard Peele.
Initiated family pepper trade with
Sumatra.
WILLARD PEELE (married Margaret Appleton)
(1773-1835) = son of Jonathan Jr. and Margaret (Mason) Peele
Maintained a part interest in voyages to
Sumatra. Assumed responsibility for
family shipping interests about 1800.
His ships traded throughout Asia,
Europe and South America. Operated a
store in Salem and served as trustee of
several financial institutions. Helped
form Ohio Company to manage real
estate investments in Ohio.
J. WILLARD PEELE (not known if married or had children)
(1804-1871) = Son of Willard and Margaret (Appleton) Peele
Engaged in maritime commerce.
Established merchant house of Peele,
Hubbell and Co., Manila.


26
Linked by marriage and maritime activity was the Carnes
family. Their genealogy is not as exact as the Peeles. However, the
following table does list some of the important aspects of their contri-
butions to Salem and its sailings.
With this setting known, it is now appropriate to recount Salem's
entry into the pepper trade.
It was the autumn of 1795, to many, the most beautiful season of
the year in New England. Crisp days, yellow and red foliage, a time for
harvest of late crops with Thanksgiving soon to come. On
November 3rd, 1795, leaving in time to be present for the March Sumatran
pepper harvest, the schooner Rajah made ready to clear the harbor of
Salem, Massachusetts with a load of lumber and iron to be sold at the Cape
of Good Hope. In return, cape wines were to be purchased, then to be sold
in Sumatra along with some gin and brandy loaded in Salem. Ship's owners
36
Jonathan Jr. and Willard Peele owned and operated both a distillery and
mercantile business in spirits. No doubt the latter two items had recently
been removed from their inventory.
Their plan was to purchase advantageously Sumatran pepper and
any other spices with the sales proceeds of the spirits and then head directly
for New York to unload the spice cargo. Should the purchase prices of
pepper or other spices be too high, Captain Jonathan Carnes was to put the
ship to the best possible use consistent with the interest of the owners.
Having a one-eighth interest in ship, voyage and cargo, Carnes could be
relied upon to use every effort to make this venture successful and
37
profitable.


CARNES FAMILY GENEALOGICAL TABLE
JOHN CARNES^ (Married Hannah Peele sister of Jonathan Peele, Jr. in 1753)
Not born in Salem. Master Mariner. Captain of severa
privateers in American Revolution.
JonathamCarnes (married Rebecca Vans
in 1784; (I777(?) 1827)
or
John Carnes, Jr. (married L/dia Derby in 1782)
(1755-1796)
Master Mariner. Captain of brig Cadet and Privateersman in American Revolution maritime career
schooner Rajah partly owned by Peele as captain of several vessels. Died at Cape of Good
family with tradition holding beginning Hope on voyage to Indies,
of Sumatra pepper trade for Salem.


28
This 1st Rajah voyage was preceded by an uncertain background;
previously there had been but one proven American contact with Sumatra.
The brig Cadet in 1790, also captained by Jonathan Carnes of Rajah, brought
back a varied cargo that may have included pepper. However, so much of
this event is cloaked in myth and tradition, that few hard facts are known.
Some historians have felt that the voyage was merely exploratory, providing
38
evidence to Carnes that pepper was the key to significant potential profit.
However, speculation exists as to when and where pepper came to Carnes'
attention. In 1788, the 30-year old master sailed the brig Cadet from Salem
39
for "India and the China Seas." The 100-ton vessel is believed to have
returned to Boston after visiting Benkulen, other Sumatran ports, and Cape
40
of Good Hope in 1790. But no log of her voyage is known to exist and the
books which should have recorded her entry at the Boston Custom House
have disappeared.^* No further mention is made of Carnes and Cadet until
June 1794 when he sailed it, as master, for Hamburg. Thus, it could not
have been lost at sea nor met any other unkind fate on its 1788-90 voyage.
When he visited the west Sumatran ports on Cadet's first voyage did Carnes
learn of and purchase pepper? On May 3, 1791, Carnes sailed as master of
42
the snow, Grand Sachem for India. Details of this long voyage are
unknown but in January, 1794, the ship with all its cargo, was lost off
43
Bermuda. However, Carnes was able to return home. Some believe he
may have learned about the pepper crop and coast on this later voyage,
rather than earlier on the Cadet. The question remains as to whether a man
of Carnes' temperament would wait from 1790 to 1795 (the first Rajah
voyage) to exploit his secret knowledge. Or did he first learn of the pepper
44
coast potential in 1793, as suggested by one of Salem's early historians?


29
At any rate, no known further activity by Americans along the
coast of Sumatra appears to have occurred until Rajah's 1st voyage. It is
logical to assume that the commercial advantage of buying a valuable
commodity, pepper, at a low, non-competitive price, remained locked in the
minds and actions of Captain Carnes and his cousins, the Peele family.
Popular knowledge to this day attributes the pepper trade discovery to
45
Rajah's I st voyage.
Even our knowledge of Rajah's 1st voyage lacks so many important
details that the term "tradition" is used to substitute for substantiated fact.
What historians do know, however, suggest that it was a voyage unusual in
several respects.
First, it was shrouded in secrecy, with the crew, apart from
Captain Carnes, being unaware of the ultimate destination and the origin of
the inbound cargo. Upon completion of the voyage, many of the crew
46
believed they had been to Ceylon or Burma. Moreover, the vessel's log
book of the voyage has remained missing along with certain transaction
papers that would furnish clues as to the location and timing of all pepper
purchases. Although word eventually leaked out as to the true nature of the
voyage and what has been believed to be resultant 700% profit, confusion
still exists as to where the pepper was sold, at what price and when it all
occurred.
Adding still further to the uncertainty is the assertion by some that
there actually were two Rajah vessels, and further that the first vessel was
47 48
lost on a reef in the West Indies or in a storm off Bermuda with her
return cargo of pepper. Moreover, the change of Rajah from schooner to
brig account for some historians believing that two separate vessels were


30
involved. All that appears to be constant is that Captain Jonathan Carnes
was master of any or all of these ships during any of the voyages.
Perhaps one reason for the inconsistent and sometimes conflicting
stories was the cloud of secrecy desired by the owners. The desire for
competitive advantage would have precluded a clear statement of actual
events. However, the ship's papers for Rajah's first voyage do. cover a
complete timeframe from 1795 through 1797 though no stated record of how
the pepper cargo was landed and sold appears to exist. Thus, the Peeles
appear to have succeeded in keeping the missing cargo a mystery. Never-
theless, general information about northwest Sumatra and its pepper source
did become public knowledge and other Salem shipping interests soon
appeared at all the ports of purchase as eager competitors of British and
Dutch commercial pepper interests.
The voyage of Rajah to Sumatra was interesting in yet another
respect. Rajah's dimensions (while adequate for Salem Harbor's limitation
of less than 20 feet draft) describe a vessel of less than 70 feet length, a
49
20-foot breadth, a depth of 12 feet and a burden weight of under 130 tons.
Its size limited the crew to a total of nine persons, a minimum number to
sail. The cargo size, weight and number of crewmen on these first Salem
ships were significantly smaller than those of later built vessels which
ranged from 258 to 473 tons and were able to enter their home harbor.
Ships of Rajah's size was more suitable for and designed to engage in the
West Indies trade, a far less lengthy and demanding voyage than the journey
to Sumatra. Thus the early ships appear to be those planned to conform to
Salem Harbor's available space and to embark on the much shorter voyage to
the West Indies rather than to go 13,000 miles to Sumatra.


31
The space restriction on ships of this size was such that each crew
member would quickly learn the art of getting along with others under the
most confining conditions. The tensions endured and mastered would prove
invaluable in later life for those who would move up to the world of
shorebound and complex inter-personal mercantile dealings. The trip was
long at an average speed of five knots, barely above the walking pace of
humans, the voyage halfway around the world could take up to six months
each way.
The crew's makeup was typical for the vessel and the mission.
Rarely were captain or crew over 30 years of age. The rigors of East India
trade were for young men in their late teens or twenties. Of the crew of
nine, three were Captain and mates. A sailmaker and carpenter were
always necessary while the remaining four were able sailors and a cabin-
boy. Mates, while studying the Captain's abilities and actions, were always
aware they might have to take command, should accident or illness claim
the Captain.
The nine crew members were probably necessary not only because
of the distribution of skills but also because of the demands of the long sea
voyage. Crewmen needed to remain alert and yet plan for needed rest and
sleep. In any 24-hour day, it has been customary to "stand watch" and
operate an ocean-going vessel for a four-hour period and then rest for an
ensuing eight hours. Using this schedule, the following table is presented,
allowing for an officer and two crewmen to handle the ship at all times.
While officers and crew could rotate watch schedules, no provision
is made for accident, illness, or absence, indicating a demanding routine. At
times in the past, there have been three watches of eight hours each, while


WATCH BILL
SYMBOLS
X = On Watch
0 = Off Watch
1st Watch Midnight to 0400 Hrs. 2nd Watch 0400 to 0800 Hrs. 3rd Watch 0800 to 1200 Hrs. (Noon) 4th Watch 1200 to 1600 Hrs. 5th Watch 1600 to 2000 Hrs. 6th Watch 2000 to 2400 Hrs. (Midnight)
2nd Mate X 0 0 X 0 0
1st Mate 0 X 0 0 X 0
Captain 0 0 X 0 0 X
Team A 2 of crew X 0 0 X 0 0
Team B
2 of crew 0 X 0 0 X 0
Team C
2 of crew 0 0 X 0 0 X
Total Crew
on Watch 3 3 3 3 3 3


33
allowing three members per watch with one crew member in reserve.
However, no relief was available for officers who had to be on duty for eight
continuous hours per watch. An argument could be made that informality as
to routines did exist in Rajah's time, but, nevertheless, government laws and
regulations did then exist and violations could be reported by aggrieved crew
members and their families. If nothing else, it can be shown that fewer
crew members could not handle Rajah successfully on an extended sea
voyage.
While government interest in crews' welfare did not specifically
involve regulation of hours of work, the care, treatment, rights, and
responsibilities of crew members were covered on July 20, 1790 in one of
the first laws enacted by the United States. The Act provided for shipping
articles protecting every member of a merchant ship bound to and from an
overseas destination. It applied to vessels of at least 150 tons and with a
crew of 10 or more. Wages had to conform with the highest levels for
similar voyages to and from the port of origin. Timing and frequency of
wage payments required no more than 90-day intervals and a final settling
within 10 days of conclusion of a voyage. Unfit ships had to be repaired
with crew members being allowed to initiate legal proceedings to effect
needed changes. Among other provisions required aboard at all times was an
updated apothecary prepared medicine chest. Moreover, at least 50 gallons
of potable water, 100 pounds of salted fresh meat, and 100 pounds of
"wholesome ship bread" were to be furnished for each person aboard a
vessel. Failure to conform with the law imposed significant penalties upon
owners of ships. A copy of the Act is among the manuscript shipping papers
of the 6th voyage of the ship Freedom.^'


34
Passing out of the harbor into the open seas, the four iron cannon,
mounted on the ship, gave some sense of security to the Rajah's crew. The
seas were full of hostile navies, privateers, and pirates. Throughout the
I790's, Britain and France and their allies experienced intermittent wars,
blockades and embargoes involving all shipping, particularly for those of a
young and weaker nation. In spite of the small crew, Rajah's armament was
helpful off the coast of Sumatra. There, during the night of
January 27, 1797, a French privateer attacked and boarded the Salem vessel.
An American lost his hand and a French lieutenant was killed before the
52
engagement ended with the enemy's withdrawal.
The uncertainty of being boarded by any hostile force who might
read the customary owners' orders to the ship's captain required a "sham."
Peele's papers refer to a set of bills of exchange purportedly drawn on a
Cape of Good Hope merchant to help finance the proposed pepper purchases.
The fact that the bills were intended to be a sham is indicated by a
confidential instruction, which advised Captain Carnes never to present the
bills for acceptance. Instead, 8,000 silver Spanish dollars were aboard
hidden in a barrel, under other supplies, to be used for the purchase of
pepper. The exact wording is as follows, as prepared for Captain Carnes'
signature. "... I received a set of sham bills of exchange drawn by Jonathan
Peele, Ebenezer Beckford and Willard Peele on John V. Runan, merchant of
the Cape of Good Hope, which I promise never to present for acceptance
and which 1 hereby declare were never intended to answer any other purpose
than to cover the money on board from the depredations of persons who
might board me 8000 dolls."^


35
Needless to say, risks like these required extended safeguards.
Protection against hazards of the voyage involved the use of marine
insurance. Policies of protection against the perils of the sea had been in
existence, beginning in Italy, since the 15th century and were used in Salem
at this time. For ordinary voyages, insurance on ship, cargo and effects was
underwritten on a subscription basis by individual merchants and captains of
Salem. Often, a retired sea captain would set up shop in a business building,
where lists of forthcoming voyages were compiled. The total amount of
desired insurance for cargo and ship would be noted. Interested parties
would sign up for a percent of or a flat amount of coverage for which they
were to participate. At the end of the voyage, the premiums collected
would be distributed pro rata amongst the insurers. If a ship and/or cargo
was lost, the insurers would be liable for an assessment according to their
involvement. The system was not unlike Lloyd's of London's maritime
syndicates where individual investors jointly insured specific voyages with-
out any organized insurance company participation.^ Thus competitors
cooperated with one another to the extent that the perils of the insured
became the responsibilities of the community. All of this was voluntary and
varied from voyage to voyage. Although marine insurance companies had
come into existence, they were not active in Salem until 1800.
The insurance certificate customarily listed the voyage's des-
tination in order that premium bases could be calculated and then deter-
mined. Restrictions and limitations were to be clearly indicated, often with
geographic bounds listed. However, the voyage of the Rajah was to be
different. No certificate of insurance appears amongst the ship's papers.
We can speculate that to conform to insurance requirements would have


36
been to destroy the confidential nature of the trip. Not until July 16, 1798
did an insurance certificate appear amongst the papers for a 2nd voyage of
Rajah specifying that insurance would be provided for a voyage "from Salem
to one or two ports on the west coast of Sumatra and from thence to her
55
point of discharge in the United States of America." At least seventeen
separate subscribing merchants signatures provided coverage totaling
$18,000. Thus, we can be sure that Sumatra and pepper were common
knowledge in the Salem merchant community by 1798.
Because of dependence upon favorable winds and calm seas,
voyages were long and uncertain. Arriving at Capetown on March 18, 1796,
Rajah had been at sea for 134 days. Speed on the Rajah under good
conditions, as mentioned above, could average 5 knots. British shipping
sources at this time felt American vessels, although sturdily built, were not
fast competitors in long sea voyages.'** However, many Salem vessels,
though not swift, were ably enough maneuvered to avoid capture when
pursued by His Majesty's ships as potential prizes. Avoidance of other
shipping was certainly the safest course when at sea in perilous times.
Monthly pay and privilege for captain and crew were important
aspects of the voyage. To ask mariners to risk their lives in unknown danger
for a protracted period required a reward greater than wages alone. The
pay scale on this first voyage varied from $10 to $23 per month, comparable
to highly skilled land-based vocations in New England.^ In addition, an
individual or private trade custom, known as privilege, was allowed. From
the Captain's eight hogsheads (usually a volume of 63 gallons per hogshead)
to a crew member's usual one hogshead and one barrel (usually a half
hogshead), each mariner could bring inbound any allowed commodity to be


37
sold along with the ship's cargo by the owners. The proceeds after clearing
U.S. Customs were then to be individually remitted to the crew members
involved, permitting an interest in the success of voyage above and beyond
regular wages. It was, in effect, a limited partnership for all involved crew
members. The exact arrangement for wages and privilege on this voyage,
58
found in Rajah's 1st voyage papers, is shown on the following table.
Capt. Jon Carnes was a 2/16th owner in the cargo and proceeds of
the voyage. Moreover, he was to receive a customary commission for sales
of the cargo (usually calculated at 5%). These two factors account for his
monthly wage being lower than either the 1st or 2nd Mates, as noted above.
Progress to wealth is seldom instantaneous. Rather, it is a steady
and planned sequence of events leading to a desired conclusion. Salem's
path for mariners followed such a pattern allowing for the accumulation of
capital with each forward step. The 12 members of the Rajah's 4th voyage,
from 1799 to 1802, received monthly wages varying from $10 to $18 per
month. In addition, they again received privilege to buy, freight, and sell a
portion of the inbound cargo under controlled circumstances. The crew was
59
limited by the requirement that "No man must exceed his privilege,"
which varied from one Tierce (42 gallons) of unspecified liquid spirits to I
Tierce plus I hogshead of 63 gallons. In the next step upward, 1st and 2nd
Mates drew wages of $44 and $40 per month respectively. Their privilege
amounted to 3,000 pounds of pepper for the 1st Mate with the 2nd Mate
receiving 2 hogsheads plus I Tierce of the same unspecified liquid spirits.
Captain Jon Carnes received $36 monthly plus "5%." It is unclear again,
from the manuscript pay roster whether the "5%" relates to the net profit
(also known as a share of the voyage) or to a commission on the sales price
of the cargo.


TABLE OF CREW'S ROSTER
1ST VOYAGE OF RAJAH
1795 Time of Entry Men's Name Quality Monthly Waqes-Dollars Privilege
October 29th Jon Carnes Master 18 8 Hogsheads
October 29th Samuel Carnes 1st Mate 23 3 Hogsheads
October 29th Benj. Neal 2nd Mate 20 2 Hogsheads
November 3 Silliam Story Sailor 18 1 Hogshead & 1 Barrel
Nov. 3 Sig. George Sailor 10 1 Hogshead & 1 Barrel
Nov. 3 John Dutch Jr. Sailor 10 1 Hogshead & 1 Barrel
Nov. 3 Joshua Buffum Sailor 10 1 Hogshead & 1 Barrel
Nov. 3 William Marston Sailor 10 1 Hogshead & 1 Barrel
Nov. 3 Edward Stand ley Boy 10 None
00
CO


39
All of the foregoing, while not identical to compensation of other
voyages and ships, nevertheless was not atypical. The capital accumulation
process did reflect significant additional compensation for added responsi-
bility. Captain and 1st Mate were not only responsible for a ship's operation
but were active merchant agents who could insure the ultimate economic
success or failure of any voyage. With the capital accumulated from one or
more voyages, captains and mates could purchase shares in future ventures,
ultimately owning their own vessels and then becoming established Salem
merchants. This wealth was not acquired quickly but was available to the
thrifty and able by the third decade of their Jives.
Communication was at the heart of 18th century commerce,
particularly when the venture was a lengthy one and when the vessel was
headed for unknown territory. The only practical method of communication
between owner and captain, in the last decade of the 18th and the first
decade of the 19th century, was the letter. Captain's orders often stated
that owners were to receive frequent letters from masters advising of
completed transactions and of the general progress and/or problems of the
voyage.
Upon reaching Capetown from Salem, Captain Carnes wrote to
Messrs. Peele and Beckford, expecting to have his sealed letter forwarded
by a westbound vessel to America directly or by way of Europe. At this
time, as discussed below, no organized intercontinental postal system
existed. Rather, a code of honor, similar to the nautical "rules of the road"
applied, requiring captains to carry letters or parcels to various destinations
in the general direction of their respective voyages. Letters reaching the
North American continent were placed into "inland mail" and could reach


40
Salem on a somewhat regular basis. However, it was not until 1847 that the
1st International Postal Agreement was arranged between the United States
and the Republic of Bremen. Finally, a universal postal union formed in
1874 to help in the exchange of mail between countries. The full use of
postage stamps generally coincided with these latter two events. In the
interim, letters traveled with the best intentions and abilities of carrying
captains and their vessels.
The subject of prompt and confidential communication between
owners and captain placed much dependence upon a postal system. The
informal mail system of ships carrying letters of competitors, friends or
strangers was done in a prompt and efficient manner. Trust played an
important role in the conduct of business. A letter sent on
December 4, 1807 from Gibralter by Captain Edward Ford to the Peeles in
Salem arrived there on February 13, 1808.^ The time span is not neces-
sarily typical of other letters in the Peabody Museum manuscript holdings
and is made all the more remarkable when the average speed of Salem-type
vessels was, as noted earlier, about 5 knots.
Owners or superior authority's written orders to captains, at in-
ception of voyages, have always been the basic maritime document of
communication. From the contents of the orders, the captain would know
what was expected of him and his crew, where, when and how they were to
proceed, the nature of the commercial enterprise in which they were
engaged, and how often to communicate. Further, the orders spelled out the
limits of a ship's commander's discretion, usually noting that he was the
owner's agent and that as such he was to act on their behalf and for their
best interests. Finally, some orders contained the line of succession, should


41
illness or accident afflict the captain during the voyage. The Peele family's
captain's orders typified the standard formats and contents of the times.
There were four additional reasons for having the orders in specific
written form, signed and dated by both owners and captains. Insurance
contracts would not be valid if the understanding and/or wording of the
orders (and the contract itself) had been violated at time of loss. Rates of
premiums were based upon ports and countries to be visited, types of
cargoes involved, length of time at sea anticipated, and proposed con-
formance with decreed blockades, embargoes and conditions of established
belligerents.
Cargo and ship protection from privateers, cruisers and belligerent
powers was important. The ability to prove the origins and destinations of
ship and cargo often could allow a captain to escape condemnation and sale
by a prize-seeking captor, thus avoiding substantial loss for the owners.
Moreover, crews faced the hazard of capture and impressment if their
American birth or nationality were in doubt. A number of Peele's ships crew
rosters, attached to captain's orders, stated the nationality of each crew
member, and were attested to, either by the individual concerned or by a
, 61
notary.
The specification of a Chain of Command established the valid
authority of the succeeding officer when dealing with third parties during
the remainder of the voyage. It allowed contracts to be made and enforced
to insure the continued operation of the ship until amended or updated
orders could be sent by the owners to the vessel.
Finally, certain orders were deliberately misstated so that the
voyage would be protected through a necessary subterfuge. The sham orders


V2
issued to Captain Carnes on Rajah's 1st voyage, mentioned above, would be
a typical example.
Underlying all communication at sea was an agreed upon code of
conduct. Owners and captains needed to understand and accept certain
ethical standards. The principles of behavior required to carry on commerce
in an environment of common danger have particular application to the
pepper trade.
From situations and hazards such as these come the words found in
the American seafarer's hymn, "For those in peril on the seas." They reflect
the unending concern over the hazards of voyages. This concern, in turn,
created a tradition of common help amongst maritime vessels. Combined
with New England principles of fairness and conscientiousness, it led to a
code of ethics that transcended strong competition. When Captain John
Crowninshield's ship America on an 1801 voyage, was fully loaded with
pepper off the Town of Mac a, Sumatra, he found that $6,500 in silver dollars
remained uncommitted. So confident was he of the honesty of captains and
crews of other pepper ships located there that he resolved to send one of his
officers with the specie aboard a vessel bound north to India. There, he felt,
a suitable cargo could be purchased and brought to Salem for additional
profit. Confidence in the honor of fellow captains outweighed risk in
62
dealing with possibly unknown persons.
While perhaps at first the pepper coast was a Peele family secret,
when the information became general knowledge, both the Salem Marine
Society and the Salem East India Marine Society collected ship's logs and
marine journals from the Sumatra voyages. The preparation of the data was
suggested and then carefully supervised by Nathaniel Bowditch. The


43
information compiled contributed greatly to American knowledge and under-
standing of both navigation and trade practices in the Far East. The
uniform log books supplied by East India Marine permitted clear entries by
captains for later use by other vessels. The latitude notations, depth
soundings, and comments regarding wind changes and rough surfs are found
in detail in Captain Crowinshield's log book and journal in America's 1801
voyage to Sumatra. In this way, Salem captains added to each other's
knowledge and maintained a high level of trust.
However, trust did not go beyond the bounds of realism or beyond
national boundaries. The British East India Company station at Benkulen
disliked and feared the American pepper traders for what their competition
was doing to the Company's supposed monopoly. Captain Crowninshield
related how he spoke with Captain Skerry of the Salem ship Belisarius about
the station "where pepper is collected for the English company and they
never are allowed to sell it to strangers." Here, Salem captains did openly
inform and explain to one another inconsistent behavior of growers and
sellers. The rules at one time might be contradicted when self interest
(desire for the American's Spanish silver dollars) prevailed over the ban of
"never are allowed."
Thus, Salem captains observed and maintained amongst themselves
and peers a complex relationship of both competition and cooperation. The
conditions of the Sumatra market described by Captain Nathaniel Bowditch
in a paper prepared for Salem's seafarers in 1803, provided a clear
background study of pepper voyage operation so that colleagues and
competitors would not run the risk of being played off against one another
by the Sumatrans. Nathaniel Bowditch, contemporary and colleague of the


44
Peele's Salem group, is still considered one of America's great navigators
and oceanographic mathematicians. His account of a pepper trade voyage in
1803 to Sumatra is unusually concise and accurate. Prepared for Salem's
64
East India Marine Society, the paper is titled "Remarks on the North West
Coast of Sumatra." Because of the depth of knowledge it displays, the
manuscript is quoted, in part, below:
". . On arrival at any of these ports you con-
tract with the Datoo for the pepper and fix the
price. If more than one vessel is at the port, the
pepper which comes daily to the scales is shared
between them, as they agree, else they take it day
and day alternately. Sometimes the Datoo con-
tracts to load one vessel before any other is allowed
to take any, and he holds to this agreement as long
as he finds it for his interest to do so and no longer,
for a handsome present or an increase of rice will
prevent the pepper from Being brought in for several
days, and the person who made the agreement must
either quit the port or else add an additional price.
The price in 1808 was from ten to eleven dollars per
picul; in former years it had been as low as eight,
but the demand for it had risen the price con-
siderably, there being near thirty sail of American
vessels on the coast. The pepper season commences
in January, when they begin to gather the small
pepper at the bottom of the vines; in March, April
and May is the height of the crop. The best pepper
grows at the top of the vines, and is gathered the
last; it is larger and more solid than that gathered
at an earlier period. Some suppose it is all gathered
in May, but I was in some of the gardens in July and
found at the top of the vines large quantities which
would be ripe in a few days, and the young crop was
in considerable forwardness at the bottom of the
vine. Some calculate on two crops, but from the
best information I could obtain there is only one.
The pepper is generally weighed by American
scales and weights. It is sold by the picul of one
hundred cattres, equal to 133 I -3 lbs. American
weight. What is weighed in the day is paid for in the
evening, they being unwilling to trust their property
in the hands of those they deal with, and they ought
to be dealt with in the same manner, it not being
prudent to pay in advance to the Datoo, as it would
often be difficult to get either pepper or money of


45
him again. Dollars are the current coin, but they do
not take halves or quarters. They have a copper
coin which I believe is brought from Bengal, or else
from Prince of Wales Island (Penang). It is called
pang or pice, about equal in weight to half a cent.
We could not obtain more than eighty of these for a
dollar at Tally-Pow, though at Muckie they gave one
hundred and twenty, and at other places one hun-
dred. They are fond of gold dust and will give you
dollars for it, the rate being about thirteen and
one-half to one. It may be observed that several of
the natives speak English pretty well, so that there
is no difficulty in making your contracts with
them. . "
While Bowditch's paper did provide valuable information for
captains undertaking pepper voyages, yet individual circumstances were
unique and many questions could arise that his investigation could not cover.
For example, should a young ship's master tell competing colleagues that he
was allowed to buy pepper below the prevailing price along with an
assurance of no short weighing of any pepper bags? This was in response to
a legitimate favor or service performed for an influential headman.
For the men of Salem, supply and demand considerations had to be
weighed against immediate profit and disregard of longer term, ongoing
trading relationships. This posed difficult choices for the youthful captains.
In addition, sellers would, at times, steal not only already weighed,
delivered, and paid-for pepper but any other available property of the buyer.
Often, stones or other foreign substances were found in the purchased
pepper bags. The question of what type of countermeasures to take was
ever present. Should the weighing scales be suitably "adjusted" to compen-
sate for the degree of loss? Should the rajah, headman or native weigh-
master be advised so that the responsible sellers take corrective action
themselves? Should other and competing vessels be warned of "sharp


46
practices" at certain ports? In Willard Peele's orders to Captain James
Silver for the 3rd voyage of the ship Perseverance, he advised that "You will
be careful that the pepper is perfectly dry when you purchase and take it on
board. The Port of SooSoo is to be avoided if possible, as the pepper is
always wet at that place and liable to fall very short in weight."^
Apparently, the poor reputation of the port was known to Salem merchants
and it would later suffer in sales. The technique of not drying pepper for
sale was comparable to American livestock dealers permitting cattle to
drink large amounts of water just before weighing and sales, giving rise to
the term of "watering the stock." The process of soaking pepper in sacking
for several days to remove the husks, and thus creating white pepper, is not
to be confused with the above deception. There, the white pepper is dried
and cleaned before entering the selling phase and not subject to any
subsequent shrinkage.
Merchants and captains of competing firms met at Salem and
ports throughout the world to share news and intelligence regarding
current commodity and cargo pricing, the ease or difficulty of entering or
clearing major ports, the presence or relative absence of other trading
vessels, and the prevalence of man-made and natural hazards. In a world
of blockades, privateers, condemnation of vessels as prizes, embargoes,
wars and piracy, plagues, and quarantines, much more was to be gained by
exchanging rather than withholding information. While individualism was
stressed, yet sharing and working with others was important. One Salem
merchant, William Gray, did not participate wth other traders. His
operational philosophy and political views showed him to be a "loner,"
although commercially successful. Gray's strong feeling for individualism,


hi
contrary to Salem's prevailing family partnership mode, extended to
relationships with his children. "As his sons came of age, he gave each
ample means, that they might start and work for themselves."^ His
private and successful efforts resulted in his owning 1/3 of the registered
tonnage of Salem.^ Perhaps his commercial attainments aroused the
resentment of the other Salem merchants. So outside the norm were his
methods that he and his family were eventually ostracized and he was
forced to move to Boston where his achievements were reported to be
68
recognized in a more positive manner. Salem's ethics did not allow
much latitude for those who would not or could not conform.
As illustrated above, the ethics of a business venture, to some
degree, are shaped by the nature and demands of the product. Further, the
culture and geographic location of the source are also involved. The efforts
of Salem's merchant and shipping community were intensively directed
towards the trade of pepper. Investment of the resources of capital,
manpower, and ships obviously required a knowledge of the changes con-
cerning the product, its origins, history, geographic locations, char-
acteristics, and value.
Sumatra and its peoples were not alone in experiencing times of
change. The years of Salem's involvement in the pepper trade spanned
significant political and economic evolution. The generation of merchants
who embarked on voyages to Sumatra in the mid-1790's acquired knowledge
and sophistication as they traded. They needed to learn the most efficient
and profitable ways to procure, transport and sell pepper. In order to do
this, they had to take their understanding of mercantile competitive
advantage and adapt it to the new conditions confronting them. Against the


48
backdrop of Americas emergence into modern economic life, the merchants
assessed their needs and employed the most suitable methods. The success
of their efforts can be measured by the family fortunes built in the period
from 1795 to 1815 and the resulting capability to move on into other
economic activities such as land development and manufacturing both in the
northeastern and mid-western United States. Since the principles of finance
and profit remained relatively unchanged, the lessons of the pepper trade
would be applied to the later activities.
The actual hazards of the voyages were less difficult than the
complexities of obtaining adequate capitalization. Financing voyages could
spell the difference between profit and loss. Usually three options were
available to the merchant. The first was hard money, or specie, which had
worldwide acceptance and potentially could be used to purchase cargoes at
lower unit costs. Whether the specie was accumulated through borrowing,
using accumulated capital or invited outside equity investment, merchants
found coinage scarce, making it both difficult and time consuming to amass
an adequate amount of specie. Moreover, it was expensive to accumulate
capital through borrowing in the 1790's as interest rates of 2% to 3% per
month were commonly paid for hard money. This obviously added to the
cost of the voyage, and the result was a competitive disadvantage. A
second method, which some, astute merchants attempted to avoid, was to
finance voyages by using the proceeds from the sale of outbound cargoes to
pay the expenses of the voyage and purchase goods for the return. This
method had its drawbacks. Selling at uncertain future levels or bartering
for other cargoes too often added unwanted complications and unwanted
goods to an otherwise profitable voyage. The Brown brothers of Providence,


49
for example, made it a rule never to use their outbound cargoes to finance
foreign purchases. Rather, like most merchants, they utilized the third
69
available option, reliance on credit in different forms. Here, the cost
factor was known at the inception of the venture and usually could be paid
off with bills of exchange or other credit instruments received through
transactions consummated in the course of the voyage. In addition, the use
of credit eliminated the risk of carrying hard money aboard the ship. Only
when cargoes were bought at remote or unsophisticated locations were hard
money transactions imperative. Money in any form had its costs, so that if
generous long-term credit could be arranged, the merchant had obtained the
best of the alternatives.
The choices that traders encountered when arranging to finance
their voyages illustrate some of the hazards of improper or under capitali-
zation. Difficulties such as extended voyages, sometimes measured in years
rather than months and slow turnover of merchandise investment required
high profit margins which, in turn, caused higher selling prices. This placed
financial strains on merchants' ability to survive during externally-caused
depressed times, such as from oversupply or excessive competition.
Along with adequate capitalization, traders needed the "know how"
to survive if not succeed in a complex set of operations.
Salem's pepper trade was indeed a worldwide enterprise. Inter-
national transactions required international representation. Agents and
correspondents, particularly during the hostilities between Britain and
France at the beginning of the 19th century, were vital for merchants'
survival, if not success. Because London and Amsterdam were centers of
international commerce, it was logical to have strong, stable and honest


50
representation there. Typically the agents acting on behalf of American
merchants had a long and diverse list of duties. Some of the more common
assignments are listed below. The 6th voyage of the ship Freedom, at sea
for a number of years, is used as an example for some of the tasks involved.
All examples are from correspondence taken from the Peele papers.
First, agents gave advice on the market situations throughout
America and Europe, which included directing the ships' captains and
supercargoes to advantageous ports in Europe. This was the ongoing
provision of commercial intelligence. On November 22, 1796 and
September 21, 1797, Edward Gould & Son of New York, during the 1st
voyage of Rajah advised that the prices of pepper and fish in their local
markets were too low to sell at advantage. Instead, they counseled
temporary storage to await an expected rise in pricing for both com-
.... 70
modities.
Second, they obtained appropriate insurance for cargoes and ships
as destinations, cargoes and length of voyages changed. Samuel Williams,
London merchant, involved in the 6th voyage of the Freedom, advised
Captain Edward Ford on March 24, 1808 not to take insurance for a trip
from London to Spanish ports as the premiums were too high for the values
involved.^*
Third, they saw to ongoing maintenance and repairs of vessels.
Agents could make arrangements for such major items as the coppering of
ships' bottoms. Nathaniel Lucas, merchant of Rio de Janeiro, on the 6th
voyage of the Freedom, offered advice to Captain Ford for sheathing of the
72
vessel while in that port.


51
Fourth, the/ made themselves available to ships' captains for aid
and advice when their vessels were in distress, whether due to natural
hazards or because of capture by a belligerent. Captain Ford's letter to
Samuel Williams, written at Gibraltar on June 7, 1808, advised of his
distress concerning actions of Algerian pirates and asked for aid to meet
73
possible costs for a journey there during the voyage.
Fifth, they provided financial assistance, acting in a quasi-banking
capacity. They received remittances from the merchants' debtors or their
employees throughout the world. In addition, the agents could honor or
create bills of exchange for the merchants' account, and they might disburse
funds to settle debts accrued by the merchant. Peele's orders to Captain
Ford for the Freedom's 6th voyage directed him to remit funds to or seek
financial aid when needed from Samuel Williams of London, or Daniel
Crommelin & Sons of Amsterdam, or Abraham Gibbs of Palermo, or Philip &
Anthony Felische of Leghorn.^
Sixth, for transactions requiring hard money, the agent could often
assist in the amassing of specie, for example, by the acquisition of Spanish
silver dollars in Lisbon to finance a voyage from Salem via Portugal to
Sumatra for pepper purchases. On December 4, 1807, Captain Ford advised
the Peeles that their agent in Gibraltar, Mr. Greevano, would take at least
40 days to amass Spanish silver dollars, for use on the Freedom's voyage.
Seventh, one agent would form alliances with other agents, world-
wide, to create a network of aid and direction for client merchants, no
matter where transactions took their vessels. The network of agents
mentioned above under the fifth duty would apply here, too. In addition,
Nathaniel Lucas of Rio de Janeiro on April 8, 1809, advised Captain Ford of
his wish to become a more active agent of the Peeles.^


52
Eighth, agents arranged permission to enter cargoes into harbors of
belligerents, to avoid other areas of danger to Salem ships, and to effect
sales transactions on favorable terms for the merchant. Further, they
arranged for safe departures of such vessels with or without sales proceeds.
At times, the sales proceeds could be sent separately via credit instruments
to the agent who would promptly deposit them to the merchants' account.
Samuel Williams, on March 26, 1808, advised Captain Ford to keep the
Freedom away from American ports during the Jefferson Embargo. More-
over, he again cautioned Ford of the danger of Algerian ports and waters
76
and stay clear of that area.
Ninth, the chartering of ships for special voyages and handling of
cargoes in the "carrying trade," was an important duty of ship owners
agents. They provided revenue when goods could not be purchased at
advantageous prices. On September 22, 1808, Captain Ford's letter to the
Peeles tells of a charter that Samuel Williams had obtained for the
Freedom.
Finally, they would purchase goods, worldwide, desired by the
principal, at timing and pricing to allow for maximum profit or least
ultimate cost if the merchandise was to remain unsold for an extended
period of time. On the 2nd voyage of the Freedom, Captain John Reith
proceeded from Salem to Alexandria, Virginia where merchants Benjamin
Shreve & Son and John & Richard Gardner participated in a transaction in
which where flour was purchased by the Peeles for resale at a European port
78
for Spanish silver dollars.
Thus, the agents acted both as branch offices and merchant
bankers for a Salem firm located thousands of miles, and weeks if not


53
months away. Through the work of the agents, the obstacles of poor
communication and the financial complications of international voyages
were overcome to the greatest degree possible.
Needless to say, the acquisition of suitable, honest and reliable
agents was not a simple task. Years of observation and experience could be
required to establish the right business relationships. Salem firms consider-
ed other partial solutions such as the creation of family partnerships.
Merchants placed much importance on family solidarity, mutual trust and
political loyalty in the maintenance of these partnerships. The proportion of
shipping interests involving partnerships between relatives increased
markedly in the period from 1800 to 1810. The following table illustrates
this point by tracing ownership registries of deep sea vessels at Salem.
These relationships permitted, among other advantages, the
broadening of the family financial base. With time it also permitted a
widening circle of kin who became partners. The associations seemed to
work well when also based on a common political philosophy, making for
agreement as to goals and the methods for attaining them. For the most
part, these family networks favored the Federalist party. However, some
family arrangements upheld the Republican position. Brothers comprised
the largest category of related partners but after 1800 partnerships began to
include sons and nephews within the family firms. Unfortunately, negative
relationships and conflicts within some of these families soon emerged. The
most common causes for the ultimate breakups of these partnerships were
lack of dedication to the enterprise, distrust of others by one or more of the
partners, business dealings of questionable ethics, and overwhelmingly
strong patriarchs who inhibited next generation kin from carrying forward


54
OWNERSHIP OF DEEP-SEA VESSELS IN SALEM REGISTER,
1800 and I8I079
Ownership 1800 Number % 1810 Number %
Total Vessels 138 100.0 221 100.0
Individual Ownership 621 44.9 NO 49.8
Partnerships 76 111
a. Unrelated Persons 46 33.3 51 23.1
b. Involve known or presumed close relatives 30 21.8 60 37.1
Of the 62 ships owned by individuals, 16 were the property of William
Gray, later shunned by the community (See on Page 47)


55
entrepreneurial activities. It appears that only the most unusual families,
in which members submerged extreme views and personality traits, have
endured and succeeded. The Quaker merchant families of Colonial America
and the original Rothchild generations are notable examples.
Even in the best of circumstances, including the most complete and
competent network of agents, merchants had to be prepared to change their
plans and goals as events dictated. The 6th voyage of Freedom lasted from
1805 to 1810 as the Jefferson Embargo caught the ship in mid-voyage. The
Peeles, not wishing to have the vessel laid up in Salem and unable to produce
revenue, put her into the carrying trade. In other situations, as in the 2nd
voyage of Freedom, if no buyer could be found at a suitable price for a
shipment of goods, the Captain became, in effect a carrier, moving the
merchant's owned cargo from one port to another. At times, an
expatriate American merchant house, located in a particular foreign port,
would act as an intermediary purchaser or seller of merchandise. In
addition, some of these representatives became U.S. State Department
officials, acting as American consuls. Such an instance occurred during the
2nd voyage of Peele's ship Freedom. Captain John Reith's orders of
July 25, 1803 directed him to Alexandria, Virginia for a cargo of flour, then
to Lisbon and Gibralter where he faced the dual problem of selling and
obtaining Spanish silver dollars, and then proceeding to Sumatra to buy
pepper. At Lisbon, he attempted to sell flour at an acceptable price.
82
Failing this, he proceeded to Gibralter where the cargo was sold.
However, the Vice Consul in Lisbon, Daniel Readie, presented a bill on
83
November 5, 1803 for various services in port which Reith paid in full.
We may assume that the sales proceeds, Spanish silver dollars, were required


56
as Sumatrans felt the need for currency of a known and self-evident value.
Further, the Sumatrans not only understood the relative valuelessness of
paper currency but also knew which kinds of hard money were more
costly.^
The specie or milled Spanish silver dollars, barreled as "supplies" on
Rajah's 1 st voyage but intended to be used for purchases of spices as related
earlier, reflect a thought provoking story. In those uncertain times,
governments had difficulty maintaining general confidence in the ongoing
value of issued paper currency. Money had to be readily redeemable into
bullion in order for value to be retained. For the most part, each of the
European trading nations had different problems or restrictions that pre-
vented worldwide acceptance and use of their monies. One exception
existed. Spain, with its access to and large inventory of New World gold and
silver, was able to have its silver dollars become a medium of exchange.
The fact that these dollars were not always immediately available to
merchants and others in quantities desired did put a premium on the value of
Spain's specie, often leading to profit and advantage for the possessor.
Rajah's 1st voyage illustrates this point. As it took time and resources for
the owners and their correspondent agents to accumulate their dollars, it is
not surprising that seagoing marauders and others attacked trading vessels
suspected of carrying such a cargo while the possessors used every available
ploy or "sham" to hide their valued specie.
The pressure to accumulate specie indicates that Sumatrans under-
stood currency values at least as well as the so-called developed European
and American trading nations. The choice of the British merchants to use
credit instruments and paper currency apparently masked other intentions.


57
European nations, at the zenith of economic power and wealth wished not to
offer either gold or silver, and suffered therefore to some degree in
participation in the active pepper market. They were still influenced by the
old practice of preserving hard currency. Further, the British East India
Company wanted to keep their specie for payment of other obligations such
as dividends so they shipped very little bullion or coin out of London.
Americans, from a lesser economically developed society at this time, and
eager for profitable trade, did not hesitate to offer the required specie.
During the course of Sumatra's pepper trade, millions of pounds of
the spice left the island. In turn, hundreds of thousands of silver dollars
were paid to rajahs, headmen, and growers. The ultimate destination of the
coins has been an ongoing question amongst students of Sumatra's inter-
national trade. Did they find their way back into other nations as Sumatrans
purchased opium, textiles and other goods? Was any portion of the specie
buried as treasure yet to be discovered? Was the silver melted into bullion
and used as jewelry or an art form? Did any portion of the specie find its
way to China to be turned into investment capital? The belief that much of
85
the money disappeared from circulation persists to the present time.
United States currency was still in its early years. The dollar
became the basic unit of money through the Coinage Act of 1792, with the
first silver dollars coined in 1794. Peele's and Rajah's records indicate some
transactions in British pounds, shillings, and pence with others in American
dollars. However, the largest transactions, as shown above, on an inter-
national basis, were in Spanish silver dollars, which had gained international
use and acceptance. Although subject to some fluctuation in the 18th
century, Spanish silver dollars afterwards retained their reference value for


58
a considerable period of time. On Rajah's voyage, a Spanish silver dollar
could be purchased for 5 silver British shillings. The American dollar,
patterned on its Spanish predecessor, in 1943 could still buy 5 silver British
shillings.
Rajah, on its voyage to West Sumatra, offered more than the
buying pricing levels of the British East India Company trading factory, Fort
Marlborough, at Benkulen. There, the Company attempted to pay native
pepper growers with promissory notes, which were lower than the hard
money price levels at which pepper was being bought on the free market
with Spanish silver dollars. This failed attempt helped to bring on a Malay
revolt as well as dampened levels of production. It is interesting to note
that accounts of the Company at Benkulen were not kept in British funds,
86
but rather in Spanish dollars, the universal currency. When native pepper
planters sold pepper for specie, British authorities prohibited them from
exporting their dollars. However, corrupt British authorities moved large
sums of specie to China in their own names, collecting fees from the
87
planters for use of the official's "services."
As we have seen in Rajah's second voyage, the owner's trading
plans could be extremely complicated. One could never simply use specie
for outright purchase of the ultimate inbound cargo. Rather, the original
outbound cargo would be taken to an intermediate port, sold or exchanged
for other commodities, which, in turn, might later be sold or exchanged for
the desired cargo of pepper. At times, pepper would be taken back, not to
Salem but to Manila or Marseilles where, it was believed, a better price
could be obtained, or even exchanged for a yet more desirable cargo to
return to America. Thus, trade became increasingly complex, depending not


59
only upon the captain's merchandising abilities, but also upon the timing of
supply and demand in different ports. Different levels of pricing existed for
silver versus barter for desired items. In some cases, specie could buy less
than a purchaser's shipboard commodity. Because of the element of barter a
merchant might doubt whether a voyage was as successful as it should have
been. As a result, only the final sale of cargo at journey's end could permit
the calculation (limited as it might be), of the spread between the cost of
the original cargo and specie furnished and final selling price of the inbound
cargo. Such a profit usually did not take into account either changing
foreign exchange rates of money (which tended to fluctuate slowly), or lack
of established currency exchanges. The final calculation of profit was given
in specie, the universal measure.
Specie and paper money are a measure of value, but the ultimate
measure of business is profit. How this factor is calculated is subject to
various views and methods. In several reports of Rajah's 1st voyage, it was
88
stated that the pepper was sold at a 700% profit. Review of the Rajah's
voyage papers does not disclose any calculation or any reference to profit
made on the cargo. Moreover, none of the available ship's papers for Rajah's
first 4 voyages do not contain any profit data. The matter is of further
interest because the calculation of profit is subject to several questions.
Is the profit based on the complete cost of the cargo? (i.e., such as
crew's wages and expenses, depreciation of ship, and all other applicable
costs). Is the length of time consumed in the voyage taken into considera-
tion? It appears Rajah's voyage lasted 18 months. In absolute dollars, the
longer the voyage, the less the annual profit would be, indicating overall, a
less profitable venture. Did the owners consider the relationship of profit in


60
relation to the amount of their investment? The return on investment could
be greater if they operated with borrowed funds. Or, was the 700% merely
the difference between the supposed purchase price of the cargo and its
final selling price? This would be the mark-up of the pepper, not the true
profit.
Tradition states that at the conclusion of her 1st voyage in 1797,
Rajah returned with the pepper cargo to New York, but no firm records
exist indicating a cargo value to substantiate such a profit figure. Do the
costs and therefore the profits reflect an accurate result or have the Salem
newspapers and later histories offered hearsay rather than complete
89
accounts of what actually happened?
Why would merchants dealing in a competitive world allow reports
of a 700% profit to become common knowledge? Would they not attempt to
qualify or deny such reports with added costs and risks? No record exists of
Peele's denial of the alleged information. Did they themselves release it, in
a moment of jubilation or braggadocio? For businessmen of experience, this
does not seem likely. Most merchants, in succeeding years of the Salem-
Sumatra pepper trade, aimed for an "expected profit of 100% to 200% per
90
voyage." However, an assumptive (not substantiated by all known figures)
calculation can be made for the 700% "profit," that could be borne out by
certain known and available figures.
A. The 2nd voyage of Rajah is recorded on the register at the
U.S. Custom House Salem on October 15, 1799. It shows an
entry of 158,544 lbs. of pepper bearing a duty of $9,512.64.
B. Pepper in Sumatra at that time was purchased at 8 Spanish
silver dollars per picul. A picul equals 133.33 lbs. thus 8
divided by 133.33 equals $.06 per lb.


61
C. If pepper sold at 700% profit (probable meaning is markup)
then .06 x 700% = $.42 per lb. = selling price.
D. Taking 158,544 lbs. x $.42 = $66,588.42 value of cargo at
selling price.
E. $9,512.64 (duty as per A above divided by 66,588.48 (value in
D) equals 14.2% duty as sales price
F. 158,544 lbs x $.06 = $9,512.64 or 100% of projected cost and
is equal to total duty paid as per A above.
G. Thus cost of pepper in Sumatra and amount of U.S. duty are
identical with U.S. duty in an acceptable range 14.2% of
cargo selling price.
For pepper to sell at less than $.42 per pound would show a duty
level above the 14.2% level and could be difficult to maintain politically and
economically. In later decades of the 19th century, both the purchase cost
of pepper declined as well as sales prices in both America and Europe, due
to a glutted market. However, the duty seemed to approximate purchase
costs with a markup of approximately 300% in evidence.
The duties paid by Rajah and the other Salem ships were sub-
stantial for those times. From 1800 to 1807, 1,542 vessels arrived from
foreign ports and the average annual customs duties were over $755,000,
equal to more than 1/20 of the entire expenditure of the United States
91
government. The economic and political impact of Salem and pepper, at
that time, was therefore substantial and kept New England in prominence in
Europe as well as America.
Another aspect of profit is continued utilization of a vessel when-
ever and wherever possible. "Carrying trade" allowed for maximum


62
profitable use. The term "carrying trade" involves transport for a fee of
goods not property of a vessel's owners. At times, merchant owners did not
possess nor could they obtain suitable merchandise for sale during the course
of a voyage. Transporting a cargo for others could provide income in
making the trip ultimately profitable or, at least, less costly. Further,
during the times of the Jefferson Embargo, a ship could remain away from
the American continent and earn income. This would be preferable to idle
or laid-up ships in a home harbor, draining a Salem owner's funds.
Just before the Peele's ship Perseverance left for her 3rd voyage to
Sumatra, an advertisement was placed in Boston for a "carrying trade" cargo
of 30 tons. The voyage papers reflect a letter of inquiry from a Jas.
Williams wanting to know what goods would be suitable for transport to a
92
French market. This could indicate an intermediate stop in France prior
to proceeding to Sumatra. However, the transaction was not consummated
and the ship proceeded directly to Sumatra.
An interesting example of remaining away from America during
the Jefferson Embargo and carrying freight can be found in the 6th voyage
93
of the ship Freedom. Peeles' vessel was gone from August 1807 through
1810, traveling to Palermo, Tetuan, Gibraltar, Malaga, London, Tangier,
Valencia, Benicarlo, Plymouth, Belfast, Cork, Rio de Janeiro, Sumatra, St.
Helena, and Martha's Vineyard. Captain Edward Ford's letter of
January 21, 1808, to Peeles from London refers to his "fraight" voyage from
Malaga, and the need to adjust the insurance accordingly in the future for
94
additional freight trips. The matter of adequate freight charges to cover
all costs and a suitable profit was always of concern to captains and owners.
With no so-called uniform charges, rates could and did vary significantly.


63
Insurance coverages did form a basis for cargo valuations which, in turn,
affected freight charges.
The prominence of the Salem merchants, however, does not mean
that the/ were among the most sophisticated of New England traders.
Within the New England states, the methods of Rhode Island's Brown family
seem further advanced than those of the Salem merchants discussed above.
The Browns appeared to be aware of the return on investment concept by
charging 6% interest per annum against investment in both ship and cargo.
This was added to their selling price. Moreover, they calculated interest for
a two-year period although the actual voyage took eighteen months.
Finally, they made a 44% depreciation charge against the ship for the
95
voyage "although no substantial repairs were made." Thus, inflated costs
were used to create sales prices even though a steady rate of markup was
employed.
Both the Browns and the more profit conscious Salem merchants
applied yet another commercial technique. The larger ships with larger
cargo investments had both a captain and a supercargo, an officer responsi-
ble for the commercial intelligence involving the purchase and sale of the
voyage's cargoes. Usually this was filled by a member of the privileged
class, a business agent or the vessel's owners. Some were Harvard
96
graduates, others merchant's sons, and other young men of good families.
The separation of merchant activity from the vessel's actual operations led
to frequent conflicts between captain and supercargo. These were probably
intensified by the disparity between the compensation given to the two
officers. On a voyage of the Browns' vessel Ann And Hope in 1798, Captain
Benjamin Page received wages of $2,000 plus a privilege of 8 tons while


64
supercargo Samuel Snow received wages of $8,000 plus a privilege of 10
tons. Happily, there were individuals who bridged these gaps and did, at
different times, fill both positions. Nathaniel Bowditch, Salem's charter of
the seas, began his career as a supercargo and moved to the position of
ship's master, before becoming a mathematician. However, in general, no
"career ladder" existed on which either position was a prerequisite of the
other. Rather, each merchant had different emphases and goals, filling the
positions with individuals of varied levels of experience in accordance with
the nature of the voyage, value of the cargo, size of the ship, degree of
negotiation necessary, and required skill in navigation. The captain was
supreme in authority at sea but was bound to adhere to the commercial
demands of profit for the voyage.
The incomplete state of records available for profit or loss on
pepper voyages is not without precedent. The voyages between New
England and the West Indies in the 18th century reveal the same general
problems. Owners of ships or goods seldom rendered any account of their
own sales nor did they calculate to their own satisfaction the profit or loss
of a particular voyage or consignment. Interestingly, losses were more
often mentioned than profits. Did merchants wish to keep success, that is
both profit and net worth, confidential in order to discourage competition or
unwelcome intrusion?
Perhaps they were more troubled by notoriety or the possibility
that there would be increased taxation targets. Pleading poverty has been
often used by the successful to avoid the unwanted envy of others.
Moreover, merchants might be more concerned with the reasons for losses
than why they profited. Profits were an affirmation of correct tactics;


65
losses needed more attention. Available records do not distinguish cargo
from ship in any cost calculations. When merchants owned more than one
vessel, further confusion existed. One historian has noted that
". . Sometimes essential figures are missing, often the concerns of
different voyages were mingled together. .[and merchants often re-
98
mitted] the proceeds of their cargoes indiscriminately." Prices and
proceeds of cargo sales have to be guessed. Only comparison with like sales
prices for comparable commodities in other American cities can give
99
probable results.
Finally, merchants might have considered the concept of return on
investment, that is, the relationship of profit to the amount a merchant may
have advanced for a voyage. This would have involved not only cargo, but
ships, warehouses, offices and equipment. Merchant groups, such as the
Browns of Rhode Island, were aware of this factor and included it in some of
their transactions although not to the degree in current use.
Thus, a basic question, probably unanswerable, exists. Were
merchants and ship owners in the pepper trade aware of true and complete
costs of voyages and did they prepare calculations to determine results?
The lack of available records tends to support a negative response. How-
ever, the momentum of activity in their businesses did permit them to live
as if and believe that they were successful. This belief and their ability to
borrow permitted expansion into other activities, such as movement into
mills and factories.
This movement was related to new events on the economic
horizons that would bring great changes to Salem. The final chapter in this
paper will attempt to treat these forces in detail.


CHAPTER V
DECLINE OF SALEM'S PEPPER TRADE AND
MOVEMENT TO NEW ACTIVITIES
During the period of this study, despite intermittent setbacks,
Salem prospered in her connection with the pepper trade. Fortunes were
made by merchants and captains who could understand and move with the
tides of change. However, by 1815, new forces brought the traffic and
profit to a slowdown and halt.
The decline of Salem and its pepper merchant partnerships after
1815 had several causes. The silting, shallow harbor (not admitting ships of
more than 12 to 14-foot draft) became obsolete as sailing vessels and
steamships were built larger and heavier to carry huge and more economic
cargoes. In addition to the shoals, there were other obstructions to
navigation, such as rock formations that could cause difficulty for larger
ship traffic, particularly in bad weather.
Europe at peace presented new maritime competition. It re-
stimulated its own carrying trade, affecting American activity as British,
Dutch, French, Danish, Swedish and German ships moved cargoes to and
from new centralized port systems. ^
The move westward for possibilities in land development and
commerce left Massachusetts more remote from the center of population.
The Peeles moved with the new opportunities, investing in Ohio real estate.


67
Later, they would continue their efforts even further away, in establishing
the firm of Peele, Hubbell and Co., Manila, P.lJ^
The futile policies of New England federalism made Massachusetts
unpopular with the other states and resulted in a loss of influence in
Washington. Not only Salem but Boston experienced economic decline,
giving way to further ascendancy of New York Harbor for trade to and from
the northeastern states. ^
Prosperous and aggressive Salem merchants moved southward to
New York and Philadelphia to new centers of commerce. One example was
the Low family, which formed the firm of A. A. Low & Brother. Not
surprisingly the New York City school system named at least one school
103
for Seth Low, philanthropist as well as merchant.
Remaining businessmen saw opportunity in manufacturing rather
than shipping and moved from wharf site to mill site. Massachusetts
established centers in the textile, shoe, cordage and furniture industries.
Along with the new industries came a protective tariff in 1816, contrary to
the wishes of Salem's merchants but providing even more impetus to
manufacturing. ^ ^
Another cause for decline was Salem's lack of infrastructure.
Railroads, canals, roads, and population to move or consume seaborne goods
were not available. The natural barrier of the Appalachian Mountains to the
west would make canal and road transportation non- competitive with other
available routes. ^
The cyclical nature of pepper pricing created financial problems
and Salem's merchants lacked the resources to ride out times of over-
supply.^ Instead, New York and Philadelphia with greater available


68
capital weathered the plunging and uncertain prices. This situation helped
to drive the remaining Salem merchants into newer and more stable and
lines of activity mentioned above.
Improved worldwide communication allowed for sale and purchase
of goods before voyages were undertaken. This step resulted in major
entrepots being established in a centralized system basis excluding smaller
ports such as SalemCredit and banking institutions followed the new
communication system, curtailing needs for transport and use of specie and
the Salem method of trading in Sumatra.
The British and Dutch intensified exclusionary trade practices in
southeast Asia, gradually making it very difficult for Salem to continue the
Sumatra pepper trade. New colonial administrative policies, along with
elimination of the less efficient trading companies there, diminished Salem's
, 108
prior advantages.
The pepper trade presented both challenges and benefits to Salem.
The aftermath of a war, particularly for a former colonial possession,
usually spelled significant economic dislocation. Through exploration and
assessment of a new market, many found employment, and fortunes were
made. Further, the new trade aided in the development of the American
Merchant Marine, allowing for an active and expanded part in world
commerce.
Salem's willingness to change in contrast to British East India's
attempt to continue commerce in the mode of a prior century did spell
success for the former with defeat and disintegration for the latter. Change
involved not only new markets but the methods and practices in serving
them. Both aspects had to occur for successful continuance of trade. The
New England port town fully passed the test; its British competitor did not.


69
Later, when pepper trade conditions changed, Salem lacked the
size or resources to compete. Instead, its successful businessmen moved
themselves and their interests elsewhere and adapted, once again, to the
dynamics of commerce and now, industry.


70
NOTES CHAPTER I
Bernard Farber, Guardians of Virtue, (Basic Books, Inc., N.Y., 1972), p. 6.
2
J.W. Gould, Sumatra America's Pepperpot 1784-1873, Essex Institute
Historical Collections, Salem, Massachusetts, XCI1 1956 p. 14.
NOTES CHAPTER II
Jean Andrews, Peppers, (University of Texas Press, Austin, 1984), p. 2.
4
Frederic Rosengarten, Jr., The Book of Spices, (Jove Publications, New
York, 1981), Edition, p. 341.
NOTES CHAPTER III
^William Marsden, The History of Sumatra, (Published by the author,
London, 1811), p. 15.
£
Hawthorne Daniel, Islands of the East Indies, (G.P. Putnam Sons, N.Y.,
1944), p. 108.
^Hawthorne Daniel, ibid, p. 108
8
Ailsa Zainu'ddin, A Short History of Indonesia, (Praeger Publishers, N.Y.,
1970), p. 13. !
9
Zainu'ddin, p. 13.
'^Sophia Raffles, Memoirs, V. I, (James Duncan, London, 1835), p. 403.
**John Bastim, The British in West Sumatra (1685-1825), University of
Malaya Press, Kuala Lumpur, 1965, p. 135. Tabulated from information
noted.
12
V.O.C. = Vereenigde Oostindische Compuagnie
*^Ailsa Zainu'ddin p. 79.
^Bastin, p. XI.
^Bastin, p. XVI.


71
^Marsden, p. 277.
^Bastin, p. 89.
18
Absorption of the Africans and Madagasgans into the general Sumatran
population could produce interesting studies for later demographers.
19
Bastin, Footnote 7/306, p. 100.
20
Dictionary of American Biography, (Charles Scribners Sons, N.Y.), Vol.
XX, pps. 590-591.
Gould, p. 87.
^Dudley Leavitt Pickman, Journal of Dudley Leavitt Pickman, 1799- 1804,
ff 61-4, May 1801, at Peabody Museum, Salem, Massachusetts.
^Bastin, p. 129.
24
Benjamin Heyne, Tracts, Historical and Statistical, on India; with Journals
of several tours through various parts of the Peninsula, (London, 1814),
pp. 385-88.
^Bastin, p. 153.
26
Anthony Reid, The Conquest for North Sumatra, (University of Malaya
Press, Kuala Lumpur, Malayasia, 1969), p. 7.
^Marsden, p. 91.
29Bastin, p. XXIV.
30
John Crown inshield, Log Book and Journal Captain Ship America to
India, Book No. 3, July 18, 1801, Original Manuscript from Peabody Museum
Collection, Salem, Massachusetts.
NOTES CHAPTER IV
31
Jonathan Peele, Jr. Papers, Peele Family Papers, 1753-1810 MH-5 Ships
Papers, Schooner Rajah, 1st Voyage, Box MSS #6, Folder 3-5, Peabody
Museum Holdings, Salem.
22Robert P. Spindler and Sylvia Kennick, Peele Family Papers, 1753-1871,
p. 2. from Peabody Museum Holdings (April 1987) and Essex Institute
Holdings (July 1982), both in Salem, Massachusetts.
33
James Duncan Phillips, Salem and the Indies, (Houghton, Mifflin Co.,
Boston, 1947) p. 93.


72
34
35
Putnam, p. 10.
James Duncan Phillips, Salem in the Eighteenth Century, (Houghton
Mifflin and Co., Boston, 1937), p. XIX and p
36
George Granville Putnam, "Salem Vessels and their Voyages, (reprinted
from the Essex Institute Historical Collections, Volumes LVII and LV1II),
(Essex Institute, Salem, Massachusetts, 1922). p. 4.
37
Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Schooner
Rajah, 1st Voyage, Box MSS #6, Folder 3-5, Peabody Museum Holdings,
Salem, Mass.
38
39
40
41
Phillips, Salem and the Indies, p. 93.
The Salem Mercury, April 15, 1788.
The Salem Gazette, May 18, 1790
James Duncan Phillips, Pepper and Pirates, (Houghton, Mifflin and Co.,
1949), p. 14.
^Bjorn Landstrom, The Ship, (Doubleday & Co., Garden City, N.Y., 1961),
p. 176. The snow is a variant in sail arrangement of the brig and for a time
was known as a snowbrig.
^Phillips, Salem and the Indies, p. 94.
/|/|
Phillips, Salem and the Indies, p. 94. Reference to Charles S. Osgood:
"Sketch of Salem, p. 151.
45
The American Spice Trade Association, A History of Spices, (Enqlewood
Cliffs, N.J., 1972), p. 10.
46
James Duncan Phillips, Pepper and Pirates, (Houqhton Mifflin Co., Boston,
1949), p. 14.
47
48
Putnam, p. 4.
Putnam, p. 7.
49
Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah,
3rd Voyage, MSS #6, MH5, Box 6, Folder 5, (Peabody Museum Holdings,
Salem, Massachusetts.)
50
51
Phillips, Salem and the Indies, pps. Xli, XIII, XIV, XVI, XIX.
Jonathan Peele Jr. Papers, Peele Family Papers 1753-1810, Ship
Freedom, 6th voyage. MSS2, MH5, Box I and 2, Folder I and 2, Peabody
Museum Holdings, Salem, Massachusetts.


73
52
Putnam, p. 9.
53
Jonathan Peele, Jr. Papers, Peele Family Papers, 1753-1810 MH-5,
Ships Papers, Schooner Rajah, I st voyage, Box MSS-//6, folder 3-5, Peabody
Museum Holdings, Salem.
54
In 17th century Lloyd's Coffee House, London, the method of insuring
ships and cargoes involved listing details of a particular voyage. Those
interested in sharing the risk could sign their names beneath the statement,
listing the share of the total they would guarantee. Signing beneath the
statement was the origin of the term "underwriter."
^Jonathan Peele, Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah,
2nd voyage, MSS #6, MH-4, Box 6, folder 4, Peabody Museum Holdings,
Salem, Mass.
56
Anthony Reid, The Conquest for North Sumatra, (University of Malaya
Press, Kuala Lumpur, 1969), p. 24.
"^Samuel Eliot Morison, The Maritime History of Massachusetts, 1783-1860,
William Heinemann Ltd., London, 1923, pp. I 10-111.
58
Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810 Schooner
Rajah, 2st voyage, Box MSS #6, Folder 3, Peabody Museum Holdings, Salem,
Mass.
59
Jonathan Peele Jr. Papers, MSS #6, Box 3.
60
Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Ship
Freedom, Voyage 6, MSS #2, MH-5, Folder I, Peabody Museum Holdings,
Salem, Mass.
^ Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah,
2nd Voyage, MSS //6, MH5, Box 6, Folder 4, Peabody Museum Holdings,
Salem, Massachusetts.
62
John Crown inshield Log Book, Captain's Ship Journal America to India,
Box No. 3, July 2nd and 21, 1801, Original Manuscript from Peabody Museum
Collection, Salem, Massachusetts.
^Crowninshield, July 21, 1801.
64
Nathaniel Bowditch, Remarks on the North West Coast of Sumatra, East
India Marine Society, 1803 Voyage of Ship Putnam to Sumatra and lie de
France (Mauritius), Holdings in Peabody Museum, Salem, Massachusetts.
^Willard Peele Ships Papers, Peele Family Papers 1792-1838 Ship
Perseverance, Third Voyage, MSS //12, MH-5, Folder 1.


74
66
Anonymous, The Aristocracy of Boston: Who They Are and What They
Were, (Published by the Author "(By One Who Knows Them)," Boston, 1848),
pp. 18-19.
^Edward Gray, William Gray of Salem, Merchant (Boston, 1914), p. 50.
^Phillips, Salem and the Indies, p. 280.
69
James B. Hedges, The Browns of Providence Plantations, The Nineteenth
Century, Brown University Press, Providence, 1968, p. 65.
^Jonathan Peele, Jr. Papers, Peele Family Papers 1753-1810, Rajah, 1st
voyage.
71-77 Inclus'vejonat[ian Peele, Jr., Papers, Peele Family Papers- 1753-
1810, ship Freedom, 6th voyage.
7ft
Jonathan Peele Jr. Papers, Peele Family Papers 1753-1810, MSS-MH-5.
79
Bernard Farber, Guardians of Virtue, (Basic Books, Inc., N.Y., 1972), p.
82.
80lbid, pp. 90-92.
81 & S2jonatjian pee|e jr> paperS} Ship Freedom, 2nd Voyage, Box MSS #1,
Folder MH-5, Peabody Museum.
83
Fo
84
Jonathan Peele, Jr. Papers, ibid., Ship Freedom, 2nd Voyage, Box MSS #1,
Folder MH-5.
85
86
87
88
89
Gould, p. 126.
Gould, pp. 126-127.
Bastin, p. 98.
Bastin, p. 104.
Putnam, p. 10 and Phillips, Salem and The Indies, p. 95.
Salem Gazette, July 2, 1797 and J.W. Gould, p. 107.
Another commentary reference made by J.W. Gould is in Manning I, 74;
Saunders to Richard Crowinshield, July 21, 1797, in R. Crowninshield
Papers, IX, Peabody Museum, Salem. However, no direct references to
duties paid, requiring profit percent are available.
90
Phillips, Salem and the Indies, p. 247. From T. Pitkin, Statistical View of
the Commerce of the United States, (2nd Edition, N.Y., 1817).
^Phillips, Salem and The Indies, p. 429 and p. VII.


75
Willard Peele Ships Papers, Peele Family Papers 1792-1838, Ship
Perseverance, Third Voyage, MSS 12, MH5, Box 12, Folder I, Peabody
Museum Holdings, Salem, Massachusetts.
93
Jonathan Peele Jr. Papers, Peele Family Papers 1753-1810, Ship
Freedom, Sixth voyage. MSS2, MH5, Box 1 and 2, Folder I & 2, Peabody
Museum Holdings, Salem, Massachusetts.
94
Jonathan Peele Jr. Papers, Ship Freedom, 6th voyage, MSS2, MH5, Box I
and 2, Folder I and 2.
^Hedges, p. 24.
96
Samuel Eliot Morison, The Maritime History of Massachusetts 1783- 1860,
(William Heinemann Ltd., London, 1923), p. 112.
97
Hedges, p. 67.
98
Richard Pares, Yankees and Creoles, (Longmans, Green and Co., London,
1956), p. 139.
"ibid, p. 145.
NOTES CHAPTER V
^Morison, p. 213.
'^'peele Family Papers 1753-1871, J. Willard Peele Biography, p. 2,
Essex Institute Holdings, Salem, Massachusetts, July 1982.
^Morison, p. 213.
103
104
105
106
107
108
Morison, p. 217.
Morrison, p. 214.
Phillips, Salem and The indies, p. 8.
Bastin, p. XXXVII.
Morison, p. 215.
Reid, pp. 9, 10, II,


76
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Gould, J.W. Sumatra America's Pepperpot 1784^-1873. Essex
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Full Text

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PEELE'S PEPPER THE ROLE OF THE PEELE FAMILY AND SALEM, MASSACHUSETTS IN THE AMERICAN PEPPER TRADE WITH SUMATRA IN THE PERIOD 1795-1815 by Donald Kenneth Schwartz B.S., (Cum Laude) School of Commerce, Accounts and Finance, New York University, 1942 A thesis submitted to the Faculty of the Graduate School of the University of Colorado in partial fulfillment of the requirements for the degree of Master of Arts Department of History 1988

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This thesis for the Master of Arts degree by Donald Kenneth Schwartz has been approved for the Department of History by Date &"_ T_ __

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Schwartz, Donald Kenneth (M.A., History) Peele's Pepper The Role of the Peele Family and Salem, Massachusetts in the American Pepper Trade with Sumatra in the period 1795-1815 Thesis directed by Associate Professor Myra L. Rich iii The decades following the American Revolution were times of economic dislocation. Salem, Massachusetts' maritime community explored for new sources and markets to serve. The Peele family, merchants, with their Captain Jonathan Carnes, found pepper on Sumatra's west coast. From 1795 to 1815, Salem became the world's pepper emporium, bringing employment and wealth to the community. The backgrounds and nature of pepper, Sumatra and Salem are discussed together with the economic and commercial factors involved. Much of the information furnished comes from the Peeles and their colleagues ships' papers, made available in manuscript form, from the Essex Institute and the Peabody Museum, both of Salem. Finally, the causes of the decline of Salem's activity in this trade together with the transfer of its business energies to new areas of success are mentioned. The form and content of this abstract are approved. I recommend its publication.

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CONTENTS CHAPTER I. INTRODUCTION . . . . . II. THE CHARACTERISTICS AND HISTORY OF PEPPER iv 5 Ill. THE NATURE AND BACKGROUND OF SUMATRA II IV. THE ECONOMIC AND COMMERCIAL ASPECTS OF SALEM AND THE PEPPER TRADE 24 V. DECLINE OF SALEM'S PEPPER TRADE AND MOVEMENT TO NEW ACTIVITIES. 66 FOOTNOTES 70 BIBLIOGRAPHY 76

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TABLES TABLE PEPPER EXPORTS FROM SUMATRA YEARS 1803-1808 PEELE FAMILY GENEALOGICAL TABLE CARNES FAMILY GENEALOGICAL TABLE WATCH BILL. .. TABLE OF CREW'S ROSTER I ST VOYAGE OF RAJAH OWNERSHIP OF DEEP-SEA VESSELS IN SALEM REGISTER, 1800 AND 1810 14 25 27 32 38 . 54 v

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CHAPTER I INTRODUCTION By the middle of the 18th Century, Salem, Massachusetts had grown from a tiny village to a bustling port town, numbering 3452 souls. 1 Handsome homes lined the main thoroughfare and more occupied the adjacent streets. Stores and businesses were thriving. Salem's evident prosperity had been built on the foundations of the West Indies trade, supplemented by the produce of a fertile hinterland and the profits of an active coasting commerce. This traffic had enabled the building of merchant fortunes and had created a demand for related businesses and trades: such as sail and shipmaking, cordage, carpentry, iron making and storekeeping. Salem's population grew steadily as commerce created jobs for seamen and laborers as well as artisans, craftsmen, businessmen, merchants and professionals. Even the outbreak of war in 1775 did little to dampen this busy course. Certainly the hostilities disrupted normal trade but privateering kept vigor in the activities. Solem's citizens confidentially anticipated the return of peace and the resumption of trade within the orbit of the British Empire. The British Orders In Council of 1784, however, upset those expectations. By closing the West Indies to Americans, the British removed at one stroke the principal source of Salem's prosperity, and that of dozens of other similar towns. Trade languished, businesses suffered, jobs dis-appeared, and residents moved elsewhere in search of employment.

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2 Confronted by adversity, Salem merchants and captains, like those of other towns sought new avenues of trade. Their ships entered waters and tried markets never before explored by Americans. No journey was too long, no port too far, few risks too great for these people searching for a substitute for the West Indies trade. Salem merchants tried whaling, voyages to European ports, even going as far as China on several occasions. But the connection that brought them renewed prosperity was the trade to the West Coast of Sumatra where they purchased pepper. During the 18th century, pepper from India and the East Indies had been brought into Europe and the New World by the British East India Company and the Dutch. Their pricing at European and American destinations reflected substantial markups to provide for administrative costs and needed dividends to shareholders. Although their purchase prices to Sumatra planters were low, nevertheless the high European values indicated a monopoly-type policy that would invite new competitors to buy and trade in an advantageous market. Colonial Americans had purchased and used pepper but had not entered the trade unti I the last decade of the 18th century. Why? Because the British and Dutch were in it with larger ships and more capital than the colonies could amass. Moreover, pepper was not a commodity in which they were permitted to trade. (for British subjects, the East India company was a Crown monopoly). Thus, the Port of Salem, in the new United States republic, found one answer to the question of survival in the uncertain economic times of the last two decades of the 18th century, the decades which saw the end of the Colonial Era, pepper voyages to Sumatra. The year 1795 marked the

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3 first. verified American journey to purchase the spice. It marked the beginning of Salem's role as a world pepper emporium. The height of this venture continued (with some interruptions for the Jefferson Embargo against the American international shipping trade and the War of 1812) for two decades, ending with the cessation of hostilities in 1815. European peace brought maritime shipping into full sail on the seas and deeply cut into American foreign trade. The workings of the pepper trade are exemplified by the Peele family, whose known records date back to 1753; they had been active in commerce and shipping during the 18th century. Trading at first with the West Indies, they had built a thriving mercantile enterprise. When the coming of the American Revolution interrupted their normal trade, the family turned to privateering. At the end of hostilities, the British closed the West Indian market to their former American colonies. A time of severe economic adjustment ensued for the new nation and its maritime activities. The Sumatran pepper trade reflected one attempt at diversification by Americans (and Salem merchants in particular) to meet the demands of commercial change. Trade during the period 1795 to 1815 will be described with particular relation to the members of the Peele family and their Salem colleagues. Because business is dynamic in nature, this interim period of successful pepper trade was, in fact, a prelude to Salem's decline as activity moved elsewhere both in industrial and land development. The Peeles, too, changed their location and emphasis. Successful, ongoing business adapts to new needs and environments and the Peeles moved with the times. They are

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4 an application of our thesis -people can handle uncertain times by adapting to change. Much of the material in this paper can be and has been illustrated from over 1400 pages in unpublished manuscript form, in the Peele family papers, located at the Peabody Museum and Essex Institute; both of Salem, Massachusetts. To date, but one scholarly paper on Salem and the pepper trade has been written. Prepared by J. W. Gould in 1956, it covers in great detail the background of the venture but makes no mention of the Peele papers or their contents. 2 Though this paper will focus on the Salem captains and merchants, it will begin by describing the cultivation of pepper, the characteristics and background of Sumatra, and the position established there by the British East India Company. The ensuing chapters will turn to Salem's merchants and seafarers, the way they organized and carried on the pepper trade, the risks involved and the methods developed to cope with those risks. Finally, the paper will analyze the reasons for the decline of the pepper trade and assesses its function in Salem's history.

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CHAPTER II THE CHARACTERISTICS AND HISTORY OF PEPPER Though pepper had been known and used by Americans for 165 years, the Salem merchants and captains after 1795 had an opportunity to learn about it and Sumatra at first hand. Pepper vines thrive in a moist, hot climate from sea level to altitudes of 1500 feet. The vines can climb 30 feet or more, bearing fruit in 2 to 5 years but full production is not attained before 7 years. Crops continue up to 40 years, although yields can diminish after 20 years. Cultivation practices have a strongly positive effect on yields and quality although pepper can and does grow wild. As a result, there are recognized grades and types of pepper that have commanded varying price structures within the spice trade. The pepper season began in January with the small pepper at the bottom of the vine. However, the height of the season does not arrive until March through May when the best berries are gathered at the top of the vine. "Best" means each berry is larger and more solid than that which has been picked earlier. Pepper cuttings have been successfully interplanted on tea and coffee plantations, permitting the mixed or alternate cargoes brought out from the growing areas. The pepper berries are harvested 9 months after flowering. They are picked when not fully ripened and are then green in color. Left in heaps

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6 for a few days to ferment, they are then spread on a concrete surface to dry in sunlight for I day. After shriveling and turning black, the spice known as black pepper has been formed. If ground, the powdered pepper is a combination of dark particles from the outer hull and light-colored bits from the core. Black pepper, more properly known as true pepper or piper nigrum, is believed to have originated in ancient India. Originally, the fruit of the sacred fig tree was known as pippali. When the long black pepper was discovered it, too, was called pippali, possibly because its shape suggested the fig. Whatever the reason, with the passage of centuries, our English word -pepper was derived from pippali, the ancient Indian name. Black pepper and evidence of its uses have been found in diggings that are dated as early as I 000 B.C. Here, they appear to have been used in sacrificial formulas prepared for varying ceremonies. In the 4th century B.C., Susruta the Elder, an Indian surgeon, used pepper as an ingredient in potions to remove fat, cure urinary complaints, hemorrhoids, and jaundice. Indian trading vessels and colonists traveled south to Sumatra as early as 100 B.C. and brought with them black pepper seedlings. The cultivation of this spice was then introduced, but at the same time, was permitted to grow wild in the new but hospitable island environment. For centuries Arab traders sailed into the Arabian Sea and then to India and Sumatra. There, they acquired spices, coffee, sugar and wealth. In turn, with the coming of Islam, many areas of the Indies were converted and exposed to a new culture. The Arabs had discovered the full power of the wind systems in the Indian Ocean. Allowing for rapid travel from the southwest (outbound to India) from April to October and northeast (inbound

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7 to Arabia) from October to April, timing their trips with the monsoon winds (derived from the Arabic word mansim, meaning season), the Arabs were able to conceal this navigational knowledge from other nations and were soon in a monopoly position to move spices to the European markets. The City of Sana'a in Yemen became a distribution point with caravans of more than I ,000 camels supported by the spice trade, routinely moving along the trail. The first university in Arabia was started at AI Asha'er, where Ahmed Abu Musa AI-Jaladi developed a mathematical system which he called AI-Jabr, from which comes the word Algebra. North and west the caravans and ships made their way to Egypt and Istanbul where profits again were taken on pepper. (An example of the added high costs was the Sultan of Egypt, taking as tariff I /3 of the value of every cargo that entered his domain.) Then ships transported the spice to Venice and Genoa where merchants distributed it throughout Europe. The profits and greed were so great that European consuming nations began to seek a suitable direct sea route to the Indies. Moreover, the Arabs had kept secret too long -the source of their spices, and the journeys of Marco Polo helped to lift the veil and Jed to the breaking of the powerful Muslim domination. 3 Discovery of the monsoon secret, together with this accumulated information about the East gradually displaced the Arab trade with Europe but not until large quantities of gold had been sent to the Islamic countries in payment for spices. The European gold shortage was an important factor in the search for the wealth of the Indies and the mercantilism credo of non-exportation of bullion.

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; ; 8 The dearth of gold caused by purchase of spices from Islamic merchants permitted pepper to become a medium of exchange. Peppercorns were counted out, one by one, and accepted as currency to pay taxes, tolls and rents. A number of European towns kept their accounts in pepper with some brides' families giving pepper as a dowry. Black pepper was considered so valuable and so much a prestige item that the green, yellow and red plants of the nightshade family, as well as allspice berries were termed pimiento (Spanish for pepper). Throughout the years, the laws of supply and demand applied to the European pepper trade. When the sea route did not seem to furnish the greater demand, the overland route from India to Istanbul and Alexandria again operated as a supplementary route. Then, European syndicates charged higher prices to wholesalers and retailers, who in turn raised the costs to the European public. Demand then slackened, prices dropped and some dealers had heavy financial losses. At times, pepper prices in Antwerp were used as a barometer for commodities and business in general. The long range effect of greater pepper supplies was to lower its cost to consumers and thus bring it down from a luxury item to that of common use. This could be another way of stating how the standard of living had improved throughout European countries during the 18th and 19th centuries. Some of the uses for pepper have changed with time, others remain the same throughout the centuries. When pepper was considered a luxury, in times of Arab-controlled supply as noted above, it commanded payments in gold. Further, it became a medium of exchange with payments made by reference to the individual peppercorn. It is interesting to note that as a substitute for gold, a

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9 commodity with limited shelf or usable life competed with an enduring precious metal in public acceptance. The appearance of adequate supplies meeting normal demands eliminated pepper as a luxury item and allowed it to later assume a mass market use with little if any monetary exchange. Pepper has been used as a payment of tribute by the vanquished to the victor. Alaric the Visigoth, laying siege to Rome in 410 A.D., demanded and received 3,000 pounds of pepper as ransom with a further requirement of 300 pounds annually to keep his Army's provisions of meat fresher. This lessened his supply problem and contributed to the final collapse of the western Roman empire. In addition to the medicinal uses noted above, recently, pepper blended with powdered ginger has proven effective in preventing motion sickness. Health studies in hot climates have shown pepper to be an effective stimulant. Thus, pepper has had a significant effect on both the economy as well as health aspects in the development of backwards societies throughout history. The preservation of food has long been a concern of nutrition and health authorities. When refrigeration or other protecting procedures have not been available, pepper and other spices have been used. These processes have enhanced flavor and retained food values for extended time periods. Moreover, the aroma of pepper has affected the choice of food and the creation of dishes, thus influencing the cuisine of a culture. Church services have allowed many people find purpose and solace in their lives. Central to many rituals has been the use of incense to signify purification. While a number of perfumes and spices have been used, blends utilizing pepper are well known.

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10 Because of the use of spices, European cultures were able to enter the age of exploration, allowing for discovery of new worlds with yet additional valuable foodstuffs. Today, black pepper remains the world's most important spice. The intense Malayan-Sumatran production that led to the American and British trade in the early 19th century is in part responsible for this result. London became the world's spice center in the middle of the 19th century, distributing the increased production, bringing down prices and thus increasing consumption. 4 Pepper had now permanently and finally lost its restricted use by the wealthy. Pepper is not a product that can be grown worldwide. It requires the climatic conditions found in Sumatra. To better understand Salem's activities there, let us consider the island and its people.

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CHAPTER Ill THE NATURE AND BACKGROUND OF SUMATRA Sumatra, called by Marco Polo "Java Minor," is the 3rd largest island of Indonesia (formerly known as the East Indies.) The equator almost bisects it, traveling 248 miles across its width. In spite of its location, the climate is not extremely torrid. Cooling winds and an average annual rainfall of up to 173 inches, with a mean daily range of only 13F, keep temperatures at. an average mean of 80F.: maximum recorded temperatures at Padang, a typical and mid west coast town, is 90F. As one climbs the mountains of the interior, a temperature drop of I F per 300 feet of altitude is encountered. Along the west coast, fresh water streams and rivers are in profusion. Marsden's classic text, published during the height of the pepper trade, describes it best: "No country in the world is better supplied with water than the western coast of the island. Springs are found wherever they are sought for, and the rivers are innumerab)e." 5 Humidity is as high as 97% and is seldom less than 75%. 6 The abundance of moisture had a negative side. Malaria was prevalent, due in large part to the great mosquito-bearing swamps. 7 The fever hazard had a significant effect upon the operations of the British East India Company. At their west coast station, Fort Marlborough, illness, death and alcoholism resulting from attempts to avoid fevers (and to cope with the hazards of life "beyond the line") aided the continuance of bad decisions made in pepper cultivation and export efforts. There are but two slightly distinguishable seasons, the hot

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12 and the wet. Both climatologists and wags agree the only differences between seasons are that the hot season is slightly hotter and not quite so wet as the wet season, while the wet season is slightly wetter and not quite so hot as the hot season. While much of Sumatra, including the Highlands, is covered with forests and wild grasslands, the low-lying lands are swampy. The grasslands permit the growing of two varieties of wild sugar cane. The cane, considered a variety of wild grass, grow to heights of 3 to 12 feet and is so strong thatforests regain this land with ease. Five groups of people have been native to Sumatra, the Bataks, Achinese, Palembangese, Minangkabaus, and coastal Malays. All five groups spoke languages belonging to the same Malaya Polynesian linguistic family with many sub-type languages and/or dialects prevalent. Ethnologically, except for the foreign immigrant in groups listed below, all Indonesians are Malayan in origin with a diversity of cultures based upon religion, language and Adat -the customary law governing lives in the various communities. 8 The basis for the differences just stated are often found in the past history of the different groupings. 9 Bataks were divided into warring tribes, who, as cannibals, ate their criminals as a form of punishment. Achinese were a merchant and trading society who acquired salt and textiles in return for raw silk, pepper, sulphur, camphor, gold dust, benzoin and betel nuts. Palembangese, too, were committed to international trade where merchants from India, Persia and Arabia exchanged their goods in a series of South Eastern Sumatran markets for items from China and the Spice Islands. Minangkabaus, in the west Sumatran Highlands, were an agricultural people growing coffee, indigo, maize, sugar cane and the oil-growing plants. 1 0 They were

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13 somewhat unique in that their customary law was based upon matrilineal descent (inheritance passed from mother to daughter, rather than from father to son.) As for the coastal Malays, they had constructed a trade-based empire, at first located in southeastern Sumatra that moved over to southwestern Malaya. Their biggest gift to posterity was their language which became the lingua franca of all Indonesia. Over the centuries other ethnic groups have settled in coastal regions. Arabs, Chinese, Hindus, Bengalis, Portuguese and Eurasians have all left their influences upon the culture. The strategic location of Sumatra at the northeast end of the Indian Ocean coupled with a main route between India and China has accounted for the confluence of these many cultures. Any marketable crop, such as pepper, would soon find worldwide interest. To this day, the Malaysian area remains the earth's prime producer of pepper. As with most commodities and as noted above, Sumatran pepper has been subject to cyclical supply and demand. For a portion of our period of interest, the following table furnishes an interesting example of its Sumatran export to American vessels or traders. II

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PEPPEREXPORTSFROMSUMATRA YEARS 1803-1808 AVERAGE PURCHASE YEAR QUANTITY U.S.A. TOOK PRICE IN PECULS PER PECUL 1803 60,000 1/2 of all $8 per Pecul shipments 1804 80,000 2/3 of all $11 per Pecul shipments 1805 80,000 70,00 Peculs $10 per Pecul 1806 80,000 60,000 Peculs $7 per Pecul 1807 70,000 30,000 Peculs $6.50 per Pecul 1808 46,000 6,000 Peculs $6 per Pecul +=-

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15 The decline in exports from 1805 to 1808 correlated with the decreasing average purchase price per Pecul, both owing to the oversupply on the European and American markets. Continuance of this as a long term trend contributed to America's gradual withdrawal from the trade in the early 19th century. Prior to the 18th century for the most part, pepper had been in short supply in Europe due mainly to marketing practices of the Arabs and then the Dutch. However, as noted above, there were periods of glut. In the era of 1680-86, an employee of the v.o.c.12 (Dutch East India Company) reported that pepper was so plentiful in Indonesia that it was sometimes used as ballast or with shiploads either thrown into this sea or burnt. Christopher Fryke, ship's surgeon with the V.O.C. reported "yet dares no man in the service of the company take one single corn of it."13 The involvement of British East India Company with the economy of Sumatra spanned more than I 00 years and involved a counter influence against the Dutch along a substantial portion (some 300 miles) of the west coast, from lndrapura in the north to Krui in the south. From the beginning, directors of British East India Company realized the importance and intertwining of Empire, pepper and Sumatra. In a bitter struggle in 1680 between their company and the rival Dutch East India Company for control of the West Java pepper trade, they commented that: "If the present misunderstanding between the two nations should ferment to an open war, it would be thought by the vulgar, but a war for pepper which they think to be a slight thing, because each family spends but a little on it. But at the bottom it will prove a war for the dominion of the British as well as the Indian Seas, because if ever they come to be sole masters of that

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16 commodity, as they already are of nutmegs, mace, cloves and cinamon [sic], the sole profit of that one commodity, pepper, being of general use, wi II be more to them, than all the rest and in probability sufficient to defray the constant charge of a great Navy in Europe." 14 At first, the British acquired the seaport at Benkulen and two miles of ground from the native rulers for creation of a pepper-growing monopoly on condition they protect the inhabitants against Dutch aggression from the south. Further, the British were to pay II Spanish silver dollars to the local ruler for each 3 Peculs delivered. In addition, the native Pengeran (senior government official) was to receive an annual stipend of 400 dollars. Plans for production and export of pepper never met expectations. Rising administrative costs were not met by increased production in spite of rapidly extending territorial commitments. Complaints from the Madras government, to which Benkulen was subordinate, became more frequent. This created pressure upon the local British administrators who, in turn, introduced coercive and repressive measures. Several Sumatran rulers were placed in stocks "for no other reason but because they had not brought down to the Fort [Marlborough] such an quantity of pepper as the Governour had sent for."15 Undoubtedly, the failure to deliver pepper was attributable to the natives' lack of motivation. Payments below market prices, and then, at times, in paper instruments of credit, did little to interest growers. Forced measures of production did not sustain desired results. The measures employed by the British appeared more in line with Dutch behavior than theirs. In addition, use of harsh measures increased costs of administration. Slaves from Madagascar were brought in as garrison troops but could not be fully trusted. Moreover, "Topaz" soldiers (dark skinned, half-caste

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17 claimants of Portuguese descent) were stationed there. Finally, the main military force was drawn from the ranks of Sepoys and British in India. At least one 18th century Sumatran revolt forced the British to flee to India, to return later, with newly imposed quotas for native pepper production. East India Company continued to have insufficient specie available for payment to growers. At times, another inducement was introduced. Opium was imported as a payment in part for crop production. Marsden reported 21 ,000 pounds annually were being brought in from Bengal by East India Company but consumption totals and destinations are unknown. 16 Although probably in local demand, it did little to motivate additional labor and larger crops. All of the foregoing insured declining production, paving the way for Salem ships and their hard money purchases at low but equitable price levels. Meanwhile, much of the pepper grown, sold and collected had been sent on to Canton, China along with the shipments of opium. These commodities paid for tea exported to Europe and America. In this way, Britain avoided a bullion outflow and hoped for a large profit structure for the East India Company, permitting continued payment of its high dividend structure. As stated above, slavery existed on the holdings of the East India Company in Sumatra. Blacks from Madagasgar were used as early as 1695, and the supply of African slaves continued until 1765 when the contract for their supply terminated. Later, additional Africans were brought in, by way of Bombay, to augment the labor force. In 1770, the Company directors, impressed by the "advantages which must attend the breeding up the Company's slaves to handicraft professions" were motivated "readily to comply with the allowance of ten dollars, which you have settled as a gratuity to artificers for each slave they shall train up and perfect in their

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18 respective business."17 The directors felt if individual slaves, on their own, had the potential of, and did actually produce pepper in required quantities, they then should be freed and enjoy planter status. This intention alarmed the local administration and they actively opposed the proposal affecting some 1,100 souls. Not until 1818 when Lieutenant Governor Thomas S. Raffles issued each slave a certificate of freedom was the practice finally terminated. 18 In spite of its then remote location and difficult environment, the East India Company's station did produce at least two already referred to, notable British administrators. Thomas Raffles served there from 1818 to 1824 as Lieu tenant Governor of Fort Mar !borough. He did not succeed in turning around an unprofitable operation, that was based upon forced quotas from inadequately paid planters along with an East India Company's too high administrative cost structure. William Marsden began his career with the East India Company's station in Sumatra at the age of 17 in a clerical capacity. He advanced to secretary and then returned to Britain where in 1783 he published a first edition of "The History of Sumatra." His book, going through three editions, is still considered a valuable reference by modern historians. In 1804 he was appointed First Secretary to the Admiralty. Prior to that, he had estab:lished an East India agency business in London, and acted on behalf of a number of the Company's officials at Benkulen. As a scholar, elected member of several learned societies, lecturer at Oxford University, and author whose works have been translated into French and German, his business talents nevertheless were not unused. He remains unknown to many as, to date, no detailed biography exists. 19

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19 From the earliest years of the American colonies, there was some involvement of its native born with pepper and Sumatra. Of particular interest was Elihu Yale, benefactor of the university bearing his name. Starting as a writer or clerk with the East India Company, he rose to Governor and President of Madras in 1687. Private fortunes were to be made and issues such as conflicts of interest were not of concern. Yale, through his brother Thomas, engaged in constant and heavy trade in pepper from Sumatra. Estimates of his amassed fortune, gained through private transactions at Company expense, were estimated at 175,000. Before he could be relieved of charges of corrupt practices and released from imprisonment, he was 11compelled to disgorge at least ,000, for which he later petitioned the Company, and he was not permitted to sail for England until 1699.1120 Another American, Nathaniel Higginson of Salem, joined Yale at Madras in 1684 and became Deputy Governor. Both Yale and Higginson were involved in the Sumatran pepper trade and dissension between them soon arose. Higginson was involved in instigating the Madras Council's revolt against Yale and his private trading. However, the former was interested in having a brother .in Salem setting up an East India goods business there.21 His plan did not come to fruition. Succeeding Yale as President and Governor of Madras in 1694, Higginson became the First Lieutenant General of India. It is safe to say that one of America's great universities owes its origin, if not existence, to pepper and Sumatra as well as to the aggressive nature of its benefactor.

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20 As noted above, there was intermittent American contact at the company station in Benkulen. As competitors in the pepper trade, Salem captains were much interested in British activity in the harsh environment. Leavitt Pickman commented in his journal that: "Bencoolen [sic] has the reputation of being very unhealthy, tho' I believe not with perfect justice. The Europeans here are extremely dissipated, and to this cause may be traced almost every death which takes place among them. Excessive hard drinking is all the fashion with the young gentlemen. The disorder prevalent here is a fever of a bilious kind, which carries off the patient in a very few days, or renders him an invalid for many months. Pulo Bay, a few miles below Bencoolen, [sic] where ships occasionally go to refit, and in very severe weather, is surrounded with swamps and marshes, and is consequently very subject to fevers."22 At times in the first decade of the 19th century, the Company did trade with American ships, furnishing them with pepper, not from East India's stores but from the SooSoo district, which London officials thought somewhat inferior in quality. The Americans were transporting a number of these cargoes to Mediterranean ports where such pepper sold for only one farthing (I /4 of a penny) per pound less than that of so-called Company's quality pepper. The motivation of the British to trade with Americans at the company's station was the American's ability to pay in Spanish silver dollars. These transactions aided in preventing the outflow of bullion, so important to the British. The table above documented the declining price of pepper being exported by the Americans from Sumatra during the period 1806-08. The Company, too, was affected by the weak (oversupplied) European and

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21 American markets. On February 24, 1806, the East India Company's Court of Directors advised Fort Marlborough as follows: "The present price of pepper at the Company's sales, together with the large stock on hand, renders it expedient for them to reduce their importations. The Court would therefore be well pleased if their whole annual investment of pepper to be provided on the west coast could during the ensuring two or three seasons be disposed of at Canton."23 There, the pepper could be sold or bartered for tea, that maintained a steady demand and could later be sold for needed goods or hard money. The decline in demand continued and, by 1824, Sir Thomas Raffles had transformed the Benkulen district into a coffee growing area. More than a half million trees had been planted and were producing beans for the world's roasting markets. Pepper had thus passed its prime at Benkulen, affecting Salem's shipping activity. While many ethnic and racial groups came to Sumatra over the centuries, nothing could compare with the "melting pot" at Benkulen. Benjamin Heyne, surgeon and naturalist of the Company's Madras establishment visited West Sumatra in 1812. His "Tracts Historical And Stat-istical, On India" and "An Account of Sumatra, In A Series of Letters," tell much about the varied population of Benkulen. He described Europeans of differing origins, "gentlemen of color, from yellow to jet black -the descendents of Jews and Christians of all nations, by Malay or Bengal women, Chinese who live separated from the rest of the inhabitants, in an area called "China Bazar [sic] Bengalese tailors and washermen, and African slaves who live dispersed amongst the settlers."24 This polyglot British stronghold, ultimately to be given back to the Dutch after European post-Napoleonic Peace Treaty arrangements, re-

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22 fleeted an inefficient if not corrupt attempt to market pepper in a changing competitive world. Raffles, in an opening attempt to explain to the company's directors why their Sumatran pepper venture was so expensive and unproductive, argued that .the company's administrators were not to blame. "The evil seems to be of a deeper root than generally imagined. It is not a simple question of finance -whether the company will consent to lose ,000 or ,000 a year, and regulate their establishment ac-cordingly -but it is in the principles of government, and in the management of the country that the evil lie. n25 By 1820, Sumatra's annual production had reached a peak of 150,000 Peculs (about 200,000 lbs.), one-half of the world's output, the bulk of this not from the East India Company but handled 26 by Salem and Boston merchants. As with views of other peoples, varying impressions of Sumatran natives have existed. Marsden felt that, in general, mankind was by nature prone to imitation, but not so amongst the islanders. He stated they are strongly attached to their own habits, but sensible of their inferiority to European manners and arts. He contrasted Malays with other Sumatrans, finding significant differences. To the former he ascribed low cunning, plausible duplicity with lack of veracity, gratitude and integrity. In the others he found patience, modesty, courtesy in company with indolence, carelessness, servility and dishonesty when dealing with strangers.27 All native groups grew Indian hemp or Cannabis (known to us as marijuana), 28 which they called "bang." Other British views of the natives cited indolence in planting pepper as an excuse for local authorities to blame them for failures to increase production.29 The importance of proper motivation was neither discussed nor considered.

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23 On the other hand, Captain John Crowninshield of the Salem ship America in his journal entry of July 18, 1801, noted that West Sumatrans' hospitality and kindnesses to mariners exceeded that of European and American Christian ports. 30 He wrote very positively of their blunt simplicity that surmounted any language barriers. The contacts and relationships with Europeans and Americans were exposing Sumatra to a changing outside world. One such effect, involving the value of specie, will be mentioned in the next chapter.

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CHAPTER IV THE ECONOMIC AND COMMERCIAL ASPECTS OF SALEM AND THE PEPPER TRADE As has been mentioned earlier, the Peele family was typical of Salem's activity in the pepper trade. Not only were they credited with exploring and finding its Sumatran location, but its development can be laid on their ships decks and holds. Before dealing with .the details of the voyages, let us consider the family's significance to Salem's story. The Peele family papers, comprising thousands of pages in manuscript form, covering more than a century in time (1753-1871) have not, as yet, been opened, touched, or published in any historical form. They contain sources of value in assessing new views and insights in American history. A typical example is found in the papers of Rajah's first voyage to Sumatra which show that in preparation for the voyage, Jonathan Peele Jr. engaged Daniel Webster's father for fabrication of the ship's iron work. Several receipts show young Daniel's signature (at age 13) acknowledging Peele's payments "for my father."31 It is not surprising, therefore, to find amongst Willard Peele's private papers, an 1822 letter from Webster, urging Peele to run for Congress. Webster's close association with Salem shipowners opposing Jefferson's shipping embargo of 1807 and war with the British in 1812 too, is better understood in light of this evidence. The following table of genealogy shows the Peele family succession with short biographical activity sketches.32

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PEELE FAMILY GENEALOGICAL TABLE JONATHAN PEELE JR. (married Margaret Mason) (1731-1809) =son of Jonathan and Sarah (Willard) Peele Salem mariner and merchant. Engaged in West Indies trade before American Revolution. Owner of ship Hector, commanded by brother-in-law Jonathan Carnes. Father of Wi liard Peele. Initiated family pepper trade with Sumatra. WILLARD PEELE {married Margaret Appleton) ( 1773-1835) =son of Jonathan Jr. and Margaret {Mason) Peele Maintained a part interest in voyages to Sumatra. Assumed responsibility for family shipping interests about 1800. His ships traded throughout Asia, Europe and South America. Operated a store in Salem and served as trustee of several financial institutions. Helped form Ohio Company to manage real estate investments in Ohio. J. WILLARD PEELE {not known if married or had children) {1804-1871) =Son of Willard and Margaret (Appleton) Peele Engaged in maritime commerce. Established merchant house of Peele, Hubbell and Co., Manila. 25

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26 Linked by marriage and maritime activity was the Carnes family. Their genealogy is not as exact as the Peeles. However, the following table does list some of the important aspects of their contributions to Salem and its sailings. With this setting known, it is now appropriate to recount Salem's entry into the pepper trade. It was the autumn of 1795, to many, the most beautiful season of the year in New England. Crisp days, yellow and red foliage, a time for harvest of late crops with Thanksgiving soon to come. On November 3rd, 1795, leaving in time to be present for the March Sumatran pepper harvest, the schooner Rajah made ready to clear the harbor of Salem, Massachusetts with a load of lumber and iron to be sold at the Cape of Good Hope. In return, cape wines were to be purchased, then to be sold in Sumatra along with some gin and brandy loaded in Salem. Ship's owners Jonathan Jr. and Willard Peele owned and operated both a distillery36 and mercantile business in spirits. No doubt the latter two items had recently been removed from their inventory. Their plan was to purchase advantageously Sumatran pepper and any other spices with the sales proceeds of the spirits and then head directly for New York to unload the spice cargo. Should the purchase prices of pepper or other spices be too high, Captain Jonathan Carnes was to put the ship to the best possible use consistent with the interest of the owners. Having a one-eighth interest in ship, voyage and cargo, Carnes could be relied upon to use every effort to make this venture successful and profitable.37

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CARNES F AMJL Y GENEALOGICAL TABLE JOHN CARNES33 (Married Hannah Peele-sister of Jonathan Peele, Jr. -in 1753) Not born in Salem. Master Mariner. Captain of several privateers in American Revolution. I (married Rebecca Vans John Carnes, Jr. (married Lydia Derby in 1782)35 in 1784) ( 1777(?) 1827) ( 17 55-1796) Master Mariner. Captain of brig Cadet and schooner Rajah -partly owned by Peele family with tradition holding beginning of Sumatra pepper trade for Salem. Privateersman in American Revolution maritime career as captain of several vessels. Died at Cape of Good Hope on voyage to Indies. N -....J

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28 This I st Rajah voyage was preceded by an uncertain background; previously there had been but one proven American contact with Sumatra. The brig Cadet in 1790, also captained by Jonathan Carnes of Rajah, brought back a varied cargo that may have included pepper. However, so much of this event is cloaked in myth and tradition, that few hard facts are known. Some historians have felt that the voyage was merely exploratory, providing evidence to Carnes that pepper was the key to significant potential profit. 38 However, speculation exists as to when and where pepper came to Carnes' attention. In 1788, the 30-year old master sailed the brig Cadet from Salem for "India and the China Seas."39 The I 00-ton vessel is believed to have returned to Boston after visiting Benkulen, other Sumatran ports, and Cape of Good Hope in 1790. 40 But no log of her voyage is known to exist and the books which should have recorded her entry at the Boston Custom House have disappeared.41 No. further mention is made of Carnes and Cadet until June 1794 when he sailed it, as master, for Hamburg. Thus, it could not have been lost at sea nor met any other unkind fate on its I 788-90 voyage. When he visited the west Sumatran ports on Cadet's first voyage did Carnes learn of and purchase pepper? On May 3, 1791, Carnes sailed as master of the snow, Grand Sachem for lndia.42 Details of this long voyage are unknown but in January, 1794, the ship with all its cargo, was lost off However, Carnes was able to return home. Some believe he may have learned about the pepper crop and coast on this later voyage, rather than earlier on the Cadet. The question remains as to whether a man of Carnes' temperament would wait from 1790 to 1795 (the first Rajah voyage) to exploit his secret knowledge. Or did he first learn of the pepper coast potential in 1793, as suggested by one of Salem's early historians? 44

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29 At any rate, no known further activity by Americans along the coast of Sumatra appears to have occurred until Rajah's I st voyage. It is logical to assume that the commercial advantage of buying a valuable commodity, pepper, at a low, non-competitive price, remained locked in the minds and actions of Captain Carnes and his cousins, the Peele family. Popular knowledge to this day attributes the pepper trade discovery to Rajah's I st voyage. 45 Even our knowledge of Rajah's I st voyage lacks so many important details that the term "tradition" is used to for substantiated fact. What historians do know, however, suggest that it was a voyage unusual in several respects. First, it was shrouded in secrecy, with the crew, apart from Captain Carnes, being unaware of the ultimate destination and the origin of the inbound cargo. Upon completion of the voyage, many of the crew believed they had been to Ceylon or Burma.46 Moreover, the vessel's log book of the voyage has remained missing along with certain transaction papers that would furnish clues as to the location and timing of all pepper purchases. Although word eventually leaked out as to the true nature of the voyage and what has been believed to be resultant 700% profit, confusion still exists as to where the pepper was sold, at what price and when it all occurred. Adding still further to the uncertainty is the assertion by some that there actually were two Rajah vessels, and further that the first vessel was lost on a reef in the West Indies 47 or in a storm off Bermuda 48 with her return cargo of pepper. Moreover, the change of Rajah from schooner to brig account for some historians believing that two separate vessels were

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30 involved. All that appears to be constant is that Captain Jonathan Carnes was master of any or all of these ships during any of the voyages. Perhaps one reason for the inconsistent and sometimes conflicting stories was the cloud of secrecy desired by the owners. The desire for competitive advantage would have precluded a clear statement of actual events. However, the ship's papers for Rajah's first voyage do cover a complete timeframe from 1795 through 1797 though no stated record of how the pepper cargo was landed and sold appears to exist. Thus, the Peeles appear to have succeeded in keeping the missing cargo a mystery. Never-theless, general information about northwest Sumatra and its pepper source did become public knowledge and other Salem shipping interests soon appeared at all the ports of purchase as eager competitors of British and Dutch commercial pepper interests. The voyage of Rajah to Sumatra was interesting in yet another respect. Rajah's dimensions (while adequate for Salem Harbor's limitation of less than 20 feet draft) describe a vessel of less than 70 feet length, a 20-foot breadth, a depth of 12 feet and a burden weight of under 130 tons. 49 Its size limited the crew to a total of nine persons, a minimum number to sail. The cargo size, weight and number of crewmen on these first Salem ships were significantly smaller than those of later built vessels which ranged from 258 to 473 tons and were able to enter their home harbor. 50 Ships of Rajah's size was more suitable for and designed to engage in the West Indies trade, a far less lengthy and demanding voyage than the journey to Sumatra. Thus the early ships appear to be those planned to conform to Salem Harbor's available space and to embark on the much shorter voyage to the West Indies rather than to go 13,000 miles to Sumatra.

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31 The space restriction on ships of this size was such that each crew member would quickly learn the art of getting along with others under the most confining conditions. The tensions endured and mastered would prove invaluable in later life for those who would move up to the world of shorebound and complex inter-personal mercantile dealings. The trip was long -at an average speed of five knots, barely above the walking pace of humans, the voyage halfway around the world could take up to six months each way. The crew's makeup was typical for the vessel and the mission. Rarely were captain or crew over 30 years of age. The rigors of East India trade were for young men in their late teens or twenties. Of the crew of nine, three were Captain and mates. A sailmaker and carpenter were always necessary while the remaining four were able sailors and a cabinboy. Mates, while studying the Captain's abilities and actions, were always aware they might have to take command, should accident or illness claim the Captain. The nine crew members were probably necessary not only because of the distribution of skills but also because of the demands of the long sea voyage. Crewmen needed to remain alert and yet plan for needed rest and sleep. In any 24-hour day, it has been customary to "stand watch" and operate an ocean-going vessel for a four-hour period and then rest for an ensuing eight hours. Using this schedule, the following table is presented, allowing for an officer and two crewmen to handle the ship at all times. While officers and crew could rotate watch schedules, no provision is made for accident, illness, or absence, indicating a demanding routine. At times in the past, there have been three watches of eight hours each, while

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SYMBOLS X= On Watch 0 =Off Watch 2nd Mate 1st Mate Captain Team A 2 of crew Team B 2 of crew Team C 2 of crew Total Crew on Watch 1st Watch Midnight to 0400 Hrs. X 0 0 X 0 0 3 2nd Watch 0400 to 0800 Hrs. 0 X 0 0 X 0 3 WATCH BILL 3rd Watch 4th Watch 0800 1200 to 1200 Hrs. to 1600 Hrs. (Noon) 0 X 0 0 X 0 0 X 0 0 X 0 3 3 5th Watch 1600 to 2000 Hrs. 0 X 0 0 X 0 3 6th Watch 2000 to 2400 Hrs. (Midnight) 0 0 X 0 0 X 3 w N

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33 allowing three members per watch with one crew member in reserve. However, no relief was available for officers who had to be on duty for eight continuous hours per watch. An argument could be made that informality as to routines did exist in Rajah's time, but, nevertheless, government laws and regulations did then exist and violations could be reported by aggrieved crew members and their families. If nothing else, it can be shown that fewer crew members could not handle Rajah successfully on an extended sea voyage. While government interest in crews' welfare did not specifically involve regulation of hours of work, the care, treatment, rights, and responsibilities of crew members were covered on July 20, 1790 in one of the first laws enacted by the United States. The Act provided for shipping articles protecting every member of a merchant ship bound to and from an overseas destination. It applied to vessels of at least ISO tons and with a crew of I 0 or more. Wages had to conform with the highest levels for similar voyages to and from the port of origin. Timing and frequency of wage payments required no more than 90-day intervals and a final settling within I 0 days of conclusion of a voyage. Unfit ships had to be repaired with crew members being allowed to initiate legal proceedings to effect needed changes. Among other provisions required aboard at all times was an updated apothecary prepared medicine chest. Moreover, at least 50 gallons of potable water, I 00 pounds of salted fresh meat, and I 00 pounds of "wholesome ship bread" were to be furnished for each person aboard a vessel. Failure to conform with the law imposed significant penalties upon owners of ships. A copy of the Act is among the manuscript shipping papers of the 6th voyage of the ship Freedom.51

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34 Passing out of the harbor into the open seas, the four iron cannon, mounted on the ship, gave some sense of security to the Rajah'S crew. The seas were full of hostile navies, privateers, and pirates. Throughout the 1790's, Britain and F ranee and their allies experienced intermittent wars, blockades and embargoes involving all shipping, particularly for those of a young and weaker nation. In spite of the small crew, Rajah's armament was helpful off the coast of Sumatra. There, during the night of January 27, 1797, a French privateer attacked and boarded the Salem vessel. An American lost his hand and a French lieutenant was killed before the engagement ended with the enemy's withdrawat. 52 The uncertainty of being boarded by any hostile force -who might read the customary owners' orders to the ship's captain required a "sham." Peele's papers refer to a set of bills of exchange purportedly drawn on a Cape of Good Hope merchant to help finance the proposed pepper purchases. The fact that the bills were intended to be a sham is indicated by a confidential instruction, which advised Captain Carnes never to present the bills for acceptance. Instead, 8,000 silver Spanish dollars were aboard hidden in a barrel, under other supplies, to be used for the purchase of pepper. The exact wording is as follows, as prepared for Captain Carnes' signature. . I received a set of sham bills of exchange drawn by Jonathan Peele, Ebenezer Beckford and Willard Peele on John V. Runan, merchant of the Cape of Good Hope, which I promise never to present for acceptance and which I hereby declare were never intended to answer any other purpose than to cover the money on board from the depredations of persons who might board me 8000 dolls."53

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35 Needless to say, risks like these required extended safeguards. Protection against hazards of the voyage involved the use of marine insurance. Policies of protection against the perils of the sea had been in existence, beginning in Italy, since the 15th century and were used in Salem at this time. For ordinary voyages, insurance on ship, cargo and effects was underwritten on a subscription basis by individual merchants and captains of Salem. Often, a retired sea captain would set up shop in a business building, where lists of forthcoming voyages were compiled. The total amount of desired insurance for cargo and ship would be noted. Interested parties would sign up for a percent of or a flat amount of coverage for which they were to participate. At the end of the voyage, the premiums collected would be distributed pro rata amongst the insurers. If a ship and/or cargo was lost, the insurers would be liable for an assessment according to their involvement. The system was not unlike Lloyd's of London's maritime syndicates where individual investors jointly insured specific voyages with-. d t. t. 54 Th t. out any organ1ze msurance company par 1c1pa 10n. us compe 1tors cooperated with one another to the extent that the perils of the insured became the responsibilities of the community. All of this was voluntary and varied from voyage to voyage. Although marine insurance companies had come into existence, they were not active in Salem untill800. The insurance certificate customarily listed the voyage's des-tination in order that premium bases could be calculated and then deter-mined. Restrictions and limitations were to be clearly indicated, often with geographic bounds listed. However, the voyage of the Rajah was to be different. No certificate of insurance appears amongst the ship's papers. We can speculate that to conform to insurance requirements would have

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36 been to destroy the confidential nature of the trip. Not until July 16, 1798 did an insurance certificate appear amongst the papers for a 2nd voyage of Rajah specifying that insurance would be provided for a voyage "from Salem to one or two ports on the west coast of Sumatra and from thence to her point of discharge in the United States of America."55 At least seventeen separate subscribing merchants signatures provided coverage totaling $18,000. Thus, we can be sure that Sumatra and pepper were common knowledge .in the Salem merchant community by 1798. Because of dependence upon favorable winds and calm seas, voyages '!'ere long and uncertain. Arriving at Capetown on March 18, 1796, Rajah had been at sea for 134 days. Speed on the Rajah under good conditions, as mentioned above, could average 5 knots. British shipping sources at this time felt American vessels, although sturdily built, were not fast competitors in long sea voyages. 56 However, many Salem vessels, though not swift, were ably enough maneuvered to avoid capture when pur;_ sued by His Majesty's ships as potential prizes. Avoidance of other shipping wascertainly the safest course when at sea in perilous times. Monthly pay and privilege for captain and crew were important aspects of the voyage. To ask mariners to risk their Jives in unknown danger for a protracted period required a reward greater than wages alone. The pay scale on this first voyage varied from $10 to $23 per month, comparable to highly skilled land-based vocations in New England. 57 In addjtion, an individual or private trade custom, known as privilege, was allowed. From the Captain's eight hogsheads (usually a volume of 63 gallons per hogshead) to a crew member's usual one hogshead and one barrel (usually a half hogshead), each mariner could bring inbound any allowed commodity to be

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37 sold along with the ship's cargo by the owners. The proceeds after clearing U.S. Customs were then to be individually remitted to the crew members involved, permitting an interest in the success of voyage above and beyond regular wages. It was, in effect, a limited partnership for all involved crew members. The exact arrangement for wages and privilege on this voyage, found in Rajah's I st voyage papers, is shown on the following table. 5 8 Capt. Jon Carnes was a 2/16th owner in the cargo and proceeds of the voyage. Moreover, he was to receive a customary commission for sales of the cargo (usually calculated at 5%). These two factors account for his monthly wage being lower than either the I st or 2nd Mates, as noted above. Progress to wealth is seldom instantaneous. Rather, it is a steady and planned sequence of events leading to a desired conclusion. Salem's path for mariners followed such a pattern allowing for the accumulation of capital with each forward step. The 12 members of the Rajah's 4th voyage, from 1799 to 1802, received monthly wages varying from $10 to $18 per month. In addition, they again received privilege to buy, freight, and sell a portion of the inbound cargo under controlled circumstances. The crew was limited by the requirement that "No man must exceed his privilege,"59 which varied from one Tierce (42 gallons) of unspecified liquid spirits to I Tierce plus I hogshead of 63 gallons. In the next step upward, I st and 2nd Mates drew wages of $44 and $40 per month respectively. Their privilege amounted to 3,000 pounds of pepper for the I st Mate with the 2nd Mate receiving 2 hogsheads plus I Tierce of the same unspecified liquid spirits. Captain Jon Carnes received $36 monthly plus "5%." It is unclear again, from the manuscript pay roster whether the "5%" relates to the net profit (also known as a share of the voyage) or to a commission on the sales price of the cargo.

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1795 TABLE OF CREW'S ROSTER I ST VOYAGE OF RAJAH Time of Men's Name Quality Monthly Entry_ __ _Wages-Dollars October 29th Jon Carnes Master 18 October 29th Samuel Carnes 1st Mate 23 October 29th Benj. Neal 2nd Mate 20 November 3 Si IIi am Story Sailor 18 Nov.3 Sig. George Sailor 10 Nov.3 John Dutch Jr. Sailor 10 Nov. 3 Joshua Buffum Sailor 10 Nov.3 Wi IIi am Marston Sailor 10 Nov. 3 Edward Stand ley Boy 10 Privilege 8 Hogsheads 3 Hogsheads 2 Hogsheads I Hogshead & I Barrel I Hogshead & I Barrel I Hogshead & I Barrel I Hogshead & I Barrel I Hogshead & I Barrel None w CD

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39 All of the foregoing, while not identical to compensation of other voyages and ships, nevertheless was not atypical. The capital accumulation process did reflect significant additional compensation for added responsi bility. Captain and I st Mate were not only responsible for a ship's operation but were active merchant agents who could insure the ultimate economic success or failure of any voyage. With the capital accumulated from one or more voyages, captains and mates could purchase shares in future ventures, ultimately owning their own vessels and then becoming established Salem merchants. This wealth was not acquired quickly but was available to the thrifty and able by the third decade of their lives. Communication was at the heart of 18th century commerce, particularly when the venture was a lengthy one and when the vessel was headed for unknown territory. The only practical method of communication between owner and captain, in the last decade of the 18th and the first decade of the 19th century, was the letter. Captain's orders often stated that owners were to receive frequent letters from masters advising of completed transactions and of the general progress and/or problems of the voyage. Upon reaching Capetown from Salem, Captain Carnes wrote to Messrs. Peele and Beckford, expecting to have his sealed letter forwarded by a westbound vessel to America directly or by way of Europe. At this time, as discussed below, no organized intercontinental postal system existed. Rather, a code of honor, simi Jar to the nautical "rules of the road" applied, requiring captains to carry letters or parcels to various destinations in the general direction of their respective voyages. Letters reaching the North American continent were placed into "inland mail" and could reach

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40 Salem on a somewhat regular basis. However, it was not until 1847 that the I st International Postal Agreement was arranged between the United States and the Republic of Bremen. Finally, a universal postal union formed in 1874 to help in the exchange of mail between countries. The full use of postage stamps generally coincided with these latter two events. In the interim, letters traveled with the best intentions and abilities of carrying captains and their vessels. The subject of prompt and confidential communication between owners and captain placed much dependence upon a postal system. The informal mail system of ships carrying letters of competitors, friends or strangers was done in a prompt and efficient manner. Trust played an important role in the conduct of business. A letter sent on December4, 1807 from Gibralter by Captain Edward Ford to the Peeles in Salem arrived there on February 13, The time span is not necessarily typical of other letters in the Peabody Museum manuscript holdings and is made all the more remarkable when the average speed of vessels was, as noted earlier, about 5 knots. Owners or superior authority's written orders to captains, at inception of voyages, have always been the basic maritime document of communication. From the contents of the orders, the captain would know what was expected of him and his crew, where, when and how they were to proceed, the nature of the commercial enterprise in which they were engaged, and how often to communicate. Further, the orders spelled out the limits of a ship's commander's discretion, usually noting that he was the owner's agent and that as such he was to act on their behalf and for their best interests. Finally, some orders contained the line of succession, should

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41 illness or accident afflict the captain during the voyage. The Peele family's captain's orders typified the standard formats and contents of the times. There were four additional reasons for having the orders in specific written form, signed and dated by both owners and captains. Insurance contracts would not be valid if the understanding and/or wording of the orders (and the contract itself) had been violated at time of loss. Rates of premiums were based upon ports and countries to be visited, types of cargoes involved, length of time at sea anticipated, and proposed conformance with decreed blockades, embargoes and conditions of established belligerents. Cargo and ship protection from privateers, cruisers and belligerent powers was important. The ability to prove the origins and destinations of ship and cargo often could allow a captain to escape condemnation and sale by a captor, thus avoiding substantial loss for the owners. Moreover, crews faced the hazard of capture and impressment if their American birth or nationality were in doubt. A number of Peele's ships crew rosters, attached to captajn's orders, stated the nationality of each crew member, and were attested to, either by the individual concerned or by a 61 notary. The specification of a Chain of Command established the valid authority of the succeeding officer when dealing with third parties during the remainder of the voyage. It allowed contracts to be made and enforced to insure the continued operation of the ship unti I amended or updated orders could be sent by the owners to the vessel. Finally, certain orders were deliberately misstated so that the voyage would be protected through a necessary subterfuge. The sham orders

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42 issued to Captain Carnes on Rajah's 1st voyage, mentioned above, would be a typical example. Underlying all communication at sea was an agreed upon code of conduct. Owners and captains needed to understand and accept certain ethical standards. The principles of behavior required to carry on commerce in an environment of common danger have particular application to the pepper trade. From situations and hazards such as these come the words found in the American seafarer's hymn, "For those in peri I on the seas." They reflect the unending concern over the hazards of voyages. This concern, in turn, created a tradition of common help amongst maritime vessels. Combined with New England principles of fairness and conscientiousness, it led to a code of ethics that transcended strong competition. When Captain John Crowninshield's ship America on an 1801 voyage, was fully loaded with pepper off the Town of Maca, Sumatra, he found that $6,500 in silver dollars remained uncommitted. So confident was he of the honesty of captains and crews of other pepper ships located there that he resolved to send one of his officers with the specie aboard a vessel bound north to India. There, he felt, a suitable cargo could be purchased and brought to Salem for additional profit. Confidence in the honor of fellow captains outweighed risk in dealing with possibly unknown persons. 62 While perhaps at first the pepper coast was a Peele family secret, when the information became general knowledge, both the Salem Marine Society and the Salem East India Marine Society collected ship's logs and marine journals from the Sumatra voyages. The preparation of the data was suggested and then carefully supervised by Nathaniel Bowditch. The

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43 information compiled contributed greatly to American knowledge and understanding of both navigation and trade practices in the Far East. The uniform log books supplied by East India Marine permitted clear entries by captains for later use by other vessels. The latitude notations, depth soundings, and comments regarding wind changes and rough surfs are found in detail in Captain Crowinshield's log book and journal in America's 180 I voyage to Sumatra. In this way, Salem captains added to each other's knowledge and maintained a high level of trust. However, trust did not go beyond the bounds of realism or beyond national boundaries. The British East India Company station at Benkulen disliked and feared the American pepper traders for what their competition was doing to the Company's supposed monopoly. Captain Crowninshield related how he spoke with Captain Skerry of the Salem ship Belisarius about the station "where pepper is collected for the English company and they never are allowed to sell it to strangers."63 Here, Salem captains did openly inform and explain to one another inconsistent behavior of growers and sellers. The rules at one time might be contradicted when self interest (desire for the American's Spanish silver dollars) prevailed over the ban of "never are a II owed." Thus, Salem captains observed and maintained amongst themselves and peers a complex relationship of both competition and cooperation. The conditions of the Sumatra market described by Captain Nathaniel Bowditch in a paper prepared for Salem's seafarers in 1803, provided a clear background study of pepper voyage operation so that colleagues and competitors would not run the risk of being played off against one another by the Sumatrans. Nathaniel Bowditch, contemporary and colleague of the

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44 Peele's Salem group, is still considered one of America's great navigators and oceanographic mathematicians. His account of a pepper trade voyage in 1803 to Sumatra is unusually concise and accurate. Prepared for Salem's East India Marine Society, 64 the paper is titled "Remarks on the North West Coast of Because of the depth of knowledge it displays, the manuscript is quoted, in part, below: . On arrival at any of these ports you contract with the Datoo for the pepper and fix the price. If more than one vessel is at the port, the pepper which comes daily to the scales is shared between them, as they agree, else they take it day and day alternately. Sometimes the Datoo con -tracts to load one vessel before any other is allowed to take any, and he holds to this agreement as long as he finds it for his interest to do so and no longer, for a handsome present or an increase of rice will prevent the pepper from 6eing brought in for several days, and the person who made the agreement must either quit the port or else add an additional price. The price in 1808 was from ten to eleven dollars per picul; in former years it had been as low as eight, but the demand for it had risen the price considerably, there being near thirty sail of American vessels on the coast. The pepper season commences in January, when they begin to gather the small pepper at the bottom of the vines; in March, April and May is the height of the crop. The best pepper grows at the top of the. vines, and is gathered the last; it is larger and more solid than that gathered at an earlier period. Some suppose it is all gathered in May, but I was in some of the gardens in July and found at the top of the vines large quantities which would be ripe in a few days, and the young crop was in considerable forwardness at the bottom of the vine. Some calculate on two crops, but from the best information I could obtain there is only one. The pepper is generally weighed by American scales and weights. It is sold by the picul of one hundred cattres, equal to 133 I -3 lbs. American weight. What is weighed in the day is paid for in the evening, they being unwilling to trust their property in the hands of those they deal with, and they ought to be dealt with in the same manner, it not being prudent to pay in advance to the Datoo, as it would often be difficult to get either pepper or money of

PAGE 50

him again. Dollars are the current coin, but they do not take halves or quarters. They. have a copper coin which I believe is brought from Bengal, or else from Prince of Wales Island (Penang). It is called pang or pice, about equal in weight to half a cent. We could not obtain more than eighty of these for a dollar at Tally-Pow, though at Muckie they gave one hundred and twenty, and at other places one hun dred. They are fond of gold dust and wi II give you dollars for it, the rate being about thirteen and one-half to one. It may be observed that several of the natives speak English pretty well, so that there is no difficulty in making your contracts with them 45 While Bowditch's paper did provide valuable information for captains undertaking pepper voyages, yet individual circumstances were unique and many questions could arise that his investigation could not cover. For example, should a young ship's master tell competing colleagues that he was allowed to buy pepper below the prevailing price along with an assurance of no short weighing of any pepper bags? This was in response to a legitimate favor or service p erformed for an influential headman. For the men of Salem, supply and demand considerations had to be weighed against immediate profit and disregard of longer term, ongoing trading relationships. This posed difficult choices for ,the youthful captains. In addition, sellers would, at times, steal not only already weighed, delivered, and paid-for pepper but any other available property of the buyer. Often, stones or other foreign substances were found in the purchased pepper bags. The question of what type of countermeasures to take was ever present. Should the weighing scales be suitably "adjusted" to compen-sate for the degree of loss? Should the rajah, headman or native weigh-master be advised so that the responsible sellers take corrective action themselves? Should other and competing vessels be warned of "sharp

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46 practices" at certain ports? In Willard Peele's orders to Captain James Silver for the 3rd voyage of the ship Perseverance, he advised that "You will be careful that the pepper is perfectly dry when you purchase and take it on board. The Port of SooSoo is to be avoided if possible, as the pepper is always wet at that place and liable to fall very short in weight."65 Apparently, the poor reputation of the port was known to Salem merchants and it would later suffer in sales. The technique of not drying pepper for sale was comparable to American livestock dealers permitting cattle to drink large amounts of water just before weighing and sales, giving rise to the term of "watering the stock." The process of soaking pepper in sacking for several days to remove the husks, and thus creating white pepper, is not to be confused with the above deception. There, the white pepper is dried and cleaned before entering the selling phase and not subject to any subsequent shrinkage. Merchants and captains of competing firms met at Salem and ports throughout the world to share news and intelligence regarding current commodity and cargo pricing, the ease or difficulty of entering or clearing major ports, the presence or relative absence of other trading vessels, and the prevalence of man-made and natural hazards. In a world of blockades, privateers, condemnation of vessels as prizes, embargoes, wars and piracy, plagues, and quarantines, much more was to be gained by exchanging rather than withholding information. While individualism was stressed, yet sharing and working with others was important. One Salem merchant, William Gray, did not participate wth other traders. His operational philosophy and political views showed him to be a "loner," although commercially successful. Gray's strong feeling for individualism,

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47 contrary to Salem's prevailing family partnership mode, extended to relationships with his children. "As his sons came of age, he gave each ample means, that they might start and work for themselves."66 His private and successful efforts resulted in his owning I /3 of the registered 67 tonnage of Salem. Perhaps his commercial attainments aroused the resentment of the other Salem merchants. So outside the norm were his methods that he and his family were eventually ostracized and he was forced to move to Boston where his achievements were reported to be d t 68 recogmze m a more pos1 1ve manner. Salem's ethics did not allow much latitude for those who would not or could not conform. As illustrated above, the ethics of a business venture, to some degree, are shaped by the nature and demands of the product. Further, the culture and geographic location of the source are also involved. The efforts of Salem's merchant and shipping community were intensively directed towards the trade of pepper. Investment of the resources of capital, manpower, and ships obviously required a knowledge of the changes con-cerning the product, its origins, history, geographic locations, char-acteristics, and value. Sumatra and its peoples were not alone in experiencing times of change. The years of Salem's involvement in the pepper trade spanned significant political and economic evolution. The generation of merchants who embarked on voyages to Sumatra in the mid-1790's acquired knowledge and sophistication as they traded. They needed to learn the most efficient and profitable ways to procure, transport and sell pepper. In order to do this, they had to take their understanding of mercantile competitive advantage and adapt it to the new conditions confronting them. Against the

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48 backdrop of America's emergence into modern economic life, the merchants assessed their needs and employed the most suitable methods. The success of their efforts can be measured by the family fortunes built in the period from 1795 to 1815 and the resulting capability to move on into other economic activities such as land development and manufacturing both in the northeastern and mid-western United States. Since the principles of finance and profit remained relatively unchanged, the lessons of the pepper trade would be applied to the later activities. The actual hazards of the voyages were less difficult than the complexities of obtaining adequate capitalization. Financing voyages could spell the difference between profit and loss. Usually three options were available to the merchant. The first was hard money, or specie, which had worldwide acceptance and potentially could be used to purchase cargoes at unit costs. Whether the specie was accumulated through borrowing, using accumulated capital or invited outside equity investment, merchants found coinage scarce, making it both difficuit and time consuming to amass an adequate amount of specie. Moreover, it was expensive to accumulate capital through borrowing in the 1790's as interest rates of 2% to 3% per month were commonly paid for hard money. This obviously added to the cost of the voyage, and the result was a competitive disadvantage. A second method, which some. astute merchants attempted to avoid, was to finance voyages by using the proceeds from the sale of outbound cargoes to pay the expenses of the voyage and purchase goods for the return. This method had its drawbacks. Selling at uncertain future levels or bartering for other cargoes too often added unwanted complications and unwanted goods to an otherwise profitable voyage. The Brown brothers of Providence,

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49 for example, made it a rule never to use their outbound cargoes to finance foreign purchases. Rather, like most merchants, they utilized the third available option, reliance on credit in different forms. 69 Here, the cost factor was known at the inception of the venture and usually could be paid off with bills of exchange or other credit instruments received through transactions consummated in the course of the voyage. In addition, the use of credit eliminated the risk of carrying hard money aboard the ship. Only when cargoes were bought at remote or unsophisticated locations were hard money transactions imperative. Money in any form had its costs, so that if generous long-term credit could be arranged, the merchant had obtained the best of the alternatives. The choices that traders encountered when arranging to finance their voyages illustrate some of the hazards of improper or under capitali-zation. Difficulties such as extended voyages, sometimes measured in years rather than months and slow turnover of merchandise investment required high profit margins which, in turn, caused higher selling prices. This placed financial strains on merchants' ability to survive during externally-caused depressed times, such as from oversupply or excessive competition. Along with adequate capitalization, traders needed the "know how" to survive if not succeed in a complex set of operations. Salem's pepper trade was indeed a worldwide enterprise. International transactions required international representation. Agents and correspondents, particularly during the hostilities between Britain and France at the beginning of the 19th century, were vital for merchants' survival, if not success. Because London and Amsterdam were centers of international commerce, it was logical to have strong, stable and honest

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50 representation there. Typically the agents acting on behalf of American merchants had a long and diverse list of duties. Some of the more common assignments are listed below. The 6th voyage of the ship Freedom, at sea for a number of years, is used as an example for some of the tasks involved. All examples are from correspondence taken from the Peele papers. First, agents gave advice on the market situations throughout America and Europe, which included directing the ships' captains and supercargoes to advantageous ports in Europe. This was the ongoing provision of commercial intelligence. On November 22, 1796 and September 21, 1797, Edward Gould & Son of New York, during the 1st voyage of Rajah advised that the prices of pepper and fish in their local markets were too low to sell at advantage. Instead, they counseled temporary storage to await an expected rise in pricing for both com-d"t" 70 mo 1 tes. Second, they obtained appropriate insurance for cargoes and ships as destinations, cargoes and length ,of voyages changed. Samuel Williams, London merchant, involved in the 6th voyage of the Freedom, advised Captain Edward Ford on March 24, 1808 not to take insurance for a trip from London to Spanish ports as the premiums were too high for the values I d 71 tnvo ve Third, they saw to ongoing maintenance and repairs of vessels. Agents could make arrangements for such major items as the coppering of ships' bottoms. Nathaniel Lucas, merchant of Rio de Janeiro, on the 6th voyage of the Freedom, offered advice to Captain Ford for sheathing of the vessel while in that port. 72

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51 Fourth, they made themselves available to ships' captains for aid and advice when their vessels were in distress, whether due to natural hazards or because of capture by a belligerent. Captain Ford's Jetter to Samuel Williams, written at Gibraltar on June 7, 1808, advised o f his distress concerning actions of Algerian pirates and asked for aid to meet possible costs for a journey there during the voyageJ3 Fifth, they provided financial assistance, acting in a quasi -banking capacity. They received remittances from the merchants' debtors or their employees throughout the world. In addition, the agents could honor or create bills of exchange for the merchants' account, and they might disburse funds to settle debts accrued by the merchant. Peele's orders to Captain Ford for the Freedom's 6th voyage directed him to remit funds to or seek financial aid when needed from Samuel Wi Jliams of London, or Daniel Crommelin & Sons of Amsterdam, or Abraham Gibbs of Palermo, or Phi lip & Anthony Felische of LeghornJ4 Sixth, for transactions requiring hard money, the agent could often assist in the amassing of specie, for example, by the acquisition of Spanish silver dollars in Lisbon to finance a voyage from Salem via Portugal to Sumatra for pepper purchases. On December 4, 1807, Captain Ford advised the Peeles that their agent in Gibraltar, Mr. Greevano, would take at least 40 days to amass Spanish silver dollars, for use on the Freedom's voyage. Seventh, one agent would form alliances with other agents, worldwide, to create a network of aid and direction for client merchants, no matter where transactions took their vessels. The network of agents mentioned above under the fifth duty would apply here, too. In addition, Nathaniel Lucas of Rio de Janeiro on April 8, 1809, advised Captain Ford of his wish to become a more active agent of the Peeles. 75

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52 Eighth, agents arranged permission to enter cargoes into harbors of belligerents, to avoid other areas of danger to Salem ships, and to effect sales transactions on favorable terms for the merchant. Further, they arranged for safe departures of such vessels with or without sales proceeds. At times, the sales proceeds could be sent separately via credit instruments to the agent who would promptly deposit them to the merchants' account. Samuel Williams, on March 26, 1808, advised Captain Ford to keep the Freedom away from American ports during the Jefferson Embargo. Moreover, he again cautioned Ford of the danger of Algerian ports and waters . 76 and stay clear of that area. Ninth, the chartering of ships for special voyages and handling of cargoes in the "carrying trade," was an important duty of ship owners agents. They provided revenue when goods could not be purchased at advantageous prices. On September 22, 1808, Captain Ford's letter to the Peeles tells of a charter that Samuel Williams had obtained for the Freedom.77 Finally, they would purchase goods, worldwide, desired by the principal, at timing and pricing to allow for maximum profit or least ultimate cost if the merchandise was to remain unsold for an extended period of time. On the 2nd voyage of the Freedom, Captain John Reith proceeded from Salem to Alexandria, Virginia where merchants Benjamin Shreve & Son and John & Richard Gardner participated in a transaction in which where flour was purchased by the Peeles for resale at a European port for Spanish silver dollars. 78 Thus, the agents acted both as branch offices and merchant bankers for a Salem firm located thousands of miles, and weeks if not

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53 months away. Through the work of the agents, the obstacles of poor communication and the financial complications of international voyages were overcome to the greatest degree possible. Needless to say, the acquisition of suitable, honest and reliable agents was not a simple task. Years of observation and experience could be required to establish the right business relationships. Salem firms considered other partial solutions such as the creation of family partnerships. Merchants placed much importance on family solidarity, mutual trust and political loyalty in the maintenance of these partnerships. The proportion of shipping interests involving partnerships between relatives increased markedly in the period from 1800 to 1810. The following table illustrates this point by tracing ownership registries of deep sea vessels at Salem. These relationships permitted, among other advantages, the broadening of the family financial base. With time it also permitted a widening circle of kin who became partners. The associations seemed to work well when also based on a common political philosophy, making for agreement as to goals and the methods for attaining them. For the most part, these family networks favored the Federalist party. However, some family arrangements upheld the Republican position. Brothers comprised the largest category of related partners but after 1800 partnerships began to include sons and nephews within the family firms. Unfortunately, negative relationships and conflicts within some of these families soon emerged. The most common causes for the ultimate breakups of these partnerships were lack of dedication to the enterprise, distrust of others by one or more of the partners, business dealings of questionable ethics, and overwhelmingly strong patriarchs who inhibited next generation kin from carrying forward

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54 OWNERSHIP OF DEEP-SEA VESSELS IN SALEM REGISTER, 1800 and 1810 79 1800 1810 Ownership Number % Number % Total Vessels 138 100.0 221 100.0 Individual Ownership 62 1 44.9 110 49.8 Partnerships 76 Ill a. Unre Ia ted Persons 46 33.3 51 23.1 b. Involve known or presumed close relatives 30 21.8 60 37.1 1ot the 62 ships owned by individuals, 16 were the property of William Gray, later shunned by the community (See on Page 4:7)

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55 entrepreneurial It appears that only the most unusual families, in which members submerged extreme views and personality traits, have endured and succeeded. The Quaker merchant families of Colonial America and the original Rothchild generations are notable examples. Even in the best of circumstances, including the most complete and competent network of agents, merchants had to be prepared to change plans and goals as events dictated. The 6th voyage of Freedom lasted from 1805 to 1810 as the Jefferson Embargo caught the ship in mid-voyage. The Peeles, not wishing to have the vessel laid up in Salem and unable to produce revenue, put her into the carrying trade. In other situations, as in the 2nd voyage of Freedom, if no buyer could be found at a suitable price for a shipment of goods, the Captain became, in effect a carrier, moving the 81 merchant's owned cargo from one port to another. At times, an expatriate American merchant house, located in a particular foreign port, would act as an intermediary purchaser or seller of merchandise. In addition, some of these representatives became U.S. State Department officials, acting as American consuls. Such an instance occurred during the 2nd voyage of Peele's ship Freedom. Captain John Reith's orders of July 25, 1803 directed him to Alexandria, Virginia for a cargo of flour, then to Lisbon and Gibralter where he faced the dual problem of selling and obtaining Spanish silver dollars, and then proceeding to Sumatra to buy pepper. At Lisbon, he attempted to sell flour at an acceptable price. 82 Failing this, he proceeded to Gibralter where the cargo was sold. However, the Vice Consul in Lisbon, Daniel Readie, presented a bill on NovemberS, 1803 for various services in port which Reith paid in full. 83 We may assume that the sales proceeds, Spanish silver dollars, were required

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56 as Sumatrans felt the need for currency of a known and self -evident value. Further, the Sumatrans not only understood the relative valuelessness of paper currency but also knew which kinds of hard money were more 84 costly. The specie or milled Spanish silver dollars, barreled as "supplies" on Rajah's I st voyage but intended to be used for purchases of spices as related earlier, reflect a thought provoking story. In those uncertain times, governments had difficulty maintaining general confidence in the ongoing value of issued paper currency. Money had to be readily redeemable into bullion in order for value to be retained. For the most part, each of the European trading nations had different problems or restrictions that pre-vented worldwide acceptance and use of their monies. One exception existed. Spain, with its access to and large inventory of New World gold and silver, was able to have its silver dollars become a medium of exchange. The fact that these dollars were not always Immediately available to merchants and others in quantities desired did put a premium on the value of Spain's specie, often leading to profit and advantage for the possessor. Rajah's I st voyage illustrates this point. As it took time and resources for the owners and their correspondent agents to accumulate their dollars, it is not surprising that seagoing marauders and others attacked trading vessels suspected of carrying such a cargo while the possessors used every available ploy or "sham" to hide their valued specie. The pressure to accumulate specie indicates that Sumatrans under-stood currency values at least as well as the so-called developed European and American trading nations. The choice of the British merchants to use credit instruments and paper currency apparently masked other intentions.

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57 European nations, at the zenith of economic power and wealth wished not to offer either gold or silver, and suffered therefore to some degree in participation in the active pepper market. They were still influenced by the old practice of preserving hard currency. Further, the British East India Company wanted to keep their specie for payment of other obligations such as dividends so they shipped very little bullion or coin out of London. Americans, from a lesser economically developed society at this time, and eager for profitable trade, did not hesitate to offer the required specie. During the course of Sumatra's pepper trade, millions of pounds of the spice left the island. In turn, hundreds of thousands of silver dollars were paid to rajahs, headmen, and growers. The ultimate destination of the coins has been an ongoing question amongst students of Sumatra's inter-national trade. Did they find their way back into other nations as Sumatrans purchased opium, textiles and other goods? Was any portion of the specie buried as treasure yet to be discovered? Was the silver melted into bullion and used as jewelry or an art form? Did any portion of the specie find its way to China to be turned into investment capital? The belief that much of the money disappeared from circulation persists to the present time.85 United States currency was still in its early years. The dollar became the basic unit of money through the Coinage Act of 1792, with the first silver dollars coined in 1794. Peele's and Rajah's records indicate some transactions in British pounds, shillings, and pence with others in American dollars. However, the largest transactions, as shown above, on an inter-national basis, were in Spanish silver dollars, which had gained international use and acceptance. Although subject to some fluctuation in the 18th century, Spanish silver dollars afterwards retained their reference value for

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58 a considerable period of time. On Rajah's voyage, a Spanish silver dollar could be purchased for s silver British shillings. The American dollar, patterned on its Spanish predecessor, in 1943 could still buy 5 silver British shi I lings. Rajah, on its voyage to West Sumatra, offered more than the buying pricing levels of the British East India Company trading factory, Fort Marlborough, at Benkulen. There, the Company attempted to pay native pepper growers with promissory notes, which were lower than the hard money price levels at which pepper was being bought on the free market with Spanish silver dollars. This failed attempt helped to bring on a Malay revolt as well as dampened levels of production. It is interesting to note that accounts of the Company at Benkulen were not kept in British funds, but rather in Spanish dollars, the universal currency.86 When native pepper planters sold pepper for specie, British authorities prohibited them from exporting their dollars. However, corrupt British authorities moved large sums of specie to China in their own names, collecting fees from the planters for use of the official's "services."87 As we have seen in Rajah's second voyage, the owner's trading plans could be extremely complicated. One could never simply use specie for outright purchase of the ultimate inbound cargo. Rather, the original outbound cargo would be taken to an intermediate port, sold or exchanged for other commodities, which, in turn, might later be sold or exchanged for the desired cargo of pepper. At times, pepper would be taken back, not to Salem but to Manila or Marseilles where, it was believed, a better price could be obtained, or even exchanged for a yet more desirable cargo to return to America. Thus, trade became increasingly complex, depending not

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59 only upon the captain's merchandising abilities, but also upon the timing of supply and demand in different ports. Different levels of pricing existed for silver versus barter for desired items. In some cases, specie could buy less than a purchaser's shipboard commodity. Because of the element of barter a merchant might doubt whether a voyage was as successful as it should have been. As a result, only the final sale of cargo at journey's end could permit the calculation (limited as it might be), of the spread between the cost of the original cargo and specie furnished and final selling price of the inbound cargo. Such a profit usually did not take into account either changing foreign exchange rates of money (which tended to fluctuate slowly), or lack of established currency exchanges. The final calculation of profit was given in specie, the universal measure. Specie and paper money are a measure of value, but the ultimate measure of business is profit. How this factor is calculated is subject to various views and methods. In several reports of Rajah's I st voyage, it was stated that the pepper was sold at a 700% profit.88 Review of the Rajah's voyage papers does not disclose any calculation or any reference to profit made on the cargo. Moreover, none of the available ship's papers for Rajah's first 4 voyages do not contain any profit data. The matter is of further interest because the calculation of profit is subject to several questions. Is the profit based on the complete cost of the cargo? (i.e., such as crew's wages and expenses, depreciation of ship, and all other applicable costs). Is the length of time consumed in the voyage taken into considera-tion? It appears Rajah's voyage lasted 18 months. In absolute dollars, the longer the voyage, the less the annual profit would be, indicating overall, a less profitable venture. Did the owners consider the relationship of profit in

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60 relation to the amount of their investment? The return on investment could be greater if they operated with borrowed funds. Or, was the 700% merely the difference between the supposed purchase price of the cargo and its final selling price? This would be the mark-up of the pepper, not the true profit. Tradition states that at the conclusion of her 1st voyage in 1797, Rajah returned with the pepper cargo to New York, but no firm records exist indicating a cargo value to substantiate such a profit figure. Do the costs and therefore the profits reflect an accurate result or have the Salem newspapers and later histories offered hearsay rather than complete 89 accounts of what actually happened? Why would merchants dealing in a competitive world allow reports of a 700% profit to become common knowledge? Would they not attempt to qualify or deny such reports with added costs and risks? No record exists of Peele's denial of the alleged information. Did they themselves release it, in a moment of jubilation or braggadocio? For businessmen of experience, this does not seem likely. Most merchants, in succeeding years of the Salem-Sumatra pepper trade, qimed for an "expected profit of I 00% to 200% per voyage." 90 However, an assumptive (not substantiated by all known figures) calculation can be made for the 700% "profit," that could be borne out by certain known and available figures A. The 2nd voyage of Rajah -is recorded on the register at the U.S. Custom House Salem on October 15, 1799. It shows an entry of 158,544 lbs. of pepper bearing a duty of $9,512.64. B. Pepper in Sumatra at that time was purchased at 8 Spanish silver dollars per picul. A picul equals 133.33 lbs. thus 8 divided by 133.33 equals $.06 per lb.

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61 C. If pepper sold at 700% profit (probable meaning is markup) then .06 x 700% = $.42 per lb. = selling price. D. Taking 158,544 lbs. x $.42 = $66,588.42 value of cargo at selling price. E. $9,512.64 (duty as per A above divided by 66,588.48 (value in D) equals 14.2% duty as sales price F. 158,544 lbs x $.06 = $9,512.64 or I 00% of projected cost and is equal to total duty paid as per A above. G. Thus cost of pepper in Sumatra and amount of U.S. duty are identical with U.S. duty in an acceptable range 14.2% of cargo selling price. For pepper to sell at less than $.42 per pound would show a duty level above the 14.2% level and could be difficult to maintain politically and economically. In later decades of the 19th century, both the purchase cost of pepper declined as well as sales prices in both America and Europe, due to a glutted market. However, the duty seemed to approximate purchase costs with a markup of approximately 300% in evidence. The duties paid by Rajah and the other Salem ships were substantial for those times. From 1800 to 1807, I ,542 vessels arrived from foreign ports and the average annual customs duties were over equal to more than I /20 of the entire expenditure of the United States government. 91 The economic and political impact of Salem and pepper, at that time, was therefore substantial and kept New England in prominence in Europe as well as America. Another aspect of profit is continued utilization of a vessel when-ever and wherever possible. "Carrying trade" allowed for maximum

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62 profitable use. The term "carrying trade" involves transport for a fee of goods not property of a vessel's owners. At times, merchant owners did not possess nor could they obtain suitable merchandise for sale during the course of a voyage. Transporting a cargo for others could provide income in making the trip ultimately profitable or, at least, less costly. Further, during the times of the Jefferson Embargo, a ship could remain away from the American continent and earn income. This would be preferable to idle or laid-up ships in a home harbor, draining a Salem owner's funds. Just before the Peele's ship Perseverance left for her 3rd voyage to Sumatra, an advertisement was placed in Boston for a "carrying trade" cargo of 30 tons. The voyage papers reflect a letter of inquiry from a Jas. Williams wanting to know what goods would be suitable for transport to a French market.92 This could indicate an intermediate stop in France prior to proceeding to Sumatra. However, the transaction was not consummated and the ship proceeded directly to Sumatra. An interesting example of remaining away from America during the Jefferson Embargo and carrying freight can be found in the 6th voyage of the ship Freedom.93 Peeles' vessel was gone from August 1807 through 1810, traveling to Palermo, Tetuan, Gibraltar, Malaga, London, Tangier, Valencia, Benicarlo, Plymouth, Belfast, Cork, Rio de Janeiro, Sumatra, St. Helena, and Martha's Vineyard. Captain Edward Ford's letter of January 21, 1808, to Peeles from London refers to his "fraight" voyage from Malaga, and the need to adjust the insurance accordingly in the future for additional freight trips. 94 The matter of adequate freight charges to cover all costs and a suitable profit was always of concern to captains and owners. With no so-called uniform charges, rates could and did vary significantly.

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63 Insurance coverages did form a basis for cargo valuations which, in turn, affected freight charges. The prominence of the Salem merchants; however, does not mean that they were among the most sophisticated of New England traders. Within the New England states, the methods of Rhode Island's Brown family seem further advanced than those of the Salem merchants discussed above. The Browns appeared to be aware of the return on investment concept by charging 6% interest per annum against investment in both ship and cargo. This was added to their selling price. Moreover, they calculated interest for a two-year period although the actual voyage took eighteen months. Finally, they made a 44% depreciation charge against the ship for the voyage "although no substantial repairs were made."95 Thus, inflated costs were used to create sales prices even though a steady rate of markup was employed. Both the Browns and the more profit conscious Salem merchants applied yet another commercial technique. The larger ships with larger cargo investments had both a captain and a supercargo, an officer responsible for the commercial intelligence involving the purchase and sale of the voyage's cargoes. Usually this was filled by a member of the privileged class, a business agent or the vessel's owners. Some were Harvard graduates, others merchant's sons, and other young men of good families. 96 The separation of merchant activity from the vessel's actual operations led to frequent conflicts between captain and supercargo. These were probably intensified by the disparity between the compensation given to the two officers. On a voyage of the Browns' vessel Ann And Hope in I 798, Captain Benjamin Page received wages of $2,000 plus a privilege of 8 tons while

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64 supercargo Samuel Snow received wages of $8,000 plus a privilege of I 0 tons.97 Happily, there were individuals who bridged these gaps and did, at different times, fill both positions. Nathaniel Bowditch, Salem's charter of the seas, began his career as a supercargo and moved to the position of ship's master, before becoming a mathematician. However, in general, no "career ladder" existed on which either position was a prerequisite of the other. Rather, each merchant had different emphases and goals, filling the positions with individuals of varied levels of experience in accordance with the nature of the voyage, value of the cargo, size of the ship, degree of negotiation necessary, and required skill in navigation. The captain was supreme in authority at sea but was bound to adhere to the commercial demands of profit for the voyage. The incomplete state of records available for profit or loss on pepper voyages is not without precedent. The voyages between New England and the West Indies in the 18th century reveal the same general problems. Owners of ships or goods seldom rendered any account of their own sales nor did they calculate to their own satisfaction the profit or loss of a particular voyage or consignment. Interestingly, losses were more often mentioned than profits. Did merchants wish to keep success, that is both profit and net worth, confidential in order to discourage competition or unwelcome intrusion? Perhaps they were more troubled by notoriety or the possibility that there would be increased taxation Pleading poverty has been often used by the successfu I to avoid the unwanted envy of others. Moreover, merchants might be more concerned with the reasons for losses than why they profited. Profits were an affirmation of correct tactics;

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65 losses needed more attention. Available records do not distinguish cargo from ship in any cost calculations. When merchants owned more than one vessel, further confusion existed. One historian has noted that .. Sometimes essential figures are missing, often the concerns of different voyages were mingled together .. [and merchants often remitted] the proceeds of their cargoes indiscriminately." 98 Prices and proceeds of cargo sales have to be guessed. Only comparison with like sales prices for comparable commodities in other American cities can give 99 probable results. Finally, merchants might have considered the concept of return on investment, that is, the relationship of profit to the amount a merchant may have advanced for a voyage. This would have involved not only cargo, but ships, warehouses, offices and equipment. Merchant groups, such as the Browns of Rhode Island, were aware of this factor and included it in some of their transactions although not to the degree in current use. Thus, a basic question, probably unanswerable, exists. Were merchants and ship owners in the pepper trade aware of true and complete costs of voyages and did they prepare calculations to determine results? The lack of available records tends to support a negative response How-ever, the momentum of activity in their businesses did permit them to live as if and believe that they were successful. This belief and their ability to borrow permitted expansion into other activities, such as movement into mills and factories. This movement was related to new events on the economic horizons that would bring great changes to Salem. The final chapter in this paper will attempt to treat these forces in detail.

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CHAPTER V DECLINE OF SALEM'S PEPPER TRADE AND MOVEMENT TO NEW ACTIVITIES During the period of this study, despite intermittent setbacks, Salem prospered in her connection with the pepper trade. Fortunes were made by merchants and captains who could understand and move with the tides of change. However, by 1815, new forces brought the traffic and profit to a slowdown and halt. The decline of Salem and its pepper merchant partnerships after 1815 had several causes. The silting, shallow harbor (not admitting ships of more than 12 to 14-foot draft) became obsolete as sailing vessels and steamships were built larger and heavier to carry huge and more economic cargoes. In addition to the shoals, there were other obstructions to navigation, such as rock formations that could cause difficulty for larger ship traffic, particularly in bad weather. Europe at peace presented new maritime competition. It re-stimulated its own carrying trade, affecting American activity as British, Dutch, French, Danish, Swedish and German ships moved cargoes to and from new centralized port systems. 1 00 The move westward for possibilities in land development and commerce left Massachusetts more remote from the center of population. The Peeles moved with the new opportunities, investing in Ohio real estate.

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67 Later, they would continue their efforts even further away, in establishing the firm of Peele, Hubbell and Co., Manila, P.t.101 The futile policies of New England federalism made Massachusetts unpopular with the other states and resulted in a loss of influence in Washington. Not only Salem but Boston experienced economic decline, giving way to further ascendancy of New York Harbor for trade to and from the northeastern states. 1 02 Prosperous and aggressive Salem merchants moved southward to New York and Phi !adelphia to new centers of commerce. One example was the Low family, which formed the firm of A.A. Low & Brother. Not surprisingly -the New York City school system named at least one school for Seth Low, philanthropist as well as merchant. 103 Remaining businessmen saw opportunity in manufacturing rather than shipping and moved from wharf site to mill site. Massachusetts established centers in the textile, shoe, cordage and furniture industries. Along with the new industries came a protective tariff in 1816, contrary to the wishes of Salem's merchants but providing even more impetus to f t I 04 manu ac unng. Another cause for decline was Salem's lack of infrastructure. Railroads, canals, roads, and population to move or consume seaborne goods were not available. The natural barrier of the Appalachian Mountains to the west would make canal and road transportation non-competitive with other available routes. 1 OS The cyclical nature of pepper pricing created financial problems and Salem's merchants lacked the resources to ride out times of over106 supply. Instead, New York and Philadelphia with greater available

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68 capital weathered the plunging and uncertain prices. This situation helped to drive the remaining Salem merchants into newer and more stable and lines of activity mentioned above. Improved worldwide communication allowed for sale and purchase of goods before voyages were undertaken. This step resulted in major entrep11ts being established in a centralized system basis excluding smaller ports such as Salem. 1 07 Credit and banking institutions followed the new communication system, curtailing needs for transport and use of specie and the Salem method of trading in Sumatra. The British and Dutch intensified exclusionary trade practices in southeast Asia, gradually making it very difficult for Salem to continue the Sumatra pepper trade. New colonial administrative policies, along with elimination of the less efficient trading companies there, diminished Salem's d t 108 pnor a van ages. The pepper trade presented both challenges and benefits to Salem. The aftermath of a war, particularly for a former colonial possession, usually spelled significant economic dislocation. Through exploration and assessment of a new market, many found employment, and fortunes were made. Further, the new trade aided in the development of the American Merchant Marine, allowing for an active and expanded part in world commerce. Salem's willingness to change in contrast to British East India's attempt to continue commerce in the mode of a prior century did spell success for the former with defeat and disintegration for the latter. Change involved not only new markets but the methods and practices in serving them. Both aspects had to occur for successful continuance of trade. The New England port town fully passed the test; its British competitor did not.

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69 Later, when pepper trade conditions changed, Salem lacked the size or resources to compete. Instead, its successful businessmen moved themselves and their interests elsewhere and adapted, once again, to the dynamics of commerce and now, industry.

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70 NOTESCHAPTER I 1 Bernard Farber, Guardians of Virtue, (Basic Books, Inc., N.Y., 1972), p. 6. 2 J.W. Gould, Sumatra-America's Pepperpot-1784-1873, Essex Institute Historical Collections, Salem, Massachusetts, XCII 1956 p. 14. NOTESCHAPTER II 3 Jean Andrews, Peppers, (University of Texas Press, Austin, 1984), p. 2. 4Frederic Rosengarten, Jr., The Book of Spices, (Jove Publications, New York, 1981), Edition, p. 341. NOTESCHAPTER Ill 5 william Marsden, The History of Sumatra, (Published by the author, London, 1811), p. 15. 6 Hawthorne Daniel, Islands of the East Indies, (G.P. Putnam Sons, N.Y., 1944), p. I 08. 7 Hawthorne Daniel, ibid, p. I 08 8 Ailsa Zainu'ddin, A Short History of Indonesia, (Praeger Publishers, N.Y., 1970), p. 13. 9 zainu'ddin, 13. 10 : Sophia Raff;les, Memoirs, V. I, (James Duncan, London, 1835), p. 403. II John The British in West Sumatra ( 1685-1825), University of Malaya Press: Kuala Lumpur, 1965, p. 135. Tabulated from information noted. 12v.o.c. = Oostindische Compuagnie 13 Ailsa Zainu'ddin p. 79. 14Bastin, p. XI. 15Bastin, p. XVI.

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71 16 Marsden, p. 277. 17 Bastin, p. 89. 18 Absorption of the Africans and Modagasgans into the general Sumatran population could produce interesting studies for later demographers. 19Bastin, Footnote /1306, p. I 00. 20 Dictionary of American Biography, (Charles Scribners Sons, N.Y.), Vol. XX, pps. 590-591. 21 Gould, p. 87. 22Dudley Leavitt Pickman, Journal of Dudley Leavitt Pickman, 17991804, ff 61 -4, May 180 I, at Peabody Museum, Salem, Massachusetts. 23Bastin, p. 129. 24 Benjamin Heyne, Tracts, Historical and Statistical, on India; with Journals of several tours through various ports of the (London, 1814), pp. 385-88. 25Bastin, p. 153. 26 Reid, The Conquest for North Sumatra, (University of Malaya Press, Kuala Lumpur, Malayasia, 1969), p. 7. 28 Marsden, p. 91. 29 Bastin, p. XXIV. 30 John Crown inshield, Log Book and Journal -Captain Ship America to India, Book No.3, July 18,1801, Original Manuscript from Peabody Museum Collection, Salem, Massachusetts. NOTESCHAPTER IV 31 Jonathan Peele, Jr. Papers, Peele Family Papers, 1753-1810 MH-5 Ships Papers, Schooner Rajah, I st Voyage, Box MSS /16, Folder 3-5, Peabody Museum Holdings, Salem. 32Robert P. Spindler and Sylvia Kennick, Peele Family Papers, 1753-1871, p. 2. from Peabody Museum Holdings (April 1987) and Essex Institute Holdings (July 1982), both in Salem, Massachusetts. 33 Duncan Phillips, Salem and the Indies, (Houghton, Mifflin Co., Boston, 1947) p. 93.

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72 34 Putnam, p. I 0. 35 James Duncan Phillips, Solem in the Century, (Houghton Mifflin and Co., Boston, 1937), p. XIX and p. 4 2. 36George Granville Putnam, "Salem Vessels and their Voyages," (reprinted from the Essex Institute Historical Collections, Volumes LVII and LVIII), (Essex Institute, Salem, Massachusetts, 1922). p. 4. 37 Jonathon Peele Jr. Papers, Peele Family Papers, 1753-1810, Schooner Rajah, I st Voyage, Box MSS 116, Folder 3-5, Peabody Museum Holdings, Solem, Moss. 38 Phillips, Solem and the Indies, p. 93. 39 The Solem Mercury, April 15, 1788. 40 The Solem Gazette, May 18, 1790 41 James Duncan Phillips, Pepper and Pirates, (Houghton, Mifflin and Co., I 949), p. 14. 42 Bjorn Landstrom, The Ship, (Doubleday & Co., Gorden City, N.Y., 1961), p. 176. The snow is a variant in soil arrangement of the brig and for a time was known as a snowbrig. 43Phillips, Solem and the Indies, p. 94. 44 Phillips, Salem and the Indies, p. 94. Reference to Charles S. Osgood: "Sketch of Salem, p. 151. 45 The American Spice Trade Association, A History of Spices, (Englewood Cliffs, N.J., 1972), p. 10. 46 James Duncan Phillips, Pepper and Pirates, (Houghton Mifflin Co., Boston, 1949), p. 14. 47 Putnam, p. 4. 48 Putnam, p. 7. 49 Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah, 3rd Voyage, MSS 116, MH5, Box 6, Folder 5, (Peabody Museum Holdings, Solem, Massachusetts.) 50 Phillips, Solem and the Indies, pps. XII, XIII, XIV, XVI, XIX. 51Jonathan Peele Jr. Papers, Peele Family Papers-1753-1810, Ship Freedom, 6th voyage. MSS2, MHS, Box I and 2, Folder I and 2, Peabody Museum Holdings, Salem, Massachusetts.

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73 52 Putnam, p. 9. 53 Jonathan P_ eele, Jr. Papers, Peele Family Papers, 1753-1810-MH-5, Ships Papers, Schooner Rajah, I st voyage, Box MSS-116, folder 3-5, Peabody Museum Holdings, Salem. 54tn 17th century Lloyd's Coffee House, London, the method of insuring ships and cargoes involved listing details of a particular voyage. Those interested in sharing the risk could sign their names beneath the statement, listing the share of the total they would guarantee. Signing beneath the statement was the origin of the term "underwriter." 55 Jonathan Peele, Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah, 2nd voyage, MSS 116, MH-4, Box 6, folder 4, Peabody Museum Holdings, Salem, Mass. 56Anthony Reid, The Conquest for North Sumatra, (University of Malaya Press, Kuala Lumpur, 1969), p. 24. 57 Samuel Eliot Morison, The Maritime History of Massachusetts, 1783-1860, William Heinemann Ltd., London, 1923, pp. II0-111. 58 Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810-Schooner Rajah, 2st voyage, Box MSS 116, Folder 3, Peabody Museum Holdings, Salem, Mass. 59 Jonathan Peele Jr. Papers, MSS 116, Box 3. 60Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Ship Freed om, Voyage 6, MSS 112, MH-5, Folder I, Peabody Museum Holdings, Salem, Mass. 61 Jonathan Peele Jr. Papers, Peele Family Papers, 1753-1810, Brig Rajah, 2nd Voyage, MSS 116, MH5, Box 6, Folder 4, Peabody Museum Holdings, Salem, Massachusetts. 62 John Crowninshield Log Book, Captain's Ship Journal America to India, Box No.3, July 2nd and 21, 1801, Original Manuscript from Peabody Museum Collection, Salem, Massachusetts. 63crowninshield, July 21, 1801. 64Nathaniel Bowditch, Remarks on the North West Coast of Sumatra, East India Marine Society, 1803 Voyage of Ship Putnam to Sumatra and lie de France (Mauritius), Holdings in Peabody Museum, Salem, Massachusetts. 65wiltard Peele Ships Papers, Peele Family Papers1792-1838 Ship Perseverance, Third Voyage, MSS /112, MH-5, Folder I.

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66 Anonymous, The Aristocrac of Boston: Who The Are and What Were, (Published by the uthor "By One Who Knows Them," Boston, pp. 18-19. 67 Edward Gray, Wi IIi am Gray of Salem, Merchant (Boston, 1914), p. 50. 68Phillips, Salem and the Indies, p. 280. 74 69 James B. Hedges, The Browns of Providence Plantations, The Nineteenth Century, Brown University Press, Providence, 1968, p. 65. 70 Jonathan Peele, Jr. Papers, Peele Family Papers1753-1810, Rajah, 1st voyage. 71-77 Inclusive Jonathan Peele, Jr., Papers, Peele Family Papers 1753181 0, ship Freedom, 6th voyage. 78 Jonathan Peele Jr. Papers, Peele Family Papers1753-1810, MSS-MH-5. 79Bernard Farber, Guardians of Virtue, (Basic Books, Inc., N.Y., 1972), p. 82. 80 Jbid, pp. 90-92. 81 & 82 Jonathan Peele Jr. Papers, Ship Freedom, 2nd Voyage, Box MSS Ill, Folder MH-5, Peabody Museum. 83 Jonathan Peele, Jr. Papers, ibid., Ship Freedom, 2nd Voyage, Box MSS Ill, Folder MH-5. 84 Gould, p. 126. 85 Gould, pp. 126-127. 86 Bastin, p. 98. 87 Bastin, p. I 04. 88 Putnam, p. I 0 and Phillips, Salem and The Indies, p. 95. 89 Salem Gazette, July 2, 1797 and J. W. Gould, p. I 07. Another commentary reference made by J.W. Gould is in Manning I, 74; Saunders to Richard Crowinshield, July 21, 1797, in R. Crowninshield Papers, IX, Peabody Museum, Salem. However, no direct references to duties paid, requiring profit percent are available. 90 Phillips, Salem and the Indies, p. 247. From T. Pitkin, Statistical View of the Commerce of the United States, (2nd Edition, N.Y., 1817). 91 Phillips, Salem and The Indies, p. 429 and p. VII.

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75 92Willard Peele Ships Papers, Peele Family Papers 1792-1838, Ship Perseverance, Third Voyage, MSS 12, MH5, Box 12, Folder I, Peabody Museum Holdings, Salem, Massachusetts. 93 Jonathan Peele Jr. Papers, Peele Family Papers-1753-1810, Ship Freed om, Sixth voyage. MSS2, MH5, Box I and 2, Folder I & 2, Peabody Museum Holdings, Salem, Massachusetts. 94 Jonathan Peele Jr. Papers, Ship Freedom, 6th voyage, MSS2, MH5, Box and 2, Folder I and 2. 95 Hedges, p. 24. 96samuel Eliot Morison, The Maritime Histor of Massachusetts 17831860, (William Heinemann Ltd., London, 1923, p. 112. 97 Hedges, p. 67. 98Richard Pares, Yankees and Creoles, (Longmans, Green and Co., London, 1956), p. 139. 99tbid, p. 145. NOTES-CHAPTER V 100 Morison, p. 213. 101Peele Family Papers-1753-1871, J. Willard Peele Biography, p. 2, Essex Institute Holdings, Salem, Massachusetts, July 1982. 102 Morison, p. 213. 103 Morison, p. 217. 104 Morrison, p. 214. 105Phillips, Salem and The Indies, p. 8. I 06Bastin, p. XXXVII. 107 Morison, p. 215. I 08Reid, pp. 9, I 0, II.

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76 BIBLIOGRAPHY Andrews, Jean. Peppers. University of Texas Press, Austin, 1984. Anonymous. The Aristocracy of Boston: Who They Are and What They Were. Boston, 1848. Published by Author. Bastin, John. The British in West Sumatra 1685-1825. University of Malaya Press, Kuala Lumpur, Malaysia, 1965. Bowditch, Nathaniel. Remarks on the North West Coast of Sumatra. Holdings in Peabody Museum, Salem, Massachusetts. Cornell, Felix M. and Allan C. Hoffman. American Merchant Seaman's Manual. New York, 1940. Crowninshield, John, Captain. Journal Captain Ship America to India. Original Manuscript from Peabody Museum Collection, Salem, Massachusetts. Dictionary of American Biography. Charles Scribners Sons, New York. Disney, A.R. Twilight of the Pepper Empire -Portuguese Trade in Southwest India in Earl Seventeenth Centur Cambridge, 1978. Farber, ernar uar ions of irtue. Basic Books, Inc., New York, 1972. Gould, J.W. Sumatra America's Pepperpot 1784.,.1873. Essex Institute Historical Collections, Salem, Massachusetts. Gray, Edward. Wi IIi am Gray of Salem, Massachusetts. Boston, 1914. Daniel, Hawthorne. Islands of the East Indies. G.P. Putnam Sons, New York, 1944. Hedges, James B. The Browns of Providence Plantations, The Nineteenth Century. Brown University Press, Providence, 1968. Heyne, Benjamin Tracts, Historical and Statistical, on India. London, 1814. Landstrom, Bjorn. The Ship. Doubleday & Co., Garden City, New York, 1961. Marsden, William. The History of Sumatra. Published by the Author, London, 181 I. McCusker, John J. Money and Exchange Europe and America 16001775(?). University of North Carolina, Chapel Hill, North Carolina, 1978. Minchinton, W.E., ed. The Growth of English Overseas Trade in the Seventeenth and Eighteenth Centuries. London, 1969. Morison, Samuel Eliot. The Maritime History of Massachusetts 17831860. William Heinemann Ltd., London, 1923. Pares, Richard. Yankees and Creoles. Longmans, Green and Co., London, 1956. Peele, Jonathan Jr. Peele Family Papers 1753-1810. Peabody Museum Holdings, Salem, Massachusetts. Peele, Jonathan Jr., Peele Family Papers, Rajah 6th voyage. Peabody Museum Holdings, Salem, Massachusetts. Peele, Jonathan Jr., Peele Family Pahers, Rajah 2nd voyage. Peabody Museum Holdings, Salem, Massac usetts. Peele, Jonathan Jr. Ship Freedom, 6th voyage. Peabody Museum Holdings, Salem, Massachusetts.

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77 Peele, Willard. Peele Family Papers1792-1838, Ship Perseverance, Third Voyage. Peabody Museum Holdings, Salem, Massachusetts. Phillips, James Duncan. Salem in the Seventeenth Century. Houghton, Mifflin and Co., Boston, 1933. Phillips, James Duncan. Salem and The Indies. Houghton, Mifflin and Co., Boston, 1947. Phillips, James D. Pepper and Pirates. Houghton, Mifflin and Co., Boston, 1949. Phillips, James Duncan. Salem in the Eighteenth Century. Houghton, Mifflin and Co., Boston, 1937. Pickman, Dudley Leavitt. Journal of Dudley Leavitt Pickman, 17991804. Peabody Museum, Salem, Massachusetts, lBO I. Putnam, George Granville. Salem Vessels and Their Voyages. Essex Institute, Salem, Massachusetts, 1922. Raffles, Sophia. Memoirs. James Duncan, London, 1835. Reid, Anthony. The Conquest for North Sumatra. University of Malaya Press, Kuala Lumpur, Malaysia, 1969. Rosengarten, Frederic Jr. The Book of Spices. Jove Publications, New York, 1981. Schama, Simon. The Embarrassment of Riches. Alfred A. Knopf, New York, 1987. Shepherd, James T. and Gary M. Waltar. Shipping Maritime Trade and the Economic Development of Colonial North America. London, 1972. Spindler, Robert P. and Sylvia Kennick. Peele Family Papers, 17531871. Essex Institute, Salem, Massachusetts. The American Spice Trade Association. A History of Spices. Englewood Cliffs, New Jersey, 1972. The Salem Gazette. Salem, Massachusetts, May 18, 1790. The Salem Gazette. Salem, Massachusetts, July 2, 1797. The Salem Mercury. Salem, Massachusetts, April IS, 1788. Wills, John E. Jr. Pepper, Guns, and Parleys The Dutch East India Company 1622-1681. Harvard University Press, Cambridge, 1974. Zainu'ddin, Ailsa. A Short History of Indonesia. Praeger Publishers, New York, 1970.