Robert Morris: America's Founding Capitalist
There are a few things we're all taught to notice about the Declaration of Independence: the famous preamble, the phrase "all men are created equal," the defiantly large signature of John Hancock. But off to the right of Hancock's name is the cramped signature of a man few Americans have ever heard of. His name was Robert Morris, the nation's founding capitalist and the financier of its revolution.
Morris was a self-made merchant and entrepreneur from Philadelphia, so he stood out from his fellow Founding Fathers, who ranged from firebrand Boston activists to slave-owning Southern planters.
Author and journalist Charles Rappleye explores Morris' involvement in independence in a new book, Robert Morris: Financier of the American Revolution. He tells NPR's Steve Inskeep that while the other delegates were fiercely in favor of independence, Morris tried to stop it.
"He opposed it in the debate in Congress, and then when the vote came up, he absented himself," Rappleye says. "This was sort of an act of falling on his sword, because by stepping out of the hall he allowed the Pennsylvania delegation to make it a unanimous vote."
Rappleye says Morris didn't believe the colonists would prevail against England.
"He thought it was a very dangerous and wrong-headed move to actually make the break," he says.
But when the Declaration of Independence was signed two months later, Morris set his personal opposition aside and went with the majority opinion. He soon became indispensable in the Revolution.
America's Founding Capitalist
Born and raised in Liverpool, England, Morris was tall, wide and by all accounts larger than life.
"Philadelphia was a great place for feasting," Rappleye says, "and he was often the guy throwing the banquet."
Rappleye says that Morris was just as comfortable interacting with dock workers as he was with his fellow merchants and traders.
"He seemed to have that sort of gregarious, common touch, as well as being very successful -- and at times in his career very rich," he says.
Morris made his fortune as a global capitalist in 1776, well before capitalism had been described and accepted as an economic system.
"It was at the dawn of the whole idea of global enterprise," Rappleye says. "He was very much a free market, laissez-faire capitalist -- he talked about trade being as free as the air."
According to Rappleye, Morris was thinking in terms of global commerce at the same time the Scottish economist Adam Smith was describing it in his groundbreaking book, The Wealth of Nations.
Global capitalism was a risky business in a time before e-mail, or any form of reliable international communication. Morris effectively made a gamble by sending goods overseas and hoping that the profits would eventually come back to him.
"The primary [means of finance] for the international traders [were] called 'bills of exchange,' which were debts and foreign currencies that you could then buy and sell in foreign capitals, and in your own country, to other traders who needed capital," he explains. "A lot of it was based on personal relationships, so correspondence was critical and reputation was fundamental."
During the Revolution, Morris used his reputation and business connections to effectively bankroll American forces. He was active in supplying Washington's army with gunpowder, which he smuggled in under the noses of British authorities in Europe and the Caribbean. Rappleye argues that the Revolution couldn't have been won without Morris.
"He certainly came through at critical times for George Washington, who, with his army in the field, needed money to keep them clothed, keep them on the road -- and get them to Yorktown in particular," Rappleye says.
In 1781, Yorktown was the climactic battle of the American Revolution. Washington needed to march his army down to surprise and besiege British forces. And while Washington orchestrated the plan and the attack, Morris took care of everything else.
"He was getting the cattle from Connecticut, he was getting the flour from Pennsylvania and Virginia," Rappleye says, "and he was getting it all to the soldiers on the road."
Before Yorktown, the United States' fledgling new currency had all but failed, and the only medium of exchange with which to finance the revolution was Morris' own personal credit. So four years after opposing the Revolution, Morris had effectively become America's treasury and banker.
"They were Morris notes," Rappleye says. "And that had become the sole currency of the government."
A Congressional Inquiry
Despite Morris' instrumental role in the Revolution, he has gone down in history as something of a crook. According to Rappleye, this was because of the backroom dealings he resorted to in order to fund the war.
In addition to smuggling gunpowder in for the American army, Rappleye says, Morris was also in charge of a secret committee that organized an arms trade with European agents. Most of the arms contracts the secret committee signed with its European partners were to its own members -- primarily, Morris.
He was still a member of Congress at the time. In modern-day terms, it would have been equivalent to a defense contractor getting himself elected to Congress, then using his position to appropriate money to his own company as a no-bid contractor.
"There was a lot of accusation that these people were enriching themselves in this secret trade," Rappleye says. "We have to take into account that the secrecy involved required that these people do business only with people that they knew, only with people that they could take into confidence. However, it did come out soon after that this had been going on, and there was a very modern sort of outcry against the idea that there was self-dealing here."
Morris was the subject of perhaps the first congressional inquiry into self-dealings. He was exonerated by Congress when he was able to show that he had not profited inordinately from the arms contracts, though he actually had.
It was one of the many ways in which Morris didn't always get along with his fellow Founding Fathers.
"There were people in Congress who through their whole careers considered Morris to be everything the Revolution was against. He was about commerce, he was about self-interest," Rappleye says. "There was an ideological divide within the revolutionaries from the very beginning. It was between the ideologues, who believed that we should set up a society based on ideas, that people should act a new way; and then there were pragmatists, Morris primary among them, who took self-interest into account. He believed that to expect people to act in any other way was naive."
America's First Real Estate Bubble
After the war and the creation of the American government, Morris stepped out of public life. With the fortune he had amassed over the course of a career in trade, he attempted to make his biggest move yet and invested heavily in land. According to Rappleye, he ultimately attained the title to 6 million acres, stretching from New York all the way down to Georgia.
Morris was convinced that the masses of Europe would soon be flocking into the American hinterland -- something that wouldn't happen for at least another century. It was America's first great land boom, a real estate bubble.
"He was banking on the price going up. It didn't, and he went bankrupt," Rappleye says. "In those days, when you went bankrupt you went all the way down. He spent three years toward the end of his life in debtor's prison in Philadelphia."
Despite Morris' role in the Revolution, no one at the time had thought to help him.
"America was a very tough place at that time," Rappleye says. "You rose and you fell, and if you fell, nobody was there to catch your fall." Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.