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Monday, January 23, 2006 

America's Buzz from Caribbean Coffee

January 23, 2006

by Sean Silverthorne, Editor, HBS Working Knowledge

The development of the post-revolutionary American economy received a significant boost from a commodity not even produced here: coffee.

According to research performed by Michelle Craig McDonald, coffee purchased by American traders and "re-exported" to other countries accounted for a quarter of U.S. re-export trade revenue by 1800 and 10 percent of all U.S. income from exported goods, domestic and foreign. These are "remarkable figures from a commodity that North America never produced itself," says McDonald.

Her research into the Caribbean coffee industry and its impact on America continues as she enters the second half of her 2005-2006 Harvard-Newcomen Fellow in Business History at Harvard Business School. We asked her to bring us up to date on her work.

Sean Silverthorne: What drew you to research the Caribbean coffee industry?

Michelle Craig McDonald: The idea for this research project came from two courses I took while studying at the University of Michigan. The first was on early modern British culture. I came to Ann Arbor in 1998 intending to study the emergence of the public school system in America after the Civil War. With education history in mind, I used my British history class to think about how literacy could be defined in a culture where a large percentage of the population was unable to read and even fewer could write. I looked at public places such as libraries, churches, taverns, and coffeehouses where information was disseminated orally, and realized that few historians had considered the role of coffeehouses in early modern and colonial contexts.

The second course was a comparative course on the history of slavery. Few coffeehouses operated in the plantation societies of the West Indies, but I used it as an opportunity to learn more about when and how coffee production spread in the eighteenth century. I also realized that, while there is a significant literature on plantation agriculture and an increasing body of scholarship on colonial consumption, rarely did these historians "talk" to each other. In other words, production, distribution, and consumption often appeared as separate phenomena in an early Atlantic context when, instead, these processes were intricately interwoven. My dissertation, "From Cultivation to Cup: Caribbean Coffee and the North American Economy, 1765–1805" completed in February 2005, explores the history of the coffee industry with these connections in mind.

Q: Sugar is the cash crop we most associate with the Caribbean, but your work spotlights a booming coffee trade in the eighteenth and nineteenth centuries. How does focusing on a different commodity change our understanding about Caribbean production?

A: Since the 1944 publication of Eric Williams' Capitalism and Slavery, historians have maintained that the American Revolution drove a political and economic wedge between North America and the British West Indies that resulted in the diminution of sugar's profitability, the abolition of the slave trade in 1807, and the Slave Emancipation Act of 1833. This argument, however, does not address two important issues. First, while the sugar trade may have become less profitable after American independence—and the debate is far from settled even on this score—other West Indian commodities produced by slave labor thrived after 1783. Second, U.S. investment in tropical commodities other than sugar and outside the British Caribbean expanded rapidly in the post-Revolutionary period.

Coffee epitomizes this boom. While sugar production plateaued in the 1780s and 1790s, coffee cultivation based on slave labor expanded in both the French and British West Indies during the same time period, and its most lucrative years in Spanish Cuba and Puerto Rico and especially Portuguese Brazil were still years in the future. By 1800, coffee accounted for a quarter of U.S. re-export trade revenue and 10 percent of all U.S. income from exported goods, domestic and foreign—remarkable figures from a commodity that North America never produced itself.

Coffee also complicates the second half of Williams' thesis—that American independence dissolved North America's commercial ties to the West Indies—since the most vibrant and profitable period of U.S. coffee trading happened between 1783 and 1805. Commerce between the U.S. and the British West Indies declined to be sure, but this resulted in the creation of alternative trade routes, overtures to new commercial partners, and investments in new commodities. The U.S. re-export trade in Caribbean goods increased far faster than that of domestic goods, and the marketing of tropical produce encouraged the U.S. to seek diplomatic connections with France, Spain, Portugal, Holland, and Denmark and underlay America's repeated efforts to define and defend neutral shipping rights through the War of 1812.

Q: What was the importance of the American Revolution in helping create the re-export trade?

A: The historiography acknowledges the significance of America's re-export trade—traffic in goods produced in nations and colonies outside the U.S. and imported by Americans for reshipment elsewhere—but downplays its importance after the rise of southern cotton.

The domestic export market did grow in the early nineteenth century, but these goods expanded rather than supplanted existing commerce in Atlantic produce. Instead of the early stirrings of a national economy, a history of coffee between 1783 and 1805 demonstrates the continuation of North America's pre-Revolutionary participation in and benefit from a transnational, Atlantic-centered marketplace.

Q: How did the re-export trade of Caribbean coffee contribute to the political and economic development of the United States?

A: Tariff policies, trade treaties, and embargoes all led to repeated arguments in Congress, not only about whether decisions and enforcement should occur at the state or federal level, but also about which goods and nations should be treated or taxed. During these debates, however, delegates rarely questioned one aspect of the nation's post-Revolutionary economy—the centrality of West Indian commerce and the importance of securing trading rights in the region.

Richard Henry Lee applauded lobbying efforts of British and American merchants in London to lift "all the silly, malign, commercial restraints upon our trade with their W. India islands." Thomas Jefferson worried that "commerce is got & getting into vital agonies by our exclusion from the West Indies," and James Madison concluded that "the revolution has robbed us our trade with the West Indies, the only one which yielded us a favorable balance without opening other channels to compensate it." American speculations in the West Indies determined the shape of its first free trade policies, influenced the establishment of America's first tariffs and preferential agreements, and encouraged the development of a U.S. carrying trade that expanded its economic horizons around the globe.

Q: How has your research advanced our understanding of American commerce after the American Revolution and of the economic life of the Caribbean?

A: The traditional story argues that colonial North America was integral to the British Empire but became increasing autonomous during the early republic. This study instead demonstrates that integration not only continued into the late eighteenth and early nineteenth centuries but also became stronger and more diverse, as exclusion from the British Empire necessitated American alliances with the West Indian colonies of France, Denmark, and Holland.

Coffee was only one commodity, albeit an increasingly important one, in the cornucopia of goods that American merchants traded, but it is a lens through which to see the development of North America, not as a neighbor of the Caribbean, but as a fully integrated member of a transnational Atlantic world. "The discovery of coffee," wrote Theodore Bourban, a French philosopher and medical doctor in 1820, "has enlarged the realm of illusion and given more promise to hope." In the late eighteenth and early nineteenth centuries, these illusions and hopes drew North America and the different empires of the West Indies together in the creation and promotion of a coffee culture that persists to this day.

Q: What will you study during your Newcomen fellowship? What resources will you be using at Baker Library?

A: I just completed a case that was taught in the "Entrepreneurship and Global Capitalism" course this past November. Entitled "The Real Juan Valdez: Opportunities and Impoverishment in Global Coffee," it asks students to examine the impact of deregulation of the coffee industry since 1989, particularly for small farmers. Coffee has been a protected industry for centuries, first through imperial tariffs, then through Brazilian quota programs, and finally—from 1962 to 1989—by price regulations overseen by the International Coffee Organization.

Since ICO price supports ended, farmers around the world have tried different ways to compete in a free market. The case was an interesting challenge for me as an eighteenth- and early nineteenth-century historian, but it was an opportunity to learn more about the development of coffee industries in Latin America, Africa, and Asia.

It was also a chance to explore a range of issues affecting agribusiness today such as fair trade, environmental protection, marketing and advertising strategies, and the development of niche coffee markets.

During the spring term I am returning to my dissertation, currently under revision for publication. I hope to use the collections at Baker Library to achieve two goals. First, the post-Revolutionary coffee industry is not only a story about an increasing number of suppliers but also one of competing distributors.

Before 1783, Philadelphia dominated the coffee trade but after independence more merchants begin experimenting with the commodity. Boston, in particular, developed an important trade in Brazilian coffee and several account and letter books in the Baker historical collections will help me tell that tale. I also hope to write a chapter on innovations in early nineteenth century advertising using newspaper series from the late eighteenth through mid-nineteenth centuries.

One of the most interesting developments of America's increasingly diverse range of coffee suppliers is that the product becomes differentiated in a way it could not when it primarily came from the British West Indies.

As early as the early 1790s, coffee wholesale and retailers began marketing distinctions in color and taste, and especially production origin. This kind of "regional branding" had already happened to tea and wine, but these industries generally associated the commodity with one specific geographic region or country. Coffee cultivation, by contrast, was expanding around the world and these regional distinctions represent some of the best evidence of the paths commodities traveled in an increasingly global economy.

Copyright © 2006 President and Fellows of Harvard College

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