Alexander MacAulay was a spectacular failure. He failed as a colonial tobacco merchant. He failed as a retailer of manufactured goods. He failed as a land speculator. Where he did succeed, however, was in making and maintaining friendships. He was a failure, but he was an affable one, and that charm counted for more in the volatile Virginian market than tobacco, cash or property.
Moreover, MacAulay was an economic exception. He joined each of these markets in the wrong way at the wrong time, yet, somehow, managed to survive as venture after venture collapsed. And this is what makes him worthy of our attention. How could an exception, someone who always joined the bubble just before it burst, survive?
MacAulay was born in Glasgow in 1754. We have little information about his family, but what probably affected his life most was not his breeding, but Glasgow’s dramatic transformation of during his youth. In 1741, Glasgow secured nearly eight million pounds of North American tobacco. In 1752, just two years before his birth, this had trebled to twenty-four million. By the time MacAulay was five, it had reached thirty-two million. By the time he was twenty, the trade had reached forty-seven million pounds per annum, securing a majority share of the British tobacco trade. Glasgow owed its tremendous success to a variety of advantages: namely, the general practice of purchasing tobacco for cash, rather than through consignment, and access to the trade route north of Ireland, which was safer and faster than that from London. Having reached maturity when everything seemed to be in Glasgow’s favour, MacAulay must have imagined his future to be incredibly bright.
In early 1775, MacAulay and his brother, Patrick, travelled to the colony of Virginia. When they came to the James River, they would have found many other Scots dealing in tobacco. The majority of these would have been factors, employees with standard salaries who manned warehouses or stores for transatlantic firms. Although dealing primarily in bulk, or lower quality, tobacco, these firms were able to secure a healthy profit owing to the efficiency of their factors. Rather than conduct lengthy negotiations over consignment contracts, they purchased tobacco outright for cash or store credit. Their warehouses were thus filled and the tobacco ready to be loaded before the firm’s ships arrived, cutting weeks if not months off the transaction.
And 1775 was a particularly important year for these factors. The previous autumn, the First Continental Congress had enacted the Continental Association, which had prohibited the import and purchase of British manufactured goods and would, in September 1775, halt the export of American products to Britain. In Virginia, this meant tobacco. Knowing that supplies would soon dry up, Scottish firms quickly purchased as much tobacco as possible and settled their retail accounts by calling in all debts. So efficient were these factors that many consignors found themselves completely shut out of the market. It was into this chaos that the MacAulay brothers arrived. But they were no one’s factors. They were part of the ‘Cargo System’, a system that both made and nearly destroyed Alexander MacAulay.
Surviving as a truly independent merchant in the 1770s was difficult. Consignment usually relied upon established relationships and a history of profitable sales. Purchasing the crop outright required significant capital or credit. The MacAulays had neither of these. Yet, records show that they managed to consign 26 hogsheads of tobacco and set up a stable retailing business. That they convinced these planters to consign with them attests to MacAulay’s considerable charm as well as his independent status. Planters along the James were eager to sell their tobacco and MacAulay & Co., not needing to reconcile large extensions of credit, was able to carry on a retail trade through the select purchase of British wholesale goods. While buying tobacco was unlikely to cause any difficulties, selling goods appears to have been MacAulay’s undoing.
The following summer, the pages of Purdie’s Virginia Gazette were littered with notices from merchants intending to depart the mainland colonies. Among them was one from Alexander MacAulay, informing readers that he ‘shall leave the colony as soon as possible. All people indebted to me for dealing at this place are requested to settle their accounts, and those who have any demands shall receive payment on application.’ His efforts to settle his debts suggest that he expected to return to the colony and renew business ties. This was not an unprecedented attitude. Many believed the current conflict would be only temporary and it was best to suspend business in a congenial manner.
But, if he wanted to return, why did he leave in the first place? Those who have written about Scottish tobacco merchants tend to agree upon one thing. Politically, they were Tories and Loyalists and in 1776 they left Virginia en masse. This seems to be based, in part, on the accusations of Virginian planters, heavily in debt to the Scottish firms and happy to see their departure. Indeed, it appears that it was his economic transactions, not his political beliefs, that earned him a Loyalist send-off.
Some weeks earlier, MacAulay, along with his brother Patrick and fourteen other men, had been summoned to appear before the county court to answer charges of being ‘inimical or disaffected to the liberties of America’, that is to say, for having violated the Continental Association banning the import of British goods. Of the sixteen men to be summoned, eleven, including Patrick MacAulay, were found innocent of the charge. Two were deemed guilty, but, upon giving oaths of loyalty, were absolved. The last three, including MacAulay, were found guilty and refused to take the oath. Their characters thus dismantled, all three men gave notice of their departure and soon set sail.
MacAulay, however, tried to charm his way out of the situation. Following the release of the court proceedings, an anonymous letter was published in the Gazette, attempting to salvage MacAulay’s character. It stated that there had been no witness who could testify that MacAulay had ever indicated anything but support and good wishes for the American people. It was only because of certain connections in Britain, his wholesalers, that he could not publicly take an oath to take an active role in the conflict. Unfortunately for MacAulay, this latter confession had been given in confidence to a member of the council before the hearing and it had been ungentlemanly used as evidence against him. The writer is obviously predisposed toward MacAulay (it may have even been written by MacAulay himself), but the absence of a rebuttal in the following issues appears to validate the claim that ‘much was said in his favour, nothing was said against him.’ More importantly, his brother was wholly cleared of suspicion. Though Alexander MacAulay was obligated to leave until tempers cooled, Patrick could maintain the business until his return. Thus, charm and family ties maintained the merchant in an economy where the safe money was to get out, and get out quickly.