“Our Own and Our Country’s Ruin”: Public Credit, War Markets, and Political Transition in the Colonial American Northeast, 1758–1768

Abstract In British North America, imperial sovereignty required peripheral cooperation in public finance. However, because of limited coercive British state capacity, local colonial assemblies and town governments operated with substantial autonomy. The interests of colonial subjects did not align exactly with those of politicians and military officers in the center of British imperial authority in London. Short term success in colonial war between 1754 and 1763 required policies that incentivized colonists to buy into the imperial project. After 1758, Parliament and royal departments managed to incentivize greater provincial participation and resource allocation to the military by co-opting existing colonial merchant networks using lucrative public contracts. The contracts requested a small number of merchant firms in colonial cities take on large debts to circulate notes of credit in exchange for commissions. Merchant financiers could use these notes to pay for military expenses. The contracts promised bullion remittances from England to cover the debts, but these funds ultimately proved insufficient to cover outstanding obligations. Failures to remit led to a colonial credit crisis between 1762 and 1768 which shook colonists’ faith in the credibility of the British fiscal state in the decade leading up to the American Revolution.