Patriot Investors? Merchants, Insurers, and the Heroics of Money Making in the Age of the American Founding

Merchants and insurers were added quite late, and somewhat awkwardly, to the pantheon of American founders. Edward Everett’s mid-nineteenth-century biographical sketch of his father-in-law, an eminent Boston marine insurer, is one particularly awkward example: Everett declared that his subject was both an ardent patriot and a man who “never took a risk in his life.” This statement was profoundly misleading, for Brooks had been literally in the business of taking risks, and many of them were quite risky indeed. Through both his marine insurance business and his federal bond portfolio, Brooks took on a significant portion of the risk of the American founding, and so did many of his fellow insurers. Then he got rich. But as the risky founding period receded into memory, so did the activities of merchant-insurer-investor risk-takers like Brooks. How did this happen, and why?

American merchants and insurers, facing the risk of public condemnation for reckless profit seeking in the Napoleonic period, deliberately engaged in performances of American belonging, conservatism, patriotism, and loyalty, while also placing their money in public institutions. Both their investments and their civic performances effaced their politics and deflected criticism. As the United States began to achieve economic stability, merchant-insurers’ performances of their Americanness both made them seem loyal and “conservative,” and eventually created value for their companies.

After the Napoleonic Wars ended and the last founders began to die, American writers turned toward new kinds of mythmaking. The first historians of the United States wrote about the political and military risks of the republic’s founding, rather than the financial ones, while antebellum financial writers criticized their own times by contrasting them with a supposedly more stable and virtuous founding era. In this fashion, the risky nature of the founding “bet” on the United States was largely forgotten.