Monday, June 4, 2012

Dear Abby

Abigail Adams, I mean.

I just finished reading Woody Holton's biography, Abigail Adams, and I really enjoyed it.  I think the difficulty biographers often face is, how to capture a sense of the person's life and how to know when enough is really enough--when you risk overwhelming your reader with the daily details of the subject's existence.

I think Holton achieved an excellent balance because he picked a particularly interesting framework around which to organize his material.  Instead of focusing on Abigail Adams' famous letter of March 31, 1776 enjoining her husband John to "Remember the Ladies" in the drafting of the Constitution, Holton begins by quoting Adams' will, identifying the various bequests she made to her family.

It may seem innocuous and unimportant, but as Holton suggests, her words speak volumes.  Under early American law, married women were governed by the doctrine of "coverture" or "couverture"--in essence, a woman's legal identity was entirely subsumed under that of her husband.

Married women could not own or sell property, they could not enter into legal or financial contracts in their own name, and their money was never their own.  Husband and wife were considered legally "one," and the "one" was embodied in the legal identity of the husband.

So, as Holton points out, for Adams to write her own last will marks an interesting historical moment.  The document has no legal validity, unless her husband chooses to enact it (which John Adams did), yet Abigail Adams not only writes it, but does so with the assumption that she has the right to do what she wants with money that she identifies as "hers" (even though, legally, it isn't).

And where did this money come from?  If you think the Adams family survived on John's salary, guess again.  As Holton points out, Abby Adams was a junk bond dealer

Abigail Adams was an investor with an eye for opportunity, and she didn't mind using her husband's public position to aid their financial affairs.  Over the course of her lifetime, she and her friends and family never paid postage, if they could possibly help it.  One of the perks of John Adams' political offices was "franking".

As a member of the newly-formed Continental Congress, if John signed for a letter, postage was free.  So Abigail regularly instructed friends and family to fold her letters inside a sheet addressed to John.

And since John had a pesky habit of occasionally reading her correspondence (it was addressed to him, after all), she would make up little code signals for her correspondents, if they had news to tell her that she'd rather not have him find out about.

During the Revolution, while her husband was in London and Paris, Adams set up a nice little import business.  She made enormous profits--in some cases, she more than doubled her money--because she saw that, with a war on, merchants would struggle to obtain goods in the colonies.  Her husband could send her merchandise on warships (a safer mode of transport than trading vessels), and that's what he did.

No way anyone was going to be flinging Abigail Adams' tea into Boston Harbor or seizing it en route.  Not if she could help it.

She also bought government securities.  Adams had a keen eye for the bond market and its fluctuations, and she knew when to buy.

No small feat, given that the late-18th-century economies of Britain, France and the U.S. were marked by more boom-and-bust episodes than the current century has been.

In today's market, Adams would probably be considered a forex trader as well.  She took advantage of fluctuations in paper currency, paying debts with paper money, but also trading it in for silver before the currency tanked.


Adams employed a family friend as her agent (since she couldn't enter into financial contracts herself) and when he realized how savvy she was, he followed her advice with his own money as well.

Adams would run her ideas by her husband John, and sometimes he'd agree and sometimes he'd forbid her to do it--in which case, she usually did it anyway.

After all, he was in Paris.  Or London.  Or Amsterdam.  Or Philly.  Not much he could do about it.

Adams kept some of her investment ventures secret from her husband and in some cases, she just pretended she hadn't gotten his letter in time.  She bought large tracts of land in what would become Vermont.  Typically, this was the kind of move John Adams would have favored--he preferred to invest in land, not bonds and securities--but he usually wanted land right around his farm outside of Boston.

He had no idea what anyone would want with acres and acres of land in Vermont.

Abigail Adams' ability to do all of this is accentuated by the fact that, contrary to popular belief, taxes in the newly-independent colonies after the American Revolution were astronomical.

It's an odd irony of American history that the Revolution was fought over Britain's policy of taxation without representation, but by the mid-1780's, the former colonists were having the living shit taxed out of them by their own state governments, courtesy of their own newly-elected representatives (men like John Hancock and Samuel Adams).

Sounds terribly familiar, doesn't it?

So, although many of today's Tea Party Patriots would insist otherwise, the sad historical fact of the matter is, the colonies revolted against England over a tax rate that was far less than the one subsequently imposed by the newly independent state governments they fought so hard to achieve.

Needless to say, this made quite a few Revolutionary War veterans very unhappy.

The new state governments taxed everything: tea, stamps, property--you name it--and because they were now facing an enormous post-war debt and fluctuating currency values (each state had its own independent government and its own currency), taxes skyrocketed.

It became so bad that, in 1786-1787, a group of farmers and citizens in Western Massachusetts revolted against the new state government.  They stormed the courthouses in Northampton, Worcester, and Great Barrington, and attempted to take the armory and courthouses in Springfield.

The movement was known as "Shay's Rebellion."

The protesters wanted relief from the enormous tax burden that had been placed upon them (the state government's way of solving the enormous debt incurred during the Revolution), they wanted to stop feeling the pinch from the newly instituted credit freeze (the result of the post-war economic depression) and they wanted the courts to cease prosecuting individual debtors and print more paper currency instead (as they had done previously).

Sounds terribly familiar, doesn't it?

The Adams family and their friends in Boston were horrified at the actions and assumptions of such rebellious ne'er-do-wells.  Like many of the elite, they felt that taxation was the only way to pay down the debt.

And, of course, stiff taxes would mean that Abigail Adams would see a hefty return on her bond investments.

Ironically, Samuel Adams thought the "traitors" involved in Shay's Rebellion should be executed.  Rebellion looks very different, depending on which side of the gun you're on.

For her part, Abigail Adams' life, as told by Holton, accentuates many of the problems and paradoxes we continue to see in American government today.  Her husband John worried enormously about the influence that investments and "speculation"--what we would today identify as "Wall Street"--might have on the direction of the newly-formed federal government, and he spoke out vehemently against that influence.

And yet, as Holton acknowledges, one of the reasons John Adams did not die massively in debt (as Thomas Jefferson and George Washington both did), was because dear Abby invested avidly.

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