The signers of the Declaration of Independence pledged their “lives,” their “fortunes,” and their “sacred honor” to advance the revolutionary cause. Their lives have been the subject of innumerable biographies. Their sense of honor has been often explicated in terms of the philosophies of both collective and individual self-governance that they espoused. But much less has been written on how their personal fortunes contributed to the revolution and the foundation of the Republic. Thus, The Founders’ Fortunes: How Money Shaped the Birth of America, the latest effort of the historian Willard Sterne Randall, fills an important gap in our understanding. If at times diffused and insufficiently theorized, the book shows that right from the beginning, a commercial spirit and the wealth it generated were essential to creating and constituting America.

Gratitude to the One Percent

It is not too much to say that without the money and acumen of the richest Americans, the Revolution would have failed. Robert Morris, a Pennsylvania merchant now little remembered, was the wealthiest man on the continent in 1776. He played multiple, indispensable roles in seeing the revolution through. He sat on key committees in the Continental Congress early in the Revolution and used his knowledge to scrounge enough money to keep the troops supplied. He even used his own credit when it was hardly clear that the credit of the Congress or any state would have sufficed. Later in 1781, when finances became even more rickety, he took over as Superintendent of Finance. There, Morris came up with the idea of the Bank of North America. This bank issued its own notes that replaced the Continentals which had continually lost value. They were not backed by tangible assets, like gold, and were widely counterfeited. In contrast, the notes of the Bank of North America were ultimately backed by precious metals.

The Bank of North America deserves to be better known for constitutional as well as revolutionary history, because it provides neglected evidence in support of the constitutionality of the Bank of the United States—the most controverted legal question in the early republic. If the Continental Congress was accepted as having the power to establish a bank, why would Congress under the Constitution not have the power as well, given that it was widely understood that Congress was given more ample commercial authority than its predecessor?

Robert Morris was far from the only member of the wealthy elite who used their own resources to keep the colonists’ efforts afloat. John Hancock spent the equivalent of ten million dollars today to raise and supply an entire private regiment that provided key service in the North.

Even more importantly, wealthy merchants addressed a key deficit of the war effort: the absence of an effective American navy. They outfitted privateers, pooling their resources and repaying themselves by taking a share of the prize money from ships captured. Randall shows the surprising scale of the enterprises that interdicted British efforts to supply their troops. Instead of fitting out a large private Navy, which the colonists’ finances could ill afford, the Continental Congress registered some 1,697 vessels. In the first year of the war, they took vessels and goods worth 270 million dollars today. Even in the comparatively lean year of 1778, these ships captured one hundred British ships. In 1779 they captured two hundred. Amusingly, privatizing the Navy also showed the American dream was at work even in those early troubled times. Sailors often saved up their prize money to buy their own privateers, transforming themselves from hired hands into wartime capitalists.

Because of the weakness of American finances, many other revolutionaries of more modest means had to use their money to pay for public duties with the hope, not always fulfilled, that they would be paid back for their services. For the earliest Americans, patriotism was a matter of putting your money where your mouth was.

Business from the Beginning

In the twentieth century, Calvin Coolidge famously said the business of America is business. Randall shows this focus was also part of our origin story: the founders’ personal interest in commerce propelled both the Revolution and the Founding of the Republic. To me, one of the book’s revelations was how business-minded George Washington was. His image in American history is that of a statesman and general, but his day-to-day life was dominated by profit-making ideas. Washington was not born to wealth but at the age of sixteen, he became an excellent surveyor and was very well paid for his talents. He immediately invested some of his earnings in a company that bought land in the West, hoping for profit from development and settlement. Even at an early age, when he fought the first skirmish in what became the French and Indian Wars, he was also on the lookout for his investments, happily widening roads West that would benefit both his troops and settlers.

When he did come to own a plantation, he focused relentlessly on improving its output, reading up on the latest agricultural discoveries. He switched crops to meet market demand. He even hit on the local innovation of covering his otherwise unused hillsides with peach and apple trees.

Between his time as General and President, Washington’s obsession was an economic project to help unite the East with what was then the frontier, now the Midwest. He helped create the Potomac Company, which was to establish a network of canals connecting the Potomac, James, and Ohio Rivers, facilitating westward expansion. He used his great prestige to call a meeting of commissioners from Maryland and Virginia to end a feud over which state would benefit more. The result was the Mount Vernon Compact which criticized the inadequacy of the Articles of Confederation for creating a unified economy and set in motion the movement that created the Constitution.

Economic Liberty as Revolutionary Impetus

Randall also tells the more familiar stories about how Great Britain’s laws angered the colonial merchants and led to the revolution. But even here he emphasizes detail that is often lost in standard American history. It was only the Stamp Act that radicalized the colonists. Merchants were infuriated by the vigorous enforcement of laws that required them to send their goods by British ships, precluding their freedom of contract and driving up their costs. Britain also enacted a law requiring all debts to be paid in silver and gold, again dictating to merchants, and distressing many, given the paucity of hard currency in the colonies. The colonists argued that Parliament had no right to enact such laws because they were not represented there. But they truly hated these laws because they infringed on economic liberty and curtailed commerce. The commercial republic created by the Constitution reflects the commercial origins of the Revolution.

Any discussion of the role of money in the early republic must come to grips with Charles Beard’s claim that wealthy Founders shaped the Constitution to benefit themselves, particularly by assuring that their federal bonds would be paid off. Randall rebuts Beard by quoting Forrest McDonald’s study that showed the Founders received only small amounts from the bonds. Randall also notes that many of the Founders acquiesced in their states giving up land claims to the West from which they stood to benefit. The Founders often subordinated personal profit to the public good. Washington, for instance, pledged his profits from the Potomac Company to needy war veterans. But, in my view, the strongest argument against Beard is that the Founders knew that creating a commercial republic in which debts were paid would in short order benefit the citizenry in general. And their expectation proved accurate, as the United States prospered and attracted enterprising migrants from around the world.

Another way in which the Founders recognized the importance of money was their insistence on paying public servants well. As President, Washington received a salary the equivalent of $750,000 in today’s dollars—a huge sum back then. (Randall helpfully translates sums and salaries into current value.) As Randall notes, Washington, land-poor at the time, was grateful: “Necessity, if this election has not happened, would have forced me into frugality as my means are not adequate to the expenses I have lived since my retirement to what is called private life.” Washington had himself insisted on good salaries for his officers. Unfortunately, since the time of the Founders, a misplaced populist impulse has depressed the salaries of high government officials relative to what they could earn elsewhere, deterring many talented people from serving. Singapore, in contrast, still pays the top dollar that the Founders did and gets good government partly as a consequence.

While clearly and engagingly written, Randall’s book is not well-designed for those already knowledgeable about the Revolution and the Constitution. Much of it consists of the familiar narrative of Britain’s mistreatment of the colonies, the revolution, and the establishment of the Constitution, while intermittently highlighting financial issues. As a result, the book does not offer any grand thesis of the importance of money, or the way financial concerns interacted with the political theory of the time. Nevertheless, any reader will become convinced that money played an even greater role than most histories of the period suggest and that, as has often been the case in human history, the richest citizens were best positioned to lead the fight against tyranny. Equalizing wealth would have made it easier for the British state to lord it over the colonists. In our own time, when there is renewed hostility toward the rich, that is a lesson to remember.