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Notes and Documents
Abigail Adams, Bond Speculator
Woody Holton
| OF the thousands of soldiers and statesmen separated from their families by the American War of Independence, few were gone as long as John Adams, who spent most of the decade from 1774 to 1784 away from his wife. Like many absentees Adams asked his spouse to manage his finances as well as his farm. And that led to one of their few great quarrels. |
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In the fall of 1783, still in Europe after helping negotiate the Paris Peace Treaty that secured American independence, Adams instructed his wife to find out what price two of his neighbors would take for their farms. Responding in January 1784, Abigail Adams agreed to sound the two men out. But she added, "There is a method of laying out money to more advantage than by the purchase of land's," namely "State Notes."1 Speculators were buying a Massachusetts government security called the Consolidated Note at about one-third of its face value. Bondholders received the standard 6 percent interest every year, but the interest was based on the bonds' face value, not what had been paid for them. So the owners of Consolidated Notes earned 18 percent on their investment every year. |
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The following summer Adams finally joined her husband in Europe. Before sailing she turned the management of his affairs over to her uncle Cotton Tufts, a physician in Weymouth, Massachusetts. In September 1784 John instructed his new agent to purchase a farm from a couple who lived near the Adamses, William and Sarah Veasey. Three days later, in her own letter to Tufts, Abigail pleaded with him not to buy the farm. "Veseys place is poverty," she wrote, "and I think we have enough of that already." Tufts did not make the purchase. Abigail may or may not have told John she had countermanded his instructions, but on April 24, 1785, John started a letter to Tufts by repeating his earlier directive to buy the farm, using £200 (sterling) of Adams's funds. Later in the same letter, however, John wrote, "Shewing what I had written to Madam she has made me sick of purchasing Veseys Place. Instead of that therefore" Tufts was to use the £200 to purchase "such Notes as you judge most for my Interest."2 |
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Like the Consolidated Notes Abigail had urged on John a year earlier, the notes she persuaded him, midletter, to purchase in April 1785 were depreciated government securities. During the American Revolution, the United States government and the thirteen states adopted the time-honored practice of funding their armies partly by selling war bonds. In the final years of the conflict, Congress and the state legislatures were so strapped for cash that they also handed out securities to soldiers and suppliers who otherwise would have received nothing. Most of the soldiers, farmers, and crossroads traders to whom these certificates were disbursed were so desperate for actual gold and silver that they resold them to speculators at a fraction of their face value, creating opportunities for people who had access to precious metals, such as the Adamses. Abigail's conviction that bonds were a better investment than farmland even led her to the extremely rare step of openly criticizing John to a third person. In October 1790 Adams informed her sister Mary Cranch that if she and her uncle "had been left to the sole management of our affairs, they would have been upon a more profitable footing. In the first place I never desired so much Land unless we could have lived upon it. The money paid for useless land I would have purchase[ d] publick securities with." She lamented that "in these Ideas I have always been so unfortunate as to differ from my partner."3 |
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