Name

Elias Haskett Derby

Career

Business/Commerce

Occupation 1

shipowner

Occupation 2

merchant

Identifier

Salem/Maritius

Region

world

Era

Maritime Republic (1751-1815)

Born

1739

Died

1799

Source

ANB

Text

merchant, was born in Salem, Massachusetts, the son of Captain Richard Derby, an established ship master and merchant, and Mary Hodges, a merchant's daughter. His father's rise as a prominent general merchant was instrumental in lofting Derby to the position of one of the wealthiest and most successful merchants of his age. As an apprentice in his father's counting-house, young Derby assisted in the management of a burgeoning shipping business through the 1750s and 1760s. He became adept at keeping the firm's books and coordinating the flow of New England fish, lumber, and produce, West Indies sugar and molasses, and Southern tobacco and naval stores. As his aging father gradually withdrew from the business, the younger Derby assumed full control of counting-house operations, introducing new practices to adapt to the increasing complexity of the Atlantic trade.


At the close of the French and Indian War in 1763, during which the Derby family increased its fortune, Derby discerned fresh opportunities to expand the business and expedite his vessels' "ventures," or voyages. He cultivated a network of international agents to glean information about prices and demand throughout markets served by the Atlantic shipping lanes. This tactic also enabled him to consign cargoes directly to trusted intermediaries, thereby freeing his vessels from extended port calls. His captains assiduously scouted markets opened by British victory. Canada, Havana, Bermuda, and even the Barbary Coast hosted Derby vessels. Through the 1770s his vessels carried sugar and wine regularly to London, a market that his father had ignored. By the beginning of the Revolution, Derby's firm had become a major colonial business.


Derby's rise to business leadership was not an easy one. He entered the Atlantic trade during its "most dire trial," with "the old practices no longer fully suitable" (McKey, Ph.D diss., p. 65). After 1763 British imperial policy grew increasingly restrictive, closing lucrative markets and increasing the colonial merchant's costs of doing business. Melding idealism and self-interest, the Derby family, with a sole exception, opposed imperial regulations. "Piratical" seizures of Derby ships, targeted as smugglers by the British navy, especially outraged Elias Hasket. Furthermore, the family faulted British policy for a nasty postwar depression.


The flash of guns in April 1775 brought formal war with Great Britain and uncertain conditions for colonial commerce. With seven vessels plying the seas and "things . . . in such a confused state I know not what to write" (quoted in McKey, Ph.D. diss., p. 100), Derby had to trust to his captains' instincts. British reaction cleared the picture. By the winter of 1775 four of his vessels had fallen to enemy commerce raiders. He addressed British naval might directly. Along with the coastal trading vessels, armed privateers flying Derby colors sailed 110 cruises between 1775 and 1783, capturing 144 prizes, against nineteen losses. It was perhaps during this period that the fabled "Derby luck" became a topic of conversation--not all of it admiring--throughout Salem. While most colonial merchants suffered significant losses, Derby's investment, 5 percent of the colonies' entire privateering effort, made him one of the wealthiest merchants in the colonies. As his contribution to the colonists' victory was considerable, it also made him something of a local hero.


The Derby vessel Astrea brought home the first word of war's end in 1783; peace, however, did not improve economic conditions. Even relatively prosperous merchants like Derby found readjustment difficult, as they were forced to operate under stricter mercantilist regulations imposed by both Britain and their own former wartime allies. New England slumped into a calamitous depression; as late as 1786 the region's exports were still only one-fourth those of 1774. Derby responded to tighter postwar conditions by first employing a conventional strategy. Attempting to resume the traditional triangular coastal and West Indies trade routes, he quickly dispatched his fleet, but these twenty-five voyages between 1783 and December 1784 proved unfruitful. Trade in the Atlantic in the 1780s returned sharply reduced profits. Derby found it necessary to keep costs down, facilitate cargo collection, and avoid the prospect of flooding markets. In addition, he had to replace his wartime fleet of large, heavily-armed privateers with smaller schooners and sloops.


Derby adapted to the demands of the postwar era, establishing an economic basis for American resurgence. Scanning his maps for markets beyond the Atlantic, he targeted Mauritius, the Indian Ocean way station for France's Eastern trade, as a base for American commercial exploration. After an exchange of letters in 1785, in which his agents in Lorient identified articles best suited for the Eastern trade, Derby dispatched the Grand Turk to the Indian Ocean; she anchored at Port Louis in April 1786, the first American vessel to dock there. Remarkably, Derby gave responsibility for developing America's entry into the Eastern trade to his inexperienced 21-year-old son, Hasket. The adventurous Derby then organized three more voyages to the Cape of Good Hope in late 1786, even before French contacts informed him of a boom at Mauritius. Hasket immediately elected to sell Derby's pride, the Grand Turk, and in October 1788 sailed a newly acquired vessel to Bombay. His father's faith paid off. Through the next years, India emerged for Derby as an enormously profitable trade center.


During the next phase of commercial exploration, from 1791 to 1797, the Derby strategy focused on the search for new markets throughout the East. His captains made the first American calls at Bombay, Calcutta, Mocha, Rangoon, Manila, and assorted other ports in India, Ceylon, Sumatra, Siam, and Burma. Derby meanwhile developed a management strategy, striking a balance between writing minutely detailed instructions, based on his impressive knowledge of world markets, and permitting his captains wide latitude. The formula was successful.

Derby's entry into the China trade was more coincidental and briefer. In 1786, before Hasket sold the Grand Turk, a French trader at Port Louis had chartered the ship to sail to Canton, making it the first New England vessel to reach China. The opportunity led Derby to project his Indian Ocean strategy farther afield, and by 1789 he had dispatched four more ships to Canton. However, Derby found the costs of operations in this arena prohibitive, and the difficulty of managing for exotic goods in world markets made the Chinese leg of the Eastern trade less attractive. Relative profitability decided the issue; the Indian Ocean trade "compared too favorably" for Derby (McKey, Ph.D. diss., p. 262). Even before the last China ship returned at the close of 1790, Derby's strategy targeted the Indian Ocean and South Seas as his preferred theaters of commercial operations, using Salem and Mauritius as command centers.


Although Derby had shifted his attention to the East, he did not abandon the Atlantic trade. Rather, his strategic vision linked the two as essential complements of an interrelated world system of trade. He also redefined the scope of Atlantic commerce within this system. By the mid-1790s Derby realized that large imports of Eastern goods would not sell profitably in Salem, that he could avoid the time-consuming practice of collecting outgoing cargoes from disparate American, West Indian, and European marts, and that he could circumvent the expense of warehousing imports under the new Hamiltonian impost. Instead, he developed a strategy involving more triangular routes with briefer voyages, often using others' ships: from Salem they carried Indian goods to Europe and then brought European goods and currency to the East, returning to Salem, where eastern goods were broken into cargoes for the Atlantic and European trades or diverted directly to Europe.

...When Derby died in Salem--by 1799 the sixth largest American city--he left a legacy of an estimated $1,000,000 in vessels, cargoes, warehouses, and other property.


Of greater historical significance, Derby was one of a handful of merchants who developed new business methods, pioneered new routes, and opened new markets to American commerce during a critical period of economic uncertainty. His entreaties to the federal government, for example, inspired the establishment of the bonded warehouse system. He was among the first American merchants to commission fast, copper-bottomed ships. Known for an almost reckless devotion to daring young mariners, he dispatched the famous "boys' voyage," sending the Benjamin on a three-year cruise with a nineteen-year-old captain and only one crewman over the age of twenty-one. Derby vessels brought home the first Indian native, the first zebra, and the first elephant to the United States. The products he off-loaded in Salem--coffee, tea, indigo, sugar, silks, pepper--expanded Americans' horizons and improved the quality of their lives.

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