Financing U.S. External Trade, 1790-1819

In the "neutrality years" 1793-1807 and beyond, U.S. merchants drew on Spanish-American silver to finance their carrying trade and to settle deficits with Europe and the Far East. The size and direction of these payments must remain unknown, because no records of silver flows were kept until 1821. This paper infers the financial claims and liabilities involved from estimated balances of trade and services at foreign ports by geographic areas. It suggests that the seemingly central role of Spanish silver pesos in financing U.S. deficits with China is only partially explained by legal exchange between the United States and Spain, Spanish America, or Europe. The weight of evidence and argument thus points to any additional silver coin that U.S. merchants may have secured through unofficial exports directly to Spanish America.