Book Review: Debts Hopeful and Desperate

This book review is different.  It was written back in 1963, and has not been reprinted.  If you want to buy it, you will have to buy it used.  My copy used to be a part of the Newport, Rhode Island Public Library.  It is a short recounting of the economic history of the Pilgrims.  The total pages allocated to the main text are less than 60 pages.

But a good 60 pages they are.  Michael Milken once self-servingly said, “America was built on Junk Bonds.”  If we were talking about the Pilgrims some might say their effort was financed by loan sharks, but really, it would be fairer to say that they were financed by venture capitalists, which occasionally worked on an equity basis, and also on a debt basis.

The author does not dwell on the religious views of the Pilgrims, aside from the effects it had on the financing of the colony.  Given that this was written in 1963 that is not a weakness, because writers in that era had better historical knowledge than most in the present era, in my opinion.

Though the book has only two chapters, it breaks down into 5 phases:

  1. The decision to emigrate from Leyden (in Holland) to the New World, obtaining an initial patent, gaining financial backers who were less than reliable, to the formation of a Joint Stock company.
  2. Leaving England and arriving at Plymouth, Massachusetts which was not their intended destination.   Disaster happens with their Winter arrival, with many dying.  The initial ability to service the debt is poor, which leads to squabbles among the financiers.  The joint-stock company breaks up, and the Pilgrims agree to buy out the financiers at a price that gives the financiers a profit, but leaves the leaders of the colony in debt to a new set of financiers.
  3. Socialistic policies lead to disaster, until residents get their own land to till, leading to relative local prosperity.  In order to pay down debts the Pilgrims enter the fur trade, though with difficulties.
  4. They get a new patent, and find that their agent, Isaac Allerton, was not fully trustworthy.  Disputes over accounting embroil the Pilgrims and their financiers, probably to the detriment of the Pilgrims.
  5. Their financiers quarrel among themselves, after which an agreement is struck, where the amounts of goods that the Pilgrims delivered are adequate to pay off the debt.

The book doesn’t deal with the aftermath.  Anyone that has read Bradford’s writings on Plymouth Plantation would recognize that at the end, Bradford was dispirited, because almost all of those who came and survived, had moved further west to get more and better lands.  The religious motives of the colony were sufficient for its founding, but proved inadequate for its continuation.  After 25 years, the debts were paid, but for the most part, the colony had evaporated.

The collective financiers earned a handsome return, between 20-40%/year, maybe.  We don’t have enough details to be certain.  All I know is that the heavenly reward of the Pilgrims was far greater than their earthly toils to pay back their financiers.


The book could have dealt a little more closely with the motivations of the pilgrims, and their willingness to take deals that were against their interests.  Yes, the pilgrims were not as financially savvy as those that financed them, but they weren’t stupid either.  They were desperate to get out of the Netherlands and Britain.  That desperation drove some of the bad deals they took, and made them look like a bad risk, which narrowed down who would deal with them.  Leaving that aside, financing for most colonial ventures was stiff.

Who would benefit from this book: If you want to understand the economic struggles that the Pilgrims undertook, you will like this book.  If you want to, you can try to buy it here: Debts Hopeful and Desperate: Financing the Plymouth Colony.

Full disclosure: I bought the book with my own money.

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