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Recounting George Washington's Brilliant Entrepreneurship
Recounting George Washington's Brilliant Entrepreneurship
February 22, 2012
Originally published in Real Clear Markets
February is an important month in the history of American commerce. In this month is the birthday of one of the country's earliest business innovators and large-scale entrepreneurs.
During a time period of America's existence as an English colony and then a young nation -- when, to put it mildly, communication and transportation faced challenges -- this businessman's enterprise processed 1.5 million fish per year sent throughout the 13 American colonies and the British West Indies. The mill he built ground 278,000 pounds of branded flour annually that was shipped through America and, unusual during colonization, even exported to England as well as Portugal. And in the 1790s, during the last years of his life, this mogul built one of the largest whiskey distilleries in the new nation.
Don't think you've heard of this entrepreneur? Well, it's possible you might know him from some of his achievements in the political and military spheres. He did have a few notable accomplishments in these areas as well. Like serving as a representative in colonial Virginia's House of Burgesses and as a Virginia delegate to the pre-Revolutionary War Continental Congress. Then being chosen to lead the Continental Army during the Revolutionary War and leading the nascent American nation to a hard-fought victory for independence. And then, a few years after that, becoming the new nation's first president.
That's right, this entrepreneur was none other than George Washington. If he had never been president, or never even led the Continental Army to victory over the British, he would still have had the accomplishment of being one of America's most successful early business leaders. And his success was largely self-made.
As Glenn Beck notes in his penetrating new book Being George Washington, for many Americans, as well as media and academic elites, George Washington has been little more than just the face on Mount Rushmore and the one-dollar bill. People revered him but just didn't know how to relate to him. Whereas Thomas Jefferson and Benjamin Franklin generated interest with their passions and achievements in practical science and architecture, Washington didn't seem to have a career -- or much of a life -- outside of his leadership as general and president.
But now, some pioneering scholars are documenting that Washington's life's work was just as enthralling as that of any of the Founding Fathers. His pursuits can be said to be just as creative as those of Franklin and Jefferson, but in a different way. Washington's creativity was of the type one associates with modern entrepreneurs such as Bill Gates and even Donald Trump. Whereas Franklin built gadgets at his homestead, and Jefferson built fancy buildings, the notable things Washington built were a series of interconnected businesses.
In the 2006 biography The Unexpected George Washington, historian Harlow Giles Unger calls Washington "one of America's leading entrepreneurs" and chronicles Washington's transformation of Mount Vernon from a sleepy tobacco farm into a type of industrial village. As Unger writes, Washington "expanded a relatively small tobacco plantation into a diversified agroindustrial enterprise that stretched over thousands of acres and included, among other ventures, a fishery, meat processing facility, textile and weaving manufactory, distillery, gristmill, smithy [blacksmith shop], brickmaking kiln, cargo-carrying schooner, and, of course, endless fields of grain."
Some of these enterprises are now on display at the Mount Vernon Estate and Gardens historical site in Alexandria, Virginia, available for visitors to see. Washington's real birthday is the 22nd, which this year happens to fall today, just two days after the official holiday. (And the federal holiday, by the way, is still officially Washington's Birthday, not President's Day. Although many celebrate the birth of Abraham Lincoln in February, and some states have their own legal holidays for him, Congress never formally merged Washington's day with Lincoln's birthday nor gave Lincoln his own official holiday.)
The Donald W. Reynolds Museum and Education Center, opened on the grounds of Mount Vernon in 2006, has a display of the Mount Vernon fishery and other facets of his career as a "visionary entrepreneur." And Washington's gristmill and whiskey distillery were themselves recently reopened - the latter thanks to a generous grant from the Distilled Spirits Council of the United States -- for attendees to get a first-hand look at some of Washington's interconnected ventures.
In this challenging time for free enterprise, Washington's business, as well as his political biography can be seen as emblematic of the American Dream. Washington's background wasn't exactly poor, but it was not as rich as many of his contemporaries among the Founders. His father died when he was 11, and, among the youngest of many brothers, he didn't inherit much, and the family lacked money to give him a formal education.
So at 16, Washington became an apprentice land surveyor for Thomas Fairfax, 6th Lord Fairfax of Cameron. From Fairfax (namesake of Fairfax County, which is now part of the Northern Virginia suburbs of Washington, D.C.), Washington learned about land acquisition, and became skilled in the practice that today we would call a real estate speculator.
After fighting with distinction in the French and Indian War, Washington inherited the 2,000-acre Mount Vernon farm from his older brother Lawrence and began acquiring other land around it, extending his homestead to 8,000 acres at the time of his death. In 1759, Washington married the widow Martha Custis, and she and her two children came to live at Mount Vernon. But although Martha had considerable wealth, as has been noted, running a productive farm against the backdrop of British trade restrictions and taxes, as well as nature's unpredictability, was not an easy task. It was then that Washington began his innovative agribusiness practices that made Mount Vernon, as described in a paper by Mount Vernon director of restoration Dennis J. Pogue, "an expansive and ambitious commercial enterprise."
Washington's first step to becoming an entrepreneur was to abandon the most common cash crop of his native Virginia. That would be the now-dreaded tobacco. But it was not for health reasons that Washington stopped planting it. It was because of taxes and duties that reduced his profits and the fact that the tobacco crop was hurting Mount Vernon's soil. As Pogue writes in another paper , "By 1766 the disappointingly low prices that he was receiving in return for his tobacco harvest convinced Washington that he would be better off devoting the labor of his workers to producing other commodities that had a more dependable payoff."
Washington grew hundreds of crops, many of which were imported from Europe. (And yes, he did grow hemp, but not very much and not for very long.) For his main cash crop, he chose wheat. But he didn't stop fulfilling the market need with the growing of this wheat. He became a manufacturer of two products that contained his crop: flour and distilled whiskey.
Recently replicated on their original foundations at Mount Vernon, Washington's gristmill and distillery are architectural wonders that anticipated modern factories. The flour mill is three levels high with two sets of mill stones, including French buhr stones that were used to make the finest quality of flour. The mill produced about 278,000 pounds of flour per year, branded with the Washington name, sold throughout the colonies and exported to England and as far away as Portugal. The flour bore the identification of George Washington, in effect making it similar to a modern branded food product.
Washington also "farmed" the banks of the Potomac for shad, herring and other fish. His fishery consisted of rowboats and large nets, and in a six-week fishing season each spring, Washington's men netted about 1.5 million fish, according to the Reynolds museum at Mount Vernon. And the inedible portions of the fish were used as fertilizer for crops such as wheat.
But it is the distillery that may offer the most fascinating example of Washington's entrepreneurial prowess. After retiring from the presidency and returning to Mount Vernon -- setting a precedent for voluntarily relinquishing power -- Washington built a distillery in 1797 on the advice of his plantation manager James Anderson, a native of Scotland who knew a thing or two about distilled spirits. The whiskey was made largely from crops grown at Mount Vernon. As one Virginia magazine describes it, "rye, malted barley and corn were mixed with boiling water to make a mash in 120 gallon barrels."
This process is now reenacted at Mount Vernon at the distillery that was reopened in 2007, thanks to the grant from the Distilled Spirits Council of the United States. A few times a year, Washington's whiskey -- using one of the old recipes -- is even sold to Mount Vernon visitors. As a guest of the holiday party of DISCUS in its D.C. offices this December, I poured myself of glass of Washington's whiskey with curiosity, but also with concern that the recipe would be dated. I was pleasantly surprised to find it to be among the smoothest whiskeys I have ever tasted.
Washington's lifelong entrepreneurship sheds new light on his fight for liberty, and his motivation to develop a constitutional structure in which all were free to develop their many talents. Like that of other Founding Fathers, Washington's career was stained by the evils of slavery, and this extended to his business enterprises, most of which made use of the labor of the slaves at Mount Vernon. But his correspondence shows that Washington realized this contradiction more than most of the Founding Fathers, and he worked tirelessly the last few years of his life to free all of his slaves upon his and Martha's death. He also made provisions for their education and for the support of the former slave children and elderly.
In Being George Washington, Glenn Beck writes, "For America to achieve the greatness that George Washington achieved, we have to remember that it is achievable." This is true in business as well as politics and culture, and in the interplay among these spheres.
So this month, if you can't make it to the celebrations at Mount Vernon, you just may want to toast George Washington -- the politician and entrepreneur -- with a plate of herring washed down with a glass of whiskey.