The war for independence from Britain was a long and economically costly conflict. The New England fishing industry was temporarily destroyed, and the tobacco colonies in the South were also hard hit. The trade in imports was severely affected, since the war was fought against the country that had previously monopolized the colonies’ supply of manufactured goods. The most serious consequences were felt in the cities, whose existence depended on commercial activity. Boston, New York, Philadelphia, and Charleston were all occupied for a time by British troops. Even when the troops had left, British ships lurked in the harbors and continued to disrupt trade.
American income from shipbuilding and commerce declined abruptly, undermining the entire economy of the urban areas. The decline in trade brought a fall in the American standard of living. Unemployed shipwrights, dock laborers, and coopers drifted off to find work on farms and in small villages. Some of them joined the Continental army, or if they were loyal to Britain, they departed with the British forces. The population of New York City declined from 21,000 in 1774 to less than half that number only nine years later in 1783.
The disruptions produced by the fighting of the war, by the loss of established markets for manufactured goods, by the loss of sources of credit, and by the lack of new investment all created a period of economic stagnation that lasted for the next twenty years.