This is the second in an eight-part series that takes an incisive look at the Bermuda economy, historically from our humble beginnings to the 21st century and the challenges faced by the Progressive Labour Party government

A renewable resource that was found in Bermuda was the cedar tree, which was endemic to the island. It continues to be a useful and attractive wood, occupying a pride of place in Bermuda homes. It played an even more significant role in Bermuda’s history.

It is estimated that at the beginning of the 17th century, the cedar forest consisted of some eight million trees. The cedar was used in the building industry — homes, churches, furnishings, and even jails and coffins.

Cedar could be worked as soon as it was felled. The cones were used for food for both humans and animals. The berries were used to make a syrup that was beneficial for medicinal purposes. Although now very expensive — at more than $40 per broad foot — it is still used in closets to repel moths, mildew and insects. But above all it was used to build ships or for exports.

In 1627, one of Bermuda’s earliest conservation laws was designed to protect the Bermuda cedar by forbidding its export for the building of ships. In fact, over the next 75 years the local legislature passed 16 Acts to protect cedar trees.

Events during the 1940s justified Bermudian sensitivity to her natural environment. It was during the building of the military bases by the United States Government that two pests were introduced to the island: carulaspis minima and lepidosaphes newsteadi, which wiped out more than 95 per cent of the cedar forest. The destruction of the cedar forest led to the endangerment of the bluebird and the extinction of the cicada (singers), which were dependant on the cedar tree.

On departing the base lands in 1992, the US Government demonstrated its further contempt for Bermuda’s natural environment by leaving behind contaminants in the form of sewage and asbestos; the storage of waste destroyed caves and threatened underground water supplies. Containers filled with asbestos were also left behind, with the ongoing clean-up costing some $100 million.

In addition to the natural resource found in the Bermuda cedar, Jacob Jacobson, a Dutchman, was shipwrecked on the island in 1619. He would have been familiar with the sailing craft of the Netherlands: on the Zuiderzee lake and the sloops used on the coast.

These were two-mast vessels carrying a raked mast of 15 degrees with fore and aft rigs. With this knowledge, he built what has become the Bermuda sloop.

The Bermuda sloop was a fore and aft-rigged, single-mast vessel that carried a gaff rig and quadrilateral sails. It has now evolved into a triangle sail and jib. Their especially elongated booms increased the sail area and used the spinnaker when sailing downwind. Most of the sloops built in Bermuda were 25 to 30 feet, but could go up to 70 feet.

These boats with their unique design and cedar construction could travel at speeds up to five knots and were especially adept at sailing upwind. They were close-hauled and highly manoeuvrable. Builders could plan the growth of the cedar tree and shipbuilding could take place year-round. A 30-tonne ship could be built in three to four months. At one point in Bermuda’s history, land was valued by the number of cedars planted on a site.

The Bermuda cedar tree can reach heights of 50 feet and a diameter of up to four feet. Their widespread roots made them resistant to hurricanes and they are also resistant to salt air. They could be planted for future generations, but successive governments have failed to reforest the island with the now resistant cedars that have grown up. Cedars are a renewable resource.

The speed of the Bermuda sloop made it a highly sought-after carrier whose masters found ready customers in ports abroad, especially during wartime. The flexibility of the rig allowed it to sail in wind conditions that kept square-riggers at anchor, and the shallow draft of the typical Bermudian hull could navigate over sandbars that stopped larger vessels and could travel up rivers to reach markets deep in the North American interior.

The durable, native Bermuda cedar from which the sloops were built was highly resistant to rot and marine borers, giving Bermudian vessels a life span of 20 years and more, even in the worm-infested waters of the Chesapeake and the Caribbean. Bermuda cedar was as hard as oak, but much lighter, and could be crafted into superior boats that were light and fast. The industry lasted into the 19th century before it was finally displaced by the coming of the steam engine.

No vessels are made commercially in Bermuda today.

The Bermuda sloop was adopted for service by the Royal Navy and indeed it was HMS Pickle, a Bermuda sloop that carried the news of the Trafalgar victory and the death of Admiral Lord Nelson.

In the 16th and 17th centuries, Spanish ships returning to Spain from the Caribbean rode the Gulf Stream to Cape Canaveral and then aimed for Bermuda. Raising Bermuda was essential to Spanish ships for verifying their position before setting course for the Azores. As a result, some Spanish ships wrecked on Bermuda. The treacherous reefs surrounding the island were the cause of many wrecks, giving rise to salvaging activity known as wrecking.

After the English settled Bermuda in the early 17th century, they quickly took up “wrecking” as a profession, and then extended their search for wrecks to all of the Caribbean. Later in the 17th century, the centre for English “wrecking” in the Caribbean shifted to Port Royal in Kingston, Jamaica.

William Phips went there to recruit the divers he used to salvage treasure from a Spanish wreck on the north shore of Hispaniola, where he recovered the largest amount of treasure from a single wreck before the 20th century.

There are many examples of this activity in Bermuda waters. On many occasions, unsuspecting captains were deliberately lured on to the reefs.

The reefs were so treacherous that even Bermuda captains often lost their ships. On December 29, 1751, the ship Hunter Galley, built in Bermuda and launched in 1747, was wrecked on a Bermuda reef at Hogfish Cut at the western end of the island. She was commanded by Clement Conyers on her passage to South Carolina from the island of St Eustatius some days earlier. During the early part of the voyage, gale-force winds damaged the rigging, sails and “top timbers”, forcing the ship to head to Bermuda for repair.

Bermuda was visible and the ship headed for port. Because of the treacherous weather conditions, the captain and crew could not get the ship into the harbour, and moored her in Hogfish Cut. During the night, the force of the winds battered the ship to such an extent that the next day the captain was forced to cut away the mast, leaving the ship to sink.

Privateers are maritime mercenaries. Privateers not only operated against enemy ships but also against ships of their own nations if these ships were carrying contraband. Privateers were employed by most nations, converting private ships to national service. The conversion took place by a national government issuing Letters of Marque to the private shipowner.

Bermuda did well by the practice whenever there was a war among European nations.

In addition to attacks of enemy ships, the rough-and-ready justice of privateers was frequently empowered to prevent illegal trade in the ships of the nation issuing the Letters of Marque, and often acted in a high-handed fashion.

In 1772, customs officers seized the sloop Molly, suspecting a cargo of foreign rum.

The captain, Perient Trott, owner Alex Stockdale and others boarded the vessel, forced off the officers and made for sea.

As England challenged Spain, the dominant world power of the day, Admiral Sir George Somers, credited with settling Bermuda, became a hero in England because of his plunder of Caracas and Coro, cities of Venezuela.

Sir George obtained the fabulous sum in 1595 of £8,000 — more than $2 billion by today’s valuation.

Nathaniel Butler, the Governor of Bermuda, from 1619 to 1622, was himself a privateer.

In 1639, while prowling the Spanish Main, he successfully captured a Spanish frigate at Trujillo, then the capital of Honduras.

He was later paid 16,000 pesos in ransom. He failed to capture anything else of value.

In 1691, Thomas Tew came to Bermuda from Rhode Island in the middle of King William’s war that had begun three years earlier, obtained Letters of Marque from Bermuda’s governor to apprehend French ships on the west coast of Africa, raised enough capital to purchase the Amity and finance a crew of 46 men, and sailed off to Africa.

Instead of going to West Africa, he rounded the Cape of Good Hope and robbed an Indian dhow off the coast of East Africa and headed back to the Atlantic with £100,000 — comfortably in excess of $1 billion by today’s valuation — in gold and silver.

It was enough to divide among his crew, pay off the investors with 14 times their investment and make himself a millionaire. He was killed on his next venture.

King William’s war ended in 1697 and three years later, a shipping count showed that Bermuda, in addition to a fleet of 60 sloops, six brigantines, four ships, and between 300 and 400 two-mast boats for coastal waters, Bermudians also built large boats for foreign clients.

The year 1700 was a good year for Bermuda shipbuilding.

• Arthur Hodgson is a former Cabinet minister, Rhodes Scholar and graduate of Oxford University in England, where he studied philosophy, politics and economics