Everyone in colonial New York City traded with the enemy (the French) during the Seven Years' War (what we colonial descendants refer to as the French and Indian War). OK, that's an overstatement, but as Thomas Truxes fine work explains, it comes close to the truth. The City's merchants (obviously) and politicians (surprised?) were up to their necks in illegal trade before, during and after this period. "[T]rade with the enemy...did not flow from disloyalty to the Crown or indifference to the fate of the nation," writes Truxes, "...rather, the naked manifestation of a powerful commercial impulse synonymous with the great metropolis."
And while other colonies traded with the enemy--Connecticut and Rhode Island, for instance, were notorious for their "independence" in these matters--New York had distinct advantages when it came to "laundering" illegal goods. Its deep harbor and relatively small size made it easy for large ships to load and unload quickly and it had established itself since its days as a Dutch colony, as a key transshipment port.
During the war, New York's advantages as a supply depot for the British Royal Navy lent to its importance in colonial commerce and wartime machinations. This also made it an attractive target to the French, which, in turn, caused the British to increase the naval presence further. In addition, privateers from New York struck out to capture French prizes.
But there was money to be made by trading with the enemy, too. New York was both hub and spoke of illicit trade that went between Europe, the Caribbean islands and the colonies. Already established smuggling operations easily accommodated further illicit trade with the French. War or no war, they were well practiced at avoiding the authorities.
It certainly didn't help that many local politicians and crown representatives were in on the network. And, as others have argued, by the time the Crown, or Parliament, tried to do something, it was already too late. The horse was well out of the barn: these were the unfortunate rewards of so-called salutary neglect. As Truxes writes:
The flour act of 1757 was the sole piece of parliamentary legislation directed at Briton trading with the enemy during the Seven Years' War. If it was to be effective, the law would require broad support on both sides of the Atlantic. But the restrictions and penalties contained in the act applied only to colonial America. Cargoes dispatched from Great Britain and Ireland were unaffected. The discriminatory character of the act was immediately apparent. The ill-conceived legislation was one of the great blunders of the eighteenth-century British Parliament. Before a decade had passed, there would be others. (p.68)Truxes has conducted extensive research and it shows. He has a feel for the city at that time and also does a fine job explaining the relationships between various politicians and merchants. Indeed, through his explanation of both the geography and the personalities involved, he brings 1760's New York to life. He also provides a very good overview of the Caribean trade ports and, in general, this is a fine piecet of economic history. Further, it contributes to the historiography that supports the contention that it was Britain's reaction (or overreaction) to the conduct of its American colonists during the Seven Years' War that ultimately set the stage for the Revolution.