Riverside City College Effects of Mercantilist Economic System Analysis

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The American Journey: A History of the United States, Volume 1
Goldfield, Abbott, Anderson, Argersinger, Barney, 2014
Pearson
ISBN.13: 978-0-205-96096-5

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English Colonies in an Age of Empire 16609-1763 69 England's commercial goals were largely achieved. British and colonial vessels carried goods and people from The Dutch eventually lost their preeminence in the Atlan- Great Britain, continental Europe, and West Africa to the tic trade. Colonial trade helped the English economy to colonies and returned tons of raw materials to the Old grow and contributed to London's emergence as Western World. At the heart of Anglo-American trade lay the highly Europe's largest city. Colonists enjoyed protected markets profitable commerce in staple crops, most of which were for their staple crops and low prices on English imports produced by slave labor Colonial merchants took full advantage of commercial West Indian sugar far surpassed all other colonial opportunities within the empire. products in importance (see Figure 4.1). By the late 1760s, Occasionally, merchants evaded these laws by smug- the value of sugar exports reached almost £4 million per gling. Customs officials, sent over from England beginning year-nearly 50 percent more than the total value of all in the 1670s, were hard-pressed to stop them. Smuggling other exports from British American colonies. tended to increase in wartime; the risks may have been Tobacco from the Chesapeake colonies was the second higher, but so too were profits. Without the support of colo- most valuable staple crop. Nearly 90 percent of the crop was nial authorities (some of whom might have been involved re-exported to continental Europe. Persistent low prices, in illicit trade themselves), customs officials struggled to however, led many tobacco planters to sow some of their enforce parliamentary regulations. land with wheat after about 1750. This change lessened their dependence on tobacco and allowed them to take advan- 4.1.2 The Colonial Export Trade tage of the strong demand for flour in southern Europe and the West Indies. and the Spirit of Enterprise Exports of rice and indigo (a plant that produced a By the eighteenth century, the Atlantic had become a busy blue dye used in cloth manufacture) enriched many South thoroughfare of international commerce (see Map 4.1). Carolina planters. Parliament encouraged indigo production MAP 4.1 Anglo-American Transatlantic Commerce GREAT BRITAIN EUROPE NORTH AMERICA பகை CHESAPEALE LOWER SOUTH ATLANTIC Colonial Imports Colonial Exports Triangle Slave Trade OCEAN AFRICA Indies SOUTH AMERICA By the eighteenth century, Great Britain and its colonies were enmeshed in a complex web of trade. Britain exchanged manufactured goods for colonial raw materials, while Africa provided the enslaved laborers who produced the most valuable colonial crops. 70 Chapter 4 23.186.000 2714,000 Sugar Rum Other $10,000 Total 23,911,000 5756,000 Tobacco Grain Other Total E199,000 £91,000 £1,047.000 Rice £305,000 Indigo €112.000 Deerskins 37.000 Naval stores 132,000 Other 266,000 Total 1552,000 Grain 1379,000 Flaxseed 136.000 Wood products -20,000 Iron 28,000 Livestock, meat 120,000 Other 534,000 Total 1527.000 West Indies Chesapeake Lower South Middle Colonies New England Fish 152.000 Livestock, meat £90,000 Wood products £65,000 Whale products 62,000 Other £70,000 Total £439,000 0.5 1.0 1.5 2.0 25 3.0 3.5 4.0 Pounds Sterling (millions) FIGURE 4.1 Average Annual Value of Colonial Exports by Region, 1768-1772 Staple craps-especially sugar-produced by slave labor were the most valuable items exported from Britain's North American colonies. From The Economy of Sri Amur 1807-17 by John McCand Rd. Por the moundoulay American History and culture. Copyright 1965 by the University of North Carolines www.edu by granting subsidies to growers and placing stiff taxes on enough wheat to supply the domestic market, there was foreign indigo. It also subsidized colonial production of little demand there for colonial flour. But there was a strong naval stores such as tar, pitch, and turpentine—to reduce market for it in the West Indies and Europe, particularly England's dependence on Swedish suppliers. The export when poor harvests and warfare disrupted European of these items made up an important part of the North and supplies. South Carolina economies. New England had no staple crop and produced little Wheat exports from the Middle Colonies boomed in for export. The region's merchants nevertheless prospered the eighteenth century. Since farmers in Great Britain grew by carrying other colonies' goods to market. By 1770, New English Colonies in an Age of Empire 1680–1763 71 England's earnings from shipping fees, freight charges, and the West Indies, their commercial economy nonetheless insurance exceeded the total value of its own exports. depended on slavery. New England merchants also strengthened trade links to the West Indies that had first been forged in the 1650s. 4.1.3 The Import Trade and Ties By the mid-eighteenth century, more than half of all New England exports went to the islands. Merchants accepted of Credit molasses and other sugar by-products in payment, bringing By the late 1760s, more than £4 million worth of British them back to New England to be distilled into cheap rum manufactured goods flowed into the colonies each year. Traders then carried rum to Africa to exchange for slaves. This import trade satisfied a demand for items that could Although British merchants dominated the African slave not be produced—at least not cheaply-in North America. trade, New Englanders also profited. Fewer than 10 percent Imported weapons, woolen cloth, knives, and jewelry of New England's population were slaves, but because New often made their way into Indian villages. Indians were Englanders trafficked in human cargo and provisioned discerning customers and rejected goods not made to their 68 Chapter 4 4.1 Economic crucial role, since they supplied commodities that British consumers would otherwise have to purchase from foreign Development and Imperial competitors. Certain colonial products, such as tobacco or rice, could also be exported to foreign markets, further Trade in the British improving the balance of trade. Between 1651 and 1733, Par- liament passed four types of mercantilist regulations to put Colonies this policy into action (see Table 4.1). The first type of regulation aimed at ending Dutch How did trade policy shape the relationship between dominance in overseas trade. Beginning with the Naviga- Britain and the colonies? tion Act of 1651, all trade in the empire had to be conducted England's greatest assets in its competition with other Euro- in English or colonial ships, with crews of which at least pean nations were a dynamic economy and a sophisticated half were Englishmen or colonists. The act stimulated rapid financial system that put commerce at the service of the growth in England's merchant marine and New England's state. British leaders came to see colonies as indispensable shipping industry, which soon became the most profitable to the nation's economic welfare. Colonies supplied raw sector of New England's economy. materials unavailable in the mother country, and colonists The second type of legislation stipulated that certain and Indians provided a healthy market for British manu- colonial goods, called enumerated products, could be factured goods. shipped only to England or to another English colony. These As the eighteenth century progressed, colonial econo goods initially included tobacco, sugar, and indigo; other mies grew in tandem with the economy of Great Britain products, such as rice, were added later. These laws also Parliament knitted the colonies into an empire with com- required European goods to pass through England before mercial legislation, while British merchants traded with and they could be shipped to the colonies. When these goods extended credit to growing numbers of colonial merchants entered English ports, they were taxed, making them more and planters. Over time, these developments joined the expensive and encouraging colonists to buy English-made economies of the colonies and the mother country into a items vast transatlantic system. The third and fourth types of regulations enhanced the advantage of English manufacturers who produced for 4.1.1 The Regulation of Trade the colonial market. Parliament subsidized certain goods, including linen and gunpowder, to allow manufacturers to To improve its competitive position in transatlantic trade, undersell European competitors in the colonies. Other laws England adopted a policy of mercantilism. The goal was to protected English manufacturers from colonial competition achieve a favorable balance of trade within the empire asa by prohibiting colonists from manufacturing wool, felt hats, whole, with exports exceeding imports. Colonies played a and iron on a large scale. TABLE 4.1 British Imperial Trade Regulations, 1651-1733 Name of Act Key Features Navigation Act of 1061 Aired to detinate Dutch competition in overseas trade Required most goods to be carried in English or colorid stics Pesired crows to be at least for English Navigation Act of 1660 Required all colored trade to be carried in English stics Pecured master and tree-quarters of crew to be English Created te denumerated pook, schbacco and sugar, that could be apped arby to England or another English colony Staple Act of 1063 Required products from Europe, Asia and Altice to be landed in England before being striped to the colories Plantation Day Act of 1673 Attempted to reduce smuggling Required catars of colonial stics to post bond that they would dele enumerated goods to England or pay the plantation dutyret would be owed in England Navigation Act of 1696 Plugged loopholes in earlier Created vice-admiraty courts in calories to enforce trade regulations Woolens Act of 1099 Fostade sport of woodeth made in the colores, to present competition with English producers Hat Act of 1732 Prohibited export of colonyades Molasses Act of 1723 Placed high taxon French Western and the foreign matasses imported into colonies to encourage importation of British West Indian molasses
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Explanation & Answer

Attached.

Mercantilism economic System outline
Thesis statement: With the trade laws that England adopted, they had significant effects on the
colonies and the country.
I.

Introduction

II.

Analyzing Mercantilism economic System

III.

Conclusion


Running head: MERCANTILISM ECONOMIC SYSTEM

Mercantilism Economic System
Student’s Name
Professor’s Name
Course
Date

1

MERCANTILISM ECONOMIC SYSTEM

2
Introduction

British leaders in the eighteenth century wanted to identify ways of eliminating
competition from their rivals in other European nations. Therefore, the leaders enforced
mercantilist policies to enhance trade power by making the exporting activities exceed the
importing activities. Economic development in Britain was achieved through the adoption of a
trade policy where the country...


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