Post by djxkorean on Jul 12, 2009 6:54:07 GMT -8
Mercantilism in the English Colonies 1650–1753
Note: Mercantile theory of trade was accepted by most every nation as way to gather strength of nation.
North America = battleground: England vs. France
I. Mercantile Theory of Trade
. . A) Favorable balance of trade
. . . . 1. Must export more goods of greater value than it imports. Collect more than it pays.
. . . . 2. English empire must find a way to bring about and maintain an excess of exports over imports.
. . . . 3. To buy from other countries would be to increase their exports and strengthen those nations
. . B) Colonies help the favorable balance of trade
. . . . 1. Any goods obtained from one’s own colonies would make colonies prosper
. . . . 2. Keeps trade away from other nations
. . . . 3. Supplies England with goods it could not produce.
. . . . 4. Any goods produced in England must not be produced in the colonies.
. . . . 5. Colonies = natural source of raw materials
. . . . . . a) however, they are only restricted to producing raw materials and not manufacturing goods
. . . . . . . . i. only reason that this didn’t make the colonies poor because colonial supplies of raw materials did not run out.
. . . . . . b) processing must be reserved for England.
. . C) List of Provisions of some of the trade and Navigation Acts, 1650-1764
. . . . 1. Only England (colonies and mother nation) can trade with England
. . . . . . a) 1650: No foreign ships could trade in a British colony without a license
. . . . . . b) 1660: No goods could enter or leave a British colony except in a British ship with a British captain and a crew that was at least 3/5s British
. . . . . . c) Certain products only shipped to England or its colonies
. . . . 2. Britain must not reap some profit. The mother nation must never be cut out of the deal. Britain must always work on the manufacturing.
. . . . . . a) No beaver hats could be exported from one colony to another.
. . . . . . b) 1750s: Smelting furnaces, rolling mills, forges prohibited in colonies.
. . . . 3. Bounties: sum of money paid to colonial shipper to encourage flow of certain goods
. . . . 4. Triangular trips lucrative for colonies and England.
TRIANGULAR TRADE
New England (rum) -> Africa (slaves) -> West Indies (sugar, molasses) -> back to New England
New England (fish, lumber) -> England (handicraft and factory goods) -> West Indies (sugar, molasses) -> back to New England
New England (fish, lumber) -> West Indies (rum, sugar, molasses) -> England (handicraft and factory goods) -> back to New England
Middle Colonies (grain, flour) -> West Indies (rum, sugar, molasses) -> England (handicraft and factory goods) -> Back to Middle Colonies
II. How English Restrictions affected American Colonial Commerce up to 1764
. . A) Colonial trade was aided by some trade and navigation laws
. . . . 1. Ex: laws restricting shipping helped shipyards
. . . . B) English merchants were the middle man between American colonies and the rest of Europe
III. Salutary Neglect: Trade and navigation acts are obeyed based on profitability
. . A) benefited both England and colonies
. . B) Because local “deputy” often oversaw colonial trade, they were sympathetic to friends and neighbors
. . . . 1. Customary not to notice smuggling
. . C) Reason why trade and navigation acts not enforced
. . . . 1. King and parliament did not want to create hostile spirit in America toward England
. . . . . . a) needed support in fighting France in case of war
. . . . 2. Colonists mostly anti-French and anti-Catholic.
. . . . 3. Colonies needed England for leadership, wealth and power
Commentary: It is curious to imagine a universal economic plan. By universal, I mean something that was followed by most every empire. It does seem, however, that if a nation was to not exercise the mercantile theory, they would be in great steps to create a mounting debt. Although the mercantile theory of trade most definitely made sense in the 17th century, I feel that such an economic policy would fail drastically today, largely because of deficit spending. The only way I feel that such a system would succeed is if there wasn't a universally accepted form of deficit spending set in place at Europe at that time.
Additionally, I can see why England was so eager to maintain its power over the United States colonies. Under the mercantile policy, losing all the colonies would, in essence, cut the British market by one third. They wouldn't be able to import from the United States because it would be in violation of the mercantile theory. I used to find it curious why England fought for the US colonies for so long despite the heavy financial toll it placed on the colonies. IT makes sense now that losing the markets in the colonies would have been far worse than paying for the war itself.
Note: Mercantile theory of trade was accepted by most every nation as way to gather strength of nation.
North America = battleground: England vs. France
I. Mercantile Theory of Trade
. . A) Favorable balance of trade
. . . . 1. Must export more goods of greater value than it imports. Collect more than it pays.
. . . . 2. English empire must find a way to bring about and maintain an excess of exports over imports.
. . . . 3. To buy from other countries would be to increase their exports and strengthen those nations
. . B) Colonies help the favorable balance of trade
. . . . 1. Any goods obtained from one’s own colonies would make colonies prosper
. . . . 2. Keeps trade away from other nations
. . . . 3. Supplies England with goods it could not produce.
. . . . 4. Any goods produced in England must not be produced in the colonies.
. . . . 5. Colonies = natural source of raw materials
. . . . . . a) however, they are only restricted to producing raw materials and not manufacturing goods
. . . . . . . . i. only reason that this didn’t make the colonies poor because colonial supplies of raw materials did not run out.
. . . . . . b) processing must be reserved for England.
. . C) List of Provisions of some of the trade and Navigation Acts, 1650-1764
. . . . 1. Only England (colonies and mother nation) can trade with England
. . . . . . a) 1650: No foreign ships could trade in a British colony without a license
. . . . . . b) 1660: No goods could enter or leave a British colony except in a British ship with a British captain and a crew that was at least 3/5s British
. . . . . . c) Certain products only shipped to England or its colonies
. . . . 2. Britain must not reap some profit. The mother nation must never be cut out of the deal. Britain must always work on the manufacturing.
. . . . . . a) No beaver hats could be exported from one colony to another.
. . . . . . b) 1750s: Smelting furnaces, rolling mills, forges prohibited in colonies.
. . . . 3. Bounties: sum of money paid to colonial shipper to encourage flow of certain goods
. . . . 4. Triangular trips lucrative for colonies and England.
TRIANGULAR TRADE
New England (rum) -> Africa (slaves) -> West Indies (sugar, molasses) -> back to New England
New England (fish, lumber) -> England (handicraft and factory goods) -> West Indies (sugar, molasses) -> back to New England
New England (fish, lumber) -> West Indies (rum, sugar, molasses) -> England (handicraft and factory goods) -> back to New England
Middle Colonies (grain, flour) -> West Indies (rum, sugar, molasses) -> England (handicraft and factory goods) -> Back to Middle Colonies
II. How English Restrictions affected American Colonial Commerce up to 1764
. . A) Colonial trade was aided by some trade and navigation laws
. . . . 1. Ex: laws restricting shipping helped shipyards
. . . . B) English merchants were the middle man between American colonies and the rest of Europe
III. Salutary Neglect: Trade and navigation acts are obeyed based on profitability
. . A) benefited both England and colonies
. . B) Because local “deputy” often oversaw colonial trade, they were sympathetic to friends and neighbors
. . . . 1. Customary not to notice smuggling
. . C) Reason why trade and navigation acts not enforced
. . . . 1. King and parliament did not want to create hostile spirit in America toward England
. . . . . . a) needed support in fighting France in case of war
. . . . 2. Colonists mostly anti-French and anti-Catholic.
. . . . 3. Colonies needed England for leadership, wealth and power
Commentary: It is curious to imagine a universal economic plan. By universal, I mean something that was followed by most every empire. It does seem, however, that if a nation was to not exercise the mercantile theory, they would be in great steps to create a mounting debt. Although the mercantile theory of trade most definitely made sense in the 17th century, I feel that such an economic policy would fail drastically today, largely because of deficit spending. The only way I feel that such a system would succeed is if there wasn't a universally accepted form of deficit spending set in place at Europe at that time.
Additionally, I can see why England was so eager to maintain its power over the United States colonies. Under the mercantile policy, losing all the colonies would, in essence, cut the British market by one third. They wouldn't be able to import from the United States because it would be in violation of the mercantile theory. I used to find it curious why England fought for the US colonies for so long despite the heavy financial toll it placed on the colonies. IT makes sense now that losing the markets in the colonies would have been far worse than paying for the war itself.