Colonial Economy

What is mercantilism?

The belief that the colonies existed essentially to serve the economic interests of the mother country

Trade and Navigation Acts when?

1651-1673

Trade and Navigation Acts what?

• All imports and exports to and from colonies must be carried in English (after 1707 British) ships with majority English crew

• Growing number of colonial products (enumerated commodities) can only be exported to England, even if ultimately going elsewhere, eg sugar, cotton, indigo, ginger, tobacco

• European goods coming to America have to come via England and then are reshipped

Other laws to check colonial manufacturing

• The Woollen Act - 1699 - forbade export of woollen yarn and cloth outside of colony it where was produced

• The Hat Act - 1732 - prohibited export of colonial beaver hats

• The Molasses Act - 1733 - placed higher duties on sugar and molasses imported into colonies from French, Spanish and Dutch Caribbean possessions

• The Iron Act - 1750 - banned export of colonial iron outside of empire

Between 1650 and 1770 colonial gross product grew by annual average of ___

Just over 3%

Why did colonial gross product grow so much?

• Expanding intercolonial trade

• Trade with Britain and empire

• Availability of credit and capital from Britain

• Population rapid increase

• New land availability

• Increasing overseas demand for colonial products eg tobacco and grain

• Increasing diversification - eg development of iron production, textiles and shipping

What proportion of working population of American colonists worked in farming

9/10

New England key industry and why

• lacked extensive rich soils; SMALL SUBSISTENCE FARMS

• Sea - FISHING - from the Newfoundland Banks and the shores of Nova Scotia, New England fishermen brought back cod to be dried and exported

• More than half of N.E. export trade with West Indies - colonies received sugar, molasses and other tropical products

• DISTILLERIES - molasses into rum

• ships - SHIPBUILDING

Middle colonies key industry and why

• AGRICULTURAL PRODUCTS - wheat and flour products for export to other colonies, the West Indies and Europe

Southern colonies main industry and why

• TOBACCO - exports rose from £14 million in 1670s to £100 million by 1770s

• RICE, INDIGO and GRAIN - produced for export

Southern colonies - tidewater vs backcountry

• Tidewater - eastern areas nearest coast, development most advanced, population densest

• Backcountry - western areas furthers from coast, filling rapidly due to population pressure and search for higher profits

Why did so few Americans complain about mercantilist regulations in early 18th century?

• Not well enforced - Navigation Acts high duties rarely collected

• Chief posts in colonial customer service were sinecures (office without much work), filled with men who remained in Britain

• The ill-paid deputies who were sent to perform their duties were easily bribed - turned blind eye to infractions of trade laws

• Laxity of control - mainly during PM Robert Walpole’s long rule 1721-42

• Although Lord Halifax, president of the Board of Trade from 1748-1761, tried to tighten imperial control, colonies able to avoid most of trade laws and there was lots of smuggling

Extra laws - much of an effect?

• very little

• Woollen Act - limited impact as sheet and wool rarely exceeded local demand

• Hat Act - affected industry or minor importance

• Molasses Act threatened NE rum industry, evaded

• Iron Act prohibitions disregarded, also not that restrictive: designed to check expansion of iron-fishing industry and to encourage crude-iron production, allowed colonial bar and pig iron to enter Britain free of duty. By 1770s colonies outstripped Britain as producers of crude iron

Mercantilism effects for Britain

• Raw materials for British manufacturing

• All cargoes to and from colonies carried on ships built and owned in England or colonies, staffed by English crews - job opportunities

• Monopoly on colonial products (enumerated commodities) - charge high prices for these in Europe due to having to pass through England - customs duties

• Market for British manufactured goods

• Employment for British shipping and sailors

• More trade

Economic consequences colonists

• Protected market for colonial products eg tobacco in Britain and empire

• Development of tidewater due to tobacco exports

• No restrictions on non-enumerated goods (fish, grain)

• Iron Act led to increased colonial crude oil production

• British government subsidises some products eg indigo

• Great for New England shipbuilding industry

• Greater market for British manufactured consumer goods in colonies

• Greater trade

By 1760s what proportion of British merchant ships built in New England Colonies

1/3

1760s what proportion of British imports and exports crossed Atlantic?

1/3