Colonial Trade Patterns within the English Mercantilist System

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Colonial Trade Patterns within the English Mercantilist System

Trade statistics for colonial America and England demonstrate that prior to 1764, the commercial relationship was profitable for both parties.

The English commercial relationship with the North American colonies has often been cited as one of friction, contributing to the break between the colonies and the mother country. This break led to the American War for Independence and patriot victory. Trade patterns and commercial statistics, however, reveal that the trade relationship was consistent in the years before the conflict and, in many cases, lucrative for American merchants, planters, and those involved in manufacturing.

English Imports and Exports in the First Half of the 18th Century

During the first fifty years of the 18th Century, the only trade figures in terms of imports and exports that remained constant in English trade patterns were with the American colonies. In 1700, 6% of all English imports came from North America; in 1750, that figure rose to 11%. In 1700 English exports to the North American colonies stood at 6%, rising to 11% in 1750. Such consistency was not the case for imports and exports to other geographic regions,

In 1700, for example, 66% of all English imports originated in Europe. This figure fell to 55% in 1750. The deficiency can be attributed to English imports coming from the East Indies, North America, and the West Indies by 1750. In fact, West Indies goods increased 5% over a fifty year period, attesting to the growing diversity of the import/export trade as the English began to forge a global trade empire.

The same can be said for English exports. Exports to Europe fell from 85% to 77% by 1750 while the largest gain in exports was in North America by 5%, followed by the East Indies 3%. Part of this increase can be attributed to a growing North American population. In 1700, the estimated population in the American colonies was 250,888. This figure grew to 1,179,760 by 1750.

Advancing the Mercantilist System Provided Profits and Continuity

Professor Oliver Dickerson argues that, “The trade of the Empire was discovered to be an economic whole with a complicated mass of legal regulation.” The chief end of these measures was to “encourage British trade and commerce.” Dickerson cites, as an example, the introduction of naval stores in the Southern colonies as an industry designed to benefit both the colonies and England.

Prior to 1700, naval stores had been purchased from the Baltic region, not part of the English system. Naval stores included such commodities as tar, pitch, and hemp, all essential in servicing ships. By introducing these industries to the colonies and levying high tariffs on the Baltic products, profits were retained within the mercantilist system. Further, England paid colonial producers bounties in order to make the production more appealing.

Many “enumerated” goods included bounties or subsidies paid above the value of the commodity, such as tobacco. Such financial enhancements were discontinued, however, with over-production and the depression of prices. George Washington, for example, invested heavily in tobacco only to accumulate high debts when prices fell, forcing him to convert land on his Mount Vernon estate to other crops.

End of the Protectionist Trade System

By 1764 England, attempting to payoff huge debts associated with the Seven Years’ War altered the previously consistent trade regulations associated with the Navigation Acts. Dickerson, for example, states that these policy changes were accomplished for “the sake of revenue and political exploitation.” Other historians of the colonial period agree with this assessment.

Thus, the original regulations attached to decades-old Navigation Acts were not to blame for the revolution. It can even be argued that they benefited the colonies and made many Americans wealthy, increasing the colonial standard of living. Rather, if the commercial policies are to used as a cause for the revolution, it was their subversion by various English treasury ministers that brought about conflict.

The American Revolution ended colonial participation in the intricate trade system of Britain. In some cases, certain lucrative enterprises were lost, such as tobacco, rice, and naval stores. Tobacco, in many cases, was replaced by cotton, which turned out to be fortuitous because increased cotton cultivation in the South coincided with a growing English need for cotton.

Economic historian David Landes, for example, writes that in 1760 “Britain imported some 2 ½ million pounds of raw cotton…” and that by 1787, this increased to 22 million pounds. Although Britain imported cotton in the 19th century from India, the West Indies, and Egypt, American cotton was considered superior.

The Trade Relationship with the English Colonies

The English-colonial trade relationship functioned well in the years before the regulatory policy changes that focused on revenue collection. Although it can be argued that these pre-revolutionary taxes were justified, albeit ill-conceived, they led to the revolution which ultimately destroyed that trade relationship.

Direct and indirect policies regarding colonial affairs, coupled with decades of internal strife, provided the thirteen colonies with an opportunity to thrive.

English non-interference with certain colonial matters has come to be known as “salutary neglect” and is best embodied in Robert Walpole’s dictum regarding North Americans: “Let sleeping dogs lie.” This policy allowed local colonial assemblies to assume greater autonomy politically over indigenous affairs and may help to explain why, under King George III and the post-Seven Years’ War Parliament, parliamentary measures became viewed as acts of oppression. Additionally, 17th century internal turmoil in England had allowed the colonies to establish trade relationships with non-English competitors, notably the Dutch.

17th Century Internal Turmoil Fostered Colonial Autonomy

Thirty-five years after the founding of the first permanent English colony in Virginia, a civil war broke out in England, pitting King Charles I against Parliament, dominated by Puritans. It was an inevitable answer to Charles’ notions of divine right rule and his refusal to grant basic rights of due process. Defeated at Naseby in 1645, Charles I was executed in 1649 and for the next ten years England would be led by Oliver Cromwell during the Commonwealth Period.

1660 was the year of the Restoration, bringing Charles II to the throne. During his reign, England fought a series of naval wars against the Dutch in order to curb the Netherlands’ maritime commercial empire. It was also the period in which the Navigation Acts were issued, an attempt to promote mercantile goals that sought to end illegal trade with competing nations. Further, England sought to tighten control of its Caribbean possessions where English Separatists were become increasingly independent of home rule.

Charles II’s brother, James II, threatened the peace of the kingdom by actively embracing Catholicism. In 1688, England erupted in the bloodless Glorious Revolution and in the following year William and Mary became the new monarchs, signing off on the English Bill of Rights and inaugurating the first phases of a constitutional monarchy. King William, however, brought with him an animosity toward France.

William III, as the prior stadthalter of the Netherlands, had been fighting Louis XIV of France for several years. Now, as the new English king, he embroiled England in what would become a series of wars with the French. In America, they would be known as King William’s War, Queen Anne’s War, King George’s War, and the French and Indian War.

Salutary Neglect and the Colonies

English non-interference with the colonies, whether direct or indirect during the 17th century, became a policy of Sir Robert Walpole in the early 18th century. During these years, the colonial population grew and the colonies became prosperous. Americans developed their own indigenous aristocracy, notably among Southern planters and wealthy urban merchants. Further, colonists were slowly developing a self-identity as Americans, fiercely defensive of their freedoms.

Although England had policies in effect designed to interdict illegal foreign trade as per the Navigation Acts, these were not enforced until the end of the Seven Years’ War (French and Indian War). According to Howard Zinn of Columbia University, some Patriot leaders of the impending Revolution, like John Hancock, had made fortunes in smuggling illegal goods in violation of English policies and the mercantile system. [1]

Salutary neglect was certainly a reason for the protestations against English attempts to develop a policy of enforcement. Additionally, salutary neglect had permitted colonial assemblies and local governments the ability to function independently of Parliament for decades. The sleeping dogs of Robert Walpole were slowly awakening. It was a cause of the coming Revolution.

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