MERCANTILISM

1. MERCANTILISM Mr. Sandford AP American History

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3. Mercantilism4 Main Goals • Encourage growth of native merchant ships, this included the colonial ships. • Protect English manufacturers from foreign competition. • Protect English Agriculture, especially grain farmers. • Accumulate as much hard money as possible. (Colonial money was worthless in England, merchants wanted Gold!)

4. Mercantilism • The colonists supplied raw materials to England and they could buy the finished products back from GB. • GB wanted to be self-sufficient, and new that the colonies played a large role. • For this to be successful, GB needed laws and regulations to protect wealthy British merchants and industrialists at the expense of the colonists. • A mercantilist economy is a managed economy, managed by the larger and stronger power.

5. Regulations To Support Mercantilism • NAVIGATION ACT OF 1651 • All imports or exports had to be carried on GB ships. • Targeted the Dutch control of world wide shipping. • All crews must be at least 1/2 British or Colonists. • NE economy - “carrying trade” - increased. http://williamsburghotel.com/triangle/Js_three_ships.gif

6. Regulations to Support Mercantilism • Act of 1660 • Required all exports from the colonies to go to GB. • GB merchants would then sell or trade the materials around the world. • Tobacco, sugar, indigo, cotton, molasses – ENUMERATED PRODUCTS • It also required all Colonial imports to go through GB. • Each product was taxed before being sent. • All products imported or exported assists the GB economy.

7. Regulations to Support Mercantilism • The third type of law dealt with GB subsidizing certain products produced in GB which allowed their goods to be cheaper and bought more by the colonists. • The fourth type of law prohibited colonists from manufacturing certain products on a large scale that may compete with GB manufacturers http://hsb.baylor.edu/html/gardner/ship.gif

8. How GB Saw It • Mercantilism was explained by its proponents, as a "a philosophy of nation building, a series of economic controls intended to strengthen a country ... against other … empires. A major tenant of this view was self-sufficiency: sources of supply--raw materials, agriculture, and industry--should be developed domestically, or in colonies, to prevent interruptions by hostile foreigners”

9. Did it Help the Colonies? • Protection from foreign competition helped New England's ship building industry. • Individual colonies benefited by specializing. • Various colonial exporters benefited when they exported to Britain because competing goods from foreign nations were subject to tariffs theirs were not. • The colonies were easily made into “international traders” because of the British Empire.

10. But, • On the other hand, colonists paid more than they otherwise would have for imports from foreign countries (Tariffs) • Southern planters, particularly rice and tobacco planters, bore much of the burden, because most Southern exports went there, while smaller shares of the other two regions' exports went there. • New Englanders often evaded this cost through trading with foreign countries illegally.

11. Economic Belief • Jose del Campillo y Cossio • “New System of Economic Government of America” • 1743 • factories and industries “must absolutely be forbidden in America”