Mercantilism

The Board of Trade was concerned with commerce as well as colonial administration. According to prevailing European opinion, colonies were important for economic reasons, chiefly as a source of raw materials. To obtain these, British officials developed a number of loosely related policies that later economists called mercantilism. The most important raw materials in the eyes of mercantilists were gold and silver, which, being universally valued and relatively rare, could be exchanged at any time for anything the owner desired or, being durable and compact, stored for future use. For these reasons, how much gold and silver (“treasure” according to mercantilists) a nation possessed was considered the best barometer of its prosperity and power.

Since gold and silver could not be mined in significant amounts in western Europe, every early colonist dreamed of finding “El Dorado.” The Spanish were the winners in this search; from the mines ofMexico and South America a treasure in gold and silver poured into the Iberian peninsula. Failing to control the precious metals at the source, the other powers tried to obtain them by guile and warfare (witness the state-supported piracy of Francis Drake).

In the mid-seventeenth century another method, less hazardous and in the long run far more profitable, called itself to the attention of the statesmen of western Europe. If a country could make itself as selfsufficient as possible and also keep its citizens busy producing items sought in other lands, it could sell more goods abroad than it imported. This was known as having “a favorable balance of trade.” A country with an unfavorable balance was obliged to make up its shortage by “exporting” its gold and silver. Mercantilists regarded colonies as a means of acquiring precious metals by helping the mother country generate a favorable trade balance. Colonists thus were to supply raw materials that would otherwise have to be purchased from foreign sources or colonists were to buy substantial amounts of manufactured goods produced in the mother country.

Of the English colonies in the New World, those in tropical and subtropical climes were valued for their raw materials. The more northerly ones were important as markets, but because they were small in the seventeenth century, in English eyes they took

Sea Captains Carousing in Surinam by John Greenwood, a late eighteenth-century oil painting, describes the effects of alcohol—one man guzzles his rum punch straight from the bowl, another vomits onto the floor, while a third pours his punch onto an insensate colleague. Greenwood implicitly denounces as well the trade in sugar (rum) and slaves in which these captains were engaged.

Source: John Greenwood, Sea Captians Carousing in Surinam, 1758. St. Louis Art Museum, Purchase.

Second place. In 1680 the sugar imported from the single West Indian island of Barbados was worth more than the goods sent to England by all the mainland colonies.

If the possession of gold and silver signified wealth, trade was the route that led to riches, and merchants were the captains who would pilot the ship of state to prosperity. “Trade is the Wealth of the World,” Daniel Defoe wrote in 1728. One must, of course, have something to sell, so internal production must be stimulated. Parliament encouraged the British people to concentrate on manufacturing by placing tariffs—taxes on trade—on foreign manufactured goods and by subsidizing British-made textiles, iron, and other products.

•••-[Read the Document Mun, England's Treasure by Foreign Trade at myhistorylab. com