Popular Articles

The Mercantilist Tradition

trade english colonial colonies acts navigation england market parliament foreign

By the seventeenth century the economic philosophy now known as mercantilism had gained considerable prestige and support in England. Simple emphasis upon bullionism no longer seemed reasonable as an economic way of life. The mercantilists' definition of wealth, which had originally encompassed only gold and silver, now was extended to include all commercial activity. This extension explains the mercantilist view of empire building: each colony's function was to provide the mother country with raw materials, and each was to serve as a market where manufactured products would be consumed. "Our . . . plantations . . . in New England, Virginia, Greenland, the Summer Islands and the Newfoundland," noted the great mercantilist theoretician Thomas Mun (1571-1641), "afford . . . much wealth and employments to maintain a great number of poor, and to increase our decaying trade." The English Parliament actively legislated to protect that trade.

The British Acts Of Tradeaffecting The Colonies

Parliament had originally placed strict limits upon the conduct of colonial trade when chartering the joint-stock companies designated to establish colonies, but it had neglected comprehensive trade regulations until 1651. The Navigation Acts of 1650 and 1651 compelled the colonists to trade only with England. But the acts carried a reciprocal advantage: though the English received a closed market in the colonies, the colonials were guaranteed a market in England.

The Navigation Act of 1651. The Navigation Act of 1651 was preceded by the appointment of a parliamentary commission. Its purpose was to discover more satisfactory ways of regulating the colonial trade so as to free the English nation from external dependence. In 1650 Parliament had made an effort to exclude foreign vessels from participating in the colonial trade. (This effort at regulating the carrying trade was not an innovation on the part of Parliament, but was already part of an established tradition; such legislation had been passed as early as the reign of Richard II.) The Act of 1651 aimed to define the role of English shipping in the conduct of both the import and export trade. It was also candidly admitted that the Act was intended to increase and encourage the national shipping. The law allowed only English and colonial ships to conduct the national trade, the sole exception being in the case of transportation of imported goods; these could be transported by the producer. A serious defect in the act - a defect which was to be present in navigation acts for more than a century - was the absence of provision for an effective regulatory agency. Since nothing existed to prevent trading with alien ships, the natural tendency to evade the intent of the acts led to extensive smuggling. The Act also provoked a war with the Dutch in 1652, since the ambitious Lowlanders did not intend to surrender peacefully their right of participation in the colonial trade.

War did not deter the English merchants from proposing further extensions of the navigation regulations. As early as 1656 the London merchants seriously considered whether a more extensive regulation of trade was not in order. Charles II, restored to the throne in 1660, did not reverse the mercantilist policies established during Cromwell's Commonwealth. In fact, the Stuart family's extensive investments in the fur and slave trades added court influence to the increasingly strong demands of English merchants for an extension of trade regulation.

The Enumerated Commodities Act of 1660. The Act of 1651, along with all other acts passed during the Commonwealth, was declared invalid by Charles II. Almost immediately, a parliamentary committee chaired by George Downing prepared replacement legislation. The resulting Navigation Act of 1660 paralleled the intent of its 1651 predecessor in regulating the carrying trade. However, it added an enumerated list of articles including sugar, cotton, tobacco, wool, and indigo, which could be consumed only within the empire. It was hoped that this would increase the self-sufficiency of the empire by reducing England's dependence on foreign resources. In 1662 an Act of Frauds, passed to clarify some obscure points in the 1660 Act, permitted English-owned, foreign-built ships to participate in the carrying trade, and also provided for participation in English trade by colonial shipping.

The Staple Act of 1663. The logic of mercantilism led to increasingly rigid regulation of colonial trade. The 1660 Navigation Act secured for the English merchant a monopoly in the articles listed, and each monopoly fostered another. Soon, the remaining right of the colonials to import directly from countries other than Britain, and their right to export non-enumerated articles to countries outside the empire stirred another protest among English merchants. As a result, the Staple Act of 1663 was passed. This act required that all goods destined for the colonies be shipped through English ports. Those who benefited most from this act were the English middlemen. Though the English duty on colonial imports was rebated, thereby enabling the colonial consumer to purchase goods more cheaply than could his English cousins, fees charged for processing imports added considerably to the colonial cost of these items. Though the enumerated clause gave the colonies a guaranteed market in England, it compelled them to make heavy payments to English agents. Finally, by requiring the colonials to use English ships, the law deprived them of the advantages offered by the lower rates of the Dutch shipping companies.

The Plantation Duty Act of 1673. It is hardly surprising that many colonials interested in obtaining the superior profits of the European market were determined to circumvent the restrictions imposed by the various trade regulations. Since enumerated articles were permitted free transit between colonies, planters eager to avoid English charges often shipped tobacco to another colony, from which it was then shipped - labeled as something else - to a foreign port. This trade grew so large that Parliament passed the Plantation Duty Act of 1673, which for the first time imposed duties on any ship transporting enumerated articles between colonial ports.

English Administrative Reform. In spite of continued passage of legislation, however, it became evident that the colonials would do all in their power to circumvent the navigation acts by whatever subterfuges they could think of. It was apparent that extending the prohibitive Navigation Acts would be of little use unless methods were developed to enforce the legislation. Restrictions, to be made effective, required administrative reforms. To achieve this goal Parliament provided both regulations and penalties. Governors who failed to enforce the Navigation Acts were subject to heavy fines and removal from office. Beginning in 1660, a Committee for Foreign Plantations consisting of merchants and nobles, and authorized by the Privy Council, began to explore the governments and administrative practices of the colonies. Its purpose was to bring about better supervision and a more effective response to colonial needs. Further efforts to improve the system came in 1668, when a Council of Trade and four Privy Council committees - Foreign Affairs, Trade and Plantations, Petitions and Grievances, and Military Affairs - were appointed. Though superior to previous regulations, this system was rendered unwieldy by overlapping authority and by its only subsidiary concern with colonial affairs. The Act of 1673, however, gave the Privy Council sole responsibility for supervising colonial affairs.

The Lords of Trade. The Lords of Trade were appointed in 1675, in an attempt to overcome the lack of a central colonial administration. This regulatory group had as its purpose the channeling of information on the colonies to the Privy Council. Though the intent of the group was honorable, the twenty-four Lords of Trade were often burdened with other duties, and colonial affairs were still only a subsidiary concern. Enforcement of the navigation acts was uneven, especially as the high degree of freedom accorded the early colonies in their original charters made them nearly independent of the Crown. These colonies strenuously opposed any effort to enforce the Navigation Acts. When Edward Randolph investigated trade conditions in the colonies in 1676, he found flagrant violations of the acts on every hand, and courts unwilling to convict. This stirred a determination on the part of the British government to extend effective regulation and a uniform system of administration by the Crown.

The Growth of Colonial Markets. The growing interest of English merchants in the colonies was stimulated by the expanding profits to be obtained from the colonial trade. Though it might be thought that the English were engaged in a ruthless exploitation of their colonies, it must be remembered that mercantilism emphasized the importance of colonies as markets for manufactured goods. Obviously, colonial prosperity insured colonial purchases. Therefore, the Navigation Acts gave the colonies a secure monopoly of the English market through the enumerating articles. Certain strategic materials, particularly naval stores, received parliamentary bounties. As trade expanded, the importance of the colonies increased. Between 1660 and 1700, the value of the colonial trade increased from L600,000 to more than L1,175,000. The encouragement to colonial shipbuilding resulted in the near doubling of the English merchant marine. Finally, the protection of the royal Navy relieved the colonists from the heavy burden of self-defense. The primary intention of mercantilism was reciprocal advantage, and it generally achieved this objective. Though the revolutionists of 1776 emphasized the disadvantages of their trade relations with England, they were to express considerable dismay when, after the Revolution, these privileges were revoked.

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or

privacy policy