The Colonial Economies - The Mercantilist Tradition

england colonies industry trade tobacco english middle agriculture world produce

The most direct effect of mercantilism on the colonies was to encourage them to concentrate on the production of crops that were profitable in world trade. This concentration, in turn, tended to make the individual colonies very susceptible to the vagaries of demand for their particular staple. Before long, the economy of many individual colonies became almost entirely dependent upon the production of a single product.

The Tobacco Economy. In Virginia and Maryland the fertile lands of the tidewater regions, and even the piedmont area, could produce an abundant crop of almost anything planted. Grain (especially wheat), fruit, and truck items flourished, and some of these items found their way into world trade. But it was tobacco that dominated the economic activity of the region. Tobacco, like corn, was an American plant already extensively used by the Indians before the colonists arrived. Sailors and colonials introduced it into Europe, where smoking soon became the almost-unanimous fashion. James I initially expressed only verbal opposition to the use of "the weed," but as its use became more prevalent, he placed an excise tax of a shilling per pound on it. The angered Virginians reluctantly accepted the tax, but when James limited the import of tobacco in 1620 to 55,000 pounds per year, they protested loudly. The Dutch promptly agreed to take the whole crop. The Privy Council met this threat in 1621 by issuing the Tobacco Contract, which gave a monopoly of the English tobacco market to the growers, and which also assured them that the English would buy all tobacco produced.

The tobacco farmers, influenced by the promise of large profits from their product as well as by the belief that their entire production, no matter how greatly expanded, would immediately be absorbed in the English market, increased tobacco production from 20,000 pounds in 1619 to nearly 25,000,000 pounds in 1664. Staple farming, however, tended to force concentration on a single crop. As an inevitable result, staple farmers became dependent on outside agents not only for finished products but also for foodstuffs. The tidewater dependence upon other colonies for food helped to create the economic ties which ultimately provided intimate links among the thirteen colonies. It also brought about a complex system of credit which pushed the tidewater colonists increasingly into debt to English merchants.

As the colony expanded, the need for a cash crop made tobacco king not only in the tidewater region but also in the piedmont region. But the devastating result of continued tobacco culture was inescapable: tobacco exhausted the soil of its fertility. Had the farmer rotated his crops or fertilized his soil he could have prevented this waste. But the farmer had what he considered a simpler alternative: whenever his land ceased to produce tobacco, he moved to a new tract. As a result, the center of population in Virginia moved steadily westward. And as the tobacco farmer pushed on in his ruthless search for productive soil, the once-fertile lands of the tidewater area were left exhausted, neglected, and fallow.

Rice and Indigo. The two great staple crops of South Carolina and Georgia, rice and indigo, formed the base of a complex economic system which enabled Carolinians and Georgians to earn large profits through agriculture. Each of these staples was consumed in large quantities by the cosmopolitan markets of Europe and the West Indies.

Rice, which grew abundantly in the swampy lands that bordered the ocean and tidal inlets, was marketed for consumption in the Mediterranean basin (where it was a fundamental foodstuff) and in the West Indies (where it was used to feed slaves). Provided with a magnificent harbor at Charleston through which to export the grain, the Carolinians had a further advantage in the sheltered waterways which connected the rice-producing sea-island formations and the well-watered coastal lands where rice was also grown. An ever-increasing harvest soon flowed toward foreign ports. Indigo, a source of blue dye, was grown on the higher ground of the Carolina tidewater area and provided a profitable complement to rice culture. Since indigo did not require winter care, slaves could spend that season working in the rice fields and maintaining the plantations. A further stimulation of the Carolinian economy was provided when Parliament, in 1748, offered a bounty for indigo.

The Carolina colony flourished between 1734 and 1776 as the value of Carolina produce increased more than fivefold. Between 1740 and 1776 rice exports trebled .and indigo exports quadrupled. After only three or four indigo crops, a planter would have earned enough to recoup his original investment in land and slaves, so that unlike the other colonies, Carolina had surplus capital to lend at interest. Its agriculture also required large-scale farming, unlike the relatively small tobacco farms in Virginia. Though the average plantation had between 300 and 500 acres and was tended by an average of only twelve slaves, some baronial holdings did exist. Governor James Wright owned 19,000 acres which were distributed among eleven plantations and farmed by more than 500 slaves. Often, vast acreages, still covered with forest, were owned by a few wealthy planters.

In spite of her prosperity, however, Carolina was, in many ways, a disorganized and neglected community. As in Virginia, there was a sharp contrast between the desolate, exhausted tobacco farms and the luxuriant, productive plantations located on more newly settled land. A nomadic quality colored much of the colony's life, for few settlers were willing to improve land that could so easily be abandoned and replaced once it had ceased to produce easily. Moreover, the diseases that broke out continually in the Carolina swamplands discouraged most whites from actually settling these areas - although the swamplands were highly productive, and an important part of the Carolina economy. It was not unusual for a few hired white overseers to manage large slave gangs in the swamplands, while the plantation owner and his family maintained their home in the comparative ease and luxury of Charleston.

Charleston. The city of Charleston alone was enough to differentiate South Carolina sharply from Virginia. This urban hub, unique in the pre-Revolutionary South, grew rapidly to a population of nearly 7,000 in 1740, and by 1776 it had expanded to 12,000. It provided extensive commercial facilities for the expanding rice and indigo plantations, the tidewater streams permitting swift transit to the great wharves of the town, where agents of English mercantile establishments purchased the produce and prepared it for shipment. Emporiums which stocked food, clothing, furniture, and hardware provided opportunity for planters to obtain supplies for their own use and that of their slaves. Trade with the Indians brought large quantities of deerskin and other furs into the town. Even a cursory examination indicated to the visitor that Charleston served a flourishing agriculture. Its self-preoccupation, however, gave it the dangerous conviction that it swayed the course of world commerce. In its own way, Carolina shared the insularity of Virginia; it saw that the world beat a path to its door, and concluded that the world needed it more than it needed the world. Such insularity was destined to become the source of bitter problems.

Agriculture in the Middle Colonies. Unlike their Southern neighbors, the middle colonies were never wedded to a single crop. As a result they prospered as food producers for the staple crop culture of the Southern colonies and for the commercial world of New England. By concentrating upon grains and livestock, the average farmer in the Middle Atlantic region grew a marketable surplus and at the same time created a nearly self-sufficient existence for himself. Travelers crossing New Jersey in the eighteenth century invariably commented on the "gardenlike" atmosphere. The "Pennsylvania Dutch," who were remarkable farmers, made the region around Lancaster green and flourishing with agricultural produce. The heavy concentration on wheat as a money crop led many to describe the middle colonies as the "colonial breadbasket."

A Diversified Agriculture. The abundance of the region's agriculture was indicated by the value of its produce. In 1766 the value of exported wheat products exceeded £770,000, while that of such nonperishables as peas, oats, corn, and beans totaled £52,000. A lively trade in horses with the West Indies brought £37,000 between 1763-66, and meat products earned £81,000 in 1766 alone. With new developments in husbandry, constant improvements in livestock were made. And unlike the South, the middle colonies did not rapidly exhaust the fertility of the soil, but used primitive techniques of crop rotation. The grain and consumer product agriculture characteristic of the middle region soon made it the archetype of the agriculture that would eventually dominate the great river valleys of the Middle West.

Furs. Agriculture occupied only a portion of the economic endeavor in the middle colonies. From the time they were first settled, the fur trade boomed; indeed, original Dutch settlers seemed concerned almost exclusively with obtaining pelts. During the middle of the seventeenth century more than 40,000 pelts a year were sent to England from New York alone. By the end of the century the fur trade in New York had declined to barely 15,000 pelts a year, but in Pennsylvania it expanded as trappers penetrated deeper into the hidden valleys of the Alleghenies. The fur trade remained a major economic factor although it declined during each decade of the seventeenth century.

Textiles. At the very beginning of the century a vigorous textile industry began to develop. As early as 1708, seventy-five per cent of the woolens and linens consumed in New York were home-produced, and nearly every farmstead in New England produced woven goods for sale. The incentive for this development may be traced to the high cost of transporting British-made goods to the New World. Although it cost twenty per cent more to produce linens in the colonies, and fifty per cent more to produce woolens, colonial products were still cheaper than English imports.

The Hat Industry. A rapidly expanding hat industry in New York, Rhode Island, and Pennsylvania gave the English manufacturers such sharp competition that Parliament passed the Hat Act of 1732, which restricted the sale of beaver hats to the colony in which they were produced. But the lack of adequate enforcement agencies made the law ineffective. The colonial hatters also produced cheap hats for backwoodsmen and slaves.

Minerals and Related Industries. In addition to providing the necessary lumber, turpentine, tar, and pitch required by the naval interests, colonial forests supported other important industries, such as the production of charcoal. The destruction of the English forests made it imperative that charcoal be obtained from the colonies for the maintenance of England's iron industry.

Potash, made by boiling the ashes of burned hardwood trees, was another by-product of the forests. It was an essential product for the bleaching processes then used in the woolen industry. To encourage potash production, the English government placed it on the enumerated list in 1764 and paid bounties for it despite the fact that New York alone was producing 7,000 barrels per year by 1763.

The discovery of iron deposits in the hills of northern New Jersey and eastern Pennsylvania fostered the development of numerous forges and furnaces in the two colonies. By 1750 a growing colonial iron industry threatened British home industry with severe competition; and by 1775, the exploitation of colonial mineral resources had enabled the colonies to produce one-seventh of the world's iron supply, and to make more pig and bar iron from this than Great Britain herself produced. Products as diverse as Franklin stoves, pots, hardware, and peg nails flowed from the forges of the middle colonies.

While small quantities of coal, copper, and lead were also mined, the bulk of this wealth waited upon later exploitation. A small glass industry grew up in Pennsylvania and New Jersey. Tile and pottery were manufactured in New York and Pennsylvania.

With each year it became clearer that the middle colonies would eventually possess a considerable industrial plant. But each new industry placed a strain upon the mercantilist tradition, which demanded that the colonies supply raw materials, not competitive manufacturec products, to the mother country.

New England Agriculture. The farmer who expected to make a prosperous living from the New England soil lived in a world of stony discouragement. Only small, isolated sections of New England - the Connecticut Valley, for instance - possessed arable land. Even there black stem rust played havoc with efforts to grow wheat. Only Indian maize grew successfully in the sparse soil of the New England colonies; but since maize required a minimum of attention, the farmer could devote his time to other enterprises. The hardy corn ear gave the New Englanders their basic cereal for both man and beast. Converted into hasty pudding, corn pone, and hominy grits, it provided hearty, though plain fare; and, as an additional advantage, it could be converted into corn liquor as well.

Consumer Agriculture. As urban centers expanded in the eighteenth century extensive truck farms developed to supply the town dwellers with vegetables. Beans, peas, squash, turnips, and pumpkins were grown in large quantities. Large orchards - especially apple orchards - were planted, and the fruit was kept for winter consumption. Cherries, plums, pears, quinces, and berries were also grown in huge quantities. Large-scale use of maple sugar and wild honey gave the New Englanders an adequate substitute for cane sugar, which was prohibitively expensive. Dairy herds supplied milk, cheese, and butter; sheep supplied wool for homespun. Each New England farm had a herd of livestock and a flock of fowl. Life for the New England farmer proved rudely comfortable; the land did not give him great wealth but it did provide him with a stable, adequate living.

Fishing. Because opportunities in farming were limited, "Go down to the sea" was the injunction received by more than one Yankee lad, and one which had ample precedent. For decades before the first settlements in New England, English, French, Dutch, and Portuguese fishermen farmed the waters south of Newfoundland. At the beginning of the seventeenth century 10,000 men and youths manned 200 fishing craft from England in the Grand Banks Boston had an extensive export of fish as early as 1633, and in 1641 Governor Winthrop recorded the export of 300,000 dried fish. By 1700, at least 4,000 men and 600 ships from New England were engaged in fishing, and during the eighteenth century the industry continued to expand steadily.

Whaling. In 1715, Christopher Hussey of Nantucket began the first colonial hunt for the sperm whale, creating an industry which reached its zenith only in the nineteenth century. By processing their giant catch aboard ship, the whaling captains were able to extend their voyages into the South Atlantic, Pacific, and even Arctic Oceans. Whaling quickly became a thriving and most profitable business: whale oil was a vital ingredient for candle-making and lamp oil, buttons were processed from whale bone, and ambergris was used in the perfume industry. Colonial assemblies, from 1732 on, began to offer bounties of twenty shillings apiece for the construction of two-hundred-ton whalers, and in 1747 they began to double the bounty. Immediately prior to the Revolution, 4,000 men were involved in the trade. Three hundred ships sailed from such centers of the industry as Nantucket, New Bedford, Marblehead, and Provincetown.

Shipbuilding. To keep the men on the seas required ships; and this led, inevitably, to the growth of a shipbuilding industry. In addition, the English government's interest in naval stores stimulated a sizable increase in lumbering. The virgin forests of the Northeast provided white pine which was particularly useful for the making of ship masts. In the pine forests of the coastal plains tar, pitch, and turpentine were processed to meet the large demands of both seaman and settler. The rapid expansion of shipbuilding in both the middle and New England colonies heightened the demand for naval stores produced in these sections.

The industry grew with remarkable rapidity. Massachusetts Bay launched its first craft, the Blessing of the Bay, in 1631, and received encouragement for further shipbuilding from the Navigation Acts of 1651, 1660, and 1663, all of which contained provisions favorable to the industry. By 1676, Massachusetts alone had a fleet of seven hundred vessels ranging from six tons to two hundred and fifty tons. The colonial need for new fishing craft and coastal trade vessels was soon matched by a heavy English demand, since the extensive American forests and the growing American production of naval stores made it possible for colonial shipbuilders to construct ships at two-thirds to one-half the cost of constructing them in England. Between 1763 and 1766 New England sold seventy ships, worth a total of £49,000, to English purchasers. At the outbreak of the Revolution a third of the ships flying the British flag had been built in the colonies, while New England possessed a fleet, independent of fishing craft, of 2,000 colonial-built ships.

Lumbering. With the growth of shipbuilding, the lumber industry of New England boomed. In 1729, white pine trees with a two-foot diameter were placed at the disposal of the Royal Navy's use unless found on private property acquired before October 1692. Only white pine trees smaller than these could be cut on private property. Forest keepers were appointed to select tall pines for use as Royal Navy masts. Once the keepers had designated their selection of a tree by marking it with a broad arrow, anyone who cut it down risked a £ 100 fine. These officials, usually colonials, became the core of an influential patronage service loyal to the Crown. When the Swedish Tar Company achieved a near-monopoly on European sources of tar, pitch, resin, and turpentine, England began to be threatened with a shortage of naval supplies. Fearful of becoming militarily dependent upon a foreign country, Parliament in 1705 placed colonial naval stores on the enumerated list. To encourage production they offered large bounties: £4 a ton for pitch and tar; £ 1 for masts, bowsprits, and yardarms; £ 3 a ton for resin and turpentine; and £ 6 a ton for hemp. Though the bounties fluctuated in value and there were some brief lapses in payment, they were paid until 1774. From this source some £1,438,702 were pumped into the colonial economy.

The Triangular Trade. As the commercial fleets of New England expanded, a complex trade relationship developed. This was known as the Triangular Trade. West Indian molasses, obtained in exchange for New England dried fish, foodstuffs, and livestock, was brought to New England and converted into rum. The rum was shipped to Africa where it was traded for slaves. The slaves, in turn, were transported to the West Indies or Southern colonial plantations to be sold for molasses or Southern staples. Though Parliament tried to regulate this trade by passing the Molasses Act in 1733, colonial merchants refused to be limited by the heavy duty imposed on foreign sugar and molasses. A vast smuggling trade developed between New England and the French and Spanish Caribbean possessions. In their search for profit, New Englanders showed a thorough contempt for parliamentary decrees, especially those lacking effective enforcement agencies.

Another triangular trade developed in the north Atlantic. The foodstuffs, livestock, and lumber of the northern colonies were used to obtain sugar, molasses, and fruit in the West Indies. These tropical products were then carried to England where they were traded for manufactured goods. Trade with the Mediterranean region carried foodstuffs, lumber, and fish from New England to Lisbon and other ports where they were traded for wine and fruit. These were also traded in England for manufactured goods.

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over 7 years ago


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about 7 years ago

What Up hommies

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almost 7 years ago


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about 7 years ago

I think the article minimizes the naval stores produced and sold to England , the other colonies and the Carri bean Islands by North Carolina (i.e. The Tar Heels) particularly from the area around Cape fear and Brunswick Town

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almost 8 years ago

it is good but not the best i seen

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almost 7 years ago

Wow this really helped... thanks but what about southern colonies?

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almost 5 years ago

You guys have never responded for 2 years, my gosh. It beryl tells me anything on what the colonies have felt, so is more crap!