Colonial Mercantilism

*Mercantilism: a political and economic system in which countries establish colonies to provide raw materials and import manufactured goods.

The "mother country" (Great Britain) controls trade policy and determines who can ship the goods and where the goods can be sold.  The British Parliament believed the colonies existed for Great Britain's financial benefit.  It controlled what colonists grew or made, where the goods would be shipped, what goods were shipped and sold to the colonies, and what taxes would be paid on those goods.

The idea was to create a more favorable balance of trade for the British.  Wealth is power and the key to wealth is to export more than import.  
*Exports: goods leaving the country
*Imports: goods entering the country
The colonies would provide the raw materials for the mother country to ensure this!

The Triangular Trade is an example of mercantilism.  By taking products from America and then either creating manufactured goods or selling the original products to other countries (foreign markets), Great Britain was able to profit from the wealth of goods found in America.  American merchants would not be able to deal with another country directly, but would have to operate within the rules that the British government established for them.

*In the 13 British American Colonies, the colonists reacted very strongly to these controls!

*Copy the following pros and cons of paying taxes to Great Britain in your class notes:

*PROS of Paying Taxes to Great Britain

*Taxes supported the British Army and its efforts to stop Native American attacks on the colonists living in the frontier.

*The colonists were loyal subjects and duty-bound to the King and British government.

*Taxes provided continued protection by the British from other countries.

*Colonists were able to buy British goods and enjoy luxuries like silk and tea.

*CONS of Paying Taxes to Great Britain

*Colonists were already paying separate taxes to cover their own war debts in the colonies.

*Colonists did not any representation in Parliament, so they should not be taxed unless their elected representative voted to pay.

*British interference in the government of the colonies was an emcroachment on thier liberty.

*If colonists payed these taxes, the British would keep levying more.