Colonial Economies

Mercantilism

• Mercantilism – Creating and maintaining wealth by carefully controlling trade. England got wealthy at the expense of the colonies.

• Under the colonial mercantilist system, Parliament required the colonists to do most of their trading with England.

• Positive: The colonists could automatically sell all of their raw materials (fur, tobacco, and lumber) and some finished products like ships to England.

• Negative: English demand determines the market price of goods. So, if there is a lot of tobacco grown but England doesn’t want to buy any more, the colonists have no one to sell to or they have to sell it for very little.

Imports and Exports

• Favorable balance of trade – having fewer imports than exports

• Imports – Goods purchased from other countries

• Exports – Goods sold to other countries

Basis of the Economies of Each Colonial Region

New England- Shipbuilding- FishingMiddle- Commerce (Exchange of Goods)- Agriculture Southern- Cash Crops

Check for Understanding

1. Give an example of something that the New England colonies might EXPORT.

2. Give an example of something that the Southern Colonies might EXPORT.

3. Give an example of something that New England might IMPORT.

4. Give an example of something that the Middle Colonies might IMPORT.

Check for Understanding

5. If you lived in New England and you imported $600 worth of rice and exported a $400 ship, do you have a favorable balance of trade?

6. If you lived in the south and imported $300 worth of slaves, $150 worth of fish, and $100 in clothing and you exported $700 in tobacco, do you have a favorable balance of trade?