How Mercantilism Helped to Shape the American

Nation

Essay submitted by Matt Stokes

In the Middle Ages, the definition of wealth was based on the amount of productive

land. According to this definition, France was the wealthiest and therefore the most

powerful of the European nations. During the sixteenth century the definition of wealth

began to change. As the ability to conduct profitable foreign trade increased, so did

the amount of cash. Thus, the new definition of wealth came to mean the gain of cash

or specie. Specie included gold, silver, or bullion. The wealthiest nation became the one

with the most cash, and therefore, the most powerful nation. As the redefining of

wealth took hold, there was an increased desire and ability to conduct foreign trade on

a larger scale as cash became the new medium of exchange in contrast to bartering.

Mercantilism began to take hold of the countries of Europe. Mercantilism was

characterized by the governmental regulation of industries, trade, and commerce. This

was especially true with foreign trade, and was determined more by national aims

rather than individual or local interests. This new quest for trade began the Age of

Expansion in the early fourteen hundreds. This era ushered in a search for new sources

of revenues, and focus turned toward the colonization of the New World. The

Portuguese, Spanish, and English directed many efforts of colonization and development

toward this new land in an attempt to establish themselves as the economic leaders of

the world. As mercantilism began to change, so did the power flux of the European

countries. Thus began the shaping of North America as we know it.

The Age of Expansion brought many changes to medieval Europe. During this period,

the countries of Europe began to look beyond their borders. In Europe, there was

nowhere to grow. This being the case, the only place to turn was west. Portugal came

into existence in the early 1400's. It is a small country bordered on one side by the

sea, and by Spain on the other. Out of necessity the Portuguese became the masters

of the sea. They began to acquire a great knowledge of the sea and advanced in

navigation, sailing, and map-making. They also founded an academy of navigation in

Lisbon. In the early 1400's, the Portuguese began exploratory voyages. The Portuguese

wanted to establish themselves in large-scale international trade. The four things most

desired by the people of Europe were spices, sugar, precious metals, and silk. These

goods were found primarily in the West Indies. In 1497, a Portuguese explorer named

Vasco da Gama became the first European to sail around the Cape of Africa, allowing

the Portuguese to establish colonies in East Africa and open new trade routes. By

1513, the Portuguese had established trade with much of the West Indies as far as the

Spice Islands.

In the late 1400's, a man by the name of Christopher Columbus had the idea that he

could reach the West Indies by a westward route over the Atlantic Ocean. He believed

that he could find a westward route to the West Indies that would make trade much

more feasible and that would supply desired goods to the European people. Desiring

support for an exploratory voyage across the Atlantic Ocean, Columbus went to the

most logical place - Portugal. For ten years he sought support for a voyage, but he

never received the funding he needed. Since Portugal refused to provide him with the

necessary support, he decided to try Spain. In 1492, Queen Isabella of Spain granted

him a commission, and he sailed west with three ships. On October 12, 1492, the ships

landed on an island which Columbus named San Salvador. He then claimed the land for

the country of Spain. Columbus explored the Caribbean Islands and journeyed back to

Spain believing he had found the West Indies. The focus of expansion now shifted to

the New World. The Spanish began to establish colonies with the hope of turning a

profit.

In 1521, Hernando Cortez, another Spanish explorer, conquered the Aztecs in

Tenochtitlan (Mexico City). He later conquered the rest of Mexico, including the Mayan

people. The Spanish also colonized Florida and claimed all the land west of the

Mississippi River. Most of the conquered natives were put into slavery or forced labor.

The Spanish operated vast silver mines and sugarcane plantations. Most of Spain's

profit came from silver and gold. The native peoples had mined much of it before the

arrival of the Spanish, and the Spanish exploited these people for their wealth. There

was a massive influx of cash into Europe. Spain began spending money as fast as it

came in. The result was the Economic Revolution. Prices all over Europe fell because of

rising inflation.

In 1497, the British sent an explorer named John Cabot on a voyage to North America.

King Henry VII granted John Cabot a royal Charter. This charter, issued by the

government, authorized Cabot to conduct a voyage in search of a Northwest Passage

to the West Indies. The charter was only permission - not financial support. The

Merchants of Bristol supplied the monetary support. Although Cabot did not find

anything, his voyage served as a model for later English settlement of the New World.

The North American colonies did not begin as royal colonies - they became royal

colonies. The colonies began as individual economic ventures supported by joint-stock

companies and given royal charters by the government. Cabot was the first man sent

by Britain on a voyage to the New World. He was also the last for a long time.

The British were late starters in the race to establish colonies. They had become a

fairly wealthy and powerful nation. As a result of this wealth, the people wanted more

material things. These material goods had to come from somewhere, so money was

being sent to other countries to purchase the desired things. This was an undesirable

situation in the mercantile system. In an attempt to solve this problem, colonies were

started to provide goods that could not be produced in the mother country. The British

established their first settlement in the New World in 1607. This settlement was called

Jamestown. The colony was funded by a group of private investors joined together to

form the Virginia Company. The primary objective of this colony was to turn a profit for

the investors. The primary source of income for colonists in Virginia was from the

production of tobacco. The tobacco trade soon became this colony's major export to

many countries all over the world. Another colony, financed by the Massachusetts Bay

Company, was established in 1620. This colony was begun by a group of Puritans under

the leadership of John Winthrop. The Puritans, also called the Pilgrims, established a

colony on the Massachusetts Bay. They shipped lumber, built and outfitted ships, and

carried on a good amount of foreign trade. There were eleven other British colonies:

North Carolina, South Carolina, Georgia, Maryland, Pennsylvania, Connecticut, Rhode

Island, Delaware, New Hampshire, New York, and New Jersey. The British also had other

colonies besides the thirteen on the North American mainland. Barbados was the chief

of these. Barbados produced more income than all thirteen mainland colonies put

together. The British viewed the colonies as part of the British Empire. They saw the

colonies as an important economic tool. The sole purpose of these colonies was to

contribute to the success of the British economy. The British Parliament passed a series

of laws called the Navigation Acts. This was an attempt to put into action the

mercantile system by keeping all the cash within its own borders so England could gain

more wealth. The Navigation Acts limited the colonists in many ways. The colonists

were not allowed to export anything unless it was in an English vessel. The colonists

also had to buy all their goods only from British merchants.

During the late 1600's and early 1700's, a series of wars broke out in Europe as

countries began to establish themselves as the major powers of the world. The first of

these was the Glorious Revolution of 1689. In this war the English Parliament

established itself as the supreme power. From 1689-1697, there was King William's War,

followed by Queen Anne's War from 1702-1713, and the War of Jenkins' Ear from

1743-1748. This shows how volatile the relationships were between the countries

during this time. The most important of the wars during this period was the Seven

Years War, or the French and Indian War. This war, between Britain and France, lasted

from 1754-1763. The French had established a profitable fur trade with the Indians,

and they did not want the English encroaching on their monopoly in this trade. The

English wanted to expand westward, but the French were blocking their efforts. This

was a critical factor for the fighting of this war. The Native Americans played a critical

role in the outcome of the war as well. The Indians were convinced to side primarily

with the French because the French wanted a trade relationship with the Indians; the

English only wanted the Indian's land. Because of the untraditional warfare of the

Native Americans, the English were forced to send many British Regulars to North

America to fight the war. As a result, the war was a costly one - adding to the

economic misery of Great Britain because of the already accumulated debt from

previous wars. The English finally won in 1763. The treaty of Paris was signed in 1763 in

Paris, France. The treaty gave all the rights of French land to the English.

As a result of all the wars that were going on with England during this time, the English

lost interest in the American colonies. They were in a state of salutary neglect. This

was a positive action in an attempt to stay out of colonists' affairs so they could

develop in a positive manner. When the English finally realized the amount of debt they

had incurred because of their numerous military campaigns, they began to look

differently at the American colonies. The English felt that the colonists had not

contributed their fair share to the British cause. After all, the colonies were only there

for the betterment of the British economy. But the colonists were not there only for

Great Britain as a whole; they were there for themselves. Britain then began to send

over troops and establish military discipline in the colonies. The English began to pass

laws in an attempt to make the Americans pay for the war. Some of the laws that were

passed included the Sugar Act in 1764, The Stamp Act in 1765, and the Quartering Act

in 1765. The most ill-received of these laws was the Stamp Act. The Stamp Act

imposed a tax on all written material. This included letters, deeds, newspapers, and all

other written transactions or documents. Needless to say, the colonists were not

happy. This caused the famous cry to be raised, "No taxation without representation."

The colonists wanted a voice in the laws that were passed for them. As a result of the

passing of these unfair taxes, the famous Boston Tea Party was held. The British then

decided to quarter troops in Boston for the first time. The colonists resented the troops

living in their towns. The two societies were moving towards war. In 1775, fighting

broke out between the two countries.

As a result of the war between England and the Colonies, the Continental Congress was

formed. The purpose of this body was not to govern, but to help make decisions,

oversee, and finance the war. Continental Congress appointed George Washington as

general of the Continental Line. The Continental Line was an army raised and funded by

the Continental Congress. In 1776, the Declaration of Independence, written by

Thomas Jefferson, was passed and signed by the Continental Congress. On October 17,

1781, Cornwallis surrendered at the Battle of Yorktown. He had retreated to Yorktown

in hopes of receiving much-needed supplies from the British fleet. But, as he was soon

to discover, the British had control of the seas no longer. The French had allied

themselves with American forces in 1778. By the time Cornwallis had retreated back to

the coast, the French had gained control of the seas. The British formally surrendered

in 1785. The two countries met again in Paris, France to sign a treaty. In 1787, the

Constitution, again written by Thomas Jefferson, was framed. But all the articles could

not be agreed upon by all the states. In 1781, however, the states did ratify the

Articles of Confederation. The Constitution was later ratified by all thirteen colonies in

1789. A new nation had officially been born.

The changing definition of mercantilism, stemming from increased trade, wrought many

new things from the early 1400's to the late 1700's. Trade increased, an economic

revolution took place, countries began to expand to new lands, and people began to

call these new lands home. The thirteen original British colonies had started as

individual, independent colonies who each worked for the economic good of Great

Britain - but they ended up a unified nation, under God, with liberty, justice, and

freedom for all.