Mercantilist Relationship between the American Colonies and the British Government
Professor W.M. Gorman
February 13, 2012
Mercantilism is an economic policy and theory where the government has complete control of trade, both foreign and inside boundaries. This policy was dominant during the 16th, 17th, and late 18th centuries, it demanded a positive balance of trade between the countries it was involved with. There were many policies that were within the theory based upon mercantilism including, building a network of overseas colonies and forbidding them to trade with other nations, forbidding trade to be carried in foreign ships, export as a trade barrier using domestic goods and services competitive against imports, and restricting domestic consumption with non-tariff barriers to trade. The British government established a mercantilist relationship with the American colonies that was to its benefit until 1763 and then the relationship no longer was of economic benefit to the British crown. Prior to 1763 the colonists had no choice but to go along with Parliament's right to take actions on their behalf and the predominance of Britain's economic benefits over their personal ones. Seven Years' War was the war that altered the parliaments actions, had been intended to regulate trade and nothing else, Parliament's arrangements began to conflict with the colonists' interests. This caused the colonies to grow and thrive, by the time the British realized this Americans had already established lucrative trade with other countries. Britain became more aware of this growing “problem” and began to keep a close eye on the colonies and implemented regulatory policies, the British instituted a series of laws of trade and navigation known as the Navigation Acts. The purposes of these acts were to limit colonial trade to the British only. For this to be accomplished all trading to be done involving the colonists was to be on either English vessels or colonial-built vessels, therefore, if colonists planned to trade with other nations all of their goods had to first be shipped to England. This gave the British the chance to get a hand on the items being traded and to collect revenue from taxation before the products were traded. Another limitation that was set on the colonies was that in order to trade products such as tobacco, sugar, and cotton it had to be done with the British only. When the British would notice the colonies beginning to make profit they would add the product that was causing the increase in revenue to the list of products only to be traded with them. Although there were many restrictions placed upon the colonies, they did not cause as much damage as Britain may have hoped. Benjamin Franklin answered when asked, “I have never heard any objection to the right of laying duties to regulate commerce; but a right to lay internal taxes was never supposed to be in Parliament, as we are not represented there”. There were even some benefits even to having these regulations, such as a built in market for raw products that they had and the British did not rigidly enforce the trading regulations that were set. Following Great Britain’s achievement of French territory in North America after the end of the French and Indian War allotted the Proclamation of 1763 in October of 1763. The purpose of the proclamation was to establish Britain’s new North American Empire and to stabilize associations with Native North Americans through regulation of settlement, trade, and land purchases. The proclamation kept certain lands for the Indians and prevented the colonies from settling inland. The colonies wished to expand their territory inlands but with the Proclamation of 1763 they were unable to do so, causing massive amounts of interest conflicts. The British seemed to be enforcing this proclamation more so than any other laws placed on the colonies before. Troops were stationed along the frontier to give...
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