Trade (Edexcel GCSE History): Revision Notes

Trade in British America, 1713-41

British control of colonial trade

Britain maintained strict control over what the American colonists could trade and who they could conduct business with. This economic policy, known as mercantilism, was designed to ensure that trade primarily benefited the British economy rather than allowing the colonies complete freedom in their commercial activities.

Under this system, most colonial trade was conducted with Britain itself, though there were also important trading relationships with other British territories, particularly the West Indies. This controlled approach meant that trade opportunities for the colonists were somewhat restricted, but it also provided certain advantages and support from the mother country.

Trade relationships with Britain and the West Indies

The trading relationship between Britain and its American colonies was more complex than simply extracting resources. Britain provided valuable financial support to its colonies, including insurance services and loans to colonial businesses. The mother country also offered subsidies to help colonists develop and grow specific products that were in demand, such as indigo, which became an important export crop.

However, Britain's strict oversight meant that it controlled what products were grown and manufactured in its American territories. This control was quite significant - only about 10 percent of goods produced in the colonies were actually sold outside the British trading network.

The 1733 Molasses Act

The effect of this legislation was to increase trade between British America and the British West Indies, which in turn meant that more taxes were paid to Britain. This policy exemplified how Britain used taxation to direct trade flows in ways that benefited British economic interests.

Benefits and limitations for colonists

While colonists did receive certain benefits from being part of the British trading system, the goods they exported were primarily raw materials that were much cheaper to produce than the manufactured goods Britain sent back to the colonies. Additionally, British ships and merchants typically handled the transportation and commerce, ensuring that Britain captured most of the profit from these trading relationships.

The importance of tobacco and rice

Two crops became absolutely central to the economy of certain American colonies: tobacco and rice. The demand for tobacco was particularly high in Britain and other British colonies, which led to a massive expansion in tobacco cultivation, especially in regions where the climate was most suitable for growing this crop.

The colonies of Virginia, Maryland, and North Carolina - known collectively as the Chesapeake region - became the primary tobacco-producing areas. This crop was so valuable that tobacco exports made up approximately 45 percent of all goods exported from British America, making it by far the most important single export.

Tobacco cultivation was extremely profitable because farmers and traders could charge high prices and make substantial profits, particularly since they relied on enslaved labour to work their plantations. This economic success made the Chesapeake colonies heavily dependent on tobacco production - if crops failed or demand decreased, these colonies had very few alternative sources of income.

Rice cultivation, primarily in South Carolina, was similarly profitable and even more so than tobacco in some cases. Rice plantation owners became incredibly wealthy due to the high profits this crop generated.

The impact of tobacco and rice cultivation

The success of tobacco and rice cultivation had profound social and economic consequences for the American colonies. Both crops required intensive manual labour, which led to a dramatic increase in the number of enslaved people being brought to work on plantations.

The profitability of these crops meant that land suitable for cultivation became extremely expensive, which only wealthy individuals could afford to purchase. This created significant resentment among poorer colonists who could not access land for farming.

As these labor-intensive plantations expanded, it became increasingly difficult for servants and free workers to find paid employment, since enslaved people were used instead of paid labourers. This economic pressure forced many poor colonists, servants, and other workers to move northward, leaving the southern colonies to become increasingly dominated by wealthy plantation owners, their families, and large populations of enslaved people.

The concentration of wealth and the reliance on enslaved labour created a distinctive social structure in the tobacco and rice-growing regions, with significant disparities between the wealthy plantation elite and the rest of the population.