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The Mercantile System and the Colonies

By 1750, the North American colonies were no longer just experiment but an essential part of the British economic and political system. To be sure, there were seasons of feast and famine for the colonists, and no settlement was entirely protected from the threat of attack from either the Spanish, French, or Native Americans. Even so, free citizens of the colonies generally had more opportunities than their counterparts in England: land was cheap and plentiful, resources were abundant, governmental controls were loose, and taxes were almost non-existent. Over time, members of Parliament began to suggest that imposing more strict controls and levying steep taxes could make the colonies more profitable to the mother country. The idea of asserting direct control over the colonies was a relatively new idea in Britain. Unlike French or Spanish colonies, where every detail of colonization had been administered by strong central governments from the start, the English colonies were established by individuals and groups, independent of governmental interference. Parliament and the King tended to be more concerned with the situation in nearby European countries and in the more profitable colonial holdings of India and the Caribbean. As a result, America was, at best, fourth in England’s list of priorities during the first hundred years of colonization.

The casual attitude toward the colonies stemmed from the mercantile system. The object of the mercantile system was to make the mother country wealthy by increasing the nation’s supply of gold and silver, thereby increasing the country’s status in terms of international trade. To increase the supply of these precious metals, a nation tried to export far more goods than it imported. As goods flowed out of the country, gold and silver flowed in. The less money that flowed out again to import goods, the wealthier the nation became. However, if the other major nations practiced mercantilism, they would refuse to buy England’s goods, leaving the country short of raw materials and products such as tobacco, sugar, and spices that could not be produced domestically. Thus, the system created the need for colonies, which would both provide needed raw materials and provide a captive market for the mother country’s exports, usually manufactured goods. As long as the American colonies provided England with a steady supply of raw materials and profits; most in Parliament saw little reason to tinker with the system.

Understandably, the mercantile system was not always favorable to the colonies. England bought cheap raw materials from America and sold back expensive manufactured goods to the colonists, and as a result, most of the precious metals flowed out of the colonies and back to England. Without the benefit of hard currency, most colonies were forced to issue paper money by the 1690s. Considering the instability of an economy based on paper money and without the backing of hard currency, colonies began looking to other countries for trading opportunities. Planters of tobacco, rice, and indigo were guaranteed a market in England, but they found that they could often get a higher price for their goods by selling them to the Dutch or directly to French or Spanish colonies. Meanwhile, merchants in northern colonies began building ships and engaging in international commerce, carrying not only the goods of the southern colonies and England, but also those of other countries, in which prices and opportunities tended to be better.

The Navigation Acts and Salutary Neglect

Although the mercantile system was the stated economic policy of England, there were few laws to enforce the system or to control the colonies before the 1660. Then, in the wake of the domestic turmoil of the English Civil War and the Commonwealth period, Parliament passed the first of the Navigation Acts, designed to enforce the mercantile system and make more money for the mother country. The new laws limited trade in the colonies to English ships in which the captain and at least three-quarters of the crew were English. Also, Parliament declared that goods from outside of England or its colonies must be brought to England, unloaded, taxed, and then reloaded before being shipped to the colonies. Furthermore, certain American products, called “enumerated articles,” could only be sent to England or another English colony. These included most of the profitable American products, including tobacco, rice, indigo, cotton, and naval stores.

If enforced fully, the Navigation Acts would have been ruinous to American farmers and merchants, because European importers were often willing to pay higher prices for such products as tobacco and rice than their counterparts in England. However, Parliament rarely expended the money and energy to see that the Acts were being carried out. As long as the colonies continued to generate a steady income for the mother country, it was enough to simply assert England’s right to rule over the colonies rather than rigidly enforcing harsh laws. Prime Minister Robert Walpole articulated this viewpoint when he declared that “salutary neglect,” or lax enforcement of the Navigation Acts, actually stimulated prosperity.

Other strategies proved equally effective in evading the Navigation Acts. The British customs agents sent to America to enforce the Acts were often either incompetent or interested only in the money their positions brought, and many accepted bribes to overlook violations of the Acts. In addition, those rare merchants who were caught smuggling found that American juries were also reluctant to convict other Americans. Thus, the Navigation Acts affected few colonists directly. However, a power struggle in England and the emergence of a new European colonial power would soon challenge American complacency and change the colonists’ way of life forever

The Glorious Revolution and its Consequences

The relative independence of the colonies remained unchallenged by Parliament until a political and religious conflict erupted in 1684. Charles II, who had been placed on the throne with the restoration of the monarchy in 1660, had acceded to Parliament’s demand that he uphold the Church of England and serve as its leader. However, the King and his brother James secretly still preferred the Catholic Church, and they looked with suspicion at the mixture of religious ideologies that were running amok in the colonies, especially Puritanism. They were also horrified to learn that the northern colonies were getting rich by avoiding the Navigation Acts. Seeking to bring the wayward colonies to heel, Charles II revoked the royal charters of Massachusetts, Plymouth, Rhode Island, New Hampshire, and Connecticut. Following the death of Charles in 1685, King James II revoked the charters of New York and New Jersey as well and combined all seven colonies into one legal entity called the Dominion of New England. The King named Edmond Andros governor of the Dominion and instructed him to dismantle all the major institutions of Puritan society by banning town meetings, charging the colonists a quitrent on what was called the King’s land, and disestablishing the Puritans’ Congregationalist Church.

The Dominion of New England represented a dramatic change in England’s relationship with its colonies, and it could have turned explosive if not for another, larger crisis taking place in England at the same time. King James II had fathered two daughters, named Mary and Anne, by his first wife. When the girls’ mother died, James married a Catholic named Mary of Modena, and the two had a son. When the King announced that his son and most immediate heir would be raised Catholic, members of Parliament revolted, believing that Catholicism would destroy England. They denounced the King and convinced the army to follow their orders, and not those of the King. Then, Parliament invited James’ daughter Mary and her Dutch husband William to return from the Netherlands and assume the English monarchy. They accepted the crown in 1689, and James II was exiled. The new monarchs pledged that they and all future rulers of England would be Protestants. The so-called Glorious Revolution was bloodless, and it represented a fundamental shift in English power away from the King and to Parliament. Every monarch thereafter would rule at the pleasure of Parliament, not the other way around.

The Glorious Revolution had a profound effect on the colonies, especially those included in the Dominion of New England. After the Revolution, each of the colonies received new royal charters except for tiny Plymouth, which became part of Massachusetts in 1691. Most importantly, the colonies learned that Parliament and not the King was the true source of power. Any questions or complaints hereafter would be directed to Parliament. For its own part, Parliament emerged from the Glorious Revolution with a new appreciation for the strategic and political significance of the American colonies, and would move to protect and expand its holdings in the New World in the decades to come.

The Emerging French Threat

During the years following the Glorious Revolution, a new threat to England’s dominance emerged. French explorers had claimed vast amounts of land in North America, including the mouth of the St. Lawrence River, Newfoundland, Nova Scotia, and the vast area surrounding Hudson Bay and west of the Appalachian Mountains. Despite these claims, the French originally only established a few small settlements along the St. Lawrence, including Quebec and Montreal. However, the success of the English colonies along the Atlantic seaboard inspired the King of France to increase and expand his commitment to territorial holdings in the New World.

Recognizing this emerging threat, members of Parliament had tried in vain to get first Charles II and then James II to attack the French. However, neither would declare war on a Catholic nation, and so the French were able to continue their expansion in North America. After the Glorious Revolution, Parliament urged the new monarchs to attack the French, and this time they acquiesced. The conflict known as King William’s War lasted from 1689 to 1697. Curiously, both countries sent very few of its own troops into battle in North America because they wanted to save their best troops for possible engagements in Europe. Instead, they hired different Native American tribes to do the fighting for them. This practice, known as proxy fighting, would be a common feature of European military engagements in America throughout the seventeenth and eighteenth centuries. However, after eight years of intermittent skirmishing and no territory gained on either side, the countries agreed to stop fighting.

Colonial tensions flared up again just five years later, and France and England again declared war on each other. By this time, William and Mary had died and the crown passed to Mary’s sister, Anne. Accordingly, the conflict, which lasted from 1702 to 1713, was named Queen Anne’s War. The manner of the fighting was much like the previous war, with both sides resorting to proxy fighting, but when peace was finally restored, England had gained control of Nova Scotia, Newfoundland, and the area immediately surrounding Hudson Bay.

An uneasy peace was maintained between the two countries, but in 1744 a dispute arose over who should be the next monarch in Austria, and France and what was now called Great Britain again went to war. Known as the War of Austrian Succession in Europe, it bore the name King George’s War in America, and it lasted from 1744 to 1748. British troops captured the strategic stronghold of Cape Breton, but were forced to return it to the French as part of the peace treaty that ended the war. After sixty years and three wars, the British had gained a considerable amount of French territory, but the two sides were still at odds. It would take one final war to settle the issue of New World dominance one and for all.

Relations Between Native Americans and French and British Settlers

The harsh northern weather and the medieval system of land distribution guaranteed that few French settlers would make the trip to the country’s North American holdings. As a result, the entire area of what was called New France had only 90,000 residents, as compared with nearly 1.2 million living in the American colonies. Whereas Americans could boast large cities such as Charleston, Philadelphia, New York, and Boston, French settlers had only established two towns of note, Montreal and New Orleans. In the vast areas between these settlements, French explorers were active, establishing trading posts along the St. Lawrence River, the Great Lakes, and Mississippi River.

Because their presence in the New World was relatively insignificant, the French found little need to take land away from the Native Americans and therefore proved much less threatening to them. By contrast, the British colonies were much larger, contained many more inhabitants, and always seemed to be expanding westward, conquering Native American tribes and taking their land. Britain did manage to maintain reasonably friendly relations with the Iroquois tribe in New York, but most other tribes viewed the British with both suspicion and fear, and with good reason. By the middle of the eighteenth century, settlers in the fast-growing colonies of Pennsylvania and Virginia had claimed all of the land east of the Appalachian Mountains. New waves of settlers crossed over the mountains and claimed Native American land the Ohio River Valley or “Ohio Country” for themselves. Not surprisingly, when conflicts erupted between France and England, most Native American tribes were likely to view the French as their allies.

The Seven Years War Begins, 1754

The land of the Ohio Country was claimed not only by the British colonists but also by the French, and the territory soon became an area controversy. The French sent troops south to build Fort Duquesne where the Allegheny and Monongahela Rivers join to form the Ohio River. Almost simultaneously, Virginia, which claimed that its charter gave it all land west of the Appalachians, sent a young colonel George Washington and 150 men to construct a fort at the exact same strategic location. The French got there first, and when George Washington and his men arrived on the scene, they drew back and hastily constructed the appropriately named Fort Necessity. Badly outnumbered, Washington ordered an attack anyway. His force was quickly surrounded, forced to surrender, and sent back to Virginia in disgrace.

When Parliament heard of the humiliating defeat, it declared war on France and sent 1,400 of the best regular soldiers under General Edward Braddock to take Fort Duquesne. The Redcoats built a road as they marched in European order through the wilderness. Thoroughly warned, the French and Indians ambushed and defeated Braddock, killing or capturing 900 soldiers. Braddock himself was killed and Washington, as second in command, led the battered remnants back to Virginia.

As war fears spread throughout the colonies early in 1754, representatives from Pennsylvania, Maryland, New York, and the New England colonies met in Albany, New York, to negotiate a treaty with the Iroquois. The Iroquois rejected the treaty at the Albany meeting, although they formed an alliance with Britain the next year. Meanwhile, Benjamin Franklin, head of the British postal service in America, proposed that the delegates adopt his Albany Plan of Union. Under this plan, the King would appoint a President General, and a legislature made up of delegates from the colonies would meet to handle national issues, including western land claims, relations with the Native Americans, and reinforcing defensive forts on the frontier. Representation in the legislature would be based on how much money each colony contributed. Despite the obvious advantages of the idea, the delegates rejected Franklin’s plan, arguing that they had no authority to establish a national legislature. In reality, the plan was rejected was because individual colonies jealously guarded their money and their western land claims. Ridiculed and dismissed in 1754, Franklin’s plan represented the first genuine attempt to unite the colonies politically.

The Course of the War

In the first years of the war, the British military leadership demonstrated spectacular ineptitude and a tight-fisted Parliament refused to adequately fund its military forces. As a result, defeat followed defeat, and soon American settlers were forced to flee east of the Appalachian Mountains. In 1757, a force of 12,500 French and Native American troops under General Montcalm captured Fort William Henry in upstate New York; this gave the French control of the main invasion route into the colonies. Native Americans then looted the fort slaughtered hundreds of those who had surrendered. Things looked bleak indeed for the American colonists.

The war had become a worldwide conflict. Britain could boast allies including the Prussians, the other German states, the Americans, and the Iroquois tribe. France allied itself with Spain, the French Canadians, and the Algonquin tribe. Although the bulk of the fighting took place in Europe, India, the Caribbean, and the Philippines, the new Prime Minister William Pitt contended that the war would be won or lost in the North America. He convinced Parliament that it must spend freely to build up the British army and navy. As a result, the British went into considerable debt during the course of the war, but the country was able to raise a large and potent fighting force.

With the Prussians handling most of the fighting in Europe, Prime Minister Pitt was free to send unit after unit to America. The British quickly overwhelmed the French and Indian troops, and General Montcalm was compelled to abandon his hopes of invasion and withdraw to Quebec. Then the British went on the offensive. General Jeffrey Amherst seized the “impregnable” French fort at Louisburg, on Cape Breton, giving the British easy access to the St. Lawrence River. Meanwhile, British troops captured Fort Duquesne and quickly renamed it Fort Pitt (and, still later, Pittsburgh). The following year, under the direction of thirty-year-old General James Wolfe, the British overran both Quebec and, in the process, destroyed Motcalm’s army. Both generals were killed in the battle, but the victory gave the British control of the St. Lawrence River, cutting off the French from reinforcements of any kind. The war in North America was effectively over. Britain proved victorious elsewhere in the world as well, and by the time the sides met to negotiate a peace treaty, France and Spain were defeated and demoralized.

Considering the magnitude of the British victory in the war, the terms of the Treaty of Paris of 1763 were remarkably moderate. France relinquished control of all of its territorial holdings in North America (except for two small islands in the Gulf of St. Lawrence), with the land east of the Mississippi River going to Great Britain and the land west of the Mississippi falling under Spanish control. For their part, the Spanish ceded Florida to the British, but retained control of her Caribbean holdings. The Prussians, who had borne the brunt of much of the fighting in Europe, were disgruntled to find that the war ended before they could achieve any military objectives. Feeling betrayed, the Prussians severed their alliance with Great Britain.

In America, the mood was euphoric. Once threatened by attack and ruin, the colonies had been protected by the mighty British Army. Cities demonstrated their gratitude by holding parades, staging rallies, firing cannon, and setting off fireworks in celebration of the victory and of the mother country. The governor of Massachusetts declared, “nothing can eradicate from our hearts the natural, almost mechanical affection to Great Britain.” However, the events of the following thirteen years would test the limits of that affection.

Chapter IV Vocabulary Terms


Navigation Acts

Salutary Neglect

Dominion of New England

Glorious Revolution

King William’s War

Queen Anne’s War

King George’s War

Ohio Country

George Washington

Seven Years War

Fort Duquesne

Albany Plan of Union

Gen. James Wolfe

William Pitt

Treaty of Paris of 1763

Chapter IV Review Questions
1. In what ways did French and English settlements in the New World differ? How did their relations with Native Americans differ and why?

2. How does mercantilism work? How does it affect the economy of colonies?

3. Why did the King want to establish the Dominion of New England? Why did it not last long

4. How did the Glorious Revolution alter the relationship between the King and Parliament, and between Parliament and the colonies?

5. How did salutary neglect actually contribute to the wealth of the mother country?

6. Discuss the causes and effects of the three wars named after English monarchs.

7. What claims did Virginia, Britain, and France have to the Ohio Country? Which claim was the most legitimate?

8. What was the strategic significance of the area where Fort Duquesne was built?

9. Why did the British lose many of the early battles in the war? What accounts for their stunning recovery and victory?

10. How did the Treaty of Paris of 1763 fundamentally alter the balance of power in the New World?


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