Colonial Government &
Economy
What is Mercantilism?

Mercantilism: is an economic policy
by the government which held that a
nation’s power was directly related to a
nation’s wealth.
◦ Wealth = Power, so it is important to
export more than import.
 European countries competed for world power
and needed colonies to provide necessary raw
materials.
What was the role of the Colonies?

Provide raw materials (so mother
country does not have to import from
other nations) and markets for exports.
◦ Favorable balance of trade for England
◦ Mercantilism always favors the
“mother” country over the colonies!
Triangular Trade
New England (Northern) Colonies

Valuable Resource:
◦ Timber / lumber
◦ This allowed for shipbuilding , which helped
the British maintain naval supremacy by
providing wood for ships, ships’ stores, sailors,
trade.
◦ Other items produced whale oil, rum, textiles,
and iron works.
Middle Colonies

Valuable Resources
◦ Primarily farm goods
 Livestock
 Grains / Food crops
◦ “Bread Basket” of the American colonies

Some major harbors allow for trade
industry to develop
Southern Colonies
Economies based on plantation
agriculture.
 Produced valuable Cash Crops such as
tobacco, rice, and indigo.
 Two Types of Systems:

◦ Plantation System:
Grew the cash crops
◦ Small Independent Farm Systems:
Raised livestock to export beef and pork.
How Did Mercantilism Impact the
Colonies?
European nations relied on strong central
governments to enforce mercantile doctrines.
• Americans provide profitable market for
English manufactured goods
• Americans discouraged from buying these
goods from other countries
 In fact, Britain created laws that made it illegal
to buy goods from outside the empire.
•
Laws that Enforce Mercantile Doctrines:
The Navigation Acts 1650
No country could trade with the
colonies unless the goods were
shipped in either colonial or
English ships.
All vessels had to be operated by
crews that were at least threequarters English or colonial
The colonies could export certain
products only to England

Almost all goods traded between
the colonies and Europe first had
to pass through an English port.
Was it reasonable for
England to pass laws
such as these to
control Colonial trade?
It was difficult for
Great Britain to
enforce these laws
because of the
distance.
Colonists broke the
law and smuggled and
traded with other
countries.
Responses of Colonists

Most importantly, mercantilism was
insulting: colonists felt they were being
milked like cows, kept in economic
adolescence
Colonist Responses

Until 1763, Navigation Laws were
not a burden because laxly enforced
(salutary neglect)
◦ Salutary Neglect: the idea that the colonies benefitted
from being left alone without British interference.

Merchants disregarded or evaded
restrictions, some got rich by smuggling
(e.g. John Hancock)
Government in the Colonies

If Britain is not enforcing the Navigation
Laws in the colonies, who is in charge?

Let’s look at Colonial Government
Structure
Basic Structure of Colonial
Government
Colonial Governor
Appointed by King or Proprietors
Colonial Council
Appointed by King or
Proprietors
Legislature
Elected by the People
Role of the Governor

The powers of the governor were extensive. He could
◦
◦
◦
◦

convene, prorogue, or dissolve the legislature
veto any of its laws
command of the militia
appointed many officials, such as judges, justices of the peace,
sheriffs, and the like
In one respect he was ever held in check -- he had no
power over the public purse.
◦ Meaning he did not control taxation or spending on the part of
the colonial government
Colonial Council

The council consisted usually of 12 men
(though in Massachusetts there were 28, and in early
Maryland but 3)
◦ They had to be residents of the colony in which they served.
◦ Appointed by the same power that appointed the governor, they
usually sided with him in his conflicts with the assembly.
The functions of the council



It was a board of advisers to the governor
It constituted the upper house of the legislature
It frequently formed the highest court of the colony.
Role of the Assembly

The assembly, or lower house of the legislature,
represented the people and was elected by them.
◦ It had the chief legislative power; but its acts could be vetoed by
the governor, or be set aside by the Crown
◦ But the assembly held the sole power of taxation.
◦ Through the exercise of this right the colonies may be said to
have been self-governing, and their liberties were secure so long
as they could retain this sole right of taxing themselves.