American Colonial Protectionist Trade Issues: Lessons for the Future Nation?

 

The English commercial relationship with the North American colonies has often been cited as one of friction, contributing to the break between the colonies and the mother country. This break led to the American War for Independence and patriot victory. Trade patterns and commercial statistics, however, reveal that the trade relationship was consistent in the years before the conflict and, in many cases, lucrative for American merchants, planters, and those involved in manufacturing.

 

English Imports and Exports in the First Half of the 18^th Century

 

During the first fifty years of the 18^th Century, the only trade figures in terms of imports and exports that remained constant in English trade patterns were with the American colonies. In 1700, 6% of all English imports came from North America; in 1750, that figure rose to 11%. In 1700 English exports to the North American colonies stood at 6%, rising to 11% in 1750. Such consistency was not the case for imports and exports to other geographic regions,

 

In 1700, for example, 66% of all English imports originated in Europe. This figure fell to 55% in 1750. The deficiency can be attributed to English imports coming from the East Indies, North America, and the West Indies by 1750. In fact, West Indies goods increased 5% over a fifty year period, attesting to the growing diversity of the import/export trade as the English began to forge a global trade empire.

 

The same can be said for English exports. Exports to Europe fell from 85% to 77% by 1750 while the largest gain in exports was in North America by 5%, followed by the East Indies 3%. Part of this increase can be attributed to a growing North American population. In 1700, the estimated population in the American colonies was 250,888. This figure grew to 1,179,760 by 1750.

 

Advancing the Mercantilist System Provided Profits and Continuity

 

Professor Oliver Dickerson argues that, “The trade of the Empire was discovered to be an economic whole with a complicated mass of legal regulation.” The chief end of these measures was to “encourage British trade and commerce.” Dickerson cites, as an example, the introduction of naval stores in the Southern colonies as an industry designed to benefit both the colonies and England.

 

Prior to 1700, naval stores had been purchased from the Baltic region, not part of the English system. Naval stores included such commodities as tar, pitch, and hemp, all essential in servicing ships. By introducing these industries to the colonies and levying high tariffs on the Baltic products, profits were retained within the mercantilist system. Further, England paid colonial producers bounties in order to make the production more appealing.

 

Many “enumerated” goods included bounties or subsidies paid above the value of the commodity, such as tobacco. Such financial enhancements were discontinued, however, with over-production and the depression of prices. George Washington, for example, invested heavily in tobacco only to accumulate high debts when prices fell, forcing him to convert land on his Mount Vernon estate to other crops.

 

End of the Protectionist Trade System

 

By 1764 England, attempting to payoff huge debts associated with the Seven Years’ War altered the previously consistent trade regulations associated with the Navigation Acts. Dickerson, for example, states that these policy changes were accomplished for “the sake of revenue and political exploitation.” Other historians of the colonial period agree with this assessment.

 

Thus, the original regulations attached to decades-old Navigation Acts were not to blame for the revolution. It can even be argued that they benefitted the colonies and made many Americans wealthy, increasing the colonial standard of living. Rather, if the commercial policies are to used as a cause for the revolution, it was their subversion by various English treasury ministers that brought about conflict.

 

The American Revolution ended colonial participation in the intricate trade system of Britain. In some cases, certain lucrative enterprises were lost, such as tobacco, rice, and naval stores. Tobacco, in many cases, was replaced by cotton, which turned out to be fortuitous because increased cotton cultivation in the South coincided with a growing English need for cotton.

 

Economic historian David Landes, for example, writes that in 1760 “Britain imported some 2 ½ million pounds of raw cotton…” and that by 1787, this increased to 22 million pounds. Although Britain imported cotton in the 19^th century from India, the West Indies, and Egypt, American cotton was considered superior.

 

The Trade Relationship with the English Colonies

 

The English-colonial trade relationship functioned well in the years before the regulatory policy changes that focused on revenue collection. Although it can be argued that these pre-revolutionary taxes were justified, albeit ill-conceived, they led to the revolution which ultimately destroyed that trade relationship.

 

Sources:

 

Carlo M. Cipolla, Before the Industrial Revolution (W.W. Norton, 1994)

Oliver M. Dickerson, The Navigation Acts and the American Revolution (University of Pennsylvania Press, 1951)

David S. Landes, The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present (Cambridge University Press, 1969)

Published August 25, 2010 by M.Streich, copyright