Trade and the Economy

Trade - or what you export and import effects your economy in a multitude of ways.  Today, it can  make a poor country rich, or a rich country poor if banns are placed on them.  The same is true of America in the 1600s and 1700s.  At first, they follow what the Mother Country - England tells them to do, but after a while, they realize this form of trade may not be in their best interest.  It takes a while for them to start making choices on their own, but once they do - it changes the world economy in SO many ways.

Trade with the colonies made everyone wealthy.  Because of the Navigation Laws which regulated who could trade with the colonies and who the colonies could trade with, it ensured prosperity for all involved.  Imagine you had goods to trade.  You knew who to trade with and you also knew no one else could trade with this country.  Your product has a set market.  The same is true with goods coming into your colony.  Because you are member of the British Empire, you have the backing of one of the most powerful countries in the world.  They not only are purchasing your goods, but they are sending steady stream of goods to you.  Sounds like the perfect deal, doesn’t it?  Except for one thing – England does not have a monopoly on goods.  There are other countries which have things you want.  How are you going to get them if you are only allowed to trade with England?  You can do without coffee or wine OR you could break the law.

Let’s discuss the trade: There were many legs on the journey.  Some were quite simple – just from one location to the next.  Others stopped in one location and then after a trade, traveled to another location.

We start in Virginia:

Tobacco

Step 1: You want to sell tobacco to England.  Tobacco is in huge demand.  Eversince John Rolfe first arrived in Jamestown and showed the people how to plant it, tobacco has been one of the most important sources of income for the young colonies. Settlers who learned to plant it became very wealthy.

tea

textiles

Step 2: If you live in England, you will trade textiles and tea for the tobacco. Textiles are yarns and fabrics used to make clothing and household products like blankets, sheets, and tablecloths.  Fancy fabrics colonists could not make on their own were in high demand – such as silks and satins.

Step 3: Virginia wants slaves.  But you don’t trade with West Africa.  England, on the other hand does, so you must wait for their ships that trade guns for slaves to reach the colonies.

Coffee

Step 3: (a secret step) You want coffee from Amsterdam.  You send tobacco to them and trade it for coffee.

Step 4: (another secret step) You want French wine so you sell tobacco to the French for their wine. 

Keep in mind – if you want those last two steps, you are breaking the Navigation Laws! Your ship will be confiscated and you will be thrown into prison.  Is it worth the risk? You will make a fortune if you are successful because of the danger.

Wine

What if you lived in New England?

Step 1: You have plenty of fish (cod) and lumber which the British want.  You send fish to England and get tea and textiles in exchange.

Step 2: You trade fish to the West Indies (Jamaica) for sugar

raw sugar

You live in the West Indies:

Step 1: You have sugar. You travel to New England and trade sugar for fish.

Step 2: You trade sugar for slaves in West Africa.

rifles/guns

If you live in Africa:

Step 1: Your biggest commodity is slavery.  Both the West Indies and Virginia want them. So, you trade guns from England for the slaves they will sell to Virginia and you trade slaves directly for sugar from the West Indies.

Step 2: You trade slaves to Virginia for tobacco or whatever else you want.  Money is always good and they can give you that.

What about England?!

Finally, if you live in England – You have all the power to stop trade or make trade. You control the seas so if there is any illegal trading going on you can put a stop to it.  After all, the law is on your side, right? But because of supply and demand, you also know where you can make money and how much.  Every so often you look the other way instead of stopping those illegal shipments.

Step 1: You have guns to trade for slaves.  Selling slaves to Virginia and the West Indies is lucrative.  From there you trade for sugar and tobacco – two things in demand in England.  It’s a win-win situation for you.

Step 2: you want lumber to build more ships and keep Britain as the most powerful country in the world with a navy that beats all the others.  You pick up lumber and fish from New England and return home.

Step 3: you have plenty of tea! And you want to sell that tea to the colonists.  So you sell it to Virginia in the south and New England in the north.  Two major areas and in exchange you get things you want – lumber, fish, tobacco, rum.  Not a bad exchange.

Step 4: If you want – you can stop any of those ships that are secretly going to Amsterdam and France.  Why should the colonists drink their coffee and wine when you can buy from those countries, raise the price, and sell it for a profit to the colonies?  The problem is – those ship captains have gotten good at slipping past you.

Triangular Trade – the trade between the colonies, the West Indies and Africa, and then England.  What made this trade important is how it was controlled by England.  Or at least they thought they controlled it.  Think about it – after a while, colonists didn’t want to keep just trading with England.  Why should they when they could get similar goods or ones they wanted desperately but at a lower price from the country of origin?  If you were give a choice of buying a pair of shoes directly from the manufacturer for $20, why would you pay $30 for the same pair in a store?  It doesn’t make sense.  The same happened to the colonists.  England started placing a tax on goods received and soon, the prices from other countries was far cheaper.  So again, I ask – why would you keep paying more when you could get the same thing for free of next to nothing?

scale to weigh money

Then when England started taxing items such as tea – the colonists were angry.  Why should they have to pay a tax on tea and other goods?  The tax was used as a way to cover the debt George made while fighting a war.  The colonists were not involved in the war so why pay the bill for the war? Makes far too much sense.  Hundreds of miles away from the Mother Country, American decided enough was enough.  No more taxes.  And, if necessary, they would always cut off times and do everything on their own.  It would take work, but it could be done.  The Americans just needed to commit to the idea of not going under the knife.

A great place to see an interactive map is www.eduplace.com/kids/socsci/blooks/applications/imaps/maps/g5s_u3/index.html

If you want an excellent lesson plan – go to http://teachers.history.org and sign up for free.  There are many different types of lesson plans, but this one is listed under economy.  Then click on Global Economy.