Financial

Look at the triangular trade map again. Some arrows on the map show colonial imports, or goods that were brought into the Thirteen Colonies. Other arrows show colonial exports, or goods that were sent out of the Thirteen Colonies.

The arrows pointing toward the colonies show imports, or goods coming into the colonies:

• • enslaved people

  • sugar

  • manufactured goods

The arrows pointing away from the colonies show exports, or goods sent out of the colonies:

• • tobacco

  • lumber

  • grain

  • iron

  • rice

What's the difference between raw materials and manufactured goods?

Manufactured goods are products that humans make from raw materials, which are materials found in nature. For example, iron is a raw material that can be turned into a horseshoe, which is a manufactured good.

Did colonists export all their raw materials?

No! Colonial artisans, or people who were skilled in certain crafts, used some of the colonies' raw materials to make manufactured goods, such as furniture and silverware. Artisans sold most of these goods in the Thirteen Colonies.

Some artisans trained for years in England and then immigrated to the Thirteen Colonies. There, they created the types of manufactured goods that were popular in Europe. A few colonial artisans became famous for their craftsmanship, or their skill in manufacturing. Below are two examples of goods that colonial artisans manufactured. Many Americans wanted goods like these, which were fashionable in England at the time.

Parliament was the law-making organization in Great Britain's government. It passed laws that controlled colonial trade. These British laws reflected a belief in an economic theory called mercantilism (mur-kan-TEEL-ism). Many other European governments between the 15th and 18th centuries also thought mercantilism was a useful theory.

Read the passage about mercantilism.

Mercantilism is the theory that a country with more wealth becomes more powerful. Many European rulers accepted this theory and tried to increase their wealth in gold and silver. They kept gold and silver in their countries by controlling trade. Each ruler wanted to make sure that more money was entering his or her country than was leaving it through trade.

According to mercantilism, a country earned money by exporting goods and lost money by importing goods. Therefore, a country could become powerful by making sure that its exports were more valuable in total than its imports. This trade policy would keep more money within the country's borders.

Why were gold and silver important?

These metals were used to create currency, or money, and other goods. So, British leaders wanted to keep silver and gold within the country's borders.

The British Parliament wanted the country to earn more money than it spent. In other words, Parliament wanted the country to make more money selling exports than it spent buying imports.

In order to make sure Great Britain was making more money on exports, Parliament made laws that gave each part of the British Empire a different role.

British laws encouraged colonists to sell raw materials to Great Britain. People in Great Britain would then produce more expensive manufactured goods, which they sold in the colonies.

Why did colonists buy British manufactured goods?

Many colonists wanted the types of manufactured goods found in the homes of wealthy people in Great Britain. Wealthy families in the colonies often modeled their homes and lifestyles after the homes of wealthy British families.

British trade laws shaped the triangular trade that developed across the Atlantic Ocean in the 1600s and 1700s. For example, in the mid-1600s, the English Parliament passed several laws that historians call the Navigation Acts. These laws were based on the theory of mercantilism.

Under the Navigation Acts, ships that carried European goods to the colonies had to first pay taxes at an English port. This tax made goods imported from Europe more expensive for people living in the colonies.

The acts also stated that English colonies could only receive goods imported on English ships. As a result, the need for English ships rose. English traders gained more business while other European traders lost business.

Whom did the Navigation Acts hurt?

The Navigation Acts hurt the business of Dutch merchants living in North America. Before the acts were passed, the Dutch Republic dominated international trade. Many Dutch merchants lived in the Dutch colony of New Netherland, around present-day New York.

English colonists often traded with these Dutch merchants. The Navigation Acts tried to limit this trade by blocking Dutch ships from bringing goods directly to the colonies. Instead, Dutch merchants had to first send their goods through England.

By the end of the French and Indian War, people living in Britain were heavily taxed. So, to pay for the war, Parliament decided to try to raise money from the people living in the colonies instead. Look at some of the acts that Parliament passed after the French and Indian War.

Stamp Act: required colonists to pay a tax on every piece of paper they used

The Townshend Acts: taxed imported goods including tea, glass, and paint, and created an agency to enforce the tax at colonial ports

Sugar Act: called for the tax on sugar to be strictly enforced and created a special court to punish illegal traders

Why did Parliament's new acts focus on the colonies?

By 1763, people in Great Britain were already heavily taxed. Many representatives in Parliament argued that the colonies had a responsibility to help pay for the war.

How did colonists feel about the new taxes?

Unhappy! Many colonists who had fought in the war felt that they had already contributed enough to Britain. Some colonies had already gone into debt to fight the war, so the new taxes seemed unnecessary.

Some colonists also felt that new ways of enforcing the taxes were unfair. For example, the Sugar Act stated that colonists who were caught trading illegally could be tried in a court with no jury. Some colonists argued that this rule violated their rights.

By the 1760s, many planters were in debt to British merchant houses. Planters often repaid their debts using colonial paper money, or money printed by colonial governments. Planters used this paper money because there wasn't much silver or gold available in the colonies. In 1764, Parliament passed the following act:

The Currency Act

Paper money printed by colonial governments cannot be used to repay debts.

Who benefited from the Currency Act?

British merchants encouraged Parliament to pass the Currency Act. Planters' paper money was much less valuable than silver and gold. Merchants had purchased goods for planters using silver and gold. But the planters paid them back using paper money, which was much less valuable. So, merchants were losing money in this exchange. Many colonial governments printed money with a leaf pattern to prevent counterfeiting, or illegal copies of money.

After Great Britain passed the Currency Act, many southern planters began to feel that merchants were taking advantage of them. The passage below comes from an essay written in 1764 by Arthur Lee, a Virginian doctor. Read the passage.

[Hard-working planters] are subjected to the arbitrary impositions of the British merchants, who [attach], like cankers, on their estates, and . . . consume them. Every [method is used] to . . . prevent [the planters'] growth. They are treated not as [equals], but as the servants of Britain.

arbitrary impositions: unnecessary fees

cankers: cancers

Was there another side to the story?

Even though planters complained about debt, they also benefited from British policies such as these:

• • Parliament banned tobacco growing in Great Britain, to protect the colonial planters' business.

  • The British navy protected ships carrying exported tobacco from Virginia.

However, policies such as the Currency Act made planters feel that Parliament served British merchants, not colonial planters. Planters resented this arrangement.

By the 1760s, the British government had a lot of debt from paying for the French and Indian War. To raise revenue, or income, Parliament passed the Stamp Act in 1765. The act required colonists to purchase official stamps for documents such as newspapers and court documents. Many colonists opposed the plan for the Stamp Act. In 1764, Connecticut governor Thomas Fitch wrote a pamphlet, or public essay, arguing against it. Read the passage from Fitch's pamphlet.

[The Stamp Act] will prove prejudicial to Great Britain itself. The [American colonies] are of great importance to [Great Britain]. . . . The more they prosper, . . . the greater will be the advantage not only to them but also to [Great Britain].

prejudicial: harmful

prosper: do well

Fitch wanted to persuade Britain to end the Stamp Act, so he said that the Stamp Act would hurt Great Britain. Fitch argued that the colonies' success was also good for Great Britain. Taxing the colonies would prevent the colonies from prospering, and that would also hurt Great Britain.

Why were colonists so upset about the Stamp Act?

In the Stamp Act, Parliament clearly stated its goal: to raise revenue to pay for defending the colonies. Many colonies had recently contributed troops and money to fight the French and Indian War. Now, Parliament was requiring them to pay more for defense!

What did colonists do to protest the Stamp Act?

Colonists protested the act both violently and nonviolently. Colonial newspapers published essays that argued against the stamp tax. In cities like New York and Boston, crowds of colonists attacked the homes of stamp collectors and burned effigies, or models, of politicians and tax collectors.

After fierce colonial protest, Parliament repealed, or canceled, the Stamp Act in 1766. But in 1767, Parliament passed a new set of laws to raise revenue. The Townshend Acts created taxes on goods such as tea, paper, and glass, as well as an organization to enforce the taxes. Many colonists opposed the acts because they did not believe that Parliament had the right to tax the colonists. In response to the Townshend Acts, colonial merchants organized nonimportation agreements. In other words, they agreed to stop importing certain British goods for a certain amount of time. They hoped that this economic protest would convince Parliament to repeal the acts.

Nonimportation was supposed to work in the following way:

• • First, all the colonial merchants in a region would agree not to import certain British goods.

  • British merchants' businesses would be hurt because people in the colonies were not buying their goods.

  • As a result, British merchants would pressure members of Parliament to repeal the Townshend Acts, so that business would improve.

  • Parliament would repeal the Townshend Acts.

  • Once the acts were repealed, the merchants would end nonimportation agreements and reopen trade.

What did colonists do without the British goods?

In many cases, colonists made their own! For example, women organized Daughters of Liberty groups to make fabric at home. They could use homemade material to make clothes instead of buying British fabric.

In 1767, a Boston newspaper printed a poem directed at women, encouraging them to make their own fabric. Since women were usually in charge of buying goods for the home, they had the power to refuse British goods.

Young ladies in town, and those that live round,

Let a friend at this season advise you: . . .

Wear none but your own country linen;

of economy boast, let your pride be the most . . .

For when once it is known this is much [worn] in town,

One and all will cry out, 'tis the fashion!

economy: thriftiness, or the ability to save money

In addition to the merchants' nonimportation agreements, groups of colonists boycotted, or refused to buy, British goods. Boycotts were another form of economic protest against British policies. In 1767 in Boston, more than 650 people signed an official agreement to boycott specific British goods. Read the simplified text of the official boycott agreement.

We . . . [promise] each other that we will encourage the use and consumption of all articles manufactured in any of the American Colonies . . . and that we will not . . . purchase any of the following articles imported from abroad: anchors, horse furniture, men's and women's hats, household furniture, gloves, men's and women's shoes, gold and silver buttons, mustard, clocks and watches, glue, silks, and cheese

[Signed:]

Paul Revere [a silversmith]

John Wheatley [a merchant]

Joseph Warren [a doctor]

James Otis, Jr. [a lawyer]

John Greenleaf, for one year

Benjamin Walker

Elizabeth Clark

Catherine Thompson

Eliza Nowell

Mary Williams

abroad: overseas

Who were the signers of the 1767 Boston boycott agreement?

The signers included colonial men and women with different jobs and backgrounds. Some signers, such as Paul Revere, went on to become famous supporters of the American Revolution. Others who signed the boycott agreement became Loyalists, or people who were loyal to Great Britain and opposed American independence.

Some signers wrote that they would agree to the boycott for only one year.

How did illiterate colonists sign the agreement?

Illiterate people could not sign their own names because they could not read or write. So, these colonists drew an 'X' and another person wrote the name next to the mark.

By the early 1770s, colonists had organized several nonimportation agreements and other boycotts of British goods, including tea. Some Americans also smuggled, or illegally imported, cheaper tea. These actions hurt the business of the British East India Company, a company closely connected to the British government. In response, Parliament passed the Tea Act in 1773.

Read the description of the Tea Act and its consequences.

• • • The Tea Act allowed the British East India Company to sell tea directly to American customers instead of through American merchants.

    • The British East India Company had to pay fewer taxes on tea that it shipped to America.

    • The Tea Act made legally imported tea cheaper than smuggled tea.

The Boston Tea Party

In port cities such as Boston, resistance to the Tea Act was strong. In 1773, a group of disguised colonists boarded ships in Boston Harbor and threw hundreds of chests of tea into the water. The destruction cost the British East India Company about £10,000, which equals millions of dollars in today's American money!

Four days later, a Boston newspaper enthusiastically described the event:

A number of brave . . . men, determined to do all in their power to save their country from the ruin . . . , in less than four hours, emptied every chest of tea on board the three ships . . . amounting to 342 chests, into the sea!! . . . The people are almost [all] congratulating each other on this happy event.

If tea was cheaper, why did people protest the Tea Act?

Many colonists did not believe that Parliament had the right to tax the colonies. These people argued that buying the tea would mean agreeing to the tax. In other words, although the tea was cheaper, colonists who bought it were supporting Parliament's right to tax the colonies.