Organizing Settlement Colonies and Establishing Mercantilism

FROM THE LECTURE SERIES: THE HISTORY OF THE UNITED STATES

By Allen Guelzo, Ph.D., Princeton University

For a century after Walter Raleigh’s first attempts to plant an English settlement on the North American coast, the English government let those settlements and colonies run by themselves, under the policy of ‘benign neglect’. Why was the English government happy to do so until the end of the 1600s?

Portrait of King Charles I who decided to organize the colonies in 1634.
A painting of King Charles I who was sent by the parliament to headman’s block as part of organizing the colonies in 1649. (Image: Follower of Anthony van Dyck/Public domain)

Organizing Colonies

The king and the parliament decided to do something to organize, systemize, and bring the colonies in line. In 1634, King Charles I, as part of the same policies that drove John Winthrop and his puritans out of England, established a board of commissioners for plantations in general, with a vague mandate to oversee colonial development. The commissioners were unpopular and ineffective when the parliament sent King Charles to the headsman’s block in 1649.

An oil painting of Charles II of England with one of the royal helps.
In order to get a grip on the colonies, Charles II organized a council for trade and plantation. (Image: Hendrick Danckerts/Public domain)

His son Charles II also toyed with plans to get a grip on the colonies, first by organizing a council, then a committee on trade and plantations. In 1674, he organized yet another committee dubbed as the ‘Lords of Trade’, which in 1696 was overhauled as the Board of Trade.

Plans to exercise real control over the colonies came in conjunction with the unwillingness of Parliament to fund anything. Because of this, benign neglect rolled on, and England remained content to see North America principally as a place to dump its unwanted.

Learn more about how the Dutch settlements developed into a major commercial center.

Establishing Mercantilism

Toward the end of the 1600s, those who decreased the wealth of the kingdom were sent off to America, turned into increasers and producers whose productivity threatened to turn the Mother Country into a dependent of its offspring, that was the conclusion of the economists. The solution they proposed was known as mercantilism.

This is a transcript from the video series The History of the United States, 2nd Edition. Watch it now, on The Great Courses Plus.

How Did Mercantilism Work?

Mercantilism offered the perfect scientific tool for regulating the colonial economy and reintegrating it with the larger economy of the British Empire. Mercantilism worked like this: first, in the world, there was a fixed and limited amount of wealth. Mercantilists disagreed about what the real form of that wealth might be but agreed that whatever it was, there were not infinite amounts of it in the possession of any given nation.

Number two in the mercantilist catechism was, if a nation wished to become more wealthy, it could do so only by taking wealth from another. It could be done by war if it liked and the willingness to bear the costs of war, or it could just as easily be done by trade.

Learn more about the Great Awakening-a revival of radical Protestant religion across New England.

Trade as War

Trade was a war because if a nation believed that governments were responsible for overseeing, equipping, and managing national resources in a time of war, then it was as important for governments to oversee, equip, and manage the nation’s trade. The conclusion was that a nation needed to regulate its trade to make itself rich at others’ expense and defend itself economically by erecting tariff barriers to protect its farmers and growers.

A nation needed to arm itself by coordinating all economic policies from the center and linking it to military policy.

French Were the First to Apply Mercantilism

The French, rather than the British, were the first ones to apply mercantilist theory to coordinate France’s national economy. France emerged from its religious civil wars in the 1590s, determined not to be weakened as it had been during those wars. It was French economists who first stepped up to advise the French kings on how to centralize and regulate their way to absolute power.

Learn more about why England was last to join the settlement game. 

Three Recommendations on Mercantilism

The French economists had three recommendations to make to the kings of France about mercantilism. First was to rationalize the haphazard tax structure of France, so that revenue not only became predictable but also taxes would be levied on the real sources of wealth, like the lands of aristocrats without taxing the businesses of France’s tiny merchant class.

An oil painting showing people around a French port.
The French economists recommended certain measures to the Kings of France for keeping England and the Netherlands from making profits at French expense. (Image: Claude Lorrain/Public domain)

The second piece of advice was to impose tariffs on English and Dutch imports, to keep England and the Netherlands from making profits at French expense. In addition, subsidizing France’s strongest industries so that the products exported would be so inexpensive that the English and the Dutch would buy them instead of shipping their goods to the French which meant that the English and the Dutch would gradually become economically dependent on France. The third suggestion was to organize and coordinate their colonies to serve the interests of the economy of France at home.

Economic Regulations-For Whom?

Unlike people in England or the Netherlands, the people of the French colonies did what Paris dictated. They were colonies, subject to the will of the French government which passed economic regulations for people at home and in the French colonies but did not for the people in England or the Netherlands. Colonies didn’t set up tariff walls to protect themselves, simply to let the mother country establish regulations that required the colonies to buy the goods of the mother country by making it mandatory. Regulations were imposed that required the colonies to use only French ships for their exports.

Common Questions about the History of The United States

Q: How was Sir Walter Raleigh significant to American history?

Sir Walter Raleigh was instrumental in planting an English settlement on the North American coast, an attempt to colonize it.

Q: Why is mercantilism important to American history?

Mercantilism was important to American history as it offered the perfect scientific tool for regulating the colonial economy and reintegrating it with the larger economy of the British Empire.

Q: Who used mercantilism?

The French, instead of the British, were the first ones to apply mercantilist theory to the coordination of France’s national economy. French economists advised the French kings on how to centralize and regulate their way to absolute power.

Q: How did Charles II contribute to British colonization in America?

Charles II contributed to British colonization in America by getting a grip on the colonies, first by organizing a council for trade and plantations, then a committee on trade and plantations, and then in 1672, a council for trade and plantations. In 1674, he organized yet another committee dubbed the ‘Lords of Trade’, which in 1696 was overhauled as the Board of Trade.

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