U.S. Economic History from Pre-Columbian History to 1789 - AP U.S. History

The economic policy of Mercantilism was designed around the premise that the colonies existed to build up the supply of gold in Empire. To achieve this goal a nation had to build up a favorable balance of trade by exporting more than it imported. The primacy of this belief in Europe helped foster the dramatic race for Empire around the globe as each additional resource, manufacturing centre and market helped contribute to the balance of trade. New England shipbuilders benefitted from the Navigation Acts because they protected their enterprise from foreign competition. Southerners found the market for their goods shrinking as it could only be shipped to England, which in turn encouraged smuggling. Conversely, far from being brought closer together, the English and French colonies began to fight extensively in the mid-eighteenth century as English settlers began to spread North and West into French lands.

During the colonial period, neither Northerners nor Southerners held much regard for the rights of blacks. However, in the North the economy was much more heavily based around small land holdings and city life than it was in the South. The South produced the vast majority of America’s cash crops. Southerners believed that they could not keep their plantations operating profitably without the import of black slaves – an opinion that would persist up to, and past, the outbreak of the Civil War.

The establishment, by John Rolfe in 1619, of tobacco as the primary cash crop of the colony lead directly to economic prosperity in Jamestown and helped stem the tide of winter starvations that had previously blighted the colony. Although aid from the Native Americans was important, it was insufficient to prevent the colony slowly atrophying.

Bacon’s Rebellion took place in Virginia, in 1676. It was an armed uprising by indentured servants, poor settlers and slaves against the rule of Virginia Governor William Berkeley. The rebellion began because Berkeley failed to provide for the safety of the colonists against Native American incursions, and because the poorer classes in the colonies—both black and white—were disturbed by the strict hierarchical nature of colonial Virginian society. The makeshift alliance between black slaves and white indentured servants disturbed the ruling classes greatly, and it caused a massive reduction in the use of indentured servants for labor, leading to a hardening of the racial hierarchy of colonial America—particularly in the South.

The 1773 protest by the Sons of Liberty in Boston was in response to, and in defiance of, the Tea Act of 1773. The Sons of Liberty protested by destroying shipments of tea sent by the East India Company by throwing them into Boston Harbor.

The Stamp Act was a duty imposed on the revenue of the American Colonies. The Intolerable Acts and the Coercive Acts were colloquial names for the series of rulings made by the British Parliament in response to the 1773 protest. The Townshend Acts referred to a series of acts concerned with the American colonies, passed in 1767.

The stamp act was imposed in order for the British to defray cost of defending, protecting, and securing the colonies as stated in the first paragraph of the stamp act.

The Economienda System dictated that Native Americans were lesser peoples, afforded the same status as other inferior races, and were free to be used as slaves to further the goals of Spanish Empire. The repeal of the system, at this insistence of several Spanish missionaries, helped lead to the massive influx of slaves from Africa to replace the work that had previously been done by Native Americans. One missionary would famously state that his work to free the Native Americans was the biggest mistake he ever made, as their population was ultimately ravaged by Smallpox anyway and the repeal of the Economienda System led directly to the massive use of African slaves in the New World

The headright system was a system of land grants that were used to expand the population of the original thirteen colonies. It functioned differently in different areas of colonial America, but the principle was essentially the same throughout: an established settlement, like Jamestown or Plymouth, would award newly arriving settlers with a fifty acre tract of land to encourage settlement. Further, to encourage families and wealthy land owners to settle in the colonies, an individual would be awarded an additional fifty acres for each individual he brought along with him.

Hernando de Soto from Spain was the first European to explore the Mississippi River in 1542.

The London Company, often called the Virginia Company of London, was established by King James I in 1606 with the expressed purpose of establishing colonies in North America. The London Company provided financial backing for the Jamestown and Plymouth experiments that later led to the creation of Massachusetts and Virginia.

John Rolfe was the first to cultivate a strain of tobacco in Virginia that became a profitable cash crop, allowing the colony to thrive. John Smith played an important early role in the settlement of Virginia, but returned to England before a profitable strain of tobacco was introduced. Miles Standish was an important leader in Plymouth colony, not Virginia. Thomas Jefferson and Eli Whitney were important late 18th and early 19th century figures, long after the early development of Virginia.

The first African slaves in any of the English colonies were brought to Virginia in 1619. They were brought to help with the thriving tobacco cultivation in the colony, and soon became a crucial part of the growing plantation economy. Their arrival in 1619 predates even the existence of the other colonies listed in this question.

Black Tuesday is when the stock market took its final plunge, a precipitating event of the Great Depression. Although there are entire courses on the Great Depression, and stock trading is likely far beyond the scope of your course, a brief overview is helpful. Essentially, many investors and traders were trading stocks “on margin”—that is (basically) using borrowed money to invest. Think of it like this: you borrow $100 dollars in order to invest it. If you get a 10% rate of return, and you lose nothing, you can repay the $100 and you’ve made $10. Think of the flipside, however: what if you borrow $100, invest it poorly, and then lose it all. Now you owe someone $100; it’s almost like borrowing money to gamble (although that would be considerably more risky). When the stock market crashed, the end result was multiplied tenfold by the fact that many people were trading on margin (thus they lost everything, and then were in debt for more money than they could possibly ever repay).

Throughout the seventeenth century and the first half of the eighteenth century, the British government employed a policy of lax enforcement of Parliamentary laws. Many British politicians, most notably Prime Minister Robert Walpole, felt that the colonies would flourish if left to their own devices. Many ministers felt that enforcement of the Navigation Acts – which stated that the colonies should only trade with mainland British merchants – would ultimately cause economic stagnation in the colonies and that it was therefore in the best interest of the Empire as a whole to ignore many of the Parliamentary restrictions employed by previous administrations. This is referred to as the policy of salutary neglect.

French settlers primarily occupied the southern regions of what is now Canada, establishing fur trading communities with the Native American tribes who already existed in the region. The French rarely attacked or plundered Native American communities, preferring to establish positive trading rights. Likewise, the French expended little effort to permanently settle new communities, and their objections to English and Spanish settlements were voiced only when the English threatened the lucrative fur trade.

The Repartimento system of forced labor was prevalent throughout much of Spain’s American Empire during the sixteenth and seventeenth centuries. The system was established whenever a Spanish settlement happened to be set up near an existing native community. The native people were rotated between various jobs, mostly agriculture, construction and mining. Due to the high rate of desertion, the system was largely replaced by the more permanent Encomienda system, which even more closely resembled slavery.

The economic policy of Mercantilism was designed around the premise that the colonies existed to build up the supply of gold in Empire. To achieve this goal a nation had to build up a favorable balance of trade by exporting more than it imported. The primacy of this belief in Europe helped foster the dramatic race for Empire around the globe as each additional resource, manufacturing centre and market helped contribute to the balance of trade. New England shipbuilders benefitted from the Navigation Acts because they protected their enterprise from foreign competition. Southerners found the market for their goods shrinking as it could only be shipped to England, which in turn encouraged smuggling. Conversely, far from being brought closer together, the English and French colonies began to fight extensively in the mid-eighteenth century as English settlers began to spread North and West into French lands.

During the colonial period, neither Northerners nor Southerners held much regard for the rights of blacks. However, in the North the economy was much more heavily based around small land holdings and city life than it was in the South. The South produced the vast majority of America’s cash crops. Southerners believed that they could not keep their plantations operating profitably without the import of black slaves – an opinion that would persist up to, and past, the outbreak of the Civil War.

The establishment, by John Rolfe in 1619, of tobacco as the primary cash crop of the colony lead directly to economic prosperity in Jamestown and helped stem the tide of winter starvations that had previously blighted the colony. Although aid from the Native Americans was important, it was insufficient to prevent the colony slowly atrophying.

Bacon’s Rebellion took place in Virginia, in 1676. It was an armed uprising by indentured servants, poor settlers and slaves against the rule of Virginia Governor William Berkeley. The rebellion began because Berkeley failed to provide for the safety of the colonists against Native American incursions, and because the poorer classes in the colonies—both black and white—were disturbed by the strict hierarchical nature of colonial Virginian society. The makeshift alliance between black slaves and white indentured servants disturbed the ruling classes greatly, and it caused a massive reduction in the use of indentured servants for labor, leading to a hardening of the racial hierarchy of colonial America—particularly in the South.