WEBVTT NOTE The Colonial Economy 1 00:00:00.000 --> 00:00:25.000 What I want to do today is do a little backing and filling, a little bit of review and then filling in some of the material that I had to finish up with last week and get us up and running as far as the colonial economy itself. 2 00:00:25.000 --> 00:00:37.000 Now what we've done so far is taking this in steps. First looking at exploration, the actual discovery of the new world. 3 00:00:37.000 --> 00:00:45.000 And what I laid out for you was that the discovery process was really engineered through mercantilist type policies. 4 00:00:45.000 --> 00:00:53.000 And this was a very powerful discovery tool, although as we saw, it has a lot of weaknesses as well. 5 00:00:53.000 --> 00:01:18.000 Then we looked at the Arctic exploration for a more in-depth look at the difference between public exploration and private exploration, finding that really, unambiguously, the private method of exploring was much more successful, cost-effective and less risky. 6 00:01:18.000 --> 00:01:24.500 And so you want to know the details about that particular issue in class. 7 00:01:24.500 --> 00:01:34.000 The next step was colonization, the actual moving of people to the new world and putting an economy in place. 8 00:01:34.000 --> 00:01:40.000 And what we saw is that life was already pretty good in Europe. 9 00:01:40.000 --> 00:01:43.000 I mean, it certainly had its drawbacks. 10 00:01:43.000 --> 00:01:57.000 Lots of problems in Europe, but relative to every other place in the world, and relative to just about any other time, going back in time, Europe at this time was pretty good. 11 00:01:57.000 --> 00:02:06.000 Whereas the New World, life was very, very difficult. And the first couple attempts at colonization were disasters. 12 00:02:06.000 --> 00:02:23.000 Jamestown was a death trap, basically, and it was a socialist technique where everybody worked for the whole and was given equal shares of production and it just didn't work. 13 00:02:23.000 --> 00:02:52.000 The same thing with the Plymouth Colony. It was organized on a socialist or public type setting, and it too was very difficult and ineffective, and both colonies probably would have been completely wiped out, hadn't they switched over to a private property system where individuals produced for themselves, basically. 14 00:02:52.000 --> 00:03:01.000 We saw that life expectancy in the New World during this time was much lower than in Europe. 15 00:03:01.000 --> 00:03:10.000 The samples that we looked at, the average life expectancy in the colonies was 21 years, whereas in Europe it was about 29. 16 00:03:10.000 --> 00:03:13.000 So why would anybody come to the New World? 17 00:03:13.000 --> 00:03:24.000 In the New World, well, the advantages were that land was inexpensive and people liked to own their own property. 18 00:03:24.000 --> 00:03:30.000 There was plenty of work available. In Europe there would be periods of famine and unemployment. 19 00:03:30.000 --> 00:03:35.000 But in the New World, you could always find a job. Someone was always willing to hire you. 20 00:03:35.000 --> 00:03:41.000 Wages were pretty good. 21 00:03:41.000 --> 00:03:45.000 And then, of course, most people wanted to work for themselves. 22 00:03:45.000 --> 00:03:55.000 We also saw that in samples that historians have taken that the quantity of food that people were able to consume in the New World was relatively high. 23 00:03:55.000 --> 00:04:10.000 Once they got through these initial mercantilist experiments and socialist experiments and reorganized society on a private property basis, the production of food was actually quite high. 24 00:04:10.000 --> 00:04:16.000 But still, it wasn't really a great bet to come to the new world. 25 00:04:16.000 --> 00:04:26.000 And so, what we ended up finding, again, looking at the population and who actually came over was that 26 00:04:26.000 --> 00:04:39.000 one large group were the indentured servants who turned out to be fatherless and friendless, familyless in many, many cases. 27 00:04:39.000 --> 00:04:58.000 And the other major group that came over, that we can identify, are people who came over for religious reasons, who came over because of religious intolerance in the old world. 28 00:04:58.000 --> 00:05:03.120 and that's not probably too surprising 29 00:05:03.120 --> 00:05:09.440 if you remember European history 30 00:05:09.440 --> 00:05:13.880 at this time Europe had just gone through the Reformation 31 00:05:13.880 --> 00:05:19.440 Europe had been dominated by the Catholic Church 32 00:05:19.440 --> 00:05:22.880 the Reformation, Martin Luther 33 00:05:22.880 --> 00:05:30.440 put into place producticism and various of its various forms. In one way in 34 00:05:30.440 --> 00:05:39.160 which producticism became so effective is that a national leader would adopt it as 35 00:05:39.160 --> 00:05:51.080 a state religion. And so everybody had to be that particular religion and the 36 00:05:51.080 --> 00:06:21.080 Catholic countries did similar things. France expelled the Huguenots. Okay, so there was a lot of intolerance with respect to religion in many European countries. And so that was a big source of new immigrants as well. Let's step back and look at this indenture process though. Sort of a market process 37 00:06:21.080 --> 00:06:24.440 of getting people from the old world to the new world 38 00:06:24.440 --> 00:06:29.920 because many of these people had a low opportunity cost. They didn't have money. 39 00:06:29.920 --> 00:06:34.600 They wanted the opportunity to work. They wanted the opportunity to get their own 40 00:06:34.600 --> 00:06:35.240 land, 41 00:06:35.240 --> 00:06:38.320 but they didn't have a way of paying their way over 42 00:06:38.320 --> 00:06:41.480 to the new world. So in England 43 00:06:41.480 --> 00:06:45.560 is where the process basically begins for the American colonies 44 00:06:45.560 --> 00:06:49.120 and there would be actually specialist 45 00:06:49.120 --> 00:06:54.120 Specialist in Setting Up Inventure Contracts 46 00:06:54.120 --> 00:06:58.120 and actually that's where the word comes from 47 00:06:58.120 --> 00:07:02.120 where the contract would be written out on a piece of paper 48 00:07:02.120 --> 00:07:08.120 and the terms of who the contract was about 49 00:07:08.120 --> 00:07:15.120 where they were from, how long the contract would be good for 50 00:07:15.120 --> 00:07:44.120 for things of that nature would be specified on the top half of the contract and also on the bottom half of the contract and then this contract, so you've got two copies of the contract on one piece of paper and then it was cut in two, it was signed by both parties and then cut in two. 51 00:07:44.120 --> 00:08:13.620 And these indentures, or indentations, were a way in which, of course, the person being indentured would get the top half, and the person buying the indenture would get the bottom half, and they would always know that they had the right contracts because they could match up the tear marks in the middle. 52 00:08:13.620 --> 00:08:20.780 it's kind of an odd way of doing things so you have in in England you have 53 00:08:20.780 --> 00:08:34.580 specialists or agents who would go around finding these people and setting 54 00:08:34.580 --> 00:08:42.660 up the contracts and then you would have the ship captains who would actually be 55 00:08:42.660 --> 00:08:49.660 The ship captain buys the contract, takes the person on the ship and brings the person to America and then sells the contract to a local landowner, a local farmer who is the owner of the contract. 56 00:09:12.660 --> 00:09:22.660 The length of the contract could be three, four, five, six, seven, maybe eight years. 57 00:09:22.660 --> 00:09:40.660 So in return for the passage over, you agree to work for someone at the other end, who you don't know, you've never met, for a period between three and eight years. 58 00:09:40.660 --> 00:09:50.100 and that depended upon your sex your age and whatever abilities or talents you 59 00:09:50.100 --> 00:09:59.380 might have so that a man with work experience might only have to agree to 60 00:09:59.380 --> 00:10:08.980 work for four years a woman might have to agree to work for five years children 61 00:10:08.980 --> 00:10:17.680 in 7 or 8 years. Depends on what your expected productivity was in the new world, how fast 62 00:10:17.680 --> 00:10:24.600 you could pay off that contract would determine its length. The buyer of the contract agreed 63 00:10:24.600 --> 00:10:31.300 to provide you with food, clothing and shelter. So you've got a buyer on this end who has 64 00:10:31.300 --> 00:10:38.640 to provide food, clothing and shelter, medical care, such as it was. And of course they didn't 65 00:10:38.640 --> 00:10:44.640 They didn't have any problem doing that. They wanted you to be properly fed so you could work hard. 66 00:10:44.640 --> 00:10:48.640 They wanted to make sure you were not ill so you could work. 67 00:10:48.640 --> 00:11:00.640 So, I mean, they were fairly well taken care of, and of course there were also instances of abuse of these indentured workers as well. 68 00:11:00.640 --> 00:11:06.640 Indenture is kind of like slavery. It involves a lot of hard work. 69 00:11:06.640 --> 00:11:22.640 The indentured worker could actually be bought and sold, so someone might buy the indentured worker and then turn around and resell the person two or three years later. 70 00:11:22.640 --> 00:11:31.640 And the person would continue to work for the next party for however long the contract specified. 71 00:11:31.640 --> 00:11:36.640 Indentured workers, however, did have legal rights and they could own personal property. 72 00:11:36.640 --> 00:11:41.640 Indentures were also like an apprenticeship. 73 00:11:41.640 --> 00:11:53.640 An apprenticeship is something that was very common in Europe and that tradition continued in America 74 00:11:53.640 --> 00:12:23.640 Where families would give up their young children or young teenagers really into apprenticeship and someone would agree to teach that child a trade like blacksmithing, hat making, wool clothing making, some trade that after seven years they could enter and start producing for themselves 75 00:12:23.640 --> 00:12:43.640 So, these indentured workers learned trades, they learned skills, and then after the period of the indenture was up, they would be set free, they would be given a new set of clothes, and a supplement wage, and the supplement wage was set free. 76 00:12:43.640 --> 00:13:13.640 set of clothes, and a supplement wage. And the supplement wage was typically not given in cash. And on Friday when we start looking at money in the colonies, we're going to see that money was relatively scarce in the colonies and that people often paid for things 77 00:13:13.640 --> 00:13:18.780 with Commodities. So if you were an indentured worker in the West Indies 78 00:13:18.780 --> 00:13:24.040 helping to make or produce sugar, you'd be given a couple barrels of sugar 79 00:13:24.040 --> 00:13:25.860 when you were set free. 80 00:13:25.860 --> 00:13:27.880 If you were 81 00:13:27.880 --> 00:13:30.160 an indentured worker on a farm 82 00:13:30.160 --> 00:13:31.340 in New York 83 00:13:31.340 --> 00:13:32.840 or Virginia, 84 00:13:32.840 --> 00:13:35.900 you might be given a couple barrels of flour. 85 00:13:35.900 --> 00:13:38.240 So enough food and sustenance 86 00:13:38.240 --> 00:13:40.420 or something you could trade 87 00:13:40.420 --> 00:13:41.940 to keep you going 88 00:13:41.940 --> 00:13:44.700 for a period of several months. 89 00:13:44.700 --> 00:13:46.980 And then as I mentioned, the indentured worker 90 00:13:46.980 --> 00:13:53.700 would then take their freedom, get a job, earn money, 91 00:13:53.700 --> 00:14:00.020 buy some land, and even buy some indentured workers themselves. 92 00:14:00.020 --> 00:14:03.340 And through this means, a lot of indentured workers 93 00:14:03.340 --> 00:14:07.220 who were penniless in the old world, 94 00:14:07.220 --> 00:14:13.220 very often fatherless or familyless would become landowners. 95 00:14:13.220 --> 00:14:18.220 Indentures are even in the U.S. Constitution. 96 00:14:18.220 --> 00:14:28.220 Does anybody remember where in the Constitution indentured workers are referred to? 97 00:14:28.220 --> 00:14:36.220 Well, it's close by to where slavery is referred to. 98 00:14:36.220 --> 00:14:42.020 When the Constitution talks about the allocation of representatives in Congress and the payment 99 00:14:42.020 --> 00:14:50.020 of taxes to the Federal Government, it says that those should be apportioned to the states 100 00:14:50.020 --> 00:15:01.180 by adding the number of free people to, quote, those bound to service for a term of years. 101 00:15:01.180 --> 00:15:09.340 goes bound to service for a term of years and then it follows up by saying that they 102 00:15:09.340 --> 00:15:20.460 should exclude Indians from this count but add in three-fifths of all other persons and 103 00:15:20.460 --> 00:15:28.500 the three-fifths of all other persons refers to slavery and the slave compromise in the 104 00:15:28.500 --> 00:15:58.500 Constitution. Now, of course, to us, this process of indenture sounds pretty miserable in a day and time where a college student can afford an airplane ticket to Europe. It doesn't seem right that you'd have to give up seven years of your life of hard labor just to get across the ocean. 105 00:15:58.500 --> 00:16:08.540 but that's the type of life that life was about in this period of time. The 106 00:16:08.540 --> 00:16:17.100 indentured process was eventually forbidden in the United States so that 107 00:16:17.100 --> 00:16:37.220 The people had to pay up front their passage to America. And this had some unfortunate consequences. 108 00:16:37.220 --> 00:16:45.140 Because people were continuing to emigrate to the United States in the 19th century. 109 00:16:45.140 --> 00:16:51.340 We're talking more here about the 18th and 17th century. 110 00:16:51.340 --> 00:16:59.420 But after indentures were forbidden, people had to pay up front. 111 00:16:59.420 --> 00:17:05.980 For example, when the Irish immigrated to America en masse around the time of the Irish 112 00:17:05.980 --> 00:17:14.500 potato famine, the ships that sailed from Ireland to the United States were called coffin ships. 113 00:17:14.500 --> 00:17:25.500 Because these people could not afford luxury accommodations, they were very often stacked into these ships. 114 00:17:25.500 --> 00:17:31.500 They were already poor, they were already malnourished because of the famine. 115 00:17:31.500 --> 00:17:34.500 Many of them had diseases. 116 00:17:34.500 --> 00:17:43.500 So that most of the people who took those ships over died in transit. 117 00:17:43.500 --> 00:17:49.500 They actually, more than half of them died. 118 00:17:49.500 --> 00:17:54.500 And so they were tossed overboard. 119 00:17:54.500 --> 00:18:01.500 And the stories about this indicate that depending upon where the ships were, 120 00:18:01.500 --> 00:18:04.500 that they would be followed by schools of sharks 121 00:18:04.500 --> 00:18:08.500 because there were so many people being thrown overboard 122 00:18:08.500 --> 00:18:13.500 who had died in transit. 123 00:18:13.500 --> 00:18:18.500 Now it doesn't seem right, does it, that paying customers 124 00:18:18.500 --> 00:18:21.500 would be actually worse off 125 00:18:21.500 --> 00:18:24.500 than indentured servants, does it? 126 00:18:24.500 --> 00:18:28.500 You'd think that indentured servants would be treated poorly 127 00:18:28.500 --> 00:18:39.500 whereas paying customers would get some decent treatment. So what's wrong with the incentives? 128 00:18:39.500 --> 00:18:50.500 Almost none of the indentured servants died on the trip over, whereas half of these Irish customers, 129 00:18:50.500 --> 00:19:01.500 During a period when, you know, we're talking about at least a hundred years later, ships were bigger and faster and we had more technology and that kind of thing. 130 00:19:01.500 --> 00:19:03.500 Yes? 131 00:19:03.500 --> 00:19:22.500 Yes. Well, if they paid up front, then there was no incentive for them to get any more money after that, whereas if they had known it was capital goods, they would have signed them, effectively, as a capitalization of their labor, they would have been paid afterwards by then. 132 00:19:22.500 --> 00:19:29.380 Yeah, that's right. I mean, with the Irish peasants paid up front, the captains of the 133 00:19:29.380 --> 00:19:39.260 ship couldn't get any money out of them. After that, there was no reward at the end for the 134 00:19:39.260 --> 00:19:45.020 captain, whereas with the indentured servants, the captains had to pay up front. They had 135 00:19:45.020 --> 00:19:51.320 to pay up front, and they only got paid when they reached the colonies. And they only got 136 00:19:51.320 --> 00:19:56.120 not paid good money if they reached the colonies with live workers, number one. They had to 137 00:19:56.120 --> 00:20:00.560 be alive and they had to be in pretty good shape too. Because if you brought somebody 138 00:20:00.560 --> 00:20:11.560 out into the marketplace in Richmond, Virginia and they were skinny and sick and coughing, 139 00:20:11.560 --> 00:20:16.320 you wouldn't get a good price for that indentured worker. Whereas if you brought somebody who 140 00:20:16.320 --> 00:20:24.320 If you look healthy, relatively happy, well-fed, you get a higher price. 141 00:20:24.320 --> 00:20:38.320 And so the incentives for the indentured servant system serve to keep those indentured servants in pretty good shape. 142 00:20:38.320 --> 00:20:51.600 Now, I'm going to go back a little bit here to British mercantilism and what we're going 143 00:20:51.600 --> 00:20:54.880 to find here are the seeds of the American Revolution. 144 00:20:54.880 --> 00:21:05.920 So it's not just blah, blah, blah, there's a reason for doing this 145 00:21:05.920 --> 00:21:15.360 in terms of seeing why America had a revolution in the first place. 146 00:21:15.360 --> 00:21:21.760 Britain owned the American colonies, they controlled them, and one of the things they 147 00:21:21.760 --> 00:21:29.160 did was restrict manufacturing in the colonies. 148 00:21:29.160 --> 00:21:37.160 So they put restrictions on the colonies in terms of what the colonialists could do. 149 00:21:37.160 --> 00:21:42.080 And one of the things they didn't want the colonies doing was being involved in manufacturing 150 00:21:42.080 --> 00:21:52.840 and competing with British manufacturers. 151 00:21:52.840 --> 00:22:06.840 Some things were okay. For example, it was okay in the colonies to produce iron and to sell it to England. 152 00:22:06.840 --> 00:22:14.840 It was not okay to produce iron and make iron goods to be sold in England. 153 00:22:14.840 --> 00:22:31.840 It was okay to be involved in extractive industries like mining and sell those raw materials to England, but they didn't want competition at the manufacturing level. 154 00:22:31.840 --> 00:22:38.840 Indeed, they wanted to sell their manufactured goods to the colonists. 155 00:22:38.840 --> 00:23:00.840 So this mercantilism thing is, of course, it's about trade, it's about gaining advantage for the home country over other countries and over your colonies, to benefit from those colonies. 156 00:23:00.840 --> 00:23:09.840 So, it was illegal to produce things like cannons and ship anchors and things of that nature. 157 00:23:09.840 --> 00:23:18.840 Industries like hat making in the colonies was restricted. 158 00:23:18.840 --> 00:23:25.840 In 1700, England passed the Cotton Act, 159 00:23:25.840 --> 00:23:31.840 which allowed the colonies to continue to export cotton, but not to export cotton textiles. 160 00:23:36.840 --> 00:23:42.840 One industry that the colonists adopted and excelled at was shipbuilding. 161 00:23:43.840 --> 00:23:50.840 America became one of the largest ship producers in the world. 162 00:23:50.840 --> 00:24:01.840 And they were producing ships for themselves, as well as for the United Kingdom, or Britain. 163 00:24:01.840 --> 00:24:09.840 Now as I said, labor was expensive in the colonies, but they had a lot of advantages 164 00:24:09.840 --> 00:24:18.520 as well, and the biggest advantage is they had a lot of trees, they had a lot of lumber, 165 00:24:18.520 --> 00:24:28.000 A lot of old, large trees very close to waterways or means of transportation. In Europe, people 166 00:24:28.000 --> 00:24:34.680 had been living in the cities for hundreds of years, and they had been cutting down the 167 00:24:34.680 --> 00:24:41.760 trees around those urban centers for fuel for a very long time. So in order to get really 168 00:24:41.760 --> 00:24:47.740 good wood for shipbuilding, they would have to transport the lumber long distances, or 169 00:24:47.740 --> 00:24:50.480 or even from other countries. 170 00:24:50.480 --> 00:24:53.380 So that was a very expensive process in Europe. 171 00:24:53.380 --> 00:25:03.060 But in the colonies, there was a lot of lumber there just sitting, waiting to be taken. 172 00:25:03.060 --> 00:25:16.460 Colonies also produced naval stores, tar, pitch, turpentine, things of that nature. 173 00:25:16.460 --> 00:25:27.940 Ludwig also produced hemp, better known as marijuana, as far as we know most of it was 174 00:25:27.940 --> 00:25:51.940 America was grown, however, to produce rope and, in terms of ships, to produce rope, rigging, and sails, as well as other things like paper and textiles. 175 00:25:51.940 --> 00:26:00.180 So, America was big into shipbuilding, and this was okay because the British wanted an 176 00:26:00.180 --> 00:26:03.380 advantage in ships. 177 00:26:03.380 --> 00:26:09.860 They wanted large navies to protect their colonies, and of course, Britain ruled the 178 00:26:09.860 --> 00:26:18.240 seas during this time, and they wanted large merchant marines. 179 00:26:18.240 --> 00:26:22.520 they wanted a large 180 00:26:22.520 --> 00:26:26.680 number of ships in order to transport goods to and from 181 00:26:26.680 --> 00:26:30.840 the home country 182 00:26:30.840 --> 00:26:35.200 but basically the colonies were left with 183 00:26:35.200 --> 00:26:38.260 besides a small extracted mineral 184 00:26:38.260 --> 00:26:39.800 sector and 185 00:26:39.800 --> 00:26:43.600 small manufacturing and shipbuilding 186 00:26:43.600 --> 00:26:47.680 the types of goods that americans were restricted to were basically agricultural 187 00:26:47.680 --> 00:26:53.480 Gold Products, which were designed for export to the old world. 188 00:26:53.480 --> 00:27:00.760 Fish was actually one of the bigger industries. 189 00:27:00.760 --> 00:27:06.640 Americans were using those ships that they were building to go out and fish. 190 00:27:06.640 --> 00:27:13.060 And of course, we're not talking bass fishing here. 191 00:27:13.060 --> 00:27:20.620 They would fish for things like cod up and off the coast of New England and also whaling 192 00:27:20.620 --> 00:27:28.380 was of course a big industry. There were a lot more whales back then and whale products 193 00:27:28.380 --> 00:27:37.780 were much more important. Whale oil was the major source of oil for burning candles and 194 00:27:37.780 --> 00:27:58.280 and Providing Light. So that was a major industry in the northern colonies. So in the northern colonies like New England, Massachusetts, Connecticut, things of that nature, fish was the major product. 195 00:27:58.280 --> 00:28:16.240 In the middle states, states like from New York down to like Delaware, grains were the 196 00:28:16.240 --> 00:28:23.840 main emphasis in the economy and the major export. 197 00:28:23.840 --> 00:28:32.680 Banking was the second largest export back to Britain. 198 00:28:32.680 --> 00:28:53.480 In the upper south, states like Virginia and Maryland, tobacco was the major product, the 199 00:28:53.480 --> 00:28:57.560 was a major export good. 200 00:28:57.560 --> 00:29:01.320 And tobacco was also the number one export of the colonies 201 00:29:01.320 --> 00:29:06.200 back to Britain. 202 00:29:06.200 --> 00:29:13.200 As you get down to the lower south, 203 00:29:16.560 --> 00:29:18.380 and of course 204 00:29:18.380 --> 00:29:25.020 wasn't even in the picture, there was no Alabama at this time. 205 00:29:25.020 --> 00:29:31.620 So we're talking about states like North Carolina, South Carolina and Georgia. 206 00:29:31.620 --> 00:29:37.500 Florida was actually in the hands of the Spanish. 207 00:29:37.500 --> 00:29:59.100 In the lower south, produce the naval stores, particularly in North Carolina, and also rice, 208 00:29:59.100 --> 00:30:18.780 and Indigo. So British mercantilism really restricted the U.S., or excuse me, the American 209 00:30:18.780 --> 00:30:24.620 colonies in terms of what they could do. Now their natural comparative advantage was certainly 210 00:30:24.620 --> 00:30:30.620 are only going to be in these areas anyways. 211 00:30:30.620 --> 00:30:40.620 Again, we had plenty of land, not a lot of labor, so agricultural type pursuits were a natural comparative advantage for the U.S. 212 00:30:40.620 --> 00:30:48.620 Particularly when talking about things like tobacco and especially later on, cotton. 213 00:30:48.620 --> 00:30:58.500 That's not surprising, but British mercantilism and its restrictions really focused the attention 214 00:30:58.500 --> 00:31:16.820 of the colonies onto those limited areas of production for its economy. 215 00:31:16.820 --> 00:31:29.020 When I was originally taught American history, I'm not sure if it's still done the same way, 216 00:31:29.020 --> 00:31:56.740 But newer research has changed this story somewhat. 217 00:31:56.740 --> 00:32:17.940 The story of the triangular trading pattern during the colonial era. 218 00:32:17.940 --> 00:32:32.340 And this triangular trade theory gives you the impression that ships went around the 219 00:32:32.340 --> 00:32:40.020 Atlantic in a sort of a triangular like pattern. 220 00:32:40.020 --> 00:32:54.780 Where you have New England up here, the West Indies down here in the Caribbean, Jamaica, 221 00:32:54.780 --> 00:33:00.740 island colonies like that. 222 00:33:00.740 --> 00:33:08.900 Then you have England over here in Europe and Africa down here. 223 00:33:08.900 --> 00:33:30.900 It's not even really a triangle, but the story went something like this, slaves would be shipped from Africa to the West Indies to work in the sugar cane fields. 224 00:33:38.900 --> 00:34:06.900 Sugar would be transported from the West Indies up to New England, where the colonists, as I said originally, the first ones to come over, were most disappointed about the absence of beer in their diet. 225 00:34:06.900 --> 00:34:29.780 They became experts in the production of rum. Much of it was consumed in New England, in 226 00:34:29.780 --> 00:34:46.900 in the colonies, but a lot of it was exported back to England, and it's kind of odd that 227 00:34:46.900 --> 00:34:55.820 Massachusetts would be like the premier rum making area in the world. The British actually 228 00:34:55.820 --> 00:35:23.820 In the old days, they used the rum as a substitute in their soldiers' rations and in their sailors' rations, and it was the case for a very long time that every English soldier and every English sailor was entitled to their alcohol ration, which I think was something like the equivalent of about 8 ounces of rum per day. 229 00:35:23.820 --> 00:35:33.820 And so when the colonies started producing this rum, they stopped buying French brandy from the French to provide those rations and substituted rum. 230 00:35:33.820 --> 00:35:47.820 And that was a tradition that had long existed for the British military to keep them fighting, I guess, and it was only abandoned, I think, in 1970. 231 00:35:53.820 --> 00:36:08.820 So, it's kind of like a triangle. Of course, notice that, notably that Africa is really not getting much out of this. 232 00:36:08.820 --> 00:36:20.820 That's not totally true. There is a flow of goods, including rum, from the UK to Africa. 233 00:36:20.820 --> 00:36:49.180 The Royal Africa Company was one of these mercantilist companies that the British had 234 00:36:49.180 --> 00:37:02.340 set up to establish, not really establish colonies, but to establish markets for slaves 235 00:37:02.340 --> 00:37:06.740 and slave ships in Africa. 236 00:37:06.740 --> 00:37:15.540 And so the Royal African Company, which had ships, warships, soldiers and agents, were 237 00:37:15.540 --> 00:37:25.220 We're overseeing the process of the buying and selling of slaves here between the slave 238 00:37:25.220 --> 00:37:32.540 hunters and the slave ships. 239 00:37:32.540 --> 00:37:40.420 And of course, the slave ships had to pay for the slaves and the slave hunters received 240 00:37:40.420 --> 00:37:44.220 money for the slaves and they use that money 241 00:37:44.220 --> 00:37:46.120 generally to buy 242 00:37:46.120 --> 00:37:49.460 british goods 243 00:37:49.460 --> 00:37:52.180 so the goods would come down here and 244 00:37:52.180 --> 00:37:53.820 be sold 245 00:37:53.820 --> 00:37:57.600 and the royal african company had a monopoly 246 00:37:57.600 --> 00:38:04.600 on the selling of those goods 247 00:38:04.600 --> 00:38:22.600 But it sort of gives you the impression that a ship would start here in New England, go here to the UK, then come down to Africa, then over to the West Indies and then up to New England and sort of repeat that process. And that really wasn't the case. 248 00:38:22.600 --> 00:38:38.600 It was usually that a shipping company would work between New England and the UK, or between New England and the West Indies, or on a specialized route. 249 00:38:38.600 --> 00:38:49.600 Now, one of the aspects of British mercantilism is that they also restricted trade with the colonies. 250 00:38:49.600 --> 00:39:03.600 The Navigation Acts are something that's going to be important over time, especially as we come up to the Revolution. 251 00:39:03.600 --> 00:39:23.600 The first Navigation Act is passed in 1651, but another one was passed in 1660 and another one in 1663, and they periodically revised the Navigation Act over time, right up to the American Revolution. 252 00:39:23.600 --> 00:39:32.640 So, it's a hodgepodge of restrictions and duties and who can do what, where, when and 253 00:39:32.640 --> 00:39:46.560 how. Each of the navigation acts is different, but the salient features of the navigation 254 00:39:46.560 --> 00:39:51.320 acts are pretty straightforward. First of all, the colonies are only allowed to trade 255 00:39:51.320 --> 00:39:56.680 Trade with English ships. So the colonies are only allowed to trade with English ships. 256 00:39:56.680 --> 00:40:01.760 So the French, the Portuguese, the British and Spanish couldn't just come to the American 257 00:40:01.760 --> 00:40:09.240 colonies and trade with the colonists. They had been doing that and they actually continued 258 00:40:09.240 --> 00:40:15.000 to do that a little bit until the British were sort of up and running with enforcing 259 00:40:15.000 --> 00:40:17.120 this provision 260 00:40:17.120 --> 00:40:21.920 this did not really piss off the colonists too much because their ships 261 00:40:21.920 --> 00:40:23.320 were considered 262 00:40:23.320 --> 00:40:26.580 English ships 263 00:40:26.580 --> 00:40:30.800 so that didn't place any restrictions on the colonists themselves with respect to 264 00:40:30.800 --> 00:40:31.720 shipping 265 00:40:31.720 --> 00:40:33.740 they could engage in shipping 266 00:40:33.740 --> 00:40:35.380 but as merchants 267 00:40:35.380 --> 00:40:38.860 selling their goods you could only sell them 268 00:40:38.860 --> 00:40:40.680 onto an English 269 00:40:40.680 --> 00:40:41.800 registered 270 00:40:41.800 --> 00:40:43.220 ship 271 00:40:43.220 --> 00:40:50.220 So foreign ships are excluded. And over time they set up enforcement mechanisms, they set 272 00:40:50.780 --> 00:40:57.780 up observers, officers and courts to prevent foreign ships from entering the major harbors 273 00:41:01.400 --> 00:41:08.400 of the American colonies. And third, commodity restrictions. So the British had direct intervention 274 00:41:13.220 --> 00:41:43.220 The colonialist policies or mercantilist policies which said the colonists couldn't manufacture various things so they ended up producing commodities, agricultural commodities and then it placed restrictions on the colonists of what they could sell to what other countries and basically all of the good stuff had to be traded or exported to England so you had to go around an English ship 275 00:41:43.220 --> 00:41:49.460 and with all of the good stuff you had to go and bring it back to England so the 276 00:41:49.460 --> 00:41:56.260 sugar and the tobacco and the cotton and the spices that were brought up from the 277 00:41:56.260 --> 00:42:03.820 West Indies could only be traded or exported back to England and of course 278 00:42:03.820 --> 00:42:10.420 this restriction why would they put that restriction on in place makes it cheaper 279 00:42:10.420 --> 00:42:20.420 They're cheaper for the English. They get the cheapest cotton, tobacco, sugar, so forth, from the colonies. 280 00:42:20.420 --> 00:42:27.420 And then the English, if the French wanted some of this stuff, then they would have to buy it from the English. 281 00:42:27.420 --> 00:42:33.420 So the French would experience a markup in the price. 282 00:42:33.420 --> 00:42:49.420 So these navigation acts are designed basically to enrich the home country at the expense of other countries as well as the colonists themselves. 283 00:42:50.420 --> 00:42:56.420 So Americans at this time, 90% at least, were engaged in farming. 284 00:42:57.420 --> 00:43:01.420 Today, less than 5% of our population is engaged in farming. 285 00:43:01.420 --> 00:43:11.000 At the time, only 5% of the population of the colonies was urban, because most people 286 00:43:11.000 --> 00:43:18.140 were out on the farm producing these commodities. 287 00:43:18.140 --> 00:43:27.080 On the eve of the revolution, Philadelphia, Pennsylvania, was the largest city in America. 288 00:43:27.080 --> 00:43:35.480 It was not as large as Auburn, Alabama is today, but, again, you've got to put things 289 00:43:35.480 --> 00:43:41.880 in perspective, like life expectancy. 290 00:43:41.880 --> 00:43:47.560 Back then 21, today 78. 291 00:43:47.560 --> 00:43:50.800 Philadelphia was the second largest city. 292 00:43:50.800 --> 00:43:59.500 London was the only other city that was noticeably larger. 293 00:43:59.500 --> 00:44:06.000 Philadelphia was in the lead at this time because it was in the center of the colonies. 294 00:44:06.000 --> 00:44:09.400 It was a trade center for the colonies. 295 00:44:09.400 --> 00:44:13.600 It was a very free and tolerant colony. 296 00:44:13.600 --> 00:44:18.600 There was not a lot of religious restrictions and things of that nature. 297 00:44:18.600 --> 00:44:35.800 New York had 25,000 residents, Boston had 16,000, Charleston, South Carolina had 12,000, and Newport, Rhode Island had 11,000. 298 00:44:35.800 --> 00:44:46.100 Okay, I don't have enough time to get into an explanation of this triangular trade issue at this point, so I'm going to pick it up and start talking about money in the colonies on Friday.