Trade And Commerce Flashcards
What is Trade?
The buying and selling of goods.
What is commerce?
Activities that help facilitate the exchange of goods from products or manufacture to markets. It includes transport, banking, insurance and warehousing.
What is Mercantilism?
A system of regulations governing trade whereby colonies had been obliged to send most of their produce to Britain, to buy British manufactured goods, and use British ships for both their imports and exports.
What is meant by protectionist?
Using tariffs, particularly duties on imported goods to regulate trade.
How did the idea of free trade come about?
In Adam Smith’s influential book, The Wealth of Nations, he argued that wealth was expandable ad freedom from commercial restrictions was the only way to maximise prosperity. Britain was able to indulge in this theory as it was the world’s most foremost trading nation and by the middle of the 19th century British trade was left free from gov trading restrictions.
How did the British gov react to free trade?
They were active in supporting the idea of free trade around the world (tended to benefit Britain’s trade dominance) and was ready to resort to threats and sometimes coercion to achieve it (e.g. In the case of China in the Opium Wars). This is sometimes know as the ‘imperialism of free trade’.
Why was colonial trade a good thing?
There was always a concern that non-colonial trade could be restricted(e.g. American Civil War) whereas colonial markets would remain open. Additionally, colonies generally wanted to trade with Britain partly out of loyalty but also because it was easier, trading patterns well established, countries of the empire shared a common language, common or tied currency and a common system of commercial law. Borrowing in London capital markets was also cheaper as lenders had faith in the reliability of British possessions.
What was the consequences of free trade?
- Imperial trade and investment grew enormously.
- An ‘industrial empire’ was created where the colonies provided the raw materials and foodstuff in which Britain would convert into finished goods and which generally the colonies were compelled to buy back.
- In the 3/4 of the 19th century around 20% of Britain’s imports came from colonies while empire provided a market for 1/3 of British exports.
- London became the worlds financial capital as British investment overseas increased and the sterling became the main currency of international trade.
- Growth in trade was also supported by technological improvements in railways, steamships, underwater cables and telegraph lines as well as innovations in banking and company organisation.
What were self-governing settler colonies permitted to do in regards to trade?
While Britain adopted free trade, there was no internal free trade between colonies and the self-governing settler colonies were permitted to adopt protective tariff systems of their own. Countries such as Australia and Canada imposed import tariffs in order to protect their own growing industries.
How were sailing ships improved due to increase trade and commerce?
Sailing ships reached max efficiency in the 1860s with clippers sailing all over the world, particularly the route to China and the East.
What were clippers.
They were fast ships ideally suited to low-volume, high-profit goods, such as tea, opium and spices and were also used to carry mail and people. Competition among them was fierce (times recorded in newspapers) but they had a short life expectancy of around 20 years of use.
What ships did Britain use for more bulky and heavy goods?
For bulky and heavy goods needing to be carried across oceans and up rivers, steamships were used. These ship’s efficiently was improved due to the development of the compound steam engine in the 1850s (consumed less coal) allowing ships to trade economically with more distant possessions. In 1850s companies reduced travel time between Britain and West Africa to less than three weeks and increased cargo capacity.
The opening of the Suez Canal in 1869 and the development of the triple expansion steam engine in the 1870s further stimulated the construction of steam carriers. Steamships could also be used inland, e.g. British companies sent steam-trading vessels up the Niger.
How were railways useful and what role did they play in the self-governing settler colonies?
Railways were key to economic development and British control. Britain provided the investment, the engineers and the rolling stock and the colonies resulting dependence on Britain could be used to pressurise governments (e.g. Canada forced to accept British policies on defence). Railways provided the largest single investment of the period in the self-governing settler colonies of Canada, Australia, New Zealand and South Africa. They opened up Canadian prairies, enabled Australia to export its wheat and wool and offered South Africa a chance to expand its territories and commercial interests into the interior.
How were railways bad?
They encroached upon indigenous lands, disrupted long-standing ecologies and communities, and often led to the displacement and forced removal of indigenous peoples.
What role did railways play in India?
They had been built for a strategic purpose but also linked the cotton and jute-growing areas of the north with the mills of Bombay and Calcutta and enabled rice to reach ports for export.
