Trade and Commerce 1857-90 (SECTION 1) Flashcards
Why did Free Trade come to dominate economic thinking?
1) In the first half of the 19th century, the highly regulated protectionist system of mercantilism had been dismantled, under the influence of new theories of ‘free trade’. Arguing that wealth was indefinitely expandable and freedom from commercial restrictions was the only way to maximise prosperity.
2) Britain was the worlds foremost trading nation and so it benefited from free trade and was active in supporting free trade agreements around the world, even ready to resort to threats to achieve them.
3) Some other nations were willing to grant them; when they were reluctant the navy enforced the British terms.
4) Economic dominance was sustained by a limited application of force.
5) The idea of free trade was closely linked to the other humanist ideas of free labour and the attack in the slave trade and slavery. It encouraged the British to see themselves as liberators.
What were the 6 consequences of free trade?
1) Many colonies continued trading with Britain, partly out of loyalty, partly out of ease. Trading patterns were already well established and the Empire used a common language, currency and commercial law.
2) Borrowing in London capital markets was also cheaper because British possessions were trusted.
3) Free trade saw imperial trade and investment grow enormously creating an ‘industrial empire’. Britain imported foodstuffs and raw materials, and manufactured goods were exported back out.
4) London became the worlds financial capital and sterling became the main currency of international trade.
5) Technological improvements supported the growth in trade: more innovation in banking and company organisation, railways allowed for quick transportation of goods, better refrigeration enabled meat and dairy products to be imported from Oceana.
6) The economic benefit of Britain enforcing free trade could have been as high as 6.5% of gross national product.
How did ships and shipping support the development of the Empire?
1) Sailing ships reached the highest state of efficiency in the 1860s.
2) Clipper ships sailed all over the world. These fast ships were ideally suited to low-volume high-profit goods such as tea, opium and spices. The times of ships were recorded in newspapers and competition was fierce.
3) Steamships were used to carry bulky, heavy goods. British iron-hulled ocean-going ships were more efficient with the new compound steam engine which enabled them to trade economically with distant possessions. They had increased cargo capacity and could travel to South Africa in less than 3 weeks.
How did Railways support the development of the Empire?
1) The building of railways was key to economic development and ensure British control. They brought new areas of land into Britain’s reach. They had only existed since the 1830’s but were now being built worldwide.
2) Railways provided the largest single investment of the period in the self-governing colonies of Canada, Australia, New Zealand and South Africa as the opened up the Canadian provinces, enabled Australia to export wheat and wool and offered South Africa a change to expand into territories and commercial interests.
3) In India, the railways linked the cotton and jute growing areas of the north with the mills of Bombay and Calcutta and enabled rice to reach ports for exports. India railways created a huge market for Britain since most of the engineers and parts were British.
4) In West Africa railways provided the vital link between interior areas of production and the sea.
5) Railways were themselves trading commodities, investments in railways provided ‘invisible’ trade and the spread of railways facilitated commercial enterprise. Around 70% of British investment as in transport infrastructure, particularly railways.
How did Canals and Rivers support the development of the Empire?
1) They provided an important means of transport for trading purposes and were often the focus of explorer’s quests.
2) Canals were built to avoid hazardous stretches of water, or they provided waterways when there were none.
3) Sometimes rivers had to be straightened, directed of deepened.
4) In Canada, after 1867, canals were deepened around St Lawrence/ Great Lakes Seaway system and the Welland Canal was built to overcome height differences between lake Eyrie and Ontario.
What agricultural goods did Britain get from its colonies?
1) Canada, Australia and New Zealand had vast tracks of land permitting the production of cheap foodstuffs and raw materials, that were available in Europe, but at a lower price.
2) Tropical colonies such as South Africa, produced goods that weren’t available in Britain such as sugar, coffee, subsistence farming. Native farmers were generally willing to sell at whatever price-often very low.
3) Britain also ran its own plantations. There was a plantation for sisal in Kenya, coffee and tea Ceylon and Kenya, tea in India.
What mineral goods did Britain get from its colonies?
1) Tin in Nigeria, gold along the Gold Coast and diamonds in Sierra Leone helped develop these colonies.
2) Copper was found in Northern Rhodesia, and gold was found in Southern Rhodesia.
What promoted a gold rush to South Africa? When was this? What effect did it have
1) In 1886, gold deposits were found in South Africa prompting a gold rush to the Transvaal.
2) 30,000 British skilled miners travelled to the Transvaal to work in the gold mines which increased British ambitions in the area.
3) Gold was discovered in New South Wales in 1851 and by 1866 Victoria was producing £124 million worth of gold.
Provide 7 examples showing that trade and commerce with Empire was important.
1) British financers made investments in the colonies.
2) Between 1850-75 20% of all imports came from colonies. The Empire provided raw materials and foodstuffs needed by British industries.
3) Between 1850-75 one thirds of all exports went to the colonies. Empire provided markets for British industries.
4) India was essential to Britain’s economy.
5) Tropical African colonies provided valuable agricultural materials, foodstuffs and minerals.
6) The value of imports of raw cotton rose by 4 million from 1854 to 1876.
7) Mining of gold and diamonds brought in wealth.
Provide examples showing that trade and commerce with Empire was less important to Britain.
1) British financers invested heavily in other countries considered part of the ‘informal empire’ such as Argentina.
2) Britain did not have to initially worry about threats to free trade with other countries that were no colonies.
3) Trade outside the Empire was far greater than trade inside it.
4) Some of the new African colonies had very little economic value.
5) in 1887 Britain rejected its free trading empire with trading preference for its colonies at the 1887 Colonial Conference.
6) Several self-governing colonies brought in tariffs to protect their industry against British manufactures such as Canada in 1859.
7) The British merchant fleet carried goods all over the world.
8) Forms of commerce happened outside the formal limits of the empire.
Provide 5 ways in which trade an commerce positively affected Indigenous people.
1) It provided benefits which no other power could match and to which colonies would not have had the same access to if they weren’t in the Empire.
2) Britain was the worlds leading source of technology and capital ad the most important trading centre.
3) Britain could provide every economic service that the colonies might need,
4) Trade created jobs on plantations and in mines.
5) Railways in India were developed.
Provide 4 ways in which trade and commerce negatively affected Indigenous people.
1) Individual human beings do not live by the free market or in the long run so they did not see the benefits.
2) The immediate impact of imperial free-trade was often the collapse of local indigenous manufacturing industries which were in no position to compete which led to the destruction of livelihoods and commodities.
3) Britain did not invest in other manufacturing industries because they wanted to limit competition. Undeveloped areas were propelled to modernise but their economic development was cured by the way it was controlled and exploited by Britain.
4) They were paid low wages for long hours (however so were people in Britain for a long time).
How did the importance of naval power change in the 1880s?
1) In the 1880’s there was a growing concern of naval weakness.
2) As a result, a large shipbuilding programme began in 1889. The big gun battlefleet now superseded the gunboat navy which made the British look powerful
Why was British Naval Power so important to them?
1) The British Navy was the biggest in the world.
2) Having a number of small ships that could penetrate coastal areas meant that Britain could exert its influence all over the world.
3) Allowed them to use military force in multiple ways where necessary to gain benefits for the Empire.
4) Ships were used to prevent the slave trade.
5) Helped protect British trade routes.
What is a chartered company? What were its privileges?
1) a trading company that would be granted privileges, status and legal rights by the government, usually summarised in a royal charter.
2) Among its privileges were ‘monopoly’ or total rights which would prevent any competitors from challenging position.
