Unit 1 - (The Mercantile System)

Question 1

What was the mercantile system?

Answer 1

An economic relationship between England and its colonies. It was a policy made by imperial powers, like Great Britain, that regulated the economies of the colonies to benefit the mother country.

Question 2

What was happening in the 1500s prior to the mercantile system? (Context behind the system)

Answer 2

• The Columbian exchange begins in the 1500s… this exchange of plants, animals, and ideas would have reaching effects.

Question 3

How was the New World divided in the 1600s? Who controlled what areas of the New World? What did this lead to?

Answer 3

• The 1600s had most of the New World divided into colonies.
• European countries controlled most of the Americas and North America (Spain, France, England, and the Dutch.)
• As a result of so many powers controlling one area, intense competition for markets and raw materials occured.
• The European powers eventually developed ways to reduce competition (Mercantile System, Navigation Acts.)

Question 4

When were the Navigation Acts passed, and who passed them?

Answer 4

English parliament passed the navigation acts in the late 1600s.

Question 5

What did navigation act number one state?

Answer 5

Colonies must purchase (and NOT make their own) manufactured goods from England.

Question 6

What did navigation act number two state?

Answer 6

Colonies must sell its raw materials to ONLY England.

Question 7

What did navigation act number three state?

Answer 7

Colonists must use its labor to benefit England.

Question 8

What did navigation act number four state?

Answer 8

Only English or colonial made ships can be used to transport goods.

Question 9

Who were the winners in the mercantile/navigation act system?

Answer 9

1. English Manufacturers - Due to act 1.
2. New England Shippers - Due to act 4.
3. English military - Due to act 4

Question 10

Who were the losers in the mercantile/navigation act system?

Answer 10

1. Colonial consumers - Due to act 1.
2. Colonial Entrepreneurs - Due to act 1.
3. Colonial planters and farmers - Due to act 2.

Question 11

What were the three core principles of mercantilism?

Answer 11

1. Wealth is the basis of a country’s power.
2. The mother country must regulate trade and production to limit competition.
3. Colonies exist solely to benefit the mother country.

Question 12

Why did mercantilism work for about 100 years?

Answer 12

• Britain’s policy of salutary neglect (so long as Britain prospered, the acts were loosely enforced.)
• Acts were constantly enforced.
• Colonists relied on smuggling and independent traders for profit.
• Both sides continued to benefit.