Unit 1 - (The Mercantile System) Flashcards

1
Q

What was the mercantile system?

A

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.

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2
Q

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

A
  • The Columbian exchange begins in the 1500s… this exchange of plants, animals, and ideas would have reaching effects.
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3
Q

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

A
  • 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.)
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4
Q

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

A

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

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5
Q

What did navigation act number one state?

A

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

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6
Q

What did navigation act number two state?

A

Colonies must sell its raw materials to ONLY England.

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7
Q

What did navigation act number three state?

A

Colonists must use its labor to benefit England.

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8
Q

What did navigation act number four state?

A

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

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9
Q

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

A
  1. English Manufacturers - Due to act 1.
  2. New England Shippers - Due to act 4.
  3. English military - Due to act 4
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10
Q

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

A
  1. Colonial consumers - Due to act 1.
  2. Colonial Entrepreneurs - Due to act 1.
  3. Colonial planters and farmers - Due to act 2.
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11
Q

What were the three core principles of mercantilism?

A
  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.
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12
Q

Why did mercantilism work for about 100 years?

A
  • 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.
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