Mercantilism and Colonial Governments

MUNDY 2010Social Studies 10

The Need for Resources Britain, like many industrialized countries

in the 19th Century, required a constant supply of raw materials for its factories

Wood, furs, wheat and many other resources were in high demand for the growing population in Britain’s cities like London

Many of these materials could not be found within the country, forcing Britain to look to other places

The Use of Colonies To get a constant supply of each of

these resources, Britain would conquer lands around the world

Then it would create a local colonial government to manage trade in the resources

Britain then gave approval to companies, like the Hudson’s Bay Company, to gather and ship the resources to Britain

The Use of Colonies Companies approved by Britain would

have to ensure that the ‘mother country’ would receive a consistent supply of each resource

Britain’s role was to negotiate the amount and price for the resources – factories in Britain were the ones to pay for these resources for their own use

The colonial government’s role was to support businesses that supplied Britain

Advantages of Mercantilism

For Britain’s manufacturers, a constant supply of resources meant that they would not go out of business

For Britain, growth of its industries meant more jobs and more overall wealth

For the colonies, this meant a constant customer for the raw materials that they could supply to Britain

Disadvantages of Mercantilism The type of government Britain preferred

was oligarchies, where governments were neither responsible nor representative

Because colonial governments focused only on growth of colony’s businesses and exports, it largely ignored the needs of its own people

As well, companies in Britain had to pay whatever prices for resources were negotiated

A Shift in Priorities Thus, in the mid-1800’s, Britain began to

look at the option of buying its resources from any place that would sell for the cheapest

This included searching for companies beyond its own colonies

Hence, Britain began dropping its duties (=import taxes) on goods from non-colonies

This new system was known as “FREE TRADE”

Left in the Dust Because Britain now wished to look elsewhere

for cheaper resources, British North America’s colonies no longer had guaranteed sales for its raw materials such as timber, furs and wheat

As well, Britain realized that it no longer needed to have such tight control of its colonial governments

Thus Britain began to impose responsible government on its colonies so that the local people could have control of their own policies