In the midst of this growing international trade, European sovereigns worked to ensure that colonial possessions benefited their own treasuries. In the late seventeenth century, both Louis XIV and his English rivals embraced a system known as mercantilism, which centered on the maintenance of a favorable balance of trade, with more gold and silver flowing into the home country than flowed out. In France, finance minister Jean-Baptiste Colbert honed the system. Beginning in the 1660s, he taxed foreign imports while removing all barriers to trade within French territories. Colonies like New France provided valuable raw materials—furs, fish, lumber—that could be used to produce manufactured items for sale to foreign nations and to colonists.
While France’s mercantile system was limited by the size of its empire, England benefited more fully from such policies. The English crown had access to a far wider array of natural resources and a larger market for its manufactured goods. As early as 1660, Parliament passed a Navigation Act that required merchants to conduct trade with the colonies only in English-owned ships. In addition, certain items imported from foreign ports—salt, wine, and oil, for instance—had to be carried in English ships or in ships with predominantly English crews. Finally, a list of “enumerated articles”—from tobacco and cotton to sugar and indigo—had to be shipped from the colonies to England before being re-exported to foreign ports. Thus the crown benefited directly or indirectly from nearly all commerce conducted by its colonies. But colonies, too, often benefited, as when Parliament helped subsidize the development of indigo in South Carolina. See Document Project 3: The Production of Indigo.
In 1663 Parliament expanded its imperial reach by requiring that goods sent from Europe to English colonies also pass through its ports. And a decade later, ship captains had to pay a duty or post bond before carrying enumerated articles between colonial ports. Despite the Great Plague of 1665 and the London fire of 1666, England’s overseas colonies fueled an economic upsurge. Indeed, when London was rebuilt after the fire, its wide boulevards, massive mercantile houses, crowded wharves, and bustling coffee shops marked it as the hub of an expanding commercial empire. Beginning in 1673, England sent customs officials to the colonies to enforce the various parliamentary acts. And by 1680, London, Bristol, and Liverpool all thrived as barrels of sugar, cases of indigo, and stacks of deerskin were unloaded and bolts of dyed cloth and cartons of felt hats were put on board for the return voyage. At the same time, the transformation of New Amsterdam into New York allowed England to incorporate the diverse commercial ventures that thrived in the Dutch colony into its imperial network.
Parliament then sought to quash nascent manufacturing in the colonies by prohibiting the sale of products such as American-made textiles (1699), hats (1732), and iron goods (1750). In addition, Parliament worked to restrict trade among the North American colonies. Settlers in the British West Indies had begun selling surplus fish, flour, and meat arriving from the mainland to their French neighbors. Meanwhile mainland colonists bought growing quantities of molasses, which they made into rum, from those same French islands at a much lower price than British West Indians could offer. Fearing French planters would dominate the sugar and molasses trade, Parliament passed the 1733 Molasses Act, which allowed mainland merchants to export fish and agricultural goods directly to the French West Indies but required them to pay a high import tariff on French molasses. The law might have crippled the American distilling industry, but mainland colonists instead began smuggling cheap French molasses into their ports and bribing customs officials to look the other way.
Despite the increasing regulation, American colonists could own British ships and transport goods produced in the colonies. Indeed, by the mid-eighteenth century, North American merchants oversaw 75 percent of the trade in manufactures sent from Bristol and London to the colonies and 95 percent of the trade with the West Indies. Ironically, then, a system established to benefit Great Britain ended up creating a mercantile elite in British North America. Most of those merchants traded in goods, but some traded in human cargo.