- Historic Sites
Land Of The Free Trade
Foreign trade—import and export alike—has been indispensable in building America from the very start, and many of our worst economic troubles have arisen when that trade wasn’t free enough. A historic overview.
July/august 1993 | Volume 44, Issue 4
Finally, in 1614, it began to export tobacco in small quantities, a commodity that found a swiftly growing market in Europe. But tobacco was a crop that required a lot of labor, much of it very unpleasant. At first indentured servants from England were used. But the long-term solution, at least from the point of view of the white settlers, was the importation of black slaves from Africa and the West Indies to do this work. Over the next nearly two centuries, about three hundred thousand slaves would be brought to North America in a tragic commerce.
The slaves, of course, were, in an economic sense, another import. But the value they added to the tobacco crop far more than paid for their purchase price and maintenance, and the slave population began to rise rapidly. By the middle of the seventeenth century, the system of plantation agriculture and slave labor was firmly in place in Virginia and Maryland and was spreading immediately to the other Southern colonies as they were founded.
By 1700 Virginia and Maryland were exporting annually more than three hundred thousand pounds’ worth of goods to England, mostly tobacco. Today’s equivalent, at least according to one authority, would be something on the order of a hundred million dollars. With a steady, indeed handsome income from tobacco sales in Europe, Virginia and Maryland did not need to establish strong trading ties with other areas, such as the West Indies, or develop their own manufacturing economy, as New England had begun to do.
When the Plymouth colony was founded in 1620, and, ten years later, the Massachusetts Bay at Boston, no cash crop was available, but the Northern settlers soon learned to eke out a living exporting fish, furs, barrel staves, and lumber (especially clapboards). The trouble was that there was not enough of a market for these products in England—or too much competition there. The New Englanders, therefore, soon began trading with the new colonies in the West Indies and with Africa and southern Europe. There they ran up the trade surpluses that financed their purchases in England.
By signing the Embargo Act, Jefferson in effect set the United States at war against itself, blockading its own shipping.
This “triangle trade,” far more complex than simple bartering between two parties, soon gave the New Englanders considerable expertise in international commerce. In Boston, Newport, and other New England seaports, merchants began building their own ships in large numbers and trading for profit far and wide. Further, the triangle trade led directly to the first American industry, the distilling of West Indian molasses into rum.
Only in New Netherland did the original raison d’être of the colony—fur trading—turn out to be a viable proposition. This was largely because of the entirely fortuitous facts that the Hudson and Mohawk rivers provided an easy route deep into the interior and the Indians of that interior were sophisticated and well organized.
But the fur trade, another cash crop, did not require a large resident population. In order to secure a firmer hold on the colony of New Netherlands, flanked on both north and south by growing English settlements, the Dutch West India Company decided to encourage immigration. It offered vast tracks of land along the Hudson to those who would transport fifty families at their own expense to work the land.
These tenant farmers began to grow grain, and soon wheat was a major export, especially in the form of flour. Its importance to the early colony is reflected in the fact that both the flour barrel and the beaver are still found on New York City’s coat of arms. As they were founded in the late seventeenth century, the other middle colonies also became major producers of wheat and flour.
As settlers with particular skills and tools arrived and practiced their crafts, the utter dependence of the colonies on England for simple manufactured goods began to abate. Before the Industrial Revolution most manufacturing was done on a purely local, handicraft basis even in Europe. Wheelwrights, coopers, blacksmiths, and cabinetmakers began to produce their wares in America.
But American industry, often hemmed in by British mercantilist restrictions, remained what today would be called low tech. Pig-iron production, for instance, began as early as the 1620s. By the end of the colonial era, the colonies were producing thirty thousand tons a year, one-seventh of the world supply and a major export to Britain, where the Industrial Revolution was by then gathering steam. But steelmaking, an expensive, difficult process in the eighteenth century, was unknown on this side of the Atlantic.
Shipbuilding, however, was one major exception to this low-tech, cottage-industry rule. The first ship built in Massachusetts was launched only a year after the Puritans landed. By 1665 citizens of the colony owned no fewer than 192 seagoing vessels and had built many more than that and sold them elsewhere. Indeed, it was common for an American ship to carry a cargo to England and then to be sold cargo and all. By the end of the colonial period, fully 30 percent of the British merchant marine (2,342 out of 7,694 ships) was American-built.