If you followed us here from the previous week's article, you know Cora had her head in the Renaissance era. My mission was to extract her from knights and knaves and convince her to become intrigued with foreign trade. I found the answer to this dilemma when we visited the library during our week of penny pinching. The book, Atlas of American History, by Robert H. Ferrell and Richard Natkiel, was the key for hours of painless learning, and a great introduction to the physical realities of colonization, trade, and political maneuvers.

Foreign trade was based on politics and power, and many foreign trade decisions were made before, during, and after times of war; therefore, we have a perfect book to set the stage for the noble plot of international trade. For your own edification, try The Economy of Colonial America by Edwin J. Perkins. The chapters are short, and the bibliography is outstanding if you wish to pursue this study further.

Oh - the "noble" part was also a lure for Cora's interest. Cora soon discovered it takes more than a good joust to make a person noble. Nobility, such as the crowned heads in Europe during the colonial period, set the stage for our current foreign trade affairs. At that time, the Spanish and Portuguese were out for precious metals and the British were out for land. Land, in all its pristine and occupied glory, seemed ready for the taking in the New World. Land, with all its trees, animals, and fertility, was England's key to economic and political power.

In the 1600s, the British operated under the economics of "mercantilism," a system much like Keynesian economics (see May 21 article). Self reliance and a balance of international trade was favored, since England was now in a position to force other nations to settle deficit accounts with precious metals - particularly gold. England gained this gold when the export of goods exceeded the imports, creating debts to the British crown. The colonists were expected to help England, and the first colonial settlers tried their best to accommodate these wishes.

The northern colonies supplied furs and trees, which were in vast demand overseas. England, along with a few other European nations, developed a major financial problem with deforestation. A lack of trees creates numerous issues, including the annihilation of a home for wild animals. No animals meant available fur for human warmth was at a premium. Along with a minimal amount of trees came a dearth of sturdy pine masts for ships, a must-have for transportation of goods and for defense in war. England also required lumber for heating, household building materials, and fuel for manufacturing iron.

Two of the most important and interesting exports from northern colonies to Britain were whale oil and potash. At that time, England didn't have petroleum for lighting or for lubrication to finish leather and make soap. Whale oil filled that bill. Potash was made from tree ashes leached with water, producing a chemical used in glass and soap manufacturing. We found this interesting as both products are no longer needed, and this eventual lack of demand created changes in the atmosphere of trade and in the course of history.

Southern colonies provided tobacco, hemp for rope and sails, rice, and salted fish and meat. These products make for fascinating reading, because - due to the course of politics and the development of corporate innovations - the trade climate has changed for both northern and southern colonial exports, including where they're made or grown, how they're processed, and government regulations involved in the gathering, packaging, and distribution of these products.

Britain accepted imports of all these goods and more for internal consumption and for trade to other European countries for almost two centuries. In exchange, Britain exported inexpensive trade goods to Africa. As these ships unloaded their goods in Africa, they refilled their hulls with slaves, gold dust, and pepper to distribute in the Caribbean. Once the ships unloaded most of their cargo in the islands, they gathered sugar, rum and molasses for the colonies. Britain also exported indentured servants to the colonies for a time. Manufactured goods also made their way to the New World, but demand for these items decreased once the colonists found ways to support themselves.

Britain faced a major problem when the colonists became so self-reliant they no longer needed imports from the mother country. Most imported products were eventually considered luxuries, not necessities, to the colonial settlers. In response to this predicament, Britain began to enforce rules on the game of international trade. These rules, supposedly, would inhibit the colonies from becoming rivals in the new world economy.

One of the first colonial enterprises affected by Britain's new regulations was the hat industry, notably fur hats created by manufacturers in the Hudson River Valley. British hatters became quite incensed (mad hatters?) over the fur hat craze that swept London and beyond, because these colonial hatters had captured the market with a symbol representing the unknown wilderness, bravery, and relief from poverty through industrious individual enterprise. The British hatters convinced Parliament to pass the 1792 Hat Act, prohibiting hat imports. The jobs and income of British citizens took precedence over monetary benefits received by colonists (although the largest percentage of colonists at this time were also British, including human Scotch/Irish, German, and French exports to the New World who were expected to abide by rules of the crown).

When we piece together some of these little tidbits of history, we begin to see a pattern - one that plays itself out in world trade today. Although international trade is now much more elaborate and complicated, each exported product or service is - hopefully - countered with an equally valued import. Next week we'll move into the nineteenth century to discover why the colonies decided to strike out on their own, and how the product/service market changed on a global scale during the 1800s.

Until then,
Linda Goin