Atlantic Colonial Commerce

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Atlantic Colonial Commerce

In the aftermath of the voyages of Christopher Columbus (1451–1506) to the Caribbean and Central America, there arose by the eighteenth century a complex system of trade and commerce between the Americas, the Caribbean, West Africa, and Europe, a truly Atlantic colonial commerce. Moreover, this Atlantic colonial commerce was a significant part of a larger system of trade and commerce that increasingly tied South and East Asia into this European-dominated system of trade.

There were common elements in these emerging and competing systems that the great European naval and mercantile powers established. Colonies in the New World produced raw products that they traded to the Old World for manufactured goods and slaves captured in West Africa. European imperial powers all sought to control trade with their colonies, drawing on mercantilist ideas, which suggested that states could best build their power by channeling all colonial trade through metropolitan ports and merchants.

In many ways, colonial economies and transatlantic commerce were dependent upon the great cities of Atlantic Europe. And, despite harsh laws designed to protect these competing trading systems, the colonial powers often did not, or could not, strictly enforce the laws, and colonial merchants and others violated them for their own economic benefit. Thus, there existed an official system in law, not always followed, and an unofficial system in practice, not always recognized.


Hernando Cortés (1484–1547) in Mexico and Francisco Pizarro (ca. 1475–1541) in Peru discovered vast wealth, and looted it for the benefit of Spain. In the case of Pizarro, the Inca king, Atahualpa (d. 1533), paid a ransom that consisted of a room, 6.7 meters (22 feet) long by 5.1 meters (17 feet) wide, piled some 2.1 meters (7 feet) deep with gold and silver in various shapes and arrangements—a vast fortune. Pizarro took the ransom, killed Atahualpa, decimated the Incas, and established the Spanish colonial empire in western South America.

Cortés, aided by more than twenty thousand Indians who wanted to break Aztec control of central Mexico, destroyed the capital, and Mexico City arose on the ruins of Tenochtitlán. Other conquistadores sought wealth elsewhere, and, as in the cases of Francisco Vásquez de Coronado (ca. 1510–1554), Juan Ponce de León (ca. 1460–1521), and Hernando de Soto (ca. 1500–1542), were not successful. Still this great wealth filled Spanish treasure ships, and whether they safely returned to Spain, or British and other freebooters operating in the Caribbean captured and looted them, the wealth of the New World helped spur the economy of Atlantic Europe. This influx of precious metals contributed to economic growth and, although unevenly spread, increased prosperity. The influx of gold and silver combined with an increase in the production of goods, and a fall in relative prices, especially for luxury goods, ushered in a long period of generally good economic times for Atlantic European countries.

Mines in Mexico, Peru, and Bolivia continued to produce great wealth, but, in time, production declined, and the Spanish economic empire weakened. Despite Spanish efforts, silver production declined, and attacks by Dutch, French, and English pirates on the great treasure fleets increased. This resulted in a decline of the so-called Carrera de Indias (the system of armed convoys that connected Spain to Mexico, via Veracruz, and to South America via Cartagena de Indias and the Isthmus of Panama), and the costs—ships, crews, weather challenges, and piracy—remained high.

Spain had problems in developing a viable colonial economic system that strengthened both the mother country and the colonies. Spain did try to convert Native Americans to Christianity and to have them work in agriculture, raising animals and crops to feed the miners and populations in coastal cities. But diseases inadvertently imported from Europe decimated Native American populations, and the remainder resisted the Spanish.

Landholdings in the Americas were complex, including villages, ranchos, haciendas, and estancias, which made it difficult to exploit the land to produce a valuable crop for export. In theory, Spanish settlers tried to recreate the great estates that characterized the Castilian nobility, but practice varied widely. Farmers found it more profitable to produce grains, livestock, textiles, and hides for local and sometimes regional but not transnational markets. While individual colonies may have prospered, the mother country and the closed trading system it sought to establish gradually declined.

Eventually, Spain would find more profitable crops—first sugar, and later tobacco, cotton, and coffee—that its colonies in the West Indies would produce. Indeed, in 1503, Spain bought African slaves that had been brought to its Caribbean islands, introducing of a system of African slavery that was gradually to become widespread throughout Spanish America. Although the Spanish did not capture or transport African slaves, Spanish farms used many slaves because comparatively few Spanish middle-class or lower-class families emigrated to the New World. But Spain wasted the great mineral wealth it gained in the Americas in its involvement in the religious wars in Europe, and, along with Portugal, Spain became subservient to the other European Atlantic countries.

Portugal was not as systematic in occupying Brazil. Despite the Treaty of Tordesillas in 1494, Portugal looked around Africa, towards India, for wealth and its future. There was some value in the wood of the Brazil wood tree and the red dye it created. Still, the king would divide Brazil into fifteen captaincies, and although many of these great landholdings failed, two of them, Pernambuco and São Vicente, did succeed based on sugar cane farming. Raising cane was difficult and labor intensive, and in time these Portuguese plantations would rely on African slave labor. These vast plantations required a great deal of labor, and given the relatively short distance from Brazil to West Africa, Brazil became the greatest importer of West African slaves.

While Spanish explorers found precious metals in the New World, French, English, and Dutch sailors found the great fisheries near the Newfoundland coast. This also proved to be a great source of wealth. John Cabot (ca. 1450–1499) returned to England in 1496 having failed to find a Northwest Passage but with quantities of salt cod. Fish fed Europeans in winter and was important in the Catholic calendar, and the vast reserves of fish in North American waters helped create wealth for the merchants backing these fleets.


Weaknesses in the Spanish colonial system encouraged British and also Dutch and French merchants and adventurers to fill gaps left by Spanish merchants. Such British ship captains as John Hawkins (1532–1595) recognized that Spain needed a workforce for the sugar plantations and the mines, and he helped start the English trade in West African slaves. The initial profits were so great that Queen Elizabeth I (1533–1603) secretly invested in his voyages. Despite Spanish protests and the harsh measures used against captured foreign sailors, these English privateers continued to raid Spanish treasure ships and also supply the needs of Spain's New World colonies. Dutch and French captains soon joined the English.

At this time, the Dutch were the great traders of the world, for they possessed ships that were faster and safer—more likely to reach their planned destinations—than their competitors. In Southeast Asia, Dutch traders became wealthy shipping goods within that region, which led to Holland's empire in the East Indies. The Dutch also dominated trade from north to southwest Europe and along the Baltic Sea. But, after losing New Amsterdam (New York) to the British, Holland was not a great player in the Atlantic economy of the seventeenth and eighteenth centuries. Nonetheless, one reason for the English Navigation Laws starting in the 1660s was to strengthen British merchants and break the power of the Dutch, a development taking place in the eighteenth century.

France established an empire in North America based on agriculture, fishing, lumbering, commerce, and fur trading. The French had strategic locations, controlling the Bay of Saint Lawrence, the Saint Lawrence River, the Ohio River, and the upper and lower Mississippi River. But France never had the population movement—not of French people and not of African slaves—to rival the population of its English colonial neighbors. In the West Indies, France held Martinique and Guadeloupe, useful for sugar, tobacco, and indigo (a blue dye used for naval uniforms), as well as for trade with the richer Spanish possessions. Still, defeat in the French and Indian War (known in Europe as the Seven Years War) ended France's North American empire in 1763, save for two small islands, Saint Pierre and Miquelon, which permitted the French to salt and dry cod captured off Newfoundland prior to the long journey back to Europe.

Although the French empire in the Americas was never as great or powerful as that of Spain or Britain, France also had its mercantilist policies. The French minister, Jean Baptiste Colbert (1619–1683), promulgated such rules as requiring French manufacturers to purchase raw materials only from French or French colonial sources, to control trade to the colonies through French ports, and to encourage French emigration to the colonies to help populate them, but France was not as successful as its major opponent in the seventeenth and eighteenth centuries, Great Britain.

Then there was Great Britain. Britons settled along the Atlantic seaboard, and after some fits and starts a series of flourishing colonies in Virginia and Massachusetts, Pennsylvania, and in other regions of the eastern seaboard arose. The British Hudson's Bay Company secured furs and other precious items through bases north of French-held Quebec. And British colonies in the Caribbean provided sugar, tobacco, and coffee, all commodities highly valued in Europe.

It is interesting that Britain built such a successful first empire in the Americas, since British colonists discovered little gold or precious metals; they also were unable to use or exploit the native workforce to any profitable extent. British success in competing with the other European colonial powers owed much to the greater openness of its colonial system to commerce and immigration, and to the development of an extraordinary maritime power that it could use both for peaceful trade and for fighting wars.


When historians talk of the so-called triangular trading system, they usually refer to Great Britain and its colonies in the Americas and slave colonies in West Africa. By the late seventeenth century, the countries of Atlantic Europe and their colonies to the west were connected by a relatively elaborate network of trade and commerce. It is important to note that most ships followed one route, and while the system is frequently called the triangular trade system, it was a series of separate routes that fit together into a whole.

For example, ships designed to transport slaves on the so-called Middle Passage from ports in West Africa to the Caribbean could not easily and profitably convert to transport other kinds of cargo. Manufactured products from Europe and rum from North America, a byproduct of sugar production, were traded for slaves in West Africa. West African slaves, more than ten million, were forcibly shipped to the Caribbean, Jamaica being the chief trading center, and then transshipped to Brazil, British North America, and other Caribbean islands. New England and the Carolinas produced naval stores; Boston also shipped furs and fish. The Middle Colonies consumed manufactured goods, for which they exchanged tobacco, and the southern colonies added rice, indigo, and furs. It was a complex system that most benefited Great Britain, providing goods for reexport to Europe, markets for British manufactures, and a carrying trade that strengthened the growth of its navy.

Colonial trading systems were underpinned by the theory of mercantilism, which determined the ways in which European states organized commerce with their colonies. The goal was to develop a closed trading system, where colonies provided the mother country with needed raw materials and also absorbed surplus production; colonies should not compete with the mother country in producing manufactured and finished goods. Ideally, the system would produce a surplus of a valuable good that other, competing European nations would be forced to purchase using their precious metals, thereby enriching one mercantilist empire at the cost of the others. Thus some economic historians refer to mercantilism as bullionism. To enforce this theory of mercantilism, a mother country needed a powerful navy and the capacity to force its colonies to sell valuable raw materials only to merchants of the mother country and, likewise, to purchase finished products only from the same merchants, even if a competing nation was willing to pay more or to sell finished goods for less.

Such regulations inevitably created tensions. In the Americas, colonists wanted to sell their goods for the highest possible price, purchase at the lowest, and have a navy safeguard goods to market. While they were not disloyal to their respective mother countries, they were not particularly loyal either. The British colonists in North America were probably the most guilty of this practice, favoring the Dutch through the port of Saint Eustacious in the Caribbean or the French in nearby Quebec, thereby seeking the benefits of the British trading empire without its attendant costs.

Britain, as with other imperial powers, sought to control the economies of its colonies for its own benefit. The British Parliament passed a series of so-called Navigation Acts beginning in 1651 and continuing until they were revoked in the mid-nineteenth century, long after Britain's original North American colonies had successfully revolted and established the United States. The acts required the shipping of goods to England or English colonial ports unless such goods were transshipped through a major port in Great Britain. The original acts in 1651 and again in the 1660s were clearly aimed at the Dutch, whose ships regularly visited colonial ports, and who thus profited from a system that the British Royal Navy protected but who avoided paying appropriate taxes and charges.

In the 1660s Britain produced a list of "enumerated goods," including tobacco, sugar, cotton, wool, and dyeing woods, which colonies could only trade among themselves or with Great Britain. Other European countries would have to pay marked-up prices, and thus their precious metals would flow into British ports, strengthening Britain. Later acts suppressed colonial manufactures, which would strike New York and the New England colonies especially hard had the colonists followed the law, and had British colonial agents and the Royal Navy enforced them.


About the time this Atlantic colonial commercial system was relatively firmly in place, great changes occurred. France and England fought four great wars for empire. In each case, a conflict in Europe led to a war between French Quebec and British North America. In the fourth and final war, the Seven Years (1756–1763) or French and Indian War (1754–1763), England hired German and other mercenaries to contain France on the European continent while seizing control of France's holdings in North America and elsewhere. France lost Canada and was left with only two islands off the Newfoundland coast, together with its islands in the Caribbean and its foothold on the Caribbean coast of South America.

Britain's victory over France led to the American Revolution. Britain had spent a vast fortune to defeat France, and, since one of the main beneficiaries of this overwhelming victory was Britain's colonies in North America, King George III (1738–1820) and Parliament not unnaturally wanted the colonists to help pay the cost. The colonists demurred, citing a lack of appropriate representation in the British Parliament, and eventually the situation devolved into war. When the Revolutionary War ended with the Treaty of Paris in 1783, Britain's largest holdings in the Americas were now independent, and outside of any of the imperial trading blocs.

Soon thereafter Europe plunged into the French revolutionary and Napoleonic wars. Beginning with the French Revolution in the 1790s, various combinations of European countries fought for more than two decades until, in the aftermath of the defeat of Napoléon Bonaparte (1769–1821) at Waterloo in central Belgium in 1815, a peace of sorts seemed to descend on Europe. Thereafter, the scene of colonial exploitation and hence trade would move to Asia; to the British takeover of India; to the competition in Southeast Asia between the Portuguese, the Dutch, and other late arrivers; and finally to the great prize of China, which had reached its peak and was beginning to descend in power, prestige, and control.

see also Company of New France; Export Commodities; Massachusetts Bay Company; Mercantilism; Virginia Company.


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Atlantic Colonial Commerce

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Atlantic Colonial Commerce