APUSH: Period 2, 1607-1754 - Transatlantic Trade and the Mercantilist System

Why This Matters

The Transatlantic Trade and the Mercantilist System are crucial to understanding the dynamics of global commerce and the rise of European powers in the 16th to 18th centuries. This system, characterized by the export of raw materials and the import of manufactured goods, played a significant role in shaping the modern world economy. It also highlights the tension between the interests of European powers and the colonized regions, exemplifying the AP theme of Politics and Power.

Key Events & People

• The Treaty of Tordesillas (1494): Divided the New World between Spain and Portugal, establishing the basis for European colonization and trade.
• Adam Smith (1723-1790): Scottish philosopher and economist who critiqued the Mercantilist System in his book "The Wealth of Nations," advocating for free trade and laissez-faire economics.
• The Navigation Acts (1651-1696): A series of laws passed by the British Parliament to regulate trade and commerce in the American colonies, enforcing the Mercantilist System.
• The Dutch East India Company (1602): A powerful trading company that dominated the spice trade and played a significant role in the development of global commerce.
• The British Board of Trade (1696): Established to oversee trade and commerce in the American colonies, enforcing British mercantilist policies.
• The French East India Company (1664): A rival trading company that competed with the Dutch East India Company for control of the spice trade.
• The Proclamation of 1763: Issued by King George III, prohibiting American settlement west of the Appalachian Mountains to maintain British control over Native American lands and prevent American competition with British trade.
• The British Acts of Trade and Navigation (1696-1774): A series of laws that restricted American trade and commerce, enforcing British mercantilist policies.
• The Treaty of Paris (1763): Ended the French and Indian War, granting Britain control over most of North America and establishing the basis for British mercantilist policies in the colonies.
• The American Revolution (1775-1783): A rebellion against British rule, sparked in part by American resistance to British mercantilist policies.

Cause & Effect Chain

• Cause: The rise of European powers and the establishment of the Mercantilist System.
• Effect: The exploitation of colonized regions and the restriction of their economic development.

• Long-term consequence: The creation of a global economic system that perpetuated inequality and shaped the modern world order.

• Cause: The Navigation Acts and other British laws restricting American trade and commerce.

• Effect: American resistance to British rule and the eventual outbreak of the American Revolution.

• Long-term consequence: The creation of an independent American nation and the establishment of a new economic system based on free trade and laissez-faire economics.

• Cause: The competition between European powers for control of the spice trade and other valuable commodities.

• Effect: The development of powerful trading companies and the establishment of global trade networks.
• Long-term consequence: The creation of a global economy that was increasingly interconnected and interdependent.

Essential Vocabulary

• Mercantilism: An economic system in which a nation seeks to accumulate wealth and power through the export of raw materials and the import of manufactured goods.
• Colonialism: The practice of one country establishing settlements or colonies in another country, often for economic or strategic gain.
• Imperialism: The extension of a country's power and influence through colonization, trade, or other means.
• Free trade: An economic system in which countries trade with each other without government interference or restrictions.
• Laissez-faire economics: An economic system in which the government does not intervene in the economy, allowing businesses and individuals to operate freely.
• Navigation Acts: Laws passed by the British Parliament to regulate trade and commerce in the American colonies.
• Board of Trade: A government agency responsible for overseeing trade and commerce.
• Proclamation of 1763: A royal proclamation issued by King George III prohibiting American settlement west of the Appalachian Mountains.
• Treaty of Paris: A treaty ending the French and Indian War and granting Britain control over most of North America.
• Dutch East India Company: A powerful trading company that dominated the spice trade.
• French East India Company: A rival trading company that competed with the Dutch East India Company for control of the spice trade.

Common Student Mistakes

• What students often get wrong: The Navigation Acts were passed in the 18th century, but they actually date back to the 17th century.
• Correction: The Navigation Acts were passed between 1651 and 1696.
• What students often get wrong: The British Board of Trade was established in the 18th century, but it actually dates back to the 17th century.
• Correction: The British Board of Trade was established in 1696.
• What students often get wrong: The Treaty of Paris ended the American Revolution, but it actually ended the French and Indian War.
• Correction: The Treaty of Paris ended the French and Indian War in 1763.

DBQ / LEQ Connections

• Possible essay prompt: Analyze the impact of the Mercantilist System on the American colonies. Be sure to include specific examples from the Navigation Acts, the British Board of Trade, and the Proclamation of 1763.
• Possible evidence: The Navigation Acts (1651-1696), the British Board of Trade (1696), the Proclamation of 1763, and the Treaty of Paris (1763).
• Possible essay prompt: Compare and contrast the economic systems of the Dutch East India Company and the French East India Company. Be sure to include specific examples from their trade practices and policies.
• Possible evidence: The Dutch East India Company (1602) and the French East India Company (1664).

Quick Self-Check

1. What was the main goal of the Mercantilist System?
2. Answer: To accumulate wealth and power through the export of raw materials and the import of manufactured goods.

3. Explanation: The Mercantilist System was based on the idea that a nation's wealth and power could be measured by its gold and silver reserves, and that the best way to accumulate these reserves was through the export of raw materials and the import of manufactured goods.

4. What was the significance of the Navigation Acts?

5. Answer: The Navigation Acts restricted American trade and commerce, enforcing British mercantilist policies.

6. Explanation: The Navigation Acts were a series of laws passed by the British Parliament to regulate trade and commerce in the American colonies, enforcing British mercantilist policies.

7. What was the impact of the Proclamation of 1763?

8. Answer: The Proclamation of 1763 prohibited American settlement west of the Appalachian Mountains, maintaining British control over Native American lands and preventing American competition with British trade.
9. Explanation: The Proclamation of 1763 was a royal proclamation issued by King George III to maintain British control over Native American lands and prevent American competition with British trade.

Last-Minute Cram Sheet

• The Mercantilist System was based on the idea that a nation's wealth and power could be measured by its gold and silver reserves.
• The Navigation Acts were passed between 1651 and 1696.
• The British Board of Trade was established in 1696.
• The Proclamation of 1763 prohibited American settlement west of the Appalachian Mountains.
• The Treaty of Paris ended the French and Indian War in 1763.
• The Dutch East India Company dominated the spice trade.
• The French East India Company competed with the Dutch East India Company for control of the spice trade.
• Adam Smith critiqued the Mercantilist System in his book "The Wealth of Nations."
• The American Revolution was sparked in part by American resistance to British mercantilist policies.
• The Treaty of Tordesillas divided the New World between Spain and Portugal in 1494.