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Harvard Univ. Press, Cambridge, 1955, 246 pgs., index, end notes,
sources, illustrations
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This is a terrific book - no economic theories, just the facts about
economic activity, who, when, where, why and results. We learn many things. The
governments of the various colonies were created either before the colonists
left England or immediately upon arrival. The organization of the economic
activities was an immediate priority government activity. Governments expect to
and were expected to manage much economic activity; promote, prevent,
subsidize, encourage, discourage private and group activities in the name of
the colony as well as deal with the demands of trade with external individuals
and groups such as merchants in different parts of England and gradually also
with increased economic relationships with foreign powers.. Actually the
purpose was always strongly influenced by the desires of special inerest
groups, farmers, fisherman, and especially various types of merchants. The
colonial government and merchants also had to deal with the original financial
backers, merchants in England, whose motives were different.
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Immediately, not only government executives and legislatures were
created, but also courts. Lawyers were soon employed in civil cases over
economic controversies, such as bankruptcies.
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Although the colonists had many different personal motives for their
personal risk in venturing into the unknown, the colonies themselves, were
generally organized as commercial enterprises and the financiers in England
expected profits. The colonists and the colony thus started out on the basis of
credit (debt) and some of the English financiers invested their own money but
others borrowed on credit themselves. De. Bailyn discusses the role of currency
money and credit money of which the latter was a critical component. When
individual merchants began to conduct trade with overseas places (Caribbean,
Spain, Africa,) they used letters of credit frequently drawn on English banks
or merchant houses. To reduce financial risk most such merchant enterprises
were organized around family members sent to foreign locations as factors.
There was a constant shortage of coin money in New England. Some colonies
experimented with paper money, which rapidly depreciated.
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The English merchants extended this initial credit plus added more in
the hopes of making profits from the exchange of the goods they provided for
producdts from the colonies. These were expected to be mostly fish and furs.
But these soon were depleated or the trade was captured by the Dutch aor
Sweds.. Thus there was a continual deficit in the balance of trade between the
colonies and England. And the shortage of coin within the colony inhibited
local economic activity. The colonial governments sought to create local
production, especially of goods being imported from England. This resulted in
many efforts to produce iron and establish local clothing industry. By the last
decades of the century British wars with Holland resulted in innovative
colonists creating a new profitable industry in shipping hondreds of tall
timber masts for the British fleets. They also found that some agricultural
products and horses were needed in the Caribbean colonies.
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