3: Trade and Commerce
Trade The buying and selling of goods
Commerce Activities that help facilitate the exchange of goods from products or manufacture to
markets. It included transport, banking, insurance and warehousing
Mercantilism A system of regulations governing trade whereby colonies had been obliged to send
most of their produce to Britain, to buy British manufactured foods and use British ships
for imports/exports
Free Trade Trade without tariffs, quotas or other restrictions. It was advocated by Adam Smith in 'The
Wealth of Nations'. it argued that wealth was indefinitely expandable and freedom from
commercial restrictions was the only way to maximise prosperity. Britain was the world’s
foremost trading nation so it benefitted from free trade and created free trade
agreements around the word, sometimes through force. It was closely linked to other
ideas of free labour and the attack in the slave trade/slavery. It encouraged Britain to
see themselves as liberators
Consequences Many colonies continued trading with Britain, partly out of loyalty, partly out of ease.
of Free Trade Trading patterns were already well established and there was a common language,
currency and commercial law. It was easier/cheaper for British possessions to borrow in
London because they were trusted. London became the world's financial capital and
sterling the main currency of international trade. Approx. 20% of British imports and 1/3
of exports came from/went to the colonies. Technological improvements improved
communication and trade e.g. improvements in ship building, telegraph lines and
underwater cables, railways, improved refrigeration and new armaments. The
economic benefit of enforcing free trade could have been 6.5% of GNP
Ships and Sailing ships reached the highest state of efficiency in the 1860s. Clipper ships were fast
Shipping and ideally suited to low-volume, high profit goods such as tea, opium and spices. Their
times were recorded and the competition was fierce. They usually had to be broken up
after 20 years. Steamships were used to carry bulky, heavy goods. They became more
efficient with the new compound steam engine which enabled them to trade
economically with distant possessions. They were more effective because they didn't
rely on wind/currents and they could reach up rivers in to previously inaccessible
countries
Railways They brought new areas into Britain's reach and under British control. They provided the
largest single investment in Canada, Australia, New Zealand and South Africa. In India,
railways (built for strategic purposes) linked the cotton and jute growing areas of the
north with the mills of Bombay and Calcutta and enabled rice to reach ports for exports.
They created a huge market for Britain since most of the engineers and parts were from
Britain. Investments in railways provided 'invisible' trade and the spread of railways
facilitated commercial enterprise. Around 70% of British investment was in transport
infrastructure, especially railways
Canals and Provided an important means of transport for trading purposes and were often the
Rivers focus of explores' quests. Canals were built to avoid hazardous stretches of water, or
they provided waterways when there were none. Sometimes rivers had to be
straightened, directed or depend. They were developed an a huge scale in India from
1857. In Canada, after 1867, canals were deepened around St Lawrence/Great Lakes
Seaway system and the Welland Canal was built to overcome height differences
between lake Eyrie and Ontario
Agricultural Canada, Australia and New Zealand had vast tracks of land permitting the production
Goods of cheap foodstuffs and raw materials that were available in Europe but at a lower
price e.g. wool. Tropical colonies produced goods not available in Britain e.g. sugar,
coffee, cocoa, groundnuts, copra and palm oil. The production in these places were
small and native farmers were generally willing to see at whatever price. Britain ran its
own plantations. Indian coolies were transported to work in the West Indies for fixed
periods to work in exchange for their transport, they were paid low wages for hard,
unpleasant work. There were plantations for sisal in Kenya and Tanganyika, coffee and
tea in Ceylon and Kenya, tea in India, sugar in Mauritius, Fiji, Queensland and Natal,
rubber and palm oil in Malaya and North Borneo. Imports from India increased between
1854-1876: cotton 1.6m-5.9m; jute 0.5m-2.8m; tea 0.02m-2.4m; wheat 0-1.6m
Mineral Goods Tin in Nigeria, gold in the Gold Coast, diamonds in Sierra Leone helped develop these
countries. Copper was found in what would be Northern Rhodesia and coal and gold
was found in Southern Rhodesia. In 1886, gold was found in South Africa prompting a
gold rush to the previously poor Dutch-Boer republic in the Transvaal. Over 30 000 British
Trade The buying and selling of goods
Commerce Activities that help facilitate the exchange of goods from products or manufacture to
markets. It included transport, banking, insurance and warehousing
Mercantilism A system of regulations governing trade whereby colonies had been obliged to send
most of their produce to Britain, to buy British manufactured foods and use British ships
for imports/exports
Free Trade Trade without tariffs, quotas or other restrictions. It was advocated by Adam Smith in 'The
Wealth of Nations'. it argued that wealth was indefinitely expandable and freedom from
commercial restrictions was the only way to maximise prosperity. Britain was the world’s
foremost trading nation so it benefitted from free trade and created free trade
agreements around the word, sometimes through force. It was closely linked to other
ideas of free labour and the attack in the slave trade/slavery. It encouraged Britain to
see themselves as liberators
Consequences Many colonies continued trading with Britain, partly out of loyalty, partly out of ease.
of Free Trade Trading patterns were already well established and there was a common language,
currency and commercial law. It was easier/cheaper for British possessions to borrow in
London because they were trusted. London became the world's financial capital and
sterling the main currency of international trade. Approx. 20% of British imports and 1/3
of exports came from/went to the colonies. Technological improvements improved
communication and trade e.g. improvements in ship building, telegraph lines and
underwater cables, railways, improved refrigeration and new armaments. The
economic benefit of enforcing free trade could have been 6.5% of GNP
Ships and Sailing ships reached the highest state of efficiency in the 1860s. Clipper ships were fast
Shipping and ideally suited to low-volume, high profit goods such as tea, opium and spices. Their
times were recorded and the competition was fierce. They usually had to be broken up
after 20 years. Steamships were used to carry bulky, heavy goods. They became more
efficient with the new compound steam engine which enabled them to trade
economically with distant possessions. They were more effective because they didn't
rely on wind/currents and they could reach up rivers in to previously inaccessible
countries
Railways They brought new areas into Britain's reach and under British control. They provided the
largest single investment in Canada, Australia, New Zealand and South Africa. In India,
railways (built for strategic purposes) linked the cotton and jute growing areas of the
north with the mills of Bombay and Calcutta and enabled rice to reach ports for exports.
They created a huge market for Britain since most of the engineers and parts were from
Britain. Investments in railways provided 'invisible' trade and the spread of railways
facilitated commercial enterprise. Around 70% of British investment was in transport
infrastructure, especially railways
Canals and Provided an important means of transport for trading purposes and were often the
Rivers focus of explores' quests. Canals were built to avoid hazardous stretches of water, or
they provided waterways when there were none. Sometimes rivers had to be
straightened, directed or depend. They were developed an a huge scale in India from
1857. In Canada, after 1867, canals were deepened around St Lawrence/Great Lakes
Seaway system and the Welland Canal was built to overcome height differences
between lake Eyrie and Ontario
Agricultural Canada, Australia and New Zealand had vast tracks of land permitting the production
Goods of cheap foodstuffs and raw materials that were available in Europe but at a lower
price e.g. wool. Tropical colonies produced goods not available in Britain e.g. sugar,
coffee, cocoa, groundnuts, copra and palm oil. The production in these places were
small and native farmers were generally willing to see at whatever price. Britain ran its
own plantations. Indian coolies were transported to work in the West Indies for fixed
periods to work in exchange for their transport, they were paid low wages for hard,
unpleasant work. There were plantations for sisal in Kenya and Tanganyika, coffee and
tea in Ceylon and Kenya, tea in India, sugar in Mauritius, Fiji, Queensland and Natal,
rubber and palm oil in Malaya and North Borneo. Imports from India increased between
1854-1876: cotton 1.6m-5.9m; jute 0.5m-2.8m; tea 0.02m-2.4m; wheat 0-1.6m
Mineral Goods Tin in Nigeria, gold in the Gold Coast, diamonds in Sierra Leone helped develop these
countries. Copper was found in what would be Northern Rhodesia and coal and gold
was found in Southern Rhodesia. In 1886, gold was found in South Africa prompting a
gold rush to the previously poor Dutch-Boer republic in the Transvaal. Over 30 000 British
