Colonial America

Although there was some involvement by the Spanish, Dutch, and French in the early development of what was to become the United States, the predominant colonial influence was that of the British.

From the outset, British interest in North America was primarily commercial. When Elizabeth established internal unity in Britain in the early 17th century, British entrepreneurs began to look for opportunities abroad. Their attention initially focused on Ireland, which was rapidly taken over as a frontier for British enterprise. In the late 1500s the first attempts to establish commercial settlements in North America, in Newfoundland and at Roanoke on the coast of Virginia, were failures, but in 1606 an organization known as the London Company founded Jamestown in the Chesapeake Bay area to which some 10,000 settlers were sent over the next several years. The hoped-for commercial profits from this venture were elusive, however, and, in 1622, with the population much diminished, Jamestown was made a royal colony. Subsequent introduction of tobacco farming helped make the settlement viable and the whole Chesapeake Bay area soon began attracting immigrants from Britain, many of them poor folk who were prepared to work as indentured laborers, paying off the costs of their passage and, in the case of the more successful, eventually acquiring land and economic independence. The flow of those seeking economic opportunity was strengthened by migrants fleeing religious persecution. Maryland was created in 1632 as a refuge for Roman Catholics, but many Protestants also made their way there.

Further north, in what was to become known as New England, religious dissidents, the Pilgrims, founded Plymouth Colony in 1620. They were followed by other Puritan dissidents brought to the area of present day Boston by the Massachusetts Bay Company. By 1642 some 16,000 Puritans had found haven in the area, establishing a network of local communities in which they aspired to create an exemplary Christian society firmly committed to the ideals of a strict Calvinism. As they multiplied, new communities were established further inland, giving rise to Connecticut and New Hampshire which were hived off from the royal colony of Massachusetts.

With the end of the Civil War in England and the restoration of the Stuarts in 1660, there ensued a new surge of British commercial activity abroad. A successful settlement was founded in Carolina in the 1670s and eventually, in the 1720s, two new royal colonies, South Carolina and North Carolina were founded. To the north, Britain reasserted her claims to the valleys of the Hudson and Delaware rivers which had been occupied by the Dutch since 1624. New Amsterdam became New York, a thriving center of trade and commercial activity in the region. In 1702 New Jersey became part of the package and was made a royal colony. Although English settlers soon became the dominant ethnic group in the region, the legacy of earlier occupation by the Dutch and other European groups was preserved. Another religious congregation, the Quakers, began arriving during the 1680s to take up residence in the vicinity of Philadelphia. Pennsylvania was founded by William Penn in 1681.

All these pioneer settlements along the eastern coastal plain, especially in the rather harsh northern regions, developed economies which were of necessity diversified. While the southern colonies could exploit the opportunities presented by soils and climate to produce specialized products for export to overseas markets, such as tobacco, indigo, and later cotton and sugar, the more northerly colonies of New England had to make do with a number of activities which included mixed farming, the timber trade, fishing, whaling, shipbuilding, transportation, trade and a variety of commercial activities. Fuel was provided by wood from the region’s forests, but by the early 19th century was being replaced by coal from the coal fields of Appalachia. A network of roads and trails joined the major settlements, but the natural waterways were utilized as much as possible to transport goods and people. 

The labor force in these colonies was made up mainly of free workers, many of whom were or were the offspring of people driven out of their traditional ways of life by the enclosures and other economic and social disruptions taking place in Britain. Independent farmers, tradesmen, and wage employees made up the bulk of the population. Early in the 17th century, however, some American colonists acquired slaves from Dutch slave merchants who had discovered the lucrative potential of Africa as a source of cheap labor. When British slavers entered this business in the latter part of that century, larger numbers of slaves were imported, most of them forced to work on the large commercial plantations of the southern colonies, although there were significant numbers in northern colonies as well. Especially in the south, the slave population grew rapidly. By the 1770s half the population of Virginia was made up of black slaves and in some parts of the south the slave population greatly outnumbered the whites. The effect on the society was profound. As the large plantations prospered, economic differences among elements of the white population increased, giving rise to the emergence of a type of landed aristocracy uncommon in other parts of North America. The establishment of a privileged white elite, a growing white underclass, and a large, potentially threatening black slave class created a social order which would eventually lead to serious problems for all the American colonies.

Throughout the colonial period the economy was essentially agricultural. Land was plentiful and, while estimates of living standards are largely conjectural, the evidence is that the output of food increased at least as rapidly as the growth of the population. Although the potential supply of new land was almost limitless, it was far from being "free". The cost of bringing land into production included clearing it, but also defending it against the Indians and the French. Labour was less plentiful, but natural increase and immigration permitted the colonial population to expand at a rate of approximately 3.5 per cent per year, effectively doubling in numbers every 20 years. By far the scarcest factor of production was capital. Colonial incomes were generally not high enough to permit substantial rates of domestic saving to finance the creation of capital goods and major investment had to be financed out of savings abroad. There are various estimates of colonial per capital income levels, but the one most commonly accepted today is that of Robert Gallman who put it at 45 dollars per year, the equivalent of 550 dollars US in 1989. By 1775 this had grown to 60 dollars, or 750 (1989) dollars. The implied average annual growth rate of less than .5 per cent is modest in per capita terms, but in absolute terms the extensive growth of the economy was more impressive. In terms of sheer size, the colonial economy expanded by 10 times during this period.

As land-hungry settlers spread out from the colonies of the eastern seaboard, conflicts with the native Indians increased in number and ferocity. The last quarter of the 17th century was scarred by the Indian Wars in which settlers and Indians battled for control of territory. These conflicts were complicated by the contest between the French and English to determine who would control the lucrative fur trade of the Ohio and Mississippi Valleys west of the Appalachians. The native Iroquois League, which controlled the territory comprising present day northern New York State and much of the territory far to the west, was historically allied with the British and were fierce enemies of the Hurons to the north who supported the French. Residents of the New England region had much to fear from the possibility of a contest with the French and their Indian allies, a threat which disappeared only with the British conquest of New France in 1763. 

The end of the French and Indian War as it was known in America (in Europe it was called the Seven Years War) restored confidence and enthusiasm for territorial expansion in the minds of the colonists who had been hemmed into the coastal region. Many hoped that with the French out of the way, their westward movement could resume. Such was not the intention of the British authorities, however, who sought to preserve the interior for the traditional fur trade and, by inference, as a territory in which the Indians, essential for that trade, could live unmolested. A Royal Proclamation in 1763 defined a line running along the crest of the Appalachians, beyond which there was to be no activity by colonists. This restriction was bitterly opposed by the colonists.
This attempt to block westward expansion of the American colonies was not the only source of a growing divergence between British and American interests. The cost of the long war with France had depleted the British Treasury which began looking for ways to increase its collections of taxes and other sources of revenues from the colonies in America. Economic historians have devoted much effort to explaining the connection between the mercantilist restrictions Britain imposed on the American colonies and the Revolution of 1775-81. Modern scholarship suggests that the relationship was neither simple nor direct. 

Until the 1760’s, it appears that trade restrictions imposed on the Americans were not in fact very burdensome. Only the producers of rice and tobacco seem to have been seriously affected. In practice, most of the trade regulations were not effectively enforced, and the benefits of belonging to the British imperial trading system, which included the protection afforded by British sea power, preferential tariffs in the British market, and a complicated system of bounties paid to colonial producers, probably made the situation of most colonial business interests quite bearable. Nevertheless, such taxes and duties were much resented in the colonies, as was the substantial military garrison which Britain kept deployed there even after the hostilities with France were ended. Adding fuel to these practical issues of the day lay a fundamental political, perhaps even cultural, disaffection on the part of the Americans. Most felt little affection for the British aristocracy’s Royalist, elitist, High Church Anglican posturing, favoring their own republican, egalitarian, dissenting, and anti-establishment traditions. 

When negotiations failed to resolve the various issues between the two parties, an ill-organized series of skirmishes broke out and there ensued a long period of intermittent warfare between Britain, by then the greatest military power in the world, and an unimpressive colonial force comprising an "army" of never more than about 20,000 men and a navy consisting of mainly pirate vessels ("privateers").

The American Revolution was led by a relatively small, radical group and there is little indication that it attracted widespread public support. An important part of the colonial population having strong ties to Britain (wealthy landowners, the Anglican clergy, British civil servants, and the military forces) more or less openly opposed the movement. When it became evident that the revolution would nevertheless succeed, many of these "Loyalists" found it expedient to pack up and move to Britain or north to what remained of British North America. There were some 45,000 of the latter. The largest number of them went to what was then Nova Scotia, spurring the creation of a new colony, New Brunswick, in 1784. Others settled in the Niagara Peninsula and along the north shore of Lake Ontario between the Bay of Quinte and Kingston. Desirous of having their own familiar British institutions rather than those prevailing in Quebec, these immigrants provided much of the population base and the political impetus for the creation of another new colony, Upper Canada, established in 1791. Smaller numbers of Loyalists settled further east in Lower Canada, mainly in the vicinity of Sorel (in what we now know as the "Eastern Townships") and in the Gaspé. This migration was an important development for British North America, but its significance with respect to the United States was much less. It is worth noting that many more professed Loyalists remained in the US after the revolution than left.

As the American Revolutionary War dragged on, rebel governments were established in each of the 13 rebellious colonies, and a coordinating body, the Continental Congress, was convened in Philadelphia to provide a rudimentary form of national government. Despite many handicaps, including a severe shortage of funds, the American troops led by George Washington and considerably aided by French army and naval units eventually defeated the British commander Lord Cornwallis in the fall of 1781. After two years of difficult negotiations American independence from Britain was secured under the terms of the Treaty of Paris in 1783. The conditions were highly favorable to the Americans. Britain retained only the Canadian colonies to the north while Spain regained East and West Florida to the south. The way was open for the American colonies to expand westward into the interior of the continent. Significantly, one of the few powers allotted to the new Confederation Congress, a somewhat more robust body which superseded the Continental Congress, was authority to handle the opening up of these new regions. Otherwise, the new nation’s business remained in the hands of the individual states. 

This arrangement proved untenable and the country was soon plunged into factious disorder fulfilling the expectations of the most skeptical opponents of popular democracy. But, in 1787, a new start was made by the delegates who gathered in Philadelphia for a Constitutional Convention, the purpose of which was to create a national government which deriving its authority directly from the people, not from the governments of the several states. The major national political institutions would be a Congress of the United States, which would represent the people, and a separately elected President. The first elections were held in 1789 and George Washington was made President by acclamation.