Download Colonial Organization in the Settlement of North America

Chapter Two
Government in Colonial America
Stanley L. Engerman
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Government in Colonial America by Stanley L. Engerman
Colonial America entailed the movement of settlers from elsewhere into an area
previously resided in by Indians. Settlement meant the attraction of free immigrants from
elsewhere-mainly the British Isles, the acquisition of slave labor from Africa, and the need to
control those already there, or, at least, to work out mutually satisfactory arrangements for coexistence. For free migrants it meant a relocation into an area quite different from that which
they had left, while for African slaves it meant a loss of freedom and control.
The role of colonial governments was to provide, within the colonies, for defense and
protection, laws in regard to property rights for individuals, the provision of certain public goods,
and the regulation of activities of private individuals and businesses. Externally, there were
regulations regarding trade (though these were often imposed by England) and defense against
foreign attack (again generally provided by the English). Governmental rules could be the basis
of a laissez-faire economy or a centrally- controlled one. In either case there is a major role
played by government. While the thirteen colonies were subject to control by the English until
independence, they did have some flexibility in determining who had the right to vote and to hold
office, what laws could be passed, and control over financial issues. Those not able to vote could,
however, be the beneficiaries of government policy and also were able to bring pressure on the
governments to offset losses in the economic and political sphere. 1
Early European Settlement of the New World
The nations of western Europe began their colonization movement into, and across, the
Atlantic in the late fourteenth and fifteenth centuries. The pioneering nations in settling the
Americas were Spain and Portugal. Portugal had first moved onto the offshore African islands,
including the Azores, Maderia, the Cape Verde Islands, Fernando Pó, Principe, and São Tome,
and Spain settled the Canary Islands, before both crossed the Atlantic Ocean to settle in the
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Americas. Portugal settled in Brazil, while Spain explored several parts of mainland North
America, the Caribbean, and Central and South America, primarily settling in what would be
called Latin America (South and Central America), several of the islands in the Caribbean (Cuba,
Puerto Rico, and Hispaniola), and a few scattered parts, mainly in the southwest and Florida, of
mainland North America. British expansion overseas, first as a trading nation, began with the
granting of charters to trading companies, beginning with the Muscovy Company (1553), and, by
the end of the sixteenth century there were British companies trading with the Levant, North
Africa, and India, and, in the early seventeenth century, West Africa.
Spain had a one century lead over the northern nations of western Europe – France,
Britain, and the Netherlands – and settled in those areas which had been the wealthiest parts of
the Americas and had by far the greatest numbers of American Indians. Spain’s possessions
provided great wealth from the use of Indian labor in mining gold and silver for shipment to
Spain, from where it was exported elsewhere in Europe and Asia to finance Spanish purchases of
consumer and military goods.
Native American Populations
The British and other Europeans were not, of course, the first to settle in the Americas;
they had been preceded by the Native-Americans who had settled throughout North and South
America. The locations of Indians at the time of European contact pointed to significant
differences in settlement patterns. The areas of Spanish conquest had about three-quarters of the
Indian population, mainly in the wealthy and politically sophisticated Inca and Aztec empires,
with populations resident in urban areas, military organizations, high agricultural productivity,
and large-scale slavery and imperialism. Even with the extreme mortality, primarily due to
diseases, after the Spanish contact, these areas continued to have larger Indian populations and,
even today, Indians form a large part of the regional population. Mainland North America was
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quite different. The numbers of Native-Americans were much smaller and the Indians there lived
in much smaller political units than those in Latin America.
There was a rather mixed pattern of Indian – European contact. In many cases there was
conflict and warfare, between Europeans and Indians, but some Europeans formed coalitions with
Indian groups in opposition to other Europeans, but peaceful arrangements also persisted. Trading
took place, with furs being sold in exchange for foodstuffs, alcohol, tobacco, and other goods.
The French in Canada were heavily involved in the fur trade with Indians, and the British, in their
colonies, were also able to establish trading relations in furs and other goods with the Indians.
Whether trade was peaceful or antagonistic, there was generally a push of Europeans inland, with
the Indians often being forced to relocate further inland. Thus, the land base of the British
colonists on mainland North America expanded greatly after initial settlement, as did that of the
French in Canada before they lost it to the British in 1763.
Colonial Organization in the Settlement of North America
When the three major northern European nations came to explore and settle in the New
World they were left with what were regarded as only limited opportunities relative to Spain and
Portugal. Those parts of the Americas left available had had small Indian societies of relatively
limited wealth. The overall Indian populations of the settled areas of mainland North America
were quite small relative to those of Latin America. Before settling on the mainland, European
nations had settled in the generally unoccupied islands of the Caribbean. After an early period of
using white indentured labor to produce tobacco, they transformed these islands into major sugar
producing areas, using mainly slave labor brought from Africa. Sugar was produced, to be
exported to European markets, on large-scale plantations, often of 100 to 200 or more slaves.
The rivalries among the British and Dutch, in Europe and in the New World, led to the British
introduction of Navigation Acts after 1651, to control export and import markets and shipping
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patterns, via regulating the trade of their colonies, requiring exports to go to Britain, imports to
come from Britain, and goods to be carried in British or colonial vessels. All Europeans pursued
similar policies of mercantilism, intended to increase production and trade of the home country at
the expense of other nations.
It was only at the end of the seventeenth century that the migration from Britain shifted
from the Caribbean to go primarily to the colonies of mainland North America. Settlement on the
mainland had begun earlier, in the seventeenth century, but these mainland colonies were not yet
considered as attractive a location for settlement by immigrants as were those in the Caribbean,
and the demand for slave labor to be imported was much smaller. In the seventeenth century
there were several other settlements on the mainland: the French, mainly in Canada; the Swedes
in Delaware; and the Dutch in what was called New Amsterdam. The means of establishing
settler colonies varied among European nations. The Spanish and Portuguese colonies were often
state enterprises, with state decision-making and with a strong role played by the Catholic
Church. The British pattern differed, however. Its colonies were established under charters and
controls by the crown. Yet, they were settled by individuals or groups, not by the government,
and they made decisions in their own or the colony’s interests. There were two basic British
patterns of colonial establishment and operation. Proprietorships were colonies established by a
grant made to specific individuals and groups. Sometimes these colonies were established for
particular religious or philanthropic purposes. The second method was the use of a joint stock
company to finance settlement and to establish the group controlling the political life of the
colony.
The earliest attempts to establish settlements by the British in North America, both
unsuccessful, were proprietorships for Newfoundland (1583) and Roanoke Island, North Carolina
(1585). Both involved small numbers of settlers, and lasted only for a very short period, as also
did the joint stock company established for the settlement of Kennebec River, Maine (1607). The
first successful settlement was that of Virginia, begun as a joint stock company in 1609, with land
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grants used to encourage colonization. While the settlement was to be successful, the company
was not. It failed financially and, in 1624, Virginia became the first Royal Colony. Joint stock
companies were used to settle Plymouth, Massachusetts (1620) and Massachusetts (1629, the
Massachusetts Bay Company). The former was an attempt at a communal economic system, but
was soon seen as unsuccessful and a financial failure in 1627, and there was a shift to private
ownership at that time. This communal system did not work well, as individuals and families
were less willing to work long and hard as they would if they had privately-owned property on
which they need not share their gains with others. In the case of the Massachusetts Bay Company
there was a subsequent shift of political power, by the Puritans, to a representative system of local
residents in 1634.
In the 1620’s there were several colonies formed by the British in the Caribbean. The
first, St. Kitts, was initially settled in 1623, colonized in parts by the French and the British, and
came under a grant in 1627. Barbados was first settled after 1624, and was given a grant in 1627
– the same grant that covered St. Kitts and most of the subsequent British Leeward islands in the
Caribbean. Barbados was a proprietorship, which led to a series of political disputes in
subsequent years. It became a royal colony in 1650, although some financial provisions
concerning the sharing of profits with creditors and leaseholders remained in effect for another
decade or so. A Puritan joint stock company, following the same laws as the Massachusetts Bay
Company, had been established on Providence Island off the coast of Belize, in 1630, but this was
neither an economic nor social success, and was captured by the Spanish in 1641. The largest of
the British colonies in the Caribbean, Jamaica, was settled after being conquered from Spain in
1655. As such, it was initially treated by the British government as a dependency. The varying
patterns of organization in the Caribbean and as the mainland indicate the flexibility of British
political controls and settlement arrangements.
There were numerous colonies and many different types of political arrangements. The
first post-Massachusetts settlements on the mainland (after 1629) were undertaken by the granting
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of proprietorships to specific individuals or groups by the king. These proprietorships were not
all successful, several of the colonies becoming Crown Colonies within several decades of
establishment. Maryland (1634) was formed as a proprietorship granted to the Catholic Lord
Baltimore, and became a Crown Colony in 1691: New York, in 1664, was captured from the
Dutch who had tried to establish a joint stock company in 1613, and became a Crown Colony in
1683; New Jersey (1664), initially settled by the Swedes, Finns, and Dutch, in 1655 became a
Crown Colony in 1702. The Carolinas (1670) became Crown Colonies in 1729. The final two
colonies settled as proprietorships were a colony including numerous Quakers with the title
Pennsylvania and Delaware (1681), which was to become socially and economically successful,
and Georgia (1732), initially a philanthropic venture. Georgia was not successful, and in 1751 it
was returned to the Crown, at which time it reversed its earlier policy of excluding slave labor.
All thirteen colonies were to become economically successful, over time, and whatever the
original provisions, became equivalent states after the Revolution.
Attracting Labor to the Colonies
All colonies had to solve the same set of problems, attracting labor and capital in order to
survive economically. While these factors of production were in scarce supply, a third factor,
land, was quite abundant and quite fertile. It could be used, after some costs of clearing, in
efficient agricultural production. The lower cost of producing food and other agricultural goods
in the colonies was offset, due to labor and capital scarcity, by the higher costs of producing
manufactured commodities. The Navigation Acts were meant to encourage British manufacturers
and limit colonial manufacturers. But, as can be seen by the early nineteenth century production
patterns in the United States, these Acts were, at least as far as manufacturing was concerned,
unnecessary or redundant. The controls over shipping of colonial commodities were, however,
more crucial, and did restrict shipping by the Dutch, raising the cost of the commodities in British
and other European markets, and reducing colonial incomes.
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The colonial governments adopted several different methods in their attempts to acquire
scarce labor. Land was given to encourage immigration, whether granted directly to immigrants
or else to those who brought them over. It was sometimes granted immediately, sometimes after
time needed to establish permanent residence. A system of indentured labor, along the lines of
British apprenticeship, was rapidly introduced. Most migrants lacked the funds to cover the cost
of passage to the New World and establishing themselves, therefore migrants traded a number of
years of coerced labor time for their transportation from the British Isles to the colonies. This
system, it is estimated, accounted for about three-fifths of all white migration to the mainland
colonies, and was particularly important for the southern colonies. After the indenture period,
funds or land were, at times, given to the laborer, an additional subsidy to encourage migration.
The colonies regulated the terms of transportation across the Atlantic, and were responsible for
the enforcement of the terms of the contracts and disputes between owners and servants. The
mixture of land grants and indentured contracts attracted settlers from many areas of Europe,
including all parts of the British Isles, Germany, the Netherlands, Sweden, and Finland, while
groups, such as English Pilgrims and the French Huguenots, came seeking religious freedom.
Nevertheless, the British were the dominant presence on the mainland.
Another source of labor, important in the southern states and the Caribbean, was the use
of slave labor, initially purchased from Africa. The first slaves were introduced to the North
American mainland about 1620. Following Barbados in 1660, most colonies introduced slave
codes to define slaveowner rights, including the provision for the inheritance of the slave status
by the children born to slave mothers. The relative importance of these forms of labor – free vs.
slave – varied by region, based on the profitability of different crops. All colonies, despite their
religious or political background, had legalized slavery, and no colony was to end slavery until
the Revolutionary War.
Attitudes and Political Economic Institutions
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Some of the basic economic characteristics of the different colonies seemed similar at the
start, but over time there developed significant differences in the nature of agriculture production
and in the importance of agriculture relative to other economic sectors. The proprietors and
investors in the colonies were generally from among the wealthiest and most politically important
families in the British Isles. They had generally participated in the political life of England, and
were often the recipients of charters and grants from the king which provided monopoly
privileges. They had been involved with commercial transactions and trade, both internally and
externally, and had contacts with nations on the European continent as well as with Africa and
Asia. They had seen the advantages, at least to themselves, of private property and had
developed a concern with individual and group incentives, with only limited reliance on
government controls and operations or communal activities. They had achieved, by the standard
of the time, a relatively high level of living, the outcome of a willingness to labor or to organize
labor to achieve that goal. They lived in a British economy in which there was taxation of
property, the existence of banks and money exchanges, and a productive agricultural sector on the
basis of hired labor and tenants. Therefore, it is not surprising that many of the North American
proprietors and settlers with large landholdings sought to transfer these institutions to the New
World.
A key question for understanding successful long-term growth is how pervasive these
commercial attitudes were among the remainder of the free population, and how these general
commercial, if not fully capitalist, attitudes were consistent with their religious and cultural
attitudes. In general, the desire to seek commercial gains and the willingness to respond to
various price and income incentives permitted the attraction of migrants from Europe as well as
increased economic productivity and geographic expansion after arrival in the colonies. There
was not, of course, a narrow focus on pure financial profit maximization, as seen in choices
regarding leisure, family and children, and religion, but obviously enough of a concern to achieve
high living standards.
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Also carried over with earlier settlers was an attitude towards political and legal life that
built upon, and, indeed, expanded beyond that in the metropolis. English common law was
firmly established in the colonies by the time of the Revolutionary War. While the rules of
eligibility to vote, based on property requirements were initially similar to those in Britain, the
substantial difference in the shares of the population able to meet these requirements in the
colonies did lead to important political differences. The basic requirements to vote generally
included minimum amounts of freehold, personal property, tax payments, or income or wealth,
and these did vary by colony and over time. In several states there were initially some restrictions
on voting by certain religious groups, with limitations on Catholic and Jewish voting introduced
after the late seventeenth century. Blacks and Indians were not legally citizens and thus could not
vote. There were, also, suffrage restrictions by age, gender, race and ethnicity. Nevertheless,
while the percentage of adult males who could vote in early eighteenth-century Britain, was about
15 percent, it is estimated that in the colonies about 50 to 80 percent of white males were
qualified to vote. The big difference, with its significant influence on the economic and political
behavior of the colonies, was the broader distribution of land ownership and wealthholdings in
the colonies than in the metropolis. This difference in voting helps to explain many of the
observed policy differences. Unlike in Europe, there were relatively few religious limitations on
voting, and the British colonies, unlike the Spanish, had no religious restrictions on immigration.
The colonial pattern meant that religious freedom was more developed in the British colonies
than in the colonies of other European nations as well as in Europe.
That wider holding of land, with its important impact on the economy and the size of the
electorate, was not the outcome of the basic policy of landholding introduced in the colonies at
the onset of settlement. Many of the original settlers had been landholders in Britain, and wished
to adopt the manorial, or feudal, system with which they were familiar. This would have meant
the allocation of land in large units, with the minimum acreages sold being greater than the size of
farms needed for individual or family production of most food crops. Over time, however, the
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average size of farms and of landholdings were reduced as a result of the actualities of production
methods and political influence. Average farm size in the New England and Middle Colonies was
smaller than that in the southern states, although the large holdings of Dutch patroons in the
Hudson River Valley of New York were maintained by the British after 1664. This smaller size
of landholdings in the North reflected not only the pattern of land sales adopted by the colonies,
but also the frequency of more egalitarian laws and/or practices, including inheritance practices
and the granting of headrights by colonial governments to encourage immigration from abroad
and also the settlement of frontier areas within the colonies. Whereas, in regard to land, England
maintained the practice of primogeniture (inheritance by the oldest son) many of the colonies
provided for an equal division of land among heirs, and otherwise limited the share going to the
eldest son. In the southern colonies, while there were also many small landholdings, the
emergence of plantations, to produce rice and tobacco using slave labor meant more large units
than in the North, although these plantations were smaller than were the sugar plantations of the
Caribbean. The rise of slave-based plantation reflected more the nature of the crops grown than it
did any fundamental initial differences in land law or in settler beliefs concerning slavery.
The Structure of Colonial Government
Each of the thirteen colonies had its own legal and political systems, based initially on
their governmental charter, although, in retrospect, most of these differences were relatively
minor and inconsequential. This system, resembling what would later be regarded as federalism,
did allow for mobility and competition among colonies. Each colony had elective assemblies and
a governor, often appointed by the Crown. It set its own suffrage requirements, made its own
budgetary decisions, and was responsible for its own fiscal arrangements. The outcomes,
however, were often somewhat similar across colonies, as were the legal codes.
Yet these thirteen colonies were not able to behave as fully independent powers, since
they, and their Caribbean counterparts, were still part of the developing British Empire and
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subject to metropolitan controls. All were bound by the terms of the metropolitan Navigation
Acts, influencing exports, imports, and shipping, and no colony could opt out of its provisions.
The Navigation Acts were part of the system of mercantilism, aimed at increasing shipping, ships,
production, and incomes of merchants, all to benefit residents of England. While some of the
English were to be gainers, the losers were the British colonies, foreign countries, and British
consumers of colonial products. Depending on the importance and magnitude of exports and
imports, the Acts could, however, have had dramatically different impacts across colonies and
generated differing amounts of controversy and debate. Similarly, when most of the settlements
became Crown Colonies, decisions made in colonial legislatures were required to obtain final
approval from the British parliament, which could overrule colonial decisions. In time of warfare
the colonies fought on the side of the British, and colonial militias were often called upon in wars
against the French and Indians. The basic army and navy costs were, however, paid for by the
British, saving the colonies much of the expense of defense and reducing manpower needs.
Colonies were thus a mixture of colonized nation and independent region, with their own leaders
and legislatures.
Geography’s Impact on Demographic and Economic Structures
Despite some basic similarity in patterns of belief and behavior among British settlers,
and an early similarity of institutions, there were major differences that soon emerged in
economic and demographic structures. This led to sharp differences in institutions and the nature
of laboring regimes. Fundamental to these changes were differences in climate, resources, and
the ability to grow only certain crops in the different climatic regions.
The Caribbean islands were first settled by indentured labor producing mainly tobacco,
but generally they soon became sugar-producing islands using mainly slave labor. The
populations became 90 percent slave, and the high mortality and low fertility of the slave
population meant a continued need to import large numbers of slaves from Africa. Sugar was
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grown on large plantations, and most of this sugar was exported, first to Britain, and then some
re-exported elsewhere in Europe. The total and nonhuman wealth per free capita in the Caribbean
was considerably above that in the mainland colonies, and the politically influential planter class
was able to get favorable legislation from the British government, including legislation, such as
the Molasses Act of 1733, at the expense of mainland colonies, by placing a very high tariff on
sugar, molasses, rum, and spirits that the colonies had imported from the French and other foreign
sugar colonies.
The British mainland is conventionally divided into three areas; the New England states,
the Middle Atlantic, and the South. Each had quite different economic and demographic patterns.
The New England states were characterized by very high rates of population growth, due to high
fertility and lower mortality. There were few indentured laborers and few slaves, the labor force
consisting of free members of the population. New England experienced a high rate of natural
increase, with only a rather limited immigration from Britain and elsewhere after the initial years
of settlement. Agricultural production, mainly of grains, took place on small farms, often owneroperated, and with its relatively limited exports going mainly to the British West Indies.
The Middle Atlantic states had somewhat more slaves and indentured laborers than did
New England, but it was also characterized by agricultural production of foodstuffs on relatively
small units, and with an amount of exports per capita similar to that of New England. These two
northern regions were not considered by the British to provide the principal benefits of
colonization to the British. They produced crops similar to those of Britain and thus provided a
limited basis for becoming a major trading partner.
The southern states fit much better into the British mercantilist ideal, specializing in crops
that Britain was not able to produce, and exporting them to Britain, for both British consumption
and for re-export to the Continent. The major crops were tobacco, from the Chesapeake, and later
rice and indigo from South Carolina and Georgia. Exports from the southern colonies per free
capita were about seven times that of the northern regions at the start of the eighteenth century,
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and roughly three times greater just prior to the Revolution. The early settlement of the southern
colonies was by whites, as indentured laborers and free workers, but in the eighteenth century
there was a sharp growth in the slave population, from about 6 percent of total population in 1680
to 41 percent in 1770, with slaves of particular importance mainly in export production of rice
and tobacco on units larger than the family farm. The southern natural rate of population growth,
both free and slave, was unusually rapid, but the growth of the Southern population also benefited
from large migrations from England and from Africa.
The mainland colonies had roughly similar nonhuman wealth per capita (free and slave),
a crude index of overall productivity. More useful, as a measure of differential political influence
was the total (nonhuman and human, the latter only valued for slaves) wealth per free capita, the
South’s being more than twice that of the North, or the nonhuman wealth per free capita, with
that of the South being about 1.5 times that of the North. The mainland’s wealth per free capita
was considerably below that of Jamaica and the Caribbean. The distribution of wealth among
wealthholders was similar in New England and the South, but the Middle Atlantic states were
somewhat more equal than the other regions, a point that, possibly, influenced its subsequent
economic and political development. The relative equality of incomes and wealth led to a larger
number voting, and this, in turn, influenced the decisions made as to education, land distribution,
and chartering of banks and businesses.
Although most mainland colonies become crown colonies, there were provisions
permitting British officials to limit the rights of colonial governance. Each colony remained
responsible for certain key political decisions. Colonies had legislative bodies and governors
often appointed by the crown to rule internally, and there were generally elective offices. There
were usually property requirements for voting, as was the case in England and elsewhere, but, as
noted above the broad distribution of landholdings meant a higher share of the population was
eligible to vote than in Britain and elsewhere on the European continent. It has been estimated
that by 1776, 50 to 80 percent of white adult males in the various colonies were eligible to vote,
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whereas only about 15 percent had been qualified to vote in England in the earlier part of the
eighteenth century.
Important Colonial Government Policies
Key decisions made by each colony pertained to rules regarding property rights; the
allocation of land, including the size and price of holdings made available for grants or for
purchases; the controls over labor-free, slave, and indentured labor; regulations regarding
shipping and trade, including tariffs, taxes, quality controls, and the use of product trademarks;
the issuance of paper money; the provision of state militias; and the general policies towards
taxations and expenditures. The functions performed by the colonial governments did not differ
dramatically from those later undertaken by state and local governments.
Unlike the Caribbean, with its large percentage of African slaves, and Mexico and South
and Central America, with large numbers of native-Americans, mainland. North America was
predominantly populated by the British. European settlers were about 60 percent of the
population in the southern colonies, with higher shares elsewhere. Because of the nature of the
settlement process set by the crown, there were thirteen colonies making decisions about laws,
taxes, and finances, although subject to the overriding power of the British government. Certain
aspects of economic and political structure, such as the basic Mercantilist rules controlling export
and import trade and shipping arrangements, were binding on all colonies, but the specifics of tax
and expenditure policies remained within colonial discretion. As part of the empire’s currency
union, there were constraints on colonial financial and monetary policies, as they would be for the
rest of the world in the nineteenth and twentieth centuries, with gold standards and currency
unions. The role of gold and silver specie and basically fixed definitions of colonial and British
rates of exchange did not allow for substantial and persistent, as contrasted with temporary,
variations in colonial monetary laws and money issues. The British Currency Acts of 1751 and
1764 restricted issues of paper money by colonies, as they were not considered legal tender,
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although a 1773 act allowed the use of paper money to pay provincial taxes. But a land bank was
established in Massachussetts, and more than one-half the colonies issued paper money, the latter
being particularly important as a means of temporary wartime finance to be retired at the war’s
end.
The range of legislation in the colonies was rather broad and, as J.R. T. Hughes pointed
out, during the colonial era virtually every aspect of economic life was subject to nonmarket
control “and there is very little in the way of nonmarket control of the economy that does not
have a colonial or English forerunner.” That being said, the colonies were able to experience
relatively rapid economic growth by the standards of those times, and to achieve levels of per
capita income similar to that of Britain, while receiving large number of immigrants and
sustaining an exceptionally high rate of natural population increase.
This reflected, in part, the relatively stable monetary situation, with no prolonged periods
of price inflation, so that loans of foreign capital, mainly from Britain, continued throughout the
period. Further, colonial rates of taxation, even with some allowance for the burden of the
Navigation Acts, were relatively low compared to rates in Britain and much of Europe. The
British government imposed tariffs on the external trade of the colonies, but not until the Stamp
Act of 1765 (soon repealed in part) was there a major internal tax introduced.
There were a rather mixed set of taxes imposed by different colonies- property taxes,
faculty or income taxes, poll taxes, import and export duties, excise or internal taxes, and land
taxes, based on improved acreage, total acreage, or assessed value. Tax rates did vary with
circumstances, such as wars, but in the absence of a standing army or navy, and with the primary
defense shield provided by the British, overall military expenditures were generally small. And
while the local governments in the colonies were responsible for bridges, fences, roads, and
schooling, these were often financed by tolls and fees, by the granting of land or of monopoly
franchises or by taxation paid in labor time. Political conflicts - between proprietors and
settlers, between large and small landholders, between landholders and the landless, between
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merchants and farmers, between tidewater and frontier populations – did occur at periodic
intervals, but did not lead to dramatic overhauls of the political system even though these
pressures led to measures that indicated the flexibility of the colonial political system.
These basic legal provisions and regulations seemingly did not interfere with economic
growth or, at the least, were consistent with what developed – economic growth at a relatively
high rate for the time. Of major importance were the granting of unconstrained rights to private
property, with a general absence of government confiscation or of the other forms of failure to
maintain these property rights. The Quebec Act of 1774 limited the ability of the colonists to
expand westward, as the British government took control of the western lands from those
colonies that had rights to them. Land rights were sold or given as grants by proprietors, and often
included a requirement that the land be used or improved within a limited number of years before
title was final, foreshadowing the Homestead Act of 1862. In some states Indians were not
permitted to own land. The purchasers or grantees had rights to own, use, pass on property via
inheritance (although primogeniture was not abolished until the Revolutionary War), or sell the
land, as long as the taxes (quitrents) were paid. Given the great amounts of land available and the
great importance of agriculture in national output, this security of land title played a key role in
economic growth. While early in settlement the intent was to have land be made available in
large units, over time the minimum size of units was reduced, with more land in units of 50 to
100 acres was granted to encourage population growth and relocation. Most free males were able
to acquire land.
The colonies adopted the English system of common law with great attention paid to
lawyers and legal matters, as seen in the numerous volumes of state law codes and published
legal decisions. Important sets of laws controlled black slavery, indentured labor, and
apprenticeship, and there was no serfdom or, for whites, slavery. At times colonies imposed
wages and hours regulations, as well as regulations imposing control over occupations. The
English poor laws, with local controls regulating vagabonds and vagrancy, with workhouses and
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poor relief as well as various terms regarding settlement, were carried over. Controls over
exports were introduced to provide for better marketing, including inspection systems and quality
controls, and colonies could introduce their own tariffs. License hours for stores and inns were
set, among various types of business regulations. Thus, within the basic framework of property
rights and free markets, the economies of the colonies were regulated, in terms of law if not by
actual enforcement. The colonists may have benefited from the seeming certainty of transactions
and behavior, but complications due to having thirteen colonies and legal systems may have
introduced some costs to society. The establishment of thirteen colonies did lead to some
competition and choice in settlement decisions, which may have had some influences on policies.
The Colonial Legacy
Some guide to the attitudes of the times regarding mercantilist regulations may be seen in
the aftermath of the successful Revolutionary War. One basic set of policies introduced by
Alexander Hamilton was the introduction of mercantilistic rules on shipping, imports, etc.
suggesting that there was no conceptual opposition by colonists to mercantilist policy. Rather the
issues of concern were whose mercantilistic policies to choose and whether it would be possible
to force the British to behave appropriately. Hamilton’s various proposals regarding
manufacturing, a national bank, the distribution of public lands, and the assumption of the
colonial state and national government debts were also changes that formed a basis for postRevolutionary economic policy, and were carried forward for many years. In other matters, the
Revolution led to an increase in taxation, due to the states absorbing the military expenditures
previously paid for by the British, but the basic commitment to property rights and free markets,
as well as the continuation of slavery and indentured labor, were carried forward into the New
Nation. Nevertheless, the Revolutionary War did not lead immediately to economic success. It
took about two decades before the new system became economically successful and its per capita
income rose above the pre-Revolutionary level.
18
The colonial legacy for the new nation was one that permitted an early establishment of
some characteristics needed for economic and political success. The mix of centralized power
and decentralization established with the Constitution provided for flexibility in decision-making.
Federalism meant an ability to have policy differentials among states, useful for the most part, but
something which permitted the contribution of slavery in parts of the nation. Many important
legal and political features were carried forward from earlier years. Some, such as the common
law and the belief in protection of property rights, were vestiges of the British background; others
such as a broad franchise, a state-determined banking system, and some relative generous policies
of land dispersal, reflected adaptations made by the colonists.
19
REFERENCES
John Butler, 2000. Becoming America: The Revolution Before 1776. Cambridge, MA: Harvard
University Press.
Nicholas Canny (ed.), 1994, Europeans on the Move, Studies on European Migration, 1500-1800.
New York: Oxford University Press. Essays by Canny and Cullen.
Robert J. Dinkin, 1977. Voting in Provincial America. A Study of Elections in the Thirteen
Colonies, 1689-1776. Westport: Greenwood Press.
Marc Egnal, 1998. New World Economies: The Growth of the Thirteen Colonies and
Early Canada. New York: Oxford University Press.
Stanley L. Engerman and Robert E. Gallman (eds) 1996. The Cambridge Economic History of
the United States, Volume I, The Colonial Era. Cambridge: Cambridge University Press.
Particularly the essays by Salisbury, Galenson, and McCusker.
Stanley L. Engerman and Kenneth L. Sokoloff, 2002. “Factor Endowments, Inequity, and Paths
of Development among New World Economies,” Economía. 3 (Fall), 41-88.
Robert E. Gallman, 1964. Developing the American Colonies, 1607-1783. Chicago: Scott,
Foresman.
Paul W. Gates, 1968. History of Public Land Law Development. Washington; Government
Pricing Office.
Jack P. Greene, 1986. Peripheries and Center: Constitutional Development in the Extended
Politics of the British Empire and the United States, 1607-1788. Athens: University of Georgia
Press.
Jonathan R. T. Hughes, 1991. The Governmental Habit Redux: Economic Controls from Colonial
Times to the Present. Princeton, Princeton University Press.
Alice Hanson Jones, 1980: The Wealth of a Nation to Be: The American Colonies on the Eve of
the Revolution. New York: Columbia University Press.
John McCusker and Russell Menard, 1985. The Economy of British America, 1607-1789. Chapel
Hill: University of North Carolina Press.
Richard Middleton, 1996. Colonial America: A History, 1585-1776. Oxford: Blackwell.
Curtis P. Nettels, 1938. The Roots of American Civilization: A History of American Colonial
Life. New York: Appleton-Century-Crofts.
Douglass C. North, 1990. Institutions, Institutional Change and Economic Performance.
Cambridge: Cambridge University Press.
20
Edwin J. Perkins, 1988. The Economy of Colonial America, 2nd Edition. New York: Columbia
University Press.
Gary M. Walton and James F. Shepherd, 1979. The Economic Rise of Early America.
Cambridge: Cambridge University Press.
ENDNOTES
1
The New World was not the first part of the westward expansion of England, politically or
demographically. In 1541, the Irish Kingship Act established the English king as the king of
Ireland, and also tried to establish English Protestantism rather than Irish Catholicism as the state
religion. By the start of the seventeenth century England established the plantation system, to
shift land ownership to settlers from England and give rise to a landlord-tenant pattern rather than
either large or small-scale ownership. The size of lands granted was larger than the prior units,
but were small enough to be available to many settlers. It is estimated that in the seventeenth
century about 180,000 English went to Ireland (most after Cromwell’s triumphs after 1649),
about equal to the numbers that went to the West Indies, slightly greater than the numbers going
to the mainland colonies, and greater than the overall outflow from Ireland. The Act of Union in
1801 permitted Ireland to increase its numbers in Parliament, but more complete economic and
political integration was later, if at all, in coming.
21