New Patterns of Trade

							Chapter 20
 Section 4
   Columbia Exchange
   Capitalism
   Mercantilism
   Favorable balance of trade
   Joint-stock companies
•   Widespread exchange
    of plants, animals and
    disease between two
    groups
•   Plants and animals to
    develop differently
•   Europeans did not
    know potatoes, sweet
    potatoes, corn or
    turkeys
•   People in the Americas
    did not know coffee,
    oranges, rice, wheat,
    sheep, or cattle
•   Introduction of beasts of
    burden (horses)
•   Only domesticated
    beast was a llama
•   Horse was a new source
    of transportation and
    labor
   Exchange of food and
    animals had a
    dramatic impact
   Corn and potatoes
    became a staples in
    the European diet
   Foods provided
    nutrition and people
    could live longer
   Cattle ranching in Texas
   Coffee growing in
    Brazil would not have
    been possible
   Cows and coffee came
    from the old world
   Imagine Italian food
    without tomatoes
   Some thought tomatoes
    were poisonous
   1600’s they were in
    Italian cookbooks
   Corn in China caused
    population to grow
   China bought a lot of
    U.S. silver
   Corn and peanuts grow
    in Africa
   One third of all food
    crops grown came from
    the America
   Diseases brought by
    the Europeans
   Diseases killed
    millions
     Smallpox
     Measles
     Influenza
     Malaria
   Few diseases were
    introduced to Europe
   1518 half the
    population of Santo
    Domingo died of
    smallpox
   Mexico’s population
    decreased by 30% in
    10 years
   Inca’s decreased from
    14 million to 2 million
   1500’s new type of
    economy
   Mercantilism – the
    nation’s strength
    depends on its wealth
   Had power to build a
    strong military
   Wealth measured y
    the amount of gold
    and silver one had
   One nation got
    wealthier by taking
    away items from
    another
   Led to intense
    competition between
    nations in the 1500’s
    and 1600’s
   Build wealth in two
    ways
       Extract gold and
        silver
       Sell more items than
        you buy
   This strengthened
    their country while
    weakening another
   Favorable balance of
    trade was essential
   Reduce the amount of
    goods imported
   Place tariffs on goods
    imported (adds to the
    cost)
   Imported goods
    became more
    expensive (less to
    buy)
   Sell exports for high
    prices
   Manufactured goods
    sold for more than
    raw material (woolen
    cloth vs. raw wool)
   Subsidies-
    governments provide
    grants of money to
    help start a new
    business
   Control oversee
    sources of goods
   Foreign country were
    looked at as rivals
   At any time they
    could cut off
    resources
   European nations
    worked to become self
    sufficient
   Building of colonial
    empires essential
    mercantilist system
   Control sources of
    raw materials
   Provide new markets
    for manufactured
    goods
   Colonies only existed
    to benefit the home
    country
   Towns and cities grew
    as business increased
   Wealthier merchants
    arose
   Wealthy merchants
    enjoyed mobility
   Most people are still
    poor
   Most economic
    activity is carried on
    by the private
    individual or
    organization for profit
   Individuals not
    governments amass
    great fortunes
   Merchants supply
    colonies with goods
    from Europe
   Brought back raw
    materials and
    products from the
    Americas
   Overseas trade made
    wealthy merchants
   Business activity in
    Europe increases
   Investors took risks
    and invested overseas
   Demand drove up
    prices
   Increase of money
    supply in Europe
    caused increase
   Shiploads of gold and
    silver flowed to
    Europe from America
   Joint-stock
    companies- investors
    began to pool their
    money to fund even
    larger businesses
   Investor bought
    shares
   If company achieved a
    profit they all shared
   Based on number of
    shares
   If company failed
    investors only lost the
    cost of their shares
   British East India
    Company- first joint
    stock company
   Founded in 1600 to
    import spices from
    Asia
   Other companies
    formed because of the
    expenses of forming a
    new colony
   The Virginia
    Company of London
    established the first
    successful colony in
    America
       Jamestown Virginia