History of Quebec and Canada/Study Guide/Topic 2: Mercantilism

What is mercantilism? Mercantilism was an economic policy, popular in the 17th and 18th centuries in Europe, which stated that a country's wealth and power was best served through the accumulation of gold and silver and raw materials. Because most nations did not have a natural abundance of such precious metals, the best way to acquire them was through trade. This meant striving for a favorable trade balance, that is, a surplus of exports over imports. Foreign states would then have to pay for imports in gold or silver. State action, an essential feature of the mercantile system, was used to accomplish its purposes - to sell more than it bought to accumulate gold bullion and raw materials. In the case of New France, fur was the raw material. France imported raw materials, such as furs, from its colony, New France, and transformed them into finished products (beaver hats) to be sold back to the colonies and to other countries. Beaver Hat Consequences of mercantilism on New France New France became a trading colony whose main economic role was to supply furs to the mother country and to purchase manufactured products from the mother country. Furs account for more than 70% of the colony's exports and the fur trade is directly responsible for the large expansion of territory. Do the following questions on mercantilism. 1. The measures below describe aspects of 17th century mercantilist economic policy. The colony had to obtain its supplies from France. The colony exported enormous quantities of furs to France. Hat-making was forbidden in New France. STATE TWO CONSEQUENCES OF MERCANTILISM FOR FRANCE AND ITS COLONY, NEW FRANCE. 1. It enriched the mother country. 2. It promoted the development of agriculture. 3. It allowed New France to be less dependent on France. 4. It stimulated population growth in New France. 5. It limited economic development in the colony. A)    1     and     4                                                           C)     2     and     3 B)    1     and     5                                                           D)     2     and     4 ANSWER: A B C D

2. WHICH OF THE FOLLOWING SETS OF STATEMENTS APPLIES TO THE POLICY OF MERCANTILISM?

A) · The colony was free to develop its industries.       · The colony had to expand its boundaries to the maximum.

B) · The colony could trade freely with other mother countries.       · The colony sold its manufactured goods to France.

C) · The colony exploited furs in particular.       · The colony was quickly settled because of the chartered companies.

D) · The colony was a source of raw materials for France.       · The colony bought manufactured goods from France.   ANSWER: A B C D

3. WHICH OF THE FOLLOWING DOCUMENTS DESCRIBE THE EFFECTS OF    FRENCH MERCANTILISM ON THE DEVELOPMENT OF NEW FRANCE ?

1. "Along the river banks there appeared numerous sawmills, where logs       were sawed into boards and beams." 2. "Furs represented 70 percent of total exports; agricultural products, 18       percent; fish, 9 percent; iron, 1.3 percent." 3. "It is marvelous to see their country. They have beautiful towns, with       mail-coach service. They even havecarriages." 4. "New France was disallowed to manufacture beaver hats in the colony." 5. "For forty years we have worked to convert the natives, without much       success. A)     1     and     3         B)     2     and     4        C)     2     and     5         D)     3     and     5   ANSWER: A B C D

4. WHICH STATEMENT INDICATES THAT MERCANTILISM WAS HARMFUL TO THE GROWTH OF THE COLONY'S POPULATION?

A)   France tried to establish various industries in its colony. B)    France promoted economic diversification. C)   France signed long-term trade treaties with the Amerindians. D)    France developed only one natural resource in its colony. ANSWER: A B C D

Go On To Topic 3:Territorial and Military Consequences