Chapter 16Section 3

Columbia Exchange Mercantilism Balance of trade Subsidies Capitalism Joint-stock 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 (discouraged people 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 could only sell to home country

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 Virgina