ECO3622 Final Exam Areas of emphasis Chapter 2 Founding the Colonies 3 questions from this chapter 1 Section First British Settlements in North America Perilous Beginnings 1 Two half brothers Sir Humphrey Gilbert and Sir Walter Raleigh were the first English men to undertake serious ventures in America a Gilbert went to Newfoundland in 1578 and 1583 but failed to colonize and died on the return voyage b Raleigh was granted the right to settle in Virginia 1 Sent a second group to Roanoke after first group came back all disappeared and were never heard from again 2 In 1606 two new English charters were granted one to a group of Londoners the other to merchants of Plymouth a London Company granted colonization in southern part of English territory Plymouth granted the northern part b In 1609 800 new colonists arrived at Jamestown part of the Virginia Company formerly London Colony c Of the 6 000 who had migrated to Virginia since 1607 4 000 had died 3 All early colonies without exception had become financial disasters and huge losses for capitalists Section Early Reforms 1 Jamestown 1609 small garden plots were given to individuals a To avoid starvation private landholdings replaced common ownership This encouraged one to maintain one s own property to avoid the shirking effect the tendency to do less work when the reward is minimal by the Economic principle Incentives matter 2 In 1625 Virginia was converted to a Crown colony 3 Puritan settlements in America enjoyed early success a No absentee control from England b Stronger social and cultural cohesion c More homogenous religious beliefs 4 By 1650 privately owned family farms were predominant in New England 5 Other noteworthy colonies a New York settled by Dutch West India Company but b Maryland initiated through proprietary grant by Lord c Pennsylvania initiated through proprietary grant by taken by British in 1664 Baltimore in 1634 William Penn in 1681 Bringing In Settlers page 30 33 6 Passage to America a By 1775 more than half a million made the transatlantic voyage contract 1 350 000 of them signed an IOU or indenture 2 Contracted to work as for a planter merchant when they arrived in America b Immigrants arriving from mainly Germany served IOUs for up to 7 years c By the nineteenth century due to decreases in costs and economic forces the market for indentured servants declined 7 Slavery 1650 a Slavery did not become an important source of labor until after b Slaves were used heavily in the South for the staple crops rice indigo and tobacco c Became widely accepted in the South the purchase of one slave granted a farmer 50 acres of land d Slaves served a life long term and could not be freed until self purchased e In 1774 there were nearly half a million blacks in the colonies 18 000 of whom were free 8 As many as 30 000 prisoners avoided death sentences or indefinite imprisonment in England by voluntarily transporting themselves to the New World a Prisoners in New World typically served 7 years for minor crimes and 14 years for major ones Chapter 7 Hard Realities for a New Nation 3 questions from this chapter The War and the Economy 1 The Revolutionary war began on April 19 1775 and lasted for more than 6 years a Roughly 1 3 of the colonies remained loyal to England 2 In 1775 nearly all American overseas commerce abruptly ceased 3 Despite efforts to form trade agreements with France Holland and Spain the flow of goods in and out of the colonies were far below prewar levels 4 As American exports fell the economy become considerably more self sufficient a In Philadelphia nearly 4 000 women were employed to spin materials in their homes for the newly established textile plants b Beer whiskey and other domestic alcoholic beverages were produced make choices Demonstrates Economic Principle 1 Scarcity forces us to 5 The economic decline was complemented by the critical problem of forming a government a By 1780 all of the 13 colonies had their own individual constitutions 6 Between 1775 and 1781 the war was financed by the issuing of paper money a Congress had no power to tax rapid inflation occurred 7 Virginia called for the Annapolis Convention in 1786 to settle trade regulations 8 The Philadelphia Convention met in 1787 and was led by George Washington who sent the document to be ratified a Delaware ratified it first New Hampshire was the ninth and most crucial vote The Constitution 1 The Constitution a Left the power to tax with the federal government b Gave central government right to mint coins and regulate coinage c Banned states from issuing paper money d Allowed states to charter private banks who could issue paper money e States were forbidden to enact tariffs 2 The Constitution promoted trade and economic specialization a Federal government could maintain army and navy establish post offices and roads fix standards of weights and measures and establish uniform bankruptcy laws b Congress could set laws on patents 3 Slaves were viewed as property but also as 3 5 person for membership in the House of Representatives 4 Adam Smith wrote the The Wealth of Nations in 1776 a basis for the new free American economy American Independence and Economic Change 1 U S ships were excluded from direct trade with the British West Indies and British Empire a American shipbuilding across the colonies plummeted b All industries fueled by American shipbuilding fishing whaling mercantile shipping all suffered great losses 2 The taxation on American goods resulted in happy American consumers but 3 Import prices were below prewar levels and export prices were higher than suffering manufacturers ever A Quantitative Analysis of Economic Change 1 The United States had taken advantage of its new freedom to trade directly with northern European countries 2 The United States also renewed trading ties with the British a The British offered the greatest variety of goods at the best price and quality b British merchants enjoyed the advantages of a common language 3 Tobacco was no longer the most valuable good it became bread and flour 4 Overall a 30 percent decline in real per capita exports per year occurred 5 Total exports climbed by 40 percent War Neutrality and Economic Resurgence 1 As the French Revolution occurred the United States shipbuilding sector filled in the shipping void 2 Per capita credits in the balance of payments more than tripled 4 The invention of the cotton gin stimulated cotton production 5 Known as the Essex Decision this decree