Time Frame

• The American colonial period begins on May 14, 1607 with the landing of British colonists on Jamestown Island, Virginia. It ends on July 4, 1776 with the Declaration of Independence from England.
  
  

Function

• Although it took several decades of hard work, experimentation and failure, the North American colonies eventually discovered the cash crops that would become their staple exports: wheat, corn, tobacco, indigo, rice and naval stores. This represented the mix of food stuffs, luxury goods and industrial raw materials/additives that would be sent to England, with the British exporting finished industrial products and credit back to the American colonies. The colonial period was little different than the modern era in the sense that there is more benefit to be had in the long run from being an exporter of value-added, finished products than from exporting raw materials, agricultural produce and commodities. England always made out better in these transactions, if for no other reason than it would use American raw materials to make more expensive wares, some of which would then be sent back to the colonists.
  
  

Geography

• There were regional variations and specializations present in the colonial American economy. The South was geared mostly around plantation-style agriculture, producing cash crops for export. In Maryland, North Carolina and Virginia, that cash crop was tobacco. In South Carolina, that crop was rice and indigo, and only later cotton.
  In the North, the early source of export was the fur trade, but this declined as the fur-bearing animals were gradually trapped out. The colder climate of New England did not permit colonists there to turn to exporting agricultural products, so instead they turned to fishing, ship building, small manufactures and mercantile shipping. Much of the fish went into cheap, salted or dried fish that was shipped to the British West Indies to feed the vast population of slaves working sugar plantations there. In the Mid-Atlantic colonies, the main exports were food stuffs, primarily to the British West Indies (as with the fish of New England).
  The result was the famous Triangular Trade of the eighteenth century. In general, British and New England merchant ships would carry foodstuffs, cotton, sugar, rum and tobacco from the West Indies and America to the British Isles. These ships would then pick up textiles and rum, go to Africa, pick up slaves and carry these back to the West Indies or America for sale. A specific example might see a Boston trader sailing to the West Indies with a hold of Gloucester dried fish and Pennsylvania grain, return with a cargo of molasses which was then turned to rum, that rum and more grain go to Britain, then the remainder of the rum along with crates of shirts and tools go to Africa, and a hold full of slaves reach the West Indies or South Carolina, where the process might begin all over again.
  
  

Significance

• Despite the role the American colonies played in the British imperial economy, many Americans were largely isolated from it. Smallholder family farms, especially frontier farms, grew only modest surpluses and were too far from colonial ports to bother with trying to sell them for export. These economically isolated communities were cash poor, and largely operated on a labor and food barter system. Having little hard currency, they were as self-sufficient as possible and made most of what they needed themselves.
  
  

Size

• The colonial American economy experienced the same ups and downs that continue to bedevil capitalist free markets to this day. However, they enjoyed a generally continuous rate of growth over the more than two centuries of the colonial era. Although it would look meager by today's standards, wealth generally increased by .3 to .5 percent per year, which over time increased prosperity generally. Overall, the average American was much better off than his European counterpart. The typical American farmer might have very little in hard currency, but he was no peasant. He was a smallholding owner of the land that he worked, and generally ate much better than the average European. By contrast, the rich of America did not enjoy anything like the fabulous wealth of upper classes of Europe (compare George Washington's Mount Vernon with the country manor of a British grandee or the palace of a French aristocrat). However, it should be remembered that more than a quarter of the population of the colonies were either slaves or indentured servants, and yet more were poor.