Trade and commerce 1857-1890 Flashcards

1
Q

The informal empire

A

Informal empire = the exercise of controlling influence over another area, without an associated claim to political sovereignty (supreme power) or ownership

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2
Q

Areas of the informal empire and how they became a part of it

A

Argentina
- Commercial agreements
- Charles Morrison acquired the Mercantile Bank of River Plate in Argentina in 1981 and invested directly into the country’s utilities
Mexico
- Pressure was put on Mexico in 1861 to keep access open
Peru
- The threat of the Royal Navy ensured compliance in Peru in 1857
Chile
- Commercial agreements
- The threat of the Royal Navy ensured compliance in Chile in 1863
Siam
- Trade treaties
Iran
- Trade treaties
Chinese empire
- Forced to make concessions to Britain as Britain used its naval power to threaten to attempt to disrupt opium trade between India and China
- Treaties of Nanking (1842) and Tientsin (1858) , allowed the British to gain trading bases in places under Chinese control such as Shanghai and Hong Kong. These were then settled with British people, governed under British laws, and operated outside Chinese control
- In 1863, Robert Hart was appointed as head of Chinese control Maritime Customs office with the purpose of protecting British interests in the Qing government
Afghanistan
- In 1879, the threat of full invasion secured the Treaty of Gandamak, which provided Britain with strategic territorial gains and control over Afghanistan’s foreign policy
Zanzibar
- Diplomatic pressure and the appointment of key advisors
- Through the activities of trader John Kirk, the British established a government in 1891

Gunboat diplomacy = the use of naval force to ensure British influence

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3
Q

Opium trade

A
  • East India company ships went to China to get tea
  • The tea trade made large amounts of money
  • Trade was only one way so the east India company needed something to sell to China
  • Therefore, they decided to sell opium
  • A trade triangle was formed (cotton, tea and opium)
  • The Chinese became addicted to the good of opium
  • However, to stop the Chinese buying this opium, Lin Zexu confiscated it all and put it in 2 feet of water
  • This led to the opium wars of 1842
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4
Q

Impact of trade and commerce on the British empire

A
  • The key result of imperialism was profit
  • The deepest desire of the empire was to be rich
  • British prosperity came through the empire
  • People were not likely to get involved unless they could become rich
  • The main motivation was to make money
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5
Q

Why was Britain the world’s foremost trading nation?

A
  • It was industrially advanced as its factories were producing heavy iron goods and textiles for a global market
  • Britain’s urbanisation had increased its reliance on import from overseas
  • Britain was the world’s largest consumer market of food and raw materials
  • Britain relied on its colonies to feed and provide for its work force
  • Expanding trade and commerce was one of the defining features of the Empire in the years 1857 to 1890
  • In the 18th century, the trade and commerce of the empire had been strictly regulated in a system of “mercantilism”
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6
Q

Mercantilism/protectionism

A
  • This was a belief in a controlled and regulated system of trade, monopolised by one superior country
  • Colonies had been obliged to send most of their produce to Britain, to buy British manufactured goods and use British ships for both their imports and exports
  • In the first half of the 19th, this highly regulated protectionist system had been dismantled, under the influence of new theories of free trade as advocated in Adam Smith’s influential book “the Wealth of Nations
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7
Q

Impact of Adam Smith’s “The Wealth of Nations”

A
  • In this book he argued that wealth was indefinitely expandable and freedom from commercial restrictions was the only way to maximise prosperity
  • Britain was able to use this theory due to its position as the world’s foremost trading nation and, from the middle of the 19th century, British trade was left free from government trading restrictions
  • The government was active in supporting free trade agreements around the world (which tended to benefit Britain’s trade dominance) and was ready to resort to threats, and sometimes outright coercion (forcing someone to do something), to achieve them
  • This is seen in the Opium wars as the British Navy was used to enforce British terms
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8
Q

Free trade and its impact

A
  • Dominated 19th century empire
  • Inspired by Adam Smith’s “Wealth of Nations”
  • Free trade was free from any government interference or restrictions
  • The British enforced free trade agreements through threats (Navy)
  • The coming of free trade saw imperial investment and trade grow enormously
  • Created an “industrial empire” in which the colonies supplied both the food stuffs and the raw materials which British industry converted into finished goods for export
  • Very often, the colonies were compelled to buy back these finished goods produced by the British
  • In the 3rd quarter of the 19th century, 20% of Britain’s imports came from its colonies, whilst the Empire provided a market for a 3rd of British exports
  • London became the financial capital and sterling became the international currency of trade
  • Economic dominance was thus sustained by a limited application of force, an approach sometimes referred to as the “imperialism of free trade”
  • Of course, not all British trade was with its colonies, but there was always a concern that non-colonial trade could be restricted, as had happened during the American civil war, and colonial markets would remain open
  • Furthermore, colonies wanted to continue trading with Britain
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9
Q

Reasons colonies were generally happy to continue trading with the British

A
  • Partly out of a sense of loyalty, or perhaps duty
  • Also, because it was easier
  • Trading patterns were well established
  • As far as commerce was concerned, the countries of the empire shared a common language, a common or tied currency and a common system of commercial law imposed by Britain
  • Borrowing in the London capital markets was also cheaper because lenders had faith in the reliability of British possessions
  • Supporting the growth in trade, which was a result of free trade, were technological improvements in railways, steamships, underwater cables and telegraph lines as well as innovations in banking and company organisation
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10
Q

The infrastructure of trade

A
  • British capital and technology were used to ensure that the Empire had an adequate infrastructure to facilitate trade and maximise profits
  • Ever more efficient cargo ships were built for the carriage of goods, while ports and harbours were extended and developed to accept such shipping and enable the loading and unloading of goods to take place with the minimum of delay
  • The British also developed railway systems wherever they went and they extended river transport and canals where necessary to make the internal transport of goods to ports both faster and more cost effective
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11
Q

How did ships and shipping help to facilitate trade around the empire?

A
  • Sailing ships reached their highest state of efficiency in the 1860s
  • Clipper ships were sailing all over the world, particularly on the route to China and the East
  • These fast clipper ships were ideally suited to low-volume, high-profit goods, such as tea, opium and spices and they were also used to carry mail and people
  • Competition between the clippers was fierce however, the ships had a short life expectancy and usually had to be broken up after about 20 years of use
  • For bulky and heavy goods needing to be carried across oceans and up rivers, steamships were used
  • British iron-hulled ocean-going ships were made more efficient by the development of the compound steam engine in the 1850s, which consumed less coal than earlier vessels, and this enabled steam ships to trade economically with distant possessions
  • From the 1850s, steamships companies reduced the travel time between Britain and west Africa to less than three weeks and increased their cargo capacity considerably
  • The opening of the Suez Canal in 1869 and the development of the triple expansion steam engine in the 1870s further stimulated the construction of steam ships
  • Steamships were also used in inland regions for example, by the 1870s, several British companies were sending steam trading vessels up the Niger
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12
Q

How railways helped to facilitate trade around the empire

A
  • Railway imperialism is spoken of because the building of railways, which was key to economic development, ensured British control
  • The British provided the investment, the engineers and the rolling stock and the colonies’ resulting dependence on Britain could be used to pressurise governments
  • For example, Canada was forced to accept British policies on defence in the mid-1860s, as the price of London capital guarantees
  • Railways provided the largest single investment of the period in the self-governing settler colonies of Canada, Australia and new Zealand, and south Africa
  • Railways opened up the Canadian prairies (ecosystems in the grassland)
  • Railways enabled Australia to export its wheat and wool
  • Railways offered south Africa a chance to expand its territories and commercial interests into the interior
  • However, railways in these colonies encroached upon indigenous lands, disrupted long standing ecologies and communities, and often led to the displacement and forced removal of indigenous people
  • In India, the railways were built for strategic purposes however, they also linked the cotton and jute-growing areas of the north with the mills of Bombay and Calcutta and enabled rice to reach ports for export
  • In less westernised areas, such as West Africa, railways provided the vital link between the interior areas of production and the sea
  • Railways themselves were a trading commodity and investment in railways provided invisible trade (the provision of services or investment overseas) for Britain and the spread of railways within the empire facilitated commercial enterprise
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13
Q

How canals and rivers helped to facilitate trade around the empire

A
  • Internal river systems were an important means of transport for trading products and were often the focus of explorers’ quests to discover what lay behind the more easily accessible coastal areas of continents such as Africa
  • To facilitate trade, rivers sometimes had to be straightened, diverted, and deepened, with profound ecological effect
  • Elsewhere, canals might be built to avoid hazardous stretches of water or to provide waterways where none previously existed
  • In India, for example, new canals were developed on a huge scale after 1857
  • In Canada, after 1867, canals were deepened around the St Lawrence and Great Lakes seaway system and the Welland Canal was built to overcome height differences between Lakes Eyrie and Ontario
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14
Q

The products of trade and commerce in India

A
  • Traded tea, cotton, jute and wheat
  • Trade became even more profitable after the end of the East India company’s control and the establishment of the Raj in 1858
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15
Q

the products of trade and commerce in Australia and New Zealand

A
  • Cheap foodstuffs and agriculturak raw materials siuch as wool were produced here due to the vast tracts of land which permitted this
  • Produced goods that were available in Europe but at a cheaper price
  • Gold was discovered in New South Wales in Australia and by 1866, they were producing £124 million worth of gold
  • More gold deposits were found in New Zealand in the 1860s as Australian mines began to run dry
  • Plantations for sugar in Queensland Australia
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16
Q

The products of trade and commerce in Canada

A
  • Here, vast tracts of land permitted the production of cheap foodstuffs and agricultural raw materials such as wool
  • Produced goods that were available in Europe, but at a cheaper price
17
Q

The products of trade and commerce in South Africa

A
  • Produced goods that were not available in Britain such as sugar, coffee ,cocoa, groundnuts, copra and palm oil. The production of these goods was on a small scale
  • In 1886, gold deposits were found in the Witwatersrand in South Africa which prompted a gold rush to the previously struggling and poor Dutch-Boer republic of the Transvaal
  • The gold mines required skilled labourers so 30,000 travelled there from Britain which encouraged british ambitions in this area
  • The discovery of diamonds in this area led to the formation of the Kimberley diamond syndicate in 1890
18
Q

The products of trade and commerce

A

Ceylon
- Here plantations for coffee and tea were set up

Caribbean colonies
- Indian labourers, known by the offensive term “coolies”, were transported to work here for fixed periods of usually 5 years in return for their transport. They would be paid very low wages

British east Africa
- Here there were plantations for Sisal

Tanganyika and Kenya
- Here there were plantations for Sisal

Mauritius and Natal
- Here there were plantations for sugar

West Indies

  • Produced sugar and cotton
  • Indian “coolies” were transported to work in the plantations

Malayan and North Borneo
- Produced rubber and palm oil

Sierra Leone
- Produced diamonds

Rhodesia
- Produced copper in the north and coal and gold in the south

19
Q

Chartered companies before 1857

A
  • Charted companies are where a trading company would gain status, legal rights and privileges on award of a royal charter. Such company would be granted permission to rule indirectly within its territory of operation
  • In the 17th century, the world’s leading economy had been india and the royal chartered British East India Company had been established to gain access to India’s merchandise and markets
  • Other charted companies followed
  • Such companies were government recognised commercial organisations which were granted monopoly rights to a specific territory’s resources in return for its administration
  • However, by the 19th century, Britain had become the dominant trading power, and free trade was considered the best means of assuring Britain’s global economic leadership
  • The advent of free trade, together with the Indian rebellion of 1857 brought an end to the East Indi company, but trading companies remained influential in Africa into the late 19th century
20
Q

Chartered companies after 1857

A
  • Governments allowed trade to continue at its own pace in the 1850s and 1860s as, before this, charted companies had been the normal means of organising trade
  • However, attitudes changed in the 1870s, when Britain’s economic supremacy faced challenges in the form of both European and American industrialisation and the onset of the long depression (1873 – 1896)
  • The idea of the charted company was therefore revived as a way of extending British trade and control
  • In 1881, the North Borneo Trading Company received a charter for the purposes of administering the territory
  • North Borneo benefitted from deposits of coal, iron, and copper as well as the development of tobacco and coffee plantations
  • North Borneo was also a key strategic site for Britain in the South China Sea as it was a mid-point between India and Hong Kong
  • This charter set precedent which was followed by the granting of charters to the National African Company, renamed Royal Niger Company (1886), the Imperial British East Africa Company (1888) and the British South Africa Company (1889)
  • The primary purpose of trading companies was to generate profit for shareholders in Britain which often led to the ruthless exploitation of local people and environments
  • The imperial Federation League was founded in 1884 to promote colonial unity and internal imperial tariff preference
  • Despite some traction in Britain, the Imperial Federation League was unsuccessful at overturning the systems of free trade that underpinned British economic dominance in the 19th century
21
Q

Did industrial development benefit the colonies?

A
  • Industrial development was fairly limited in the colonies as they had small markets and could not compete with British manufacturing
  • Mills in India could not compete with imported British textiles
  • Areas were propelled to modernise due to British technology
  • It was not in the interests of the British to allow too much industrial development in other countries as this would reduce British profits
22
Q

Did industrial development benefit the colonies?

A
  • Industrial development was fairly limited in the colonies as they had small markets and could not compete with British manufacturing
  • Mills in India could not compete with imported British textiles
  • Areas were propelled to modernise due to British technology
  • It was not in the interests of the British to allow too much industrial development in other countries as this would reduce British profits
23
Q

Evidence of the impact of British rule on the economic development of its colonies

A
  • The British wanted to impose a free labour market with no place for domestic slavery
  • Restrictions on trade and production, which had been imposed by indigenous people, were removed
  • Large amounts of physical and human capital were transferred to Africa, which, along with enormous public and private investments, majorly benefitted colonial Africa
  • There were usually too few capitalists meaning the absence of business enterprise was a problem
  • British trading houses in parts of India and West Africa often obtained semi-monopolies as purchasers of raw materials and marketers of imports
  • Much of the labour market of the Empire was low paid
  • Forced labour was common under colonial rule in Africa
  • The British implemented policies in India that prevented Indian industrialisation
  • Free trade, combined with the distribution of Indian railway contracts in London, robbed the Indian economy of the incentive to industrialise