The Colonial Economy

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What is salutary neglect, and how did it affect the colonies?

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On paper, Great Britain had imposed strict trading regulations on the American colonies. American goods were supposed to travel on British or authorized American ships and be sold only to Britain. This kept, for example, the Dutch from profiting by charging fees for carrying goods back to England on Dutch ships and allowed the Britsih to set low prices on the raw materials coming in from America. Further, ships that arrived in American ports from other countries were supposed to pay high tariffs. This would make their goods far more expensive than the British goods coming into port and thus ensure that the Americans bought from the British.

However, starting under Prime Minister Horace Walpole, these strict trade policies were often ignored. This was called salutary neglect. To save money, the British government did not send as many officials as it should have to oversee what was going on in American harbors. Without this oversight, the Americans developed a backdoor trade with countries such as France. For example, if there was no British official at an American port to insist a French ship pay high tariffs, those goods, tax free, could be brought into America and sold for reasonable prices.

The British were content to let this occur because the American colonies were profitable and prosperous, so it didn't seem to matter much if they made money on the side. However, in retrospect, it seems that salutary neglect helped Americans build an independent identity and sense of freedom that weakened their ties with the British.

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