.png)
BLOCK - 4
TRANSITION TO MODERN ERA
UNIT - 4
OVERSEAS TRADE
OBJECTIVE QUESTIONS
1.When was the English East India Company established?
Ans.1600
2.which are the three distinct stages in the development of mercantilism?
Ans. Bullonist stage,traditional stage, liberal stage
3. During the reign of which King did the British overseas trade begin on a large scale?
Ans. King Henry
4. During whose reign was the English East India Company formed?
Ans.Queen Elizabeth
5. Who influenced the British to come to India?
Ans. Portugese
6. Who authorised the British East India Company to trade in the East?
Ans. Queen elizabeth 1
7.Who was sent as a representative of the East India Company to visit the Mu-
ghal emperor to secure royal patronage?
Ans. Captain William Hawkins
8. In which year was the Company of Merchants Trading to Africa established?
Ans . 1750
9. In which year was the King George's 'Sound Company' established?
Ans. 1758
10. Name the founders of anti-mercantilist thought.
Ans. Adam Smith, David Hume, Edward gibbon, Voltaire and Jean Jacques rouseau
1.what are the features mercantilism
Ans. In the first place the mercantilists laid great emphasis on a 'favourable balance of trade". They held that the strength and richness of a country depend on two things - the possessionof gold and silver mines and a favourable balance of trade. As all the countries did not possess mines of gold and silver, they could build up rich stocks of these metals by exporting the maximum of their manufactured articles and importing a minimum of commodities from other countries. For the maintenance of a favourable balance of trade, the mercantilists favoured commercial regulation. They insisted on discouraging imports through the imposition of heavy duties and prohibitions on foreign goods. It also emphasised the principle of monopoly. In most European countries, the
right to engage in foreign trade was vested only in a small privileged section of society. Thus
the East India Company enjoyed a monopoly of trade with Asia, the Africa Company with
Africa and the Levant Company with the Mediterranean. Mercantilism attached great importance to money. It considered wealth as the source of all powers and laid great emphasis on the importance of gold, silver etc. It also
considered money as a significant factor for commercial advancement. Further as the
trade in those days was mostly carried on the basis of barter of
goods, the people naturally preferred to keep gold and silver rather than
commodities. The concept of interest formed an important part of mercantilism as it could
be profitably employed in trade and enabled the borrower to make high profits.
The mercantilists considered land and labour as the sole factors of production. Most of the mercantilists laid emphasis on the need of increasing production with a view to attaining self-sufficiency in foodstuffs as well as the encouragement of exports. Emphasis
was laid on the cultivation of wastelands to increase agricultural production.
2.explain the factors that led to the end of mercantilism
Ans. The introduction of free trade philosophy questioned the practice of restrictive trade
policies of mercantilism. Adam Smith, David Hume, Edward Gibbon, Voltaire and Jean Jacques Rousseau were the founding fathers of anti-mercantilist thought. Scholar critics
like Hume, Dudley North and John Locke undermined mercantilism and it steadilylost favour during the 18th century. In 1690, the Locke argued that prices vary in proportion Treatise also points towards the heart of the to the quantity of money. Locke's Second
an anti-mercantilist critique: that the wealth of the world is not fixed, but is created by human a labor. Mercantilists failed to understand the notions of absolute advantage and
comparative advantage and the benefits of trade. It was a fact that mercantilism ended
when major power shifts occurred. In Britain, mercantilism faded as the Parliament gained
the monarch's power to grant monopolies. While the wealthy capitalists who controlled
the House of Commons benefited from these monopolies, Parliament found it difficult to
implement them because of the high cost of group decision-making. Soon Britain slowly embraced free trade and Smith's laissez-faire economics.
Comments