1. Warm-Up Who is Hernan Cortes and What did he do?
What is the Treaty of Tordesillas?
Why was African slave labor introduced?

2. Columbian Exchange

4. The Columbian Exchange
Voyages launched large-scale contact between Europe and Americas.
Interaction with Native Americans led to sweeping cultural changes.
Contact between the two groups led to the widespread exchange of plants, animals, and disease—the Columbian Exchange.
Plants, animals developed in very different ways in hemispheres
Europeans—no potatoes, corn, sweet potatoes, turkeys
People in Americas—no coffee, oranges, rice, wheat, sheep, cattle
The Exchange of Goods
Arrival of Europeans in Americas changed all this
Previously unknown foods taken back to Europe
Familiar foods brought to Americas by colonists
Sharing Discoveries
The introduction of beasts of burden to the Americas was a significant development from the Columbian Exchange. The introduction of the horse provided people in the Americas with a new source of labor and transportation.

6. Effects of the Columbian Exchange
Different Foods
Exchange of foods, animals had dramatic impact on later societies
Over time crops native to Americas became staples in diets of Europeans
Foods provided substantial nutrition, helped people live longer
Economics and Gastronomics
Activities like Texas cattle ranching, Brazilian coffee growing not possible without Columbian Exchange; cows, coffee native to Old World
Traditional cuisines changed because of Columbian Exchange
Italian Food Without Tomatoes?
Until contact with Americas, Europeans had never tried tomatoes
Most Europeans thought tomatoes poisonous
By late 1600s, tomatoes had begun to be included in Italian cookbooks

7. The Introduction of New Diseases
Native Americans had no natural resistance to European diseases
Smallpox, measles, influenza, malaria killed millions
Population of central Mexico may have decreased by more than 30 percent in the 10 years following first contact with Europeans
Devastating Impact
Native American population continued to decline for centuries
Inca Empire decreased from 13 million in 1492 to 2 million in 1600
North American population fell from 2 million in 1492 to 500,000 in 1900—but disease not only factor in decrease of population
Intermittent warfare, other violence also contributed

8. Mercantilism New Economic Policy Intense Competition
Founding of colonies, new goods in Europe led to significant changes
1500s, Europeans developed new economic policy, mercantilism
Nation’s strength depended on its wealth
Wealthy nation had power for military and expanded influence
New Economic Policy
Wealth measured by amount of gold, silver possessed by nation
Mercantilists believed there was fixed amount of wealth in world
For one nation to become wealthier, more powerful—had to take wealth, power away from another nation
Mercantilism led to intense competition between nations
Intense Competition

9. Balance of Trade Imports Exports Mercantilists built wealth two ways—
extract gold, silver from mines at home, in colonies;
sell more goods than it bought from foreign countries, creating favorable balance of trade
With favorable balance of trade, country received more gold, silver from other nations than it paid to them
Increased its power; weakened foreign competitors
To achieve favorable balance of trade, could reduce amount of imports by placing tariffs on goods
Importer paid tariff, added cost to price of good
Imported goods more expensive, discouraged people from buying
Imports
Encourage exports that could sell for higher prices than raw materials
Countries encouraged manufacturing and export of manufactured goods
Governments provided subsidies to help start new industries
Exports

10. Controlling Sources (Add this to the back)
Third approach for favorable balance of trade,
Controlling Sources
Nation that controlled own sources would not need to import from competing nations
Why important
Country did not need to spend own money to obtain raw materials
Foreign countries considered rivals, might become active enemy, cut off supply of raw materials
European nations worked to become more self-sufficient
Nations began to establish colonies

12. Building colonial empires essential to mercantilist system
Colonies
Building colonial empires essential to mercantilist system
European powers wanted to establish colonies
To control sources of raw materials
To provide new markets for manufactured goods
To mercantilist, colonies existed only to benefit home country
Colonies
Monarchs restricted economic activities in colonies
Colonists could not sell raw materials to other countries
Could not buy manufactured goods from other nations
Strict laws forbade colonies from manufacturing goods
Forced to buy only from home country
Strict Laws

13. The Rise of Capitalism
Increasing trade between Europe and colonies created new business and trade practices during the 1500s and 1600s. These practices would have a great impact on the economies of European nations.
Individuals amassed great trade fortunes
Merchants supplied colonists with European goods
Returned products, raw materials
Overseas TRADE
In capitalism, most economic activity carried on by private individuals, organizations in order to seek profit
During this time, capitalism expanded
Capitalism Emerges
Overseas trade made many merchants rich
Wealth enabled them to invest in more business ventures
Business activity in Europe increased greatly
Increased
BUSINESS ACTIVITY

14. Rising Prices (INFLATION)
Investors took risks of investing in overseas trade because of inflation
Inflation: steady increase in prices
Demand for goods increased due to growing population, scarcity of goods; rising demand drove prices higher
Money Supply
Increase of money supply another factor in higher prices (INFLATION)
Shiploads of gold, silver flowed into Europe from Americas to be made into new coins
Over time, increase of money in circulation pushed prices for goods still higher

15. A New Business Organization
New Ventures
Overseas business ventures often too expensive for individual investors
Investors began pooling money in joint-stock companies
Joint-Stock Companies
Investors bought shares of stock in company
If company made profit, each shareholder received portion
Shares
Profit, loss based on number of shares owned
If company failed, investors lost only amount invested
Financing Colonies
British East India Company, one of first joint-stock companies
1600, imported spices from Asia
Others formed to bear cost of establishing colonies