The basic concept defining the trade relationship between a colony and its home country was the mercantile system. Under the mercantile system, the colony provides raw materials for the home country and the home country provides manufactured goods for the colony. An example of mercantilism would be like this: A colony produces tobacco. The tobacco is then shipped back to the mother country and made into cigarettes. Then the mother country then sells the cigarettes back to the colony. The mercantile system was communal to all the colonial powers of Europe, especially England and Spain, who used this method to obtain gold and silver. The mercantile system did not help the colonies to become economically self sufficient.Mercantilism was actually unfair to the colonies because the colonies were paying for everything, and the mother country got richer. Mercantilism developed at a time when the European economy was in transition. Isolated feudal estates were being replaced by nation-states as the center of power. Changes in shipping and the growth of urban areas led to an increase in international trade. Mercantilism focused on how this trade could best help the colonies. But in fact, Mercantilists misunderstood the concept of mercantalism, arguing that an increase in the money supply meant that everyone gets richer, when actually only the parent country gets rich. Another example of this could be triangular trade.Ships would leave from the English ports full of manufactured goods like guns and fabrics. Along the
