Economic history of Colonial Maryland facts for kids

Maryland's early economy, during its time as a colony, depended a lot on growing tobacco. Even though it would later use the forced labor of enslaved people for farming, this system really took hold in the 1700s. During the colonial period, Maryland also started to develop industries and grow its towns. It tried out different ways of using money and worked to grow more than just tobacco.

The first settlers arrived on St. Clement's Island on March 25, 1634. They built their main town, St. Mary's City. These early colonists successfully grew enough food to eat and even sent some back to Britain.

In those first years, most settlers were indentured servants. These were people who agreed to work for a certain number of years to pay for their trip to the new world. While Lord Baltimore hoped for a few very rich landowners, the colony's rules actually led to many small farms. Many of these farms were owned by people who had once been indentured servants. By the late 1600s, most farmers had small properties. They used farming methods that kept the land healthy but limited how much they could produce.

Maryland's Changing Economy (1640s-1660s)

After a period of change in England, the Maryland colony grew. The way farms operated also changed significantly. Towns began to appear, and early industries started to develop.

Around the start of the 1700s, wars like King William's War and Queen Anne's War caused problems for Maryland's economy. People in Europe bought less tobacco. Because of this, many farmers who weren't as wealthy started to grow other crops. They added cattle and grain to their farms and also began making things by hand, like crafts.

Many indentured servants continued to arrive until the late 1600s. However, as the 1700s began, farmers started to use the forced labor of enslaved people on their fields. Between 1704 and 1720, the number of enslaved people in Maryland grew from about 4,475 to 25,000.

More and more, these enslaved people were concentrated on larger farms that had many workers. Some historians believe this shift led to bigger differences between rich and poor people in the colony. Wealthier Marylanders could make their farms much more productive with this new labor system.

Other changes were happening too. In the 1730s, farmers began to melt iron near Annapolis. Annapolis was the biggest city in the colony at the time. Its population doubled between 1715 and 1740. Despite these developments, the colony faced another economic slowdown in the 1730s.

Growing and Changing Before the Revolution (1740s-1770s)

In the last few decades before the American Revolution, Maryland's economy became more diverse. It moved away from relying only on tobacco. The way money was used also changed during this time.

After the French and Indian War, Maryland started exporting a lot of grain. Grain exports reached about one-third of the amount of tobacco produced. However, Maryland's wheat trade faced challenges in the 1760s. This was because the British government limited shipping to Britain. Instead, Maryland wheat was sent to other parts of Europe. There, it had to compete with grain grown by local farmers.

To earn more money, large farm owners began lending money and renting land to other farmers. At the same time, tobacco production kept growing. In the 1740s, the colony produced about 20 million pounds of tobacco each year. By the 1760s, this increased to 25 million pounds annually.

English law at first did not allow British money to be sent out of the country. It also stopped colonies from making their own coins. This often led to a shortage of money in Maryland. Merchants often paid British companies using special promises of payment called bills of exchange. In fact, until a law was passed in 1747, tobacco itself was often used as money within the colony. After that, paper money slowly replaced the system of trading goods directly.

Maryland's paper money was special. Unlike most colonial money, which was based on future taxes or land, Maryland's paper money was backed by a special fund. This fund was held in the Bank of England. It would regularly convert some of its money into British pounds.