What was the commercial revolution?

Answer 1

The age of exploration brought far reaching changes to global cultures. Overseas trade and the conquest of empires expanded Europe's economy. This search for wealth led to the rise of free enterprise, an economic system in which money is invested in business to make profits.

Nations competed for markets and trade foods. New business methods were instituted for investing money, speeding the flow of wealth, and reducing risks in commercial ventures. These changes became known as the Commercial Revolution. The Commercial Revolution formed the roots of modern financial and business life.

Launching an overseas trading venture was a major undertaking. The financial backer of the voyage had to raise money for supplies and to hire a crew. Governments and rich merchants alone had enough money to back such trading voyages, and even they needed financial assistance. In the beginning, merchants turned to bankers for the money to finance their ventures. Families like the Medici loaned money as part of their operations. By the 1500's the Medici and other banking families became so wealthy that they accepted deposits, made loans, and transferred funds over long distances. The Medici had branches in several European cities and also made loans to European monarchs.

However, by the 1600's government-chartered banks began to form. The banks accepted deposits of money and charged interest on loans. Before long the banks began to provide services like issuing banknotes and checks, making large payments in heavy coins. They acted as money changers, exchanging currencies from other countries. The banks even provided official exchange rates for foreign currency.

Individual merchants who wanted to invest in exploration often raised money by combining their resources in joint-stock companies. Joint-stock companies were organizations that sold shares in the venture enabling large and small investors to share the profits and risks of a trading voyage. If a loss occurred, investors would lose only the amount they had invested in shares. This sharing of risk provided a stable way of raising funds for voyages. A few joint-stock companies became rich and powerful through government support.

As bullion, also known as gold or silver, flowed into Europe from overseas, the supply of coined money increased. This, in turn, led to inflation. Money, however, became more widely available for large enterprises, and idea changed about the nature and goals of businesses. Gradually, a system based on the belief that the goal of the business was to make profits took shape. Individuals known as entrepreneurs combined money, ideas, raw materials, and labor to make goods and profits.

In the Commercial Revolution, there were more resources, people, and creativity around. England was a very poor country, as King Henry VIII spent most of the money on parties and luxuries. England started doing overseas trade. The founding of the English East India Company in 1600's marked the beginning of England'scolonizations. England started colonizing because they were running out of trees. Jamestown was the earliest English settlement in North America founded in 1607.

In the 1600's European territories in the Americas based their economies on agricultural products that required intensive labor. Enslaved Africans planted and harvested sugar, tobacco, and coffee crops. They also worked silver mines. To gain slaves, slave trade took place. This was part of what was known as the Triangular Exchange. Ships sailed the legs of a triangle formed by Europe, Africa, and the Americas. Typically, European ships left their home ports carrying manufactured goods. This included knives, swords, guns, cloth, and rum. In West Africa the ship captains traded their goods with local rulers for enslaved people, most of whom were war captives. During the second leg of the triangular exchange, ships brought enslaved Africans across the Atlantic to various Caribbean islands or to mainland areas in North America and South America. Enslaved Africans were usually caught by other Africans. The enslaved Africans were sold. The money that was made was used to buy sugar, molasses, cotton, tobacco, and raw materials. Finally, the ships returned to Europe to sell the goods purchased in America. An enslaved person's journey to Africa to the Americas was commonly known as the Middle Passage. The Middle Passage was a ghastly ordeal. About one-fifth of the slaves died during the Middle Passage.

All in all, the Commercial Revolution was the change in the method of financial businesses. The effects of the Commercial Revolution were that more people invested in explorations. More businesses and expeditions were formed. The Commercial Revolution fueled colonizations and even more trade. The Commercial Revolution had a big impact on European history.

Answer 2

The Commercial Revolution was a period of European economic expansion, colonialism, and mercantilism which lasted from approximately the 13th century until the early 18th century. It was succeeded in the mid-18th century by the Industrial Revolution.

Answer 3

The expansion of trade and business in the Medieval Ages.

Answer 4

a commericial revolution is the introduction of banking, letters of credit, joint stock companies, and guilds