The main goal of mercantilism was to increase the money in a country’s treasury by creating a favorable balance of trade. A country had a favorable balance of trade if it had more exports than imports. Colonies helped a country have the goods to maintain a favorable balance of trade. For example, say Spain sold $500 in sugar to France, and France sold $300 in cloth to Spain. France would also have to pay Spain $200 worth of precious metals to pay for all the sugar. Spain would then have a favorable balance of trade because the value of its exports (sugar) was greater than the value of its imports (cloth). Spain would become richer because of the precious metals it received from France.Colonies helped nations grow rich in several ways. Colonies provided various raw materials as well as mines that produced gold and silver. In addition, colonies served as markets for goods made in the home country.
Source: http://mrthompson.org/text/2-1%20Spain%20Claims%20an%20Empire.htm
