Nuala Zahedieh's monograph draws on articles she has published over the past quarter century and adds additional material from her continuing research on London's commercial community and its fortunes in the late seventeenth century. London was then one of Europe's leading port cities and England's dominant commercial entrepôt. The book covers a period in which transatlantic trade gathered apace and made an important impact on the organization of business in England's metropolis. London accounted for about three-quarters of England's colonial trade and served as a clearinghouse for the Atlantic system. London's colonial commerce was dynamic, rising at about four times the rate of the port's total trade between 1660 and 1700. At the beginning of the eighteenth century, colonial trade comprised 20 percent of the capital's imports and 15 percent of exports. This expansion in trade was achieved despite the fact that London's legal quays, where overseas traders had to load and unload goods, were huddled together along a few miles of the River Thames between London Bridge and the Tower of London. Under the later Stuarts, London's port congestion was not relieved by any major dock improvements. Yet overseas trade thrived, and London's merchants adapted swiftly and effectively to maintain their participation in the colonial trades and to make mercantilism work through efficiency gains, lowering costs, and institutional improvements.

Zahedieh's book traces these developments in detail through evidence culled from quantitative and qualitative sources in Britain, the United States, and the Caribbean. She demonstrates her expertise in handling a wide variety of statistical, business, legal, and administrative records. Merchants’ papers are scattered and incomplete for the late seventeenth century. Thus, the discussion of mercantile practice is based on snippets of material drawn from fragmentary material dovetailed with information from a few larger collections of commercial correspondence. Quantitative material on shipping volume, the value of imports and exports, mercantile profits, and wealth was recorded unsystematically before the English state began to compile customs ledgers from 1696 onward. Zahedieh pulls together what is available. She judiciously marshals the statistical evidence that survives on London's colonial trade and analyzes the London port book for 1686 thoroughly. This enables her to demonstrate the scale and extent of trade by individual merchants and, in particular, to trace the business careers of the fifty-nine merchants with the largest turnover in that year.

The Capital and the Colonies shows that many investors participated in colonial commerce in late seventeenth-century London but that merchants in the tobacco and sugar trades—the two major import trades—were heavily concentrated in number. In 1686, a group of 170 traders accounted for over 70 percent of the turnover in London's colonial commerce. In that year twenty-three of the thirty largest importers of colonial commodities to London took more goods from the West Indies than from North America. Over 80 percent of their trade was concentrated on a particular destination within a region. Thus, the high level of concentration found in the eighteenth-century British sugar and tobacco trades was already in evidence at London by 1700, and specialization by geographical destination was an important feature of trade organization. High concentration levels reflected large London merchants’ ability to mobilize credit effectively, to dominate the assembly of cargoes, and to compete keenly among a large number of investors. Specialization by geographical destination indicates that large merchants coped with the pressures of trading over long distances by concentrating on trading in particular lines of commodity and fostering commercial contacts with agents in foreign ports with whom trust could be established and commercial operations maintained regularly.

The Capital and the Colonies shows how these features of London's colonial trade led to business and institutional changes in the metropolis. London's financial involvement in colonial commerce was aided by the rise of bill brokers, greater sophistication in the handling of paper instruments, multilateral exchanges via bills of exchange, the involvement of the Bank of England in discounting bills, and the growth of an insurance business dealing with shipping. London's merchants coped with increased overseas trade by improving their loading, unloading, warehousing, repairing, refitting and victualling services, and their sorting and marketing skills. The demand for textiles, metalware, and hardware in the colonies had a beneficial impact on London's manufacturing capacity. Equally significant was the rise in the metropolis of processing and refining facilities for handling sugar and tobacco imports. The importance of colonial products for the reexport trade made London a busy emporium at the hub of a complex commercial economy linking the Americas with continental Europe. The Capital and the Colonies emphasizes the important contribution of London's merchant investors to the dynamism of the transatlantic sector of the English economy half a century before England became the first industrial nation.