This dissertation explores the growth of the economy of Maryland and Virginia from the late 1600s to 1775 using the Naval Officer Shipping Lists for these colonies. These records contain complete cargo and ship information for almost 40,000 ship entrances and clearances. By the eve of the American Revolution, Chesapeake colonists enjoyed a level of income from this external trad that was unmatched in the preceding century. The pattern of growth, however, was not steadily upward. From 1665 to the 1680s, earning from trade declined, as did the price of tobacco and the terms of trade. From 1690 to 1705, trade and the terms of trade improved, only to decline and stagnate from 1705 to the 1740s. From the 1740s to 1775, there was a rapid but variable growth in both export earnings and terms of trade affording unprecedented levels of income and comfort. This growth did not mainly come from improvements in shipping efficiency, as suggested by James Shepard and Gary Walton. Before the 1740s, freight rates declined significantly because of advances in tobacco packing. only after the 1740s did shipping industry efficiency increase. However, the decline in freight rates in this period was slight, so the increased efficiency was not responsible for the rapid growth of the 1740s. Diversification in the Chesapeake economy was. From the 1740s to 1775, however, Maryland and Virginia colonists ran chronic trade deficits. But, their economies remained stable and even grew rapidly. British capital made up the trade deficits, and much of this capital was invested in productive enterprise, not just in increased levels of consumption.