The events that led to the American Revolution are more clearly understood if we repeat and keep in mind their central underlying theme: New and rapid changes in the old colonial policy that had been established and imposed on an essentially self-governing people for 150 years precipitated a series of crises and, ultimately, war. These crises were essentially political, but the stresses and strains that led to colonial fear and hatred of British authority had economic origins. Britain’s “new” colonial policy was only an extension of the old, with one difference: The new enactments were adopted by a Parliament and enforced by bureaucratic oversight that had every intention of enforcing them to the letter of the law, thereby sharply changing the atmosphere of freedom in the colonies. Furthermore, high British officials insisted—at almost precisely the wrong moments—on taking punitive actions that only compounded the bitterness they had already stirred up in the colonies.
The series of critical events that generated the first crisis began with the English victory over the French in 1763. The Seven Years’ War had been a struggle for the empire, of course, but it also had been a fight for the protection of the American colonies. And the colonials had been of only limited help in furnishing England with either troops or materials—to say nothing of the hurtful trade they intermittently carried on with the French in both Canada and the West Indies. The English were in no mood to spare the feelings of an upstart people who had committed the cardinal sin of ingratitude. Besides, the war had placed a heavy burden on the English treasury, and British taxes per capita in the mid-1760s were probably the highest in the world (see Davis and Huttenback 1982). Interest on the national debt had soared to ?5 million annually (nearly $500 million in today’s values), and land taxes in England had doubled during the war. To many of the English, especially taxpayers, it seemed only fair that American colonists be asked to contribute to the support of the garrisons still required on their frontier. Despite their substantial wealth, the colonists at this time were still free riders of protection, receiving British defense at almost no cost. Taxes per capita in the colonies were among the lowest in the world, only 20 to 25 percent of taxes paid by the average English resident.
George Grenville, England’s prime minister, proposed stationing a British force of some 10,000 men in the North American possessions. Although the actual number realized was closer to 6,000, their costs were more than ?350,000 annually. To help meet these costs, Parliament passed two laws to generate approximately one-tenth of this revenue. Of the two laws, the Sugar Act of 1764 had more far-reaching economic implications for the colonists, because it contained provisions that served the ends of all major English economic interests and threatened many American businesses in the colonies. But the Stamp Act of 1765, although actually far less inclusive, incited political tempers to a boil that in a very real sense started the first step toward rebellion.
The most important clauses of the Sugar Act levied taxes on imports of non-British products of the West Indies. Although the duty on foreign molasses was actually lowered from 6d. to 3d. sterling a gallon—a marked reduction from the rate set by the old
Molasses Act—provision was made for strict collection of the tax in the belief that the smaller tax, if strictly enforced, would produce a larger revenue. (A similar argument is characteristic of today’s supply-side economics.) A more important goal, however, was the protection of British West Indian planters—who were well represented in Parlia-ment—from the competition of New England rum makers. Actually, more than half of the molasses imported by colonists was used in homes to make Boston baked beans, shoofly pie, apple pandowdy, and molasses jack (a kind of homebrewed beer); but the chief fear of the English sugar planters was that cheap molasses imports from the French West Indies would enable the New England rum distilleries to capture the rum market on the mainland as well as in the non-British islands.28 And their concern was probably justified, despite the alleged inferiority of the New England product. Moreover, the Sugar Act added to the list of enumerated articles several raw materials demanded by British manufacturers, including some important exports of the Northern and Middle colonies. Finally, this comprehensive law removed most of the tariff rebates (drawbacks) previously allowed on European goods that passed through English ports and even placed new duties on foreign textiles that competed with English products. Nevertheless, the Sugar Act, in form and substance, was much like earlier acts passed to restrict and control trade.
The Stamp Act, on the other hand, was simply designed to raise revenue and served no ends of mercantile policy. The law required that stamps varying in cost from half a penny to several pounds be affixed to legal documents, contracts, newspapers and pamphlets, and even playing cards and dice.
According to Benjamin Franklin’s argument to Parliament against the tax, the colonists objected on the grounds that the act levied an “internal” tax, as distinguished from the traditional “external” taxes or duties collected on goods imported to the colonies. When English ministers refused to recognize this distinction, the colonists further objected that the tax had been levied by a distant Parliament that did not contain a single colonial representative. Thus was born the colonial rallying cry, “No taxation without representation!” Colonists complained that both the Sugar Act and the Stamp Act required the tax revenues to be remitted to England for disbursement, a procedure that further drained the colonies of precious specie and constantly reduced the amount of goods that could be imported to America. When it became apparent that strict enforcement would accompany such measures, severe resistance arose in the colonies. Lawyers and printers—who were especially infuriated by the Stamp Act—furnished articulate, able leadership and communication for anti-British agitation.
The decade of trouble that followed was characterized by alternating periods of colonial insubordination, British concession, renewed attempts to raise revenues, further colonial resistance, and, at last, punitive action—taken by the British in anger at what was felt to be rank disloyalty. The so-called Stamp Act Congress met in New York in 1765, passed resolutions of fealty, and organized a boycott of English goods. “Nonimportation associations” were established throughout the colonies, and the volume of imports from Britain declined dramatically as docks and warehouses bulged with unsold British goods.
A concerted effort to boycott English goods did not develop in all regions. The Middle colonies—where the boycotts first centered—exhibited the greatest decrease in trade with England. The Upper South contributed effectively to the boycott, largely because of the Restraining Act of 1764, which curtailed Virginia’s paper money issues and restricted their uses (see chapter 4). New England gave only slight support to these first nonimport agreements, and the Lower South failed to join the boycott. Yet overall, colonial efforts to boycott British imports were highly effective (Economic Reasoning Proposition 2,
Choices impose costs). In fact, English merchants were so sharply affected that they demanded the repeal of the Stamp Act. They were joined by such political leaders as Edmund Burke and William Pitt, who sympathized with the colonists. Parliament promptly responded, repealing the Stamp Act and reducing the duty on foreign molasses from 3d. to 1d. per gallon. Thus, the first major confrontation between America and England ended peacefully, and a profound lesson had been learned. In the mercantilist scheme of things, the Empire had tilted. The American mainland colonies ultimately had become as important a market for English wares as they and the West Indian planters were a source of raw materials. Americans as consumers had found a new and powerful economic weapon—the boycott.
World History
