In 1763 the British empire stretched around the world, from North America to India and points in between. The casual, haphazard system of colonial governance would no longer be sufficient. The mighty empire required administration and leadership far beyond that to which the colonies had become accustomed. Furthermore, the long series of wars had left the British deeply in debt, and Britain's far-flung possessions would be costly to manage. All the same, Great Britain was a wealthy nation, though a great portion of the wealth lay in private hands.
The influence of the Enlightenment had touched America, and radically new ideas of government including that of republicanism had reached across the Atlantic. Because of such things as the Puritan emphasis on reading and the general prosperity of the average citizen, Americans were quite familiar with the new ideas being propounded by the likes of Voltaire, Rousseau, Montesquieu, and other philosophes of the French salons and were well versed in political philosophy from reading John Locke. American ideology also emphasized the idea of "virtue" as a necessary component of political structure—an idea from the Enlightenment.
Of all the shortcomings of British management of their American cousins, their failure to perceive the political sophistication of the colonists was a crucial flaw. (Failures caused by not understanding one's potential adversaries have, of course, by no means been limited to the British in 1760.) A second major misunderstanding lay in the British perception that although they had neglected to enforce various import and export restrictions for decades, the colonists would understand their responsibilities as parts of the empire and readily conform to new and stricter controls.
By 1760 smuggling had become a major American enterprise. Given that it was expensive to maintain revenue cutters and other patrol vessels along a thinly populated American coast filled with many bays, inlets, and rivers in which vessels could hide themselves, the British had found it far from cost-effective to try to enforce navigation laws. In 1761 the British began to reinforce writs of assistance, laws that granted customs officials the authority to conduct random searches of property to seek out goods on which required duties had not been paid, not only in public establishments but in private homes. Representing New England's merchants, attorney James Otis protested against these general warrants, claiming that "a man's house is his castle," and that violating its sanctity was a "wanton exercise" of power.
The Proclamation of 1763. In 1763 the British took another fateful step. Understandably wishing to reduce the cost of maintaining its empire, the British felt that if the North Americans would not interfere with the Indians, guarding of the frontiers would be much less demanding and less costly. Thus in 1763 a royal proclamation was issued that reserved all of the western territory between the Allegheny Mountains and the Mississippi for use by the Indians. The colonists, now that the French were no longer present to rile and equip the Indians, saw the vast open reaches beyond the mountains as greener pastures to which they were entitled. The proclamation was thus seen as high-handed and uncalled for.