Economics Leading To The Revolutionary War After the end of the French and Indian War in 1763 the American people had taxes placed on them by the British. The British Parliament claimed that by placing the taxes they were defending the colonies for the Americans. During the twelve years following the war, the British enacted a numerous amount of taxes that allowed them to raise revenue from the American economy. This taxing of the American people hurt the American economy and started to push the American colonists toward an independence movement so they could have a free economy. Over the course of the twelve-year period there were six acts enacted to take money from the American economy.
The Sugar Act of 1764 was the first act used by the British to channel revenue into Britain. The British specifically stated in the Sugar Act, a revenue be raised in your Majestys said dominions in America, for defraying the expenses of defending, protecting, and securing the same (The Sugar Act). This proves that the British were using this act just to raise revenue because they needed it to defray the cost of fighting against the French. The act forced tariffs on goods being imported into the colonies. Examples of these goods were sugar, molasses, foreign indigo, and coffee. This angered the colonists because they were depending heavily on trade with other colonies and countries outside of the North American continent.
The colonists specifically stated in a petition from the Massachusetts House of Representatives to the House of Commons on November 3, 1764 that a prohibition will be prejudicial to many branches of its trade and will lessen the consumption of the manufactures of Britain (King, Peter. Petition from the Massachusetts). The American colonists saw the impacts this act would have on the economy of Massachusetts because it was causing economic problems. The trade of one item of commerce being stopped caused problems. A person who depended on it could no longer sell it after they imported it. This still happens in our economy today.
An example of this today would be something like Pratt and Whitney closing down a plant; it hurts the rest of the community that once benefited from it. The biggest problem for America was trade with the French. The economy of fishermen started to suffer when the French stopped permitting fish to be carried by foreigners to any of their islands unless it be bartered of exchanged for molasses (King, Peter. Petition from the Massachusetts). Not being able to exchange fish for molasses caused the economy to suffer. The British stated that the colonies could only obtain molasses from British sources, which makes this suffering economy evident.
The British not allowing fish to be traded with the colonies put the fishermen who depended on this as a livelihood out of business. This started to drive the colonists toward opposition against British involvement in North American affairs. The cause of this opposition was taxation, which was starting to hurt the economy. Another problem plaguing the economy of Britain was that the Americans continued to issue a large amount of paper bills. The British felt the effective way to halt the issuing of the bills was to put in place a Currency Act. They saw the paper money as greatly depreciating the value of debts that needed to be paid to his Majesty (The Currency Act). This policy angered the colonists because they already had an act in place to keep them from selling and buying goods at cheap prices.
The colonists stated in a petition to the House of Commons, they will not be able to pay back their debts if they are not allowed to issue currency. This caused the colonists to become extremely nervous about being hurt economically from taxes being placed on them by a government who did not even know of the conditions in America. The Stamp Act of 1765 was the first direct tax placed on the goods being imported into the American Colonies. Just like the Sugar Act, the British Parliament enacted it to raise large amounts of revenue. The original Stamp Act document states, It taxed newspapers, almanacs, pamphlets, broadsides, legal documents, dice, and playing cards.
Once this was in place the colonists became extremely angered because the act increased the price of all the items listed above. The Americans decided that it was necessary to organize protests throughout the thirteen colonies. Underground networks emerged such as the Sons of Liberty. These groups decided that a way of trying to get this act repealed was to take up protesting, which would keep the agents from enforcing the Stamp Act and boycotting British goods. Throughout America the colonies started passing resolutions against the Stamp Act so that they could show the British Parliament that it did not have local government support. In the resolutions drawn up by Virginia the leaders stated that they felt it was illegal, unconstitutional, and unjust (King, Peter. Virginia Stamp Act) to tax them without their explicit consent.
The American colonists saw this form of taxation to be very dangerous because they saw it ultimately destroying their successful economy that they had built up since the colonization of North America. It was even stated that the taxation was unreasonable and inconsistent with principles and spirit of the British constitution (Dickinson, John. Letters from a farmer IV). The American people did not like the idea that someone who did not even live in America could tax them. They had the tax forced upon them because Britain did not like the idea that the American economy was generating so much wealth and prosperity.
So they felt the best way to collect revenue from the American economy was to tax the goods heavily. The American colonists decided to come up with ways to strike the heart of the Stamp Act taxations. These would include many agreements of merchants and people related to commerce in North America. The merchants of New York signed a Non-Importation agreement on October 31, 1765. The New York Mercury, a newspaper, published the agreement made by the merchants on November 7, 1765.
The merchants came to the conclusion that the economy had become melancholy (King, Peter. Non-importation Agreement of New York). It also had been greatly restricted by the impositions on duties established by the late acts of trade (King, Peter. Non-importation Agreement of New York). It is evident that the merchants saw the act as putting the economy into a tailspin that would eventually be felt throughout the American Colonies.
The reason this was possible was because the merchants decided that they had the right to boycott items being shipped to America by Britain. The merchants unanimously agreed that no merchant will vend any goods or merchandise sent upon commission from Great Britain that shall be shipped from thence the first day of January next unless upon the condition mentioned in the first resolution (King, Peter. Non-importation Agreement of New York). The condition in the first resolution stated, all such merchants are owners of and have vessels already gone and now cleared out for Great Britain (King, Peter. Non-importation Agreement of New York). This means that the merchants would not accept any goods that had already been shipped.
Connecticut passed resolutions on the Stamp Act in December of 1765 according to the Massachusetts Gazette. The main resolution was that they felt that the Stamp Act in special, is a tax imposed on the colonies without their consent (King, Peter. Connecticut). The American people were becoming extremely angry. In towns from Boston to Rhode Island people resolved to seize and destroy the stamp papers, and to take every means of deterring the stamp officers from executing their duty (King, Peter. Lt-Gov.). At this point the Americans were still in the process of building opposition to the British regime that would eventually lead them into a Declaration of Independence. William Pitt spoke about the Stamp Act and what he thought of it.
One of his thoughts was; Omitting the immense increase of people by natural population, and the emigration from every part of Europe, I am convinced the whole commercial system of America may be altered to advantage. You have prohibited where you ought to have encouraged, encouraged where you ought to have prohibited. Improper restraints have been laid on the continent, in favour of the islands. (Pitt, William). Pitt sees the acts being levied incorrectly and in the incorrect ways.
He felt that the colonists deserved to have things regulated in some ways but not to the extent that the British had taken it to. Pitt also states that the colonists had been wronged. Finally, he says, It is that the Stamp Act be repealed absolutely, totally, and immediately; that the reason for the repeal should be assigned because it was founded on erroneous principle. (Pitt, William). This proves that what Britain was doing was completely wrong and almost illegal.
Eventually parliament saw that the Stamp Act was not working and they repealed it in 1766. It is evident William Pitt stood strong with all the other American colonists that saw the Stamp Act as being illegal. As the Non-Importation agreements stated that once the Stamp Act was repealed they would no longer ban British goods. But the colonists were now on edge for any other types of taxation and acts placed on them and it would most likely have angered them even more if any other taxes were to be placed on them. Little did the colonists know that about a year from when the Stamp Act had been repealed the parliament would go ahead and pass another tax on America and the British colonies to raise a revenue. This time the Townshend Act placed taxes on glass, lead, paint, paper, and tea. This time the tax was being placed on the items imported into the colonies from Great Britain, not from other countries.
The Townshend Act would be used to defray the charge of administration of justice and the support of civil government, in such provinces were it shall be necessary (The Townshend Act). It was being used mostly to pay for government officials that required a salary. John Dickinson raised the concern once the Townshend Act was enacted. He stated, There is another late act of parliament, which appears to me to be unconstitutional, and as destructive to the liberty of these colonies, as that mentioned in my last letter (Dickinson, John. Letters from a farmer II). The colonists were seeing this as another way for Great Britain to raise revenue instead of regulating trade like it was supposed to do.
It seems that the British designed each act not to regulate trade but to take money from a thriving American economy. Dickinson also states that it was designed to restrain the commerce of one part. He is saying is that these were being used to destroy one area of commerce to better another area of commerce. This time it was a way for the British to destroy the American commerce for the goods taxed while it bettered the British because the Americans had to pay extra on the goods that they once bought without a tax. Great Britain also knew that the colonies couldnt get these goods elsewhere other then from Great Britain. Dickinson noted this in his letters, These colonies require many things for their use, which the laws of Great Britain prohibit them from getting any where but from her. Such are paper and glass (Dickinson, John.
Letters from a farmer II). The solution to this problem by Dickinson was we may ourselves manufacture the articles on which they are laid. This was not possible with the Stamp act because they had to pay a tax on paper and it had to be stamped according to Dickinson. In 1768 the merchants and traders of Boston signed the Boston Non-Importation Agreement. They have taken into consideration the …