The Seven Years War to the American Revolution
The French and Indian War, or Seven Years War, represented the decisive turning point in British-colonial relations. The Treaty of Paris in 1763 ratified Britain’s undisputed control of the seas and shipping trade, as well as its sovereignty over much of the North American continent east of the Mississippi River (including French Canada).
But a steep price accompanied the fruits of total victory. The British Government had borrowed heavily from British and Dutch bankers to finance the war, and as a consequence the national debt almost doubled from £75 million in 1754 to £133 million in 1763. In order to address this onerous liability, British officials turned to larger import duties on enumerated goods like sugar and tobacco, along with a series of high excise (sales) taxes on goods such as salt, beer, and spirits. This taxation strategy tended to burden consumers disproportionately. In addition, government bureaucracy expanded in order to collect the needed revenue. As the number of royal officials more than doubled, Parliament delegated new legal and administrative authority to them. Thus, even as British subjects lauded their preeminent position in the world, they chafed under the weight of increased debts and tightened government controls.
Given Britain’s exertions on the North American continent for the sake of colonial security, both ministers and members of Parliament determined that the colonies were obligated to share the costs of empire. But the war exposed the weakness of British administrative control in the colonies on various fronts. The subsequent efforts on the part of royal officials to rectify these deficiencies and collect unprecedented amounts of revenue violated what many American colonists understood as the clear precedent of more than a century of colonial-imperial relations. New world institutions of self-government and trade, having matured in an age of salutary neglect, would resist and ultimately rebel against perceived British encroachment. Taxation policy became a central point of contention, because it tended to threaten both the prosperity and autonomy of colonial society.
1756-1757 Colonial assemblies in Massachusetts and several other colonies refused to support the war by raising taxes or troops unless royal governors relinquished control over military appointments and operations. Virginia’s House of Burgesses declined to raise the necessary war revenue through taxation at all, preferring a deficit financing method that relied on printing more paper money. Rampant inflation ensued, and British merchants refused to accepted depreciated currency.
The balance of trade between England and the colonies tilted decisively in favor of the former as a direct consequence of the French and Indian War. Military spending and a general increase in the demand for goods and services contributed to significant increases in colonial wealth (and prices). Colonial agricultural exports rose especially rapidly in the 1750s and 1760s. Colonists used the windfall to consume British manufactured goods at an ever increasing rate, supplementing a trend that been on the rise since the mid-1750s. Even with the boom in agricultural exports, colonists consumed more than they exported. British merchants, in the throes of the Industrial Revolution, responded by extending credit to their American customers. Accordingly, extended consumer debt became a common phenomenon in the colonies.
1760 King George III became King of England.
Peace on the continent removed the stimulus of a war economy and brought about a recession in the colonies. Debtors in both urban and agricultural sectors experienced the credit squeeze. The balance of trade continued to favor Britain, rendering colonial economies more and more dependent on British commercial ties and financial policy well into the 1770s. Even as colonial standards of living rose, indebted colonists grew increasingly suspicious of British motives and interests.
1764 Parliament passed the Currency Act, which banned the use of paper money as legal tender in all colonies. British merchants had asked for relief from the depreciated currency brought about by deficit financing in Virginia. The act represented an effort to wrest control of monetary policy from colonial assemblies.
Guided by Prime Minister George Grenville, Parliament enacted the Sugar Act. This measure amended the Molasses Act of 1733, which had imposed a 6 pence import duty on foreign molasses. The Sugar Act lowered the duty to 3 pence, in an effort to make the British sugar industry competitive without completely wrecking the mainland export trade or distilling industry. As such, it was never really designed as a revenue act, but, like its predecessor, as a means to regulate trade. Colonists generally understood such regulatory powers as a legitimate authority of Parliament. The Sugar Act inspired minor protest in specific states (Massachusetts, New York, and Pennsylvania), where distillers and merchants were hardest hit. Men like John Hancock of Boston, who had made their fortunes smuggling French molasses, emphasized financial hardship more than philosophical objections to tax policy.
A more far-reaching consequence of the Sugar Act involved its transfer of smuggling cases from provincial courts to vice-admiralty courts. Friendly local juries did not render decisions in vice admiralty courts; instead, royally appointed judges handed down decisions under a system that provided a financial incentive to find guilt. Trials were not based on common law, but decided entirely on the basis of Parliamentary legislation. The Sugar Act also shifted the burden of proof to accused merchants, who had to demonstrate the legality of their trade under the Navigations Acts.
1765 Guided by Prime Minister In order to cover about £60,000 of the £200,000 required to station troops in the colonies, George Grenville persuaded Parliament to pass a Stamp Act similar to one enacted and successfully administered in England in 1694.
Unlike the Molasses or Sugar Acts, the Stamp Act levied a direct tax on the colonies designed to raise revenue rather than to regulate trade. Colonists considered such measures unconstitutional (contrary to established common law precedent or custom). From time immemorial, colonial legislatures had exercised exclusive authority to levy direct revenue taxes in North America, their sovereignty derived directly from the people they represented. By contrast, no colonial representatives sat in the House of Commons. During the debate on the Stamp Act in England, Benjamin Franklin informed British officials that, at minimum, the colonies would need to be represented in Parliament if such taxes were to be imposed.
To the British, such demands made little sense. Direct representation was superfluous; each member of Parliament sat "not as Representative of his own constituents, but as one of that august Assembly by which the Commons of Great Britain are represented." This conception of virtual representation ran contrary to colonial experience. Arthur Lee of Virginia asked rhetorically whether any member of Parliament actually "know us, or we him? No. . . .Is he bound in duty and interest to preserve our liberty and property? No. Is he acquainted with our circumstances, situation, wants, etc.? No. What then are we to expect from him? Nothing but taxes without end."
Humble petitions were accompanied by stronger measures. Widespread mob uprisings throughout the colonial seaport towns served to harass British stamp agents and tax collectors. The Sons of Liberty, an urban organization composed primarily of middling tradesmen, artisans, clerks, and journeymen, were particularly adept at employing intimidation and violence to hamper the distribution of stamps; they frequently burned tax collectors in effigy and ransacked the homes of British officials. Such mob activity was not simply anarchistic rioting; it constituted an accepted, semi-choreographed form of political activity, an expression of the will of the "people out of doors."
Accordingly, a colony-wide boycott of British manufactured goods to protest the Stamp Act’s implementation appealed to a broad audience. Advocates meant the so-called Non-Importation Agreement as a form of economic coercion against London merchants (and their representatives in Parliament), but it was an appealing economic palliative as well. Colonists throughout the colonies subscribed enthusiastically to the plan, effectively reducing British imports to a trickle.
1767 Charles Townshend, Chancellor of the Exchequer under William Pitt, had been a proponent of colonial administrative reform since his tenure on the Board of Trade in the 1750s. After the collapse of the Rockingham ministry, Townshend eyed the colonies as an alternate source of imperial revenue that would allow him to reduce the British Land Tax. The resulting Townshend Act imposed duties on glass, paint, lead, paper, and tea imported into the colonies. Townshend earmarked anticipated revenue to fund the salaries of governors and other colonial administrators. It was a conscious effort to shift the balance of power in colonial government; by liberating royal officials from their financial dependence on American legislatures, Townshend hoped to eliminate the most tangible obstacle preventing regular enforcement of parliamentary laws and royal directives. Townshend also reorganized the Customs Service under the Revenue Act of 1767, creating a Board of American Customs Commissioners in Boston and four new vice-admiralty courts in Boston, Philadelphia, Charleston and Halifax.
"Nothing is wanted at home but a PRECEDENT, the force of which shall be established by the tacit submission of the colonies . . . IF Parliament succeeds in this attempt, other statutes will impose sums of money as they choose to take, without any other LIMITATION than their PLEASURE."
The Sons of Liberty and other colonial leaders resorted once more to a non-importation/non-consumption strategy to coerce Parliament into repealing the Townshend Act. Though embraced less rapidly than in 1765, the boycott took hold throughout the colonies. By 1769, colonial exports exceeded imports by over £800,000.
Thousands of British regular troops were stationed in Boston under General Gage, as (in contrast to 1765) Parliament contemplated a plan of military coercion.
1773 In an effort to prop up the financially troubled East India Company, Parliament passed the Tea Act, granting it a virtual monopoly over the British tea market and allowing direct sales access to the colonies (colonial merchants were cut out of the loop entirely). As a consequence, East India Company tea cost the least of any available tea, foreign or domestic. Following the retention of the 3 pence Townshend duty on tea in 1770, colonists had generally boycotted British brands, turning instead to contraband Dutch brews. An estimated 90 percent of all tea consumed in the colonies was of the Dutch variety, so patriots could sip cheaply while avoiding the despised revenue duty altogether. Now, even with the Townshend duty added, East India tea remained the least expensive. Because the tax seemed "hidden" in this manner, colonists viewed the Tea Act as an underhanded way to foist the tax, and Parliamentary taxation power, onto the colonies. Lord North fundamentally miscalculated the unity and magnitude of the colonial response.
1774 In response to the Boston Tea Party, Parliament passed a series of Coercive Acts (dubbed Intolerable Acts by the Colonists) to reestablish British dominion over the insubordinate colonies. The Massachusetts Government Act annulled the colonial charter of 1691, restricting the power of the House of Representatives and banning most local town assemblies. A Port Bill closed Boston Harbor until restitution was made to the East India Company. None was forthcoming.