Britain's First Mistake - The Sugar and Currency Acts

Britain's First Mistake - The Sugar and Currency Acts

When I first studied the American Revolution, I found it challenging to wrap my head around why a little bit of taxation turned so many people against Great Britain.  It was a very long process with many parts.

This weekend, I am stepping away from Founder-based posts to try and offer a little bit of perspective as to what originally troubled the colonists.  In this two part series, we will first see the issues that bothered Americans.  Tomorrow, we will see their first meeting...the Stamp Act Congress.

Don't worry, we'll be right back to the Founders on Monday!

Background

When the French and Indian War ended in 1763, the British Government had a substantial debt they needed to pay.  In addition to this, they had ten thousand troops stationed in America that needed funding. 

To raise the money, they decided to begin laying taxes on the colonists.  These taxes would be used to pay just a part of the cost of maintaining the soldiers.

Sugar

The first Act passed by Parliament was the Sugar Act.  This replaced the Molasses Act, which was enacted thirty years beforehand.

These laws put a tariff on the import of sugar from anyone other than a British territory.  

While the Molasses Act was a similar law, it was never strictly enforced.  Smuggling was common, and the colonists found several ways to avoid paying the tax.

The Sugar Act actually lowered the tax required by the Molasses Act.  The difference was, Parliament was going to beef up enforcement, and they were going to use the soldiers stationed in America to help.

Currency

Finding a currency for exchanging products had always been a problem in the colonies.  

Any gold or silver that came to America was quickly sent back out to pay for imported goods.  Sometimes they tried to barter, but that can be a very cumbersome way to go about things.  Often, they would make currency out of a local product that was in abundance, such as tobacco.  This would lose its value quickly as highest quality product would be shipped out for profit, leaving only the lowest quality for local trade.

Over the course of the 18th century many of the colonies began printing their own money.  This currency would also devalue extremely quickly (see Roger Sherman’s A Caveat Against Injustice).  

The Currency Act demanded that no debt, public or private, could be paid in colonial printed money.  

Results

When these taxes were imposed, they were considered indirect taxes.  This means that people were not forced to pay them.  They could choose not to purchase sugar or take on debt.

These Acts coincided with an economic depression in the colonies.  The depression, in actuality, was due to the end of the French and Indian War.  Many colonists had been selling supplies to the army, but when the war ended their sales had dried up.  However, since these new, very public, Acts were enforced at the same time, the general public blamed them for the difficulties.

The people who were hit hardest by these Acts were merchants and plantation owners who found their sales plummeting because people did not want, or could not afford, their products.  Because these were the same people who visited and communicated with London often, their complaints were heard.

The following year, these two Acts were repealed.  But they were followed by another, more direct tax…The Stamp Act.

 

Tomorrow we will be discussing the Stamp Act, the Congress that followed, and it's impact on the coming Revolution.

Check out one of these books about the onset of the American Revolution (affiliate link):

The Stamp Act Congress

The Stamp Act Congress

William Ellery - Witnessing History

William Ellery - Witnessing History