The Economic Causes of the American Revolutionary War

From The Seven Years War to Lexington & Concorde

During the 1750’s and 1760’s, Britain engaged in a war later known as the Seven Years War against certain native American Tribes as well as colonial interests from other European powers such as France and Spain. Such prolonged defense of the American Colonies strained Britain’s resources, leading members of parliament to suggest the Colonists help pay for the costs of maintaining and defending them.

Starting with updates to the Navigation Acts, the British government began imposing increasing levels of taxes on the colonists. The Stamp Act of 1765, in addition to the Townshend Acts was designed to increase revenue to the British.

When the Colonists became upset at such taxation without sufficient representation in Parliament, they began to rebel. In return, the British passed the Declaratory Act and d a series of acts later known as the Intolerable Acts, all designed to punish and reshape the colonial governance system to make it easier for the British to reign in.

Tensions rising from both sides, the Colonists could not tolerate any more what they felt was British economic and social repression, and the two sides descended into a state of war over economic and social independence.

The Navigation Acts

One of the early steps in the British plan to extract revenue from the Colonies was to step up enforcement of the then decades old Navigation Acts. These acts called for all English trade to be conducted using only English ships (Johnson 180). By only allowing English ships, Britain had direct control over the supply of ships, making it easy for British authorities to tax and regulate trade by cutting down on smuggling. Previously not heavily enforced, many American colonial merchants violated the law by smuggling goods in illegal ships in order to avoid paying import taxes (Johnson 180). Tightening this law allowed the British to cut into the profits and wellbeing of American merchants, further hurting their incentives to trade by sea (Johnson 181). This act planted the seed of malcontent with colonial merchants as they felt that laws affecting their livelihood were being thrust upon them without having acceptable levels of representation in Parliament.

Rejected Tax Scheme

Chatham, a noted British statesman was among the first to propose a taxation plan for the colonies based on representation in parliament in order to ease any forms of pressures which he felt might escalate (Williams 756). His plan called upon selection from each American state a certain number of representatives which would be the American Colonies’ representatives in parliament. Under this plan, the representatives from teh states would possess voting power in parliament concerning laws and taxes (Williams 757). According to their size and subsequent level of influence, smaller states would have fewer representatives in Parlimant than larger or more influenctial states.

States such as Massachusetts, Pennsylvania, and Virginia would elect four delegates.

States such as Connecticut and New York would elect three delegates.

States such as Maryland, South Carolina, and New Jersey would elect two delegates.

States such as North Carolina, Georgia, East and West Florida, and Florida would elect one delegate.

Additionally, Chatham felt it was important to ensure the delegates were not chosen by the British, but elected among the colonists themselves. A major provision within this plan centered upon a mandate which stated the only form of income tax enacted upon the colonists is a pound rate on their estates (Williams 758). Chatham felt this would help convince colonists they could trust parliament and not fear being unfairly overtaxed. Chatham argued this system would be most beneficial to both Parliament and the American Colonies as it would allow for a sustained connection between the two parties.

Such a connection would help add a sense of legitimacy to acts of Parliament pertaining to the colonies, as their voting representatives would have a chance to express their views and vote upon them. Additionally, the American colonists would know that their voices were being herd, making them less likely to object to changes in taxation or other measures (Williams 758). Such a mutually beneficial system, if adopted, might have prevented such large differences in interest and communications between England and her American Colonies which arose and could have prevented the outbreak of war.

However, Chatham’s plan was never enacted as Parliament felt it was unnecessary; that they had a good enough understanding of what the colonists would need and want (Williams 758). Taking a larger step than with the previous Navigation Act revisions, Parliament passed a major piece of legislation in 1764, the Sugar Act.

Sugar Act

The Sugar Act was designed to closely regulate the trade of products such as rum, molasses, and sugar in order to raise revenue for the British government through duties (Johnson 180). Passed during a time of economic depression in the colonies, this act made an already thin margin of profit in trading these goods even lower.

The act also gave British warships additional power to combat smuggling in order to ensure the proper taxes were paid, thus hurting American merchants because they could not avoid such taxation as easily anymore (Johnson 182). Merchants made appeals to Parliament, citing how enforcement of such duties on molasses would curtail their prosperity as well as ruin their trade in molasses and their distilling industries (Johnson 186).

This act was considered one of the major starting points for British redirection which was destined to be abhorred by the colonists, who had developed their own ideas of identity and place in the Empire. As the arguments of the merchants went unheeded as the bill was passed, the Sugar Act, although technically a fairly weak revenue generator, set the tone for further legislative initiatives which would spark a very real economic threat to the colonies and help ignite a revolution.

The Threat of Government Restructuring and Encroachment of Liberties

The Boston Port Act