Tuesday, June 26, 2012

Paying For Empire: British Taxes In America Before The Revolution


I am co-author of a new American history textbook for college students, The American Challenge: A New History of the United States. Below, in a passage I co-authored with Norwood Andrews, we discuss the clumsy British attempts to raise revenue to pay down their exploding national debt following a century of imperial wars.

Except for the mass population of indentured servants and slaves, others living in the colonies—such as urban merchants and master craftsmen, plantation gentry and the much larger ranks of middling landowners and small farmers—benefited from North America’s economic growth in the mid-1700s.  By the standards of the eighteenth-century world, British North America by the late colonial period enjoyed extraordinary prosperity, although the wealth was distributed unevenly among regions and between economic classes.  From the mid-seventeenth century to the eve of the Revolution, colonial per capita GDP (gross domestic product) grew at twice the rate of Great Britain.

 Faster economic growth reflected population growth, spread of territorial settlements, and development of new lands as well as increasing trade with the rest of the world.  Each of the colonial regions—even New England, with its stony soil, limited arable land, and lack of incoming migrants—grew economically over time, although by far the greatest gains were realized by the masters of Southern plantations.  As a result of the long-term trend, by the 1770s, per capita wealth in the colonies overall was higher than in Great Britain, and the gap widens when measuring slaves as part of the wealth of their owners.  White Southerners were (according to this average measurement) more than twice as wealthy as their counterparts in Great Britain, the middle colonies, and New England.

Yet economic growth was not steady or constant, and even its leading beneficiaries were never very secure.  Dependence on exports kept the colonies exposed to the rise and fall of commodity prices.  In the late 1750s, the British war against the French and their Native American allies on the western frontier, in French Canada, and in the Caribbean had generated huge orders for new ships, munitions, and other goods and supplies—and lucrative opportunities as well for colonial merchants to undertake “privateering” raids on enemy flag vessels.  Meanwhile, Virginia tobacco, South Carolina rice, and New York refined sugar all brought high prices from consumers and their mercantile agents.  But after 1760, the boom went bust, and hard times prevailed for most of the decade.
 
 STEPS TOWARD THE REVOLUTION:
 THE SUGAR AND CURRENCY ACTS

After the French and Indian War, the British government was nearly flat broke.  Years of waging war, and the famous victories in Canada and the West Indies, had added millions of pounds to the national debt.  The British sent 10,000 troops to North America to defend their new conquests in Canada and the Ohio Country from the still ambitious French and Native Americans eager to regain what had been their land.  Those soldiers had to be fed, clothed and armed, which added further to the British govnerment’s financial burdens.  The cut in purchases by the British government of military equipment and supplies for the war, meanwhile, increased unemployment.  A post-war recession caused tax revenues to drop even as government expenses continued to climb.   The poor and working class in England rioted in some cases over taxes, high prices and growing unemployment.   Meanwhile, the rich landowners who dominated the Parliament selfishly voted themselves a 25 percent tax cut, worsening the deficit.

The British Prime Minister, Sir George Grenville (in office from 1763-1765) looked for taxes to raise and expenses to cut, deciding to focus on taxing overseas commerce and the barely taxed American colonists.   In 1764, he steered through Parliament a series of revenue bills, including the Sugar Act.  Previously existing high taxes on foreign molasses within the empire had originally been intended to protect British sugar producers from foreign competition.  The Sugar Act actually lowered these rates, but it tightened procedures for enforcement of the duties by customs officers.  By ending smuggling, the British would realize an increase in revenues even though the tax rates had been cut.   The act also allowed customs officers to prosecute smugglers in vice admiralty courts, before royally appointed judges, rather than in local courts under colonial judicial systems.  Grenville feared that local judges and local juries would sympathize with the smugglers and find them not guilty, regardless of the evidence.  For the smugglers, the days of benign neglect by imperial authorities were at an end.
Making matters even worse, Parliament at the same time passed a new Currency Act, which prohibited the colonies from issuing paper money as legal tender (as happened during the Seven Years War).  British merchants and lenders had often sought to keep colonial debts from being repaid in depreciated colonial currency, and the new legislation responded to their petitions.  It also guarded against inflation.  But forcing all colonists to rely on limited supplies of specie (gold and silver coins) to pay their bills deepened the predicaments of the many debtors in the colonies.  For the next decade, the British government would be determined to make the American colonists pay their fair share for their defense. The Sugar Act would be but a hint of things to come. 
 
TAXES, TAXES, TAXES:
THE STAMP ACT

The confrontation that followed would shake the British Empire and leave its rule over the North American colonies fatally undermined.  A strange paradox now characterized the relations between the king and his subjects in North America.   In some ways—economically, socially, and culturally—they were growing ever more closely connected.  With the rapid growth of the colonies came higher volumes of transatlantic trade.  Rising numbers of ships brought not only goods, capital, and immigrants, but also news, political commentary, fashion trends, and even religious movements—such as the evangelical Great Awakening itself, which began in England and thrived on both sides of the ocean.  Wealthy colonial planters and merchants sought to imitate English standards of refined living and sent their sons to London to become socially polished and professionally trained.  But were the colonists truly Englishmen?  Were they even (as one New Hampshire newspaper editor put it) “British brothers”?

One of Ben Franklin’s letter-writing friends made this observation about the tortured relationship between Britain and the American colonies:  neither actually knew what the other was about.   Great Britain was also a dynamic, changing society.  For a recently united kingdom, now realizing unprecedented commercial wealth from its command of a global empire, the evolving meaning of “Britishness” was inseparable from the experience of imperial conquest and subjugation of others.  By the 1760s newspapers in England frequently referred to colonists as Americans—a name not yet so widely used by colonists themselves.

Familiarity gave way to mutual estrangement.  First-time colonial visitors to the mother country confronted an array of disorienting spectacles.  As much as Philadelphia had grown, by the late colonial period, London was some twenty times larger.  England outdid its colonies in terms of the ostentatious wealth, mass poverty, magnificence, and squalor on display in the imperial capital.  Social networks with elaborate rituals and pecking orders tended to exclude even eminent visiting young colonials.  (In 1761, after two years of legal studies at the Inns of Court, Charles Carroll, who would later sign the Declaration of Independence, wrote to his father in Maryland, “I am intimate with nobody.”)   Colonials in Great Britain often felt they were strangers in a strange land.

The political system was perhaps most alien of all.  In theory, the Houses of Parliament embodied the will of the British people—both lords and commoners—and while Parliament swore allegiance to the king, its political supremacy supposedly protected the historic liberties of Englishmen from any potential tyrant.  But, in fact, Parliament was anything but a straightforward, well-ordered system of representation. Elections to the House of Commons were held in constituencies that varied drastically in size, population, and qualifications for voting.  “Rotten boroughs”—former towns or onetime settlements that still retained ancient charters entitling them to elect members—were controlled by local nobles, or others with cash to spend and a desire for influence in the Commons. Parliamentary faction leaders wheeled and dealt.  Bribery was commonplace, just the normal means of doing business.  Far fewer people enjoyed the right to vote in England than in the colonies.  The colonies and Great Britain both required that a male citizen hold a certain amount of property to vote or run for office, but the requirements were much higher in the mother country.  Property requirements disenfranchised about two-thirds of the male adult population in Great Britain but only an average of one-fourth in the American colonies.

In early 1765 Grenville moved forward his proposal for “Stamp Duties” on the colonies.  All legal documents, newspapers, magazines, playing cards, and other printed materials were to be made with paper stamped in London and distributed in the colonies by tax collectors.  As with the Sugar Act, admiralty courts were empowered to handle cases of violation, at the discretion of the tax collectors.  Meeting with a group of colonial agents that included Benjamin Franklin, Grenville gently insisted that the colonies must help pay the costs of their own defense.  But he refused to hear arguments challenging the authority of Parliament to impose any kind of tax on the colonies, and the House of Commons refused to receive petitions of protest from the colonial assemblies.  On March 22, the Stamp Act was passed into law.  It was to take effect in November.


Others living in the colonies—such as urban merchants and master craftsmen, plantation gentry and the much larger ranks of middling landowners and small farmers—benefited from North America’s economic growth.  By the standards of the eighteenth-century world, British North America by the late colonial period enjoyed extraordinary prosperity, although the wealth was distributed unevenly among regions and between economic classes.  From the mid-seventeenth century to the eve of the Revolution, colonial per capita GDP (gross domestic product) grew at twice the rate of Great Britain.  Faster economic growth reflected population growth, spread of territorial settlements, and development of new lands as well as increasing trade with the rest of the world.  Each of the colonial regions—even New England, with its stony soil, limited arable land, and lack of incoming migrants—grew economically over time, although by far the greatest gains were realized by the masters of Southern plantations.  As a result of the long-term trend, by the 1770s, per capita wealth in the colonies overall was higher than in Great Britain, and the gap widens when measuring slaves as part of the wealth of their owners.  White Southerners were (according to this average measurement) more than twice as wealthy as their counterparts in Great Britain, the middle colonies, and New England.

Yet economic growth was not steady or constant, and even its leading beneficiaries were never very secure.  Dependence on exports kept the colonies exposed to the rise and fall of commodity prices.  In the late 1750s, the British war against the French and their Native American allies on the western frontier, in French Canada, and in the Caribbean had generated huge orders for new ships, munitions, and other goods and supplies—and lucrative opportunities as well for colonial merchants to undertake “privateering” raids on enemy flag vessels.  Meanwhile, Virginia tobacco, South Carolina rice, and New York refined sugar all brought high prices from consumers and their mercantile agents.  But after 1760, the boom went bust, and hard times prevailed for most of the decade.
 
 STEPS TOWARD THE REVOLUTION:
 THE SUGAR AND CURRENCY ACTS

After the French and Indian War, the British government was nearly flat broke.  Years of waging war, and the famous victories in Canada and the West Indies, had added millions of pounds to the national debt.  The British sent 10,000 troops to North America to defend their new conquests in Canada and the Ohio Country from the still ambitious French and Native Americans eager to regain what had been their land.  Those soldiers had to be fed, clothed and armed, which added further to the British govnerment’s financial burdens.  The cut in purchases by the British government of military equipment and supplies for the war, meanwhile, increased unemployment.  A post-war recession caused tax revenues to drop even as government expenses continued to climb.   The poor and working class in England rioted in some cases over taxes, high prices and growing unemployment.   Meanwhile, the rich landowners who dominated the Parliament selfishly voted themselves a 25 percent tax cut, worsening the deficit.

The British Prime Minister, Sir George Grenville (in office from 1763-1765) looked for taxes to raise and expenses to cut, deciding to focus on taxing overseas commerce and the barely taxed American colonists.   In 1764, he steered through Parliament a series of revenue bills, including the Sugar Act.  Previously existing high taxes on foreign molasses within the empire had originally been intended to protect British sugar producers from foreign competition.  The Sugar Act actually lowered these rates, but it tightened procedures for enforcement of the duties by customs officers.  By ending smuggling, the British would realize an increase in revenues even though the tax rates had been cut.   The act also allowed customs officers to prosecute smugglers in vice admiralty courts, before royally appointed judges, rather than in local courts under colonial judicial systems.  Grenville feared that local judges and local juries would sympathize with the smugglers and find them not guilty, regardless of the evidence.  For the smugglers, the days of benign neglect by imperial authorities were at an end.

Making matters even worse, Parliament at the same time passed a new Currency Act, which prohibited the colonies from issuing paper money as legal tender (as happened during the Seven Years War).  British merchants and lenders had often sought to keep colonial debts from being repaid in depreciated colonial currency, and the new legislation responded to their petitions.  It also guarded against inflation.  But forcing all colonists to rely on limited supplies of specie (gold and silver coins) to pay their bills deepened the predicaments of the many debtors in the colonies.  For the next decade, the British government would be determined to make the American colonists pay their fair share for their defense. The Sugar Act would be but a hint of things to come. 

 TAXES, TAXES, TAXES:
THE STAMP ACT

The confrontation that followed would shake the British Empire and leave its rule over the North American colonies fatally undermined.  A strange paradox now characterized the relations between the king and his subjects in North America.   In some ways—economically, socially, and culturally—they were growing ever more closely connected.  With the rapid growth of the colonies came higher volumes of transatlantic trade.  Rising numbers of ships brought not only goods, capital, and immigrants, but also news, political commentary, fashion trends, and even religious movements—such as the evangelical Great Awakening itself, which began in England and thrived on both sides of the ocean.  Wealthy colonial planters and merchants sought to imitate English standards of refined living and sent their sons to London to become socially polished and professionally trained.  But were the colonists truly Englishmen?  Were they even (as one New Hampshire newspaper editor put it) “British brothers”?

One of Ben Franklin’s letter-writing friends made this observation about the tortured relationship between Britain and the American colonies:  neither actually knew what the other was about.   Great Britain was also a dynamic, changing society.  For a recently united kingdom, now realizing unprecedented commercial wealth from its command of a global empire, the evolving meaning of “Britishness” was inseparable from the experience of imperial conquest and subjugation of others.  By the 1760s newspapers in England frequently referred to colonists as Americans—a name not yet so widely used by colonists themselves.

Familiarity gave way to mutual estrangement.  First-time colonial visitors to the mother country confronted an array of disorienting spectacles.  As much as Philadelphia had grown, by the late colonial period, London was some twenty times larger.  England outdid its colonies in terms of the ostentatious wealth, mass poverty, magnificence, and squalor on display in the imperial capital.  Social networks with elaborate rituals and pecking orders tended to exclude even eminent visiting young colonials.  (In 1761, after two years of legal studies at the Inns of Court, Charles Carroll, who would later sign the Declaration of Independence, wrote to his father in Maryland, “I am intimate with nobody.”)   Colonials in Great Britain often felt they were strangers in a strange land.

The political system was perhaps most alien of all.  In theory, the Houses of Parliament embodied the will of the British people—both lords and commoners—and while Parliament swore allegiance to the king, its political supremacy supposedly protected the historic liberties of Englishmen from any potential tyrant.  But, in fact, Parliament was anything but a straightforward, well-ordered system of representation. Elections to the House of Commons were held in constituencies that varied drastically in size, population, and qualifications for voting.  “Rotten boroughs”—former towns or onetime settlements that still retained ancient charters entitling them to elect members—were controlled by local nobles, or others with cash to spend and a desire for influence in the Commons. Parliamentary faction leaders wheeled and dealt.  Bribery was commonplace, just the normal means of doing business.  Far fewer people enjoyed the right to vote in England than in the colonies.  The colonies and Great Britain both required that a male citizen hold a certain amount of property to vote or run for office, but the requirements were much higher in the mother country.  Property requirements disenfranchised about two-thirds of the male adult population in Great Britain but only an average of one-fourth in the American colonies.

In early 1765 Grenville moved forward his proposal for “Stamp Duties” on the colonies.  All legal documents, newspapers, magazines, playing cards, and other printed materials were to be made with paper stamped in London and distributed in the colonies by tax collectors.  As with the Sugar Act, admiralty courts were empowered to handle cases of violation, at the discretion of the tax collectors.  Meeting with a group of colonial agents that included Benjamin Franklin, Grenville gently insisted that the colonies must help pay the costs of their own defense.  But he refused to hear arguments challenging the authority of Parliament to jWithin the colonies, the response would not be a quiet one.  In Williamsburg, Virginia, news of the Stamp Act’s passage arrived toward the end of the spring session of the House of Burgesses, the elected Virginia assembly.  

Patrick Henry was a young, new member, but already a successful trial attorney known for his courtroom eloquence.  The tobacco planters who dominated the Virginia legislature generally opposed the imposition of taxes by Parliament and had protested the Sugar Act, but Henry’s brand of opposition went further.  On May 29, he and his allies proposed a set of seven resolutions, and a fiery debate consumed the chamber for three days.  Together the “Virginia Resolves” denounced the Stamp Act, not as merely as an unfair policy but as unconstitutional, illegitimate, tyrannical, and void.

The colonists were not represented in the Parliament and, therefore, had no direct voice in legislation directly affecting their pocketbooks.  Taxation of the people by their own elected officials was “the distinguishing characteristic of British Freedom, without which the ancient Constitution cannot exist,” according to Henry. Defenders of the tax, however, would argue that the colonies were “virtually represented” because members of Parliament supposedly represented not only their particular districts but all the citizens of the British Empire.  Men like Henry found these arguments unconvincing and “No taxation without representation” became a rallying cry for the growing American resistance.  The seventh and last of the “resolves” even deemed any supporter of the Stamp Act to be “an enemy to this His Majesty’s colony.”  Only four of the Resolves were actually approved by the burgesses (and a fifth was passed but rescinded after Henry had left for home), but all seven were printed in the newspapers.  

This represented the boldest challenge yet by the colonists to the authority of Parliament.  As the shock waves spread, Henry gained fame for his own speech during the Resolves debate.  According to one observer, Henry called out names of tyrannical kings and the rebel leaders who overthrew them, noting for instance that “Caesar had his Brutus,” and then said he “did not Doubt that some american would stand up, in favour of his Country.”  Cut off by cries of “Treason,” Henry affirmed his loyalty to the King.  But Henry maintained that if he had gone too far, it was because of “the Interest of his Countrys Dying liberty which he had at heart.”  Henry had mastered the hellfire-and-brimstone sermonizing style of evangelical Baptist and New Side Presbyterian preachers that had fired the Great Awakening, and his eloquence won a large audience for the cause of resistance to Parliament.


Michael Phillips has authored the following:


White Metropolis: Race, Ethnicity and Religion in Dallas, Texas, 1841-2001 (Austin:  University of Texas Press, 2006)

(with Patrick L. Cox) The House Will Come to Order: How the Texas Speaker Became a Power in State and National Politics. (Austin: University of Texas Press, 2010)

“Why Is Big Tex Still a White Cowboy? Race, Gender, and the ‘Other Texans’” in Walter Buenger and Arnoldo de León, eds., Beyond Texas Through Time: Breaking Away From Past Interpretations (College Station: Texas A&M Press, 2011)

“The Current is Stronger’: Images of Racial Oppression and Resistance in North Texas Black Art During the 1920s and 1930s ”  in Bruce A. Glasrud and Cary D. Wintz, eds., The Harlem Renaissance in the West: The New Negroes’ Western Experience (New York: Routledge, Taylor and Francis Group, 2011)

“Dallas, 1989-2011,” in Richardson Dilworth, ed. Cities in American Political History (Washington, D.C.: CQ Press, 2011)

(With John Anthony Moretta, Keith J. Volonto, Austin Allen, Doug Cantrell and Norwood Andrews), Keith J. Volonto and Michael Phillips. eds., The American Challenge: A New History of the United States, Volume I.   (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Keith J. Volanto), Keith J. Volonto and Michael Phillips, eds., The American Challenge: A New History of the United States, Volume II. (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Carl J. Luna), Imperial Presidents: The Rise of Executive Power from Roosevelt to Obama  (Wheaton, Il.: Abigail Press, 2013). 

“Texan by Color: The Racialization of the Lone Star State,” in David Cullen and Kyle Wilkison, eds., The Radical Origins of the Texas Right (College Station: University of Texas Press, 2013).

He is currently collaborating, with longtime journalist Betsy Friauf, on a history of African American culture, politics and black intellectuals in the Lone Star State called God Carved in Night: Black Intellectuals in Texas and the World They Made.

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