Event that severed the political ties between Great Britain and its 13 North American colonies, setting the stage for the development of the United States of America.
In its Navigational Acts of the latter half of the seventeenth century, England created a closed mercantile system designed to control, regulate, and tax trade with its American colonies and to ensure that New World wealth flowed back to England. This system benefited the English state and economy, but for the American colonies it created problems, as their specie (gold and silver coin used as money) flowed back to England. As the trans-Atlantic trade flourished, the British encountered difficulties enforcing the restrictions on their distant colonies and failed to maintain a truly mercantile closed system that benefited the mother country The American colonies quickly discovered that throughout the Atlantic trading world, trading partners other than the English were ready and willing to purchase their commodities. This illegal trade proved extremely profitable, and thus in the late seventeenth and eighteenth centuries, Americans engaged in smuggling on a regular basis. The profits provided Americans with money to consume English goods, while English merchants extended credit to Americans, thus allowing them to purchase even more products.
In 1763, the French and Indian War ended, with Britain as the victorious master of North America. A long series of wars had left the British state deeply in debt and ready to reexamine its empire for new sources of revenue. Parliament and the king’s ministers decided that the colonies had not paid enough in taxes for their own support and maintenance. In 1764, Minister George Grenville and the British Parliament passed the Sugar Act as a way to curtail America’s smuggling and increase Britain’s revenue. This act reduced the tax on molasses, making it cheaper to purchase it legally. Parliament then passed the Currency Act, forbidding the use of paper money as legal tender. For Americans, these acts were intrusive and damaging interference in their economic growth and, when Parliament passed the Stamp Act in 1765, resistance began. The Stamp Act taxed all printed documents in the colonies, such as newspapers, legal documents, and playing cards—another example of England’s increasing tyranny.
American resistance stemmed from the slogan “No taxation without representation.” Americans believed that when the government created a new tax it took private property away from its citizens. Government could only do this with the permission of the people. Because the colonies held no seats in Britain’s Parliament, they lacked representation and therefore could not be taxed. Parliament responded with the argument that all colonies received “virtual representation,” as each member of Parliament represented all of the British Empire. Americans resisted the Stamp Act and argued against Britain’s tyranny by effectively employing the strategy of nonimportation, refusing to purchase any new British commodities or to pay their debts to British creditors. The Marquis of Rockingham repealed the Stamp Act for this reason.
During the Stamp Act crisis, Americans argued that there was a difference between a tax for revenue and a tax for the regulation of trade—Parliament, the Americans said, lacked the authority to pass the former but not the latter. The Townshend Acts (1767) were Parliament’s attempt to establish an external regulatory tax against the colonies, but the Americans responded by implementing a boycott of British goods, as they had done during the previous attempt to implement an external tax. The Townshend Duties hurt British manufacturers and Britain’s internal economy.
The Americans continued to combine their political and economic arguments against Britain’s tyranny in the years leading up to the American Revolution. Colonists realized that to improve economically they needed a voice in the political process. The events that led to the Declaration of Independence and the war allowed American patriots to reject an imperial motherland thousands of miles away in favor of developing a political and economic ideology that better suited their needs. Americans fought against Britain to gain control over their own destiny, realizing that political sovereignty would eventually provide economic prosperity.
During the American Revolution, Americans struggled with a limited supply of specie (gold and silver). At the same time, many long-established trade relations between England and the colonists were disrupted, creating a trade deficit. Americans attempted to negotiate favorable trade relations with France and Spain, but the lack of economic and political strength forced the struggling U.S. government to accept terms that were less than favorable.
