By the early 1760s, all the British colonies in America were experiencing a postwar recession. The depression was affecting the full spectrum of industries and colonists. Most historians think that, by 1764, it had become America’s first depression. Great Britain too was struggling with massive debts from the French and Indian War and believed the colonies should pay more of its war debts. To reduce British war debt, Parliament passed a series of acts—the Sugar Act, the Stamp Act, and the Townsend Act—placing new duties and regulations on Britain’s American colonies.
Great Britain also strengthened its restriction on the printing of paper currency in the colonies with the Currency Act of 1764, at a time when the colonies had low reserves of gold and silver. The colonies had used their reserves to pay their bills from the French and Indian War. Tight money—from currency restrictions and a shortage of specie—and new taxes from Parliament restricted the colonies’ means of expanding the economy. These British taxes and restrictions created a major economic crisis in the colonies that moved from recession to depression. Many believe this depression was the root of the American Revolution.
The Sugar Act of 1764 is better described by its name—the American Rev-enue Act. The act placed import duties on sugar, wine, coffee, indigo, and textiles brought into the colonies. It also required stricter enforcement of the Molasses Act of 1733. New regulations required merchants to submit customs forms. Interestingly, the act actually cut the tax rate on molasses in half in hope of better compliance. However, the rum distilleries of New England had become adept at avoiding the taxes on rum for 30 years.
Merchants in all the colonies protested the Sugar Act and its taxes on imports the most. Boston merchants even sent a letter of protest to Parliament. The tight money and the influx of cheaper British pewter and metal tableware destroyed the business of craftsmen such as Paul Revere. Merchants and craftsmen were also hurt by the Currency Act, which restricted colonial paper money, causing currency shortages. The return to a currency backed by gold and silver in effect stopped the making of silverware by American craftsmen, except where the customer supplied his own silver to be melted down.
The Stamp Act of 1765 proved to be even more politically explosive during these colonial hard times because it directly taxed goods moving within the colonies. In 1765, many prominent Boston merchants, such as Nathaniel Wheelwright, went bankrupt. The Stamp Act imposed a tax on printed materials, including legal papers, deeds, newspapers, and playing cards. This time people took to the streets in reaction to the new act, and riots occurred in all the colonies. The lieutenant governor’s mansion was burned in New England. The discontent caused by the Stamp Act gave rise to the Sons of Liberty patriotic group. Local craftsmen moved to manufacture household goods themselves instead of buying British imports. Merchants and groups like the Sons of Liberty started local boycotts of British goods. As during any depression, the unemployed and the poor joined in the political movement out of frustration.
The Stamp Act solidified colonial governments against British taxation. Pat-rick Henry led the Virginia effort, Sam Adams led the New England effort, and Ben Franklin led the Pennsylvania effort. The colonies moved toward a unified front, calling a meeting of colonial representatives in New York. Representatives signed the Nonimportation Agreement to boycott British goods. Colonists enthusiastically joined the boycott and British merchants were soon feeling the pain.The British Parliament pressed for a compromise. It was clear that the colonies continued to be in a depression, and the urban centers had high unemployment. The Stamp Act was repealed in 1767, though Parliament reaffirmed its right to tax the colonies. Parliamentary repeal of the Stamp Act gave rise to celebrations in the streets of the colonies.
The celebrations were short-lived when the Townshend Act was passed in 1767. This new set of taxes targeted imported goods such as paper, glass, and tea. Tea became a flash point as colonists boycotted it, and a brisk smuggling trade in Dutch tea developed. Tea was the national drink; little coffee was consumed in the colonies at that time. Another unpopular element of the legislation was that the taxes helped pay for royal commissioners to enforce the Townshend Act, which took away the enforcement authority previously held by the colonists. The new cus-toms system, where merchants had to submit customs forms, made it difficult for the colonists to cheat and elude the new taxes. Britain sent two regiments to Boston to keep the peace. Besides the obvious political issues, British soldiers added to the local economic woes by working off-hours for low wages, creating tension with the large number of unemployed. Incidents of British soldiers replacing colonial laborers in the workforce brought the lower classes into the struggle with the motherland.
The colonists boycotted more goods and were again successful. In 1767, New York City imported more than 350,000 pounds of tea. By 1770, after the boycott of imported British tea, fewer than 150 pounds of tea was imported into New York. Parts of the Townshend Act were repealed but were replaced with new parliamentary taxes in the 1770s.
The colonial economy remained stuck in recession, but a new manufacturing sector started to emerge. Lancaster, Pennsylvania, became a crafts and manufacturing center that supplied frontiersmen during the boycotts and high taxes on goods in the 1760s. In 1770, Lancaster had 13 blacksmiths, 22 masons, 15 coopers, 19 tailors, 7 hatters, 6 gunsmiths, 3 clockmakers, 3 silversmiths, more than 50 various craftsmen in woodworking, and hundreds of apprentices associated with them. In addition, the surrounding area had iron furnaces and glassmaking factories as well as weavers and leather craftsmen.Depressions often result in infrastructure changes in the economy. One positive side of the depression and high taxation in the 1760s was the rise of colonial manufacturing. Before the 1760s, Virginia and South Carolina exported most textiles from Great Britain.
After the new taxation laws, southern plantations began to produce their own textiles. Similarly, textile manufacturers were encouraged in New England. Stocking production started in Pennsylvania. New England started to manufacture shoes, which by the end of the decade, they were supplying to the colonies to replace British imports. In addition, South Carolina and other colonies expanded their export trade in rice and indigo. By the end of the decade, colonial exports exceeded the value of imports.
0 comments:
Post a Comment