The Sugar Act of 1764

The Sugar Act, also known as the American Revenue Act, was a revenue-raising act passed by the British Parliament of Great Britain in April of 1764. The earlier Molasses Act of 1733, which had imposed a tax of six pence per gallon of molasses, had never been effectively collected due to colonial resistance and evasion. By reducing the rate by half and expanding measures to effectively enforce the tax, the British hoped that the new tax on sugar would actually be collected. The passage and enforcement of the Sugar Act increased the colonists' concerns about their rights as British citizens and the intent of the British Parliament to more directly rule the colonies. These concerns also fed the growing resistance movement that became the American Revolution.

Background

The earlier Molasses Act of 1733 was passed by Parliament largely at the insistence of large plantation owners in the British West Indies. Molasses was used in New England for making rum, and the molasses trade had been growing between New England; the Middle colonies; and the French, Dutch, and Spanish West Indian possessions. Sugar from the British West Indies was priced much higher than its competitors, and an increasing number of colonial merchants turned to Britain's imperial rivals for the molasses they needed. 

In the first part of the 18th century, the British West Indies were Great Britain's most important trading partner, so Parliament was attentive to their requests. However, rather than agreeing to demands to prohibit the colonies from trading with the non-British islands, Parliament instead passed the excessively high tax on the colonies and molasses imported from those islands. If actually collected, the tax would have effectively closed that source to New England and destroyed much of the rum industry. Soon, smuggling, bribery, and intimidation of customs officials effectively nullified the law.

During the French and Indian War, the British government substantially increased its national debt in order to pay for the war. As the war ended in February of 1763, the ministry headed by John Stuart, the Earl of Bute, decided to maintain a standing army of 10,000 British regular troops in the colonies to protect them, which would also increase post-war expenses. 

George Grenville—who became prime minister in April 1763—had to find a way to restore the nation's finances, address the large debt, and pay for this large peacetime army. Raising taxes in Britain was not an option due to virulent protests in England, and the Grenville ministry decided Parliament would raise this revenue instead by taxing the American colonists. This was something new, as Parliament had previously passed measures to regulate trade in the colonies but had never before directly taxed the colonies to raise revenue. Grenville did not expect the colonies to contribute to the interest or the retirement of the debt; however, he did expect the colonists to pay a portion of the expenses for colonial defense, and so he devised the Sugar Act of 1764 to raise those funds.

George Grenville

Portrait of George Grenville

Passage

The Molasses Act was set to expire in 1763. The commissioners of customs anticipated greater demand for both molasses and rum as a result of the end of the war and the acquisition of Canada. They believed that the increased demand would make a reduced tax rate both affordable and collectible. When passed by Parliament, the new Sugar Act of 1764 halved the previous tax on molasses. In addition to promising stricter enforcement, the language of the bill made it clear that the purpose of the legislation was not to simply regulate trade but to actually raise revenue.

The new act listed specific goods, the most important being lumber, which could only be exported to Britain. Ship captains were required to maintain detailed manifests of their cargo, and the papers were subject to verification before anything could be unloaded from the ships. Customs officials were empowered to have all violations tried in vice admiralty courts rather than by jury trials in local colonial courts, where colonial juries generally looked favorably on smuggling as a profession.

The Stamp Act of 1765

Parliament announced with the passage of the Sugar Act in 1764 that they would also consider a stamp tax in the colonies. The Stamp Act, passed in 1765, was a direct tax imposed by the British Parliament on the colonies of British America. The act required that many printed materials in the colonies be on stamped paper produced in London, carrying an embossed revenue stamp. Similar to the Sugar Act, the purpose of the tax was to help pay for troops stationed in North America after the British victory in the Seven Years' War.

The novelty of the Stamp Act was that it was the first internal tax—that is, a tax based entirely on activities within the colonies and levied directly on the colonies by Parliament. Because of its potential widespread application to the colonial economy, the Stamp Act was judged by the colonists to be a more dangerous assault on their rights than the Sugar Act. Although opposition to this tax was soon forthcoming, there was little expectation in Britain. Members of Parliament and American agents in Great Britain did not expect the intensity of the protest that the tax would generate.

Colonial Resistance to the Acts

The Sugar Act was passed during a time of economic depression in the colonies. While it was an indirect tax, the colonists were well informed of its presence. A significant portion of the colonial economy during the Seven Years' War was involved with providing food and supplies to the British Army. Colonists, especially those affected directly as merchants and shippers, assumed that the highly visible, new tax program was the major culprit for their economic struggles. Calls for the Act's repeal began almost immediately, and protests against the Sugar Act at first focused more on the economic impact rather than the constitutional issue of taxation without representation. 

The Stamp Act was met with even greater resistance in the colonies. Opposition to the Stamp Act was not limited to the colonies—British merchants and manufacturers, whose exports to the colonies were threatened by colonial economic problems exacerbated by the tax, also pressured Parliament. 

"No Taxation Without Representation"

The First Congress of the American Colonies, also known as the Stamp Act Congress, was held in 1765 to devise a unified protest against British taxation. The colonies sent no representatives to British Parliament, and therefore had no influence over what taxes were raised, how they were levied, or how they would be spent. Many colonists considered it a violation of their rights as Englishmen to be taxed without their consent—consent that only the colonial legislatures could grant. Colonial assemblies sent petitions and protests, reflecting the first significant joint colonial response to any British measure by petitioning Parliament and the King.

The theoretical issue that would soon hold center stage was the matter of taxation without representation. The counter to this argument, held by members of Parliament, was the theory of virtual representation. Thomas Whately explained this theory in a pamphlet that readily acknowledged there could be no taxation without consent; however, he argued that at least 75% of British adult males were not represented in Parliament because of property qualifications or other factors. Since members of Parliament were bound to represent the interests of all British citizens and subjects, colonists—like those disenfranchised subjects in Great Britain—were the recipients of virtual representation in Parliament. This theory, however, ignored a crucial difference between the unrepresented in Britain and the colonists. The colonists enjoyed actual representation in their own legislative assemblies, and the issue was whether these legislatures, rather than Parliament, were in fact the sole recipients of the colonists' consent with regard to taxation.

Local protest groups led by colonial merchants and landowners established connections through correspondence, creating a loose coalition that extended from New England to Georgia. Protests and demonstrations initiated by the Sons of Liberty often turned violent and destructive as the masses became involved. Soon, many stamp tax distributors were intimidated into resigning their commissions, and the tax was never effectively collected.

The Stamp Act was repealed on March 18, 1766, as a matter of expedience, but Parliament affirmed its power to legislate for the colonies "in all cases whatsoever" by also passing the Declaratory Act. There followed a series of new taxes and regulations, likewise opposed by the colonists.