Mercantilism, taxation policies and the American revolution

Table of Content

INTRODUCTION

As have been most countries in the world, America had also gone through colonization. The Americans, like other citizens of enslaved countries, have gone through the pains of abuse of power, the absence of freedom, violence and bloody sacrifices of life. In this paper, we will look into the major events that served as prelude to the American Revolution. We will focus on the series of taxation policies enacted during the reign of King George and how these policies incited the Americans to rebel against their Mother Country and consequently winning their freedom.

The first section of this paper discusses thoroughly the provisions of the Taxation Policies and related Laws enacted during the time of King George. This finds this important in order to find a lead on how these policies angered the Americans. A brief timeline of the American Revolution is also included at the last part of this paper in order to connect the events. II.

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 COLONIAL MERCANTILISM AND THE AMERICAN REVOLUTION

Mercantilism was a 17th and 18th century European idea of establishing and empowering nations. 1Mercantilism asserts that nations have to gain power and wealth in order to survive and that a nation’s power comes from the accumulation of great wealth. In order to gain wealth, a nation has to establish colonies which will supply the Mother Country with raw materials as its economic resources. In short, mercantilism is the idea that colonies existed for the benefit of the Mother Country (M.Kelly). In the case of Britain and the then colonial America, Britain was the Mother Country and the American colonies as tenants to the British. As comparable to tenants, the American colonies are to provide money and resources to Britain because their places were owned by the Mother Country. The British idea was to keep and grow its treasury and to avoid trade with other countries on resources and materials that the colonies can and required to provide.

Britain was one of the most successful nations which employed this idea. Through colonial mercantilism, the British government was able to establish colonies in America which brought them much income and a well-balanced trade. The economic method was that there were more products exported to other countries than products they import, thus letting them accumulate gold and silver. With the British government’s desire to gain more wealth, series of taxation policies were drafted and passed during the reign of King George III.

Such taxation policies greatly favored the British government but have hurt the economy and the political interests of the colonies. The policies came to a point where the taxation policies were passed for political ends instead as economic measures. Basic commodities such as tea, paper, glass and paints were levied with trade duties and taxes with the powers of the Stamp Act, Tea Act and the repealed Townshend Act. Such acts were regarded by the colonies as economically unfair for them and later led to the boycotting of British goods by the agreement of non-importation and non-exportation.

Initially, what made the colonies refused to adhere to the acts was their non-representation in the Parliament when these laws were deliberated and drafted. Thus, such taxation policies were dubbed as “Taxation without representation” by the colonies.

KING GEORGE’S TAXATION POLICIES

THE CURRENCY ACT

The Currency Act was passed by the British Parliament and became effective on September 01, 1764. This act generally prohibits the colonists and plantations in America from printing and issuing their own currency and be used as a legal tender. Such prohibitions include issuance of paper bills or any kind and denomination of bills of credit to be used in any form of bargain, payment of debts, contracts, dues or demands. Contained in the Currency Act was also the resolution to recall all and any form of currency currently in circulation in the colonies.

To ensure compliance, the act also in its provisions had included that every governor or commander in chief who refuse to abide with the new law 2will pay one thousand pounds and be immediately dismissed as his punishment. It is also important to note that the currency restriction and regulation was extended to the colonies and plantations of Rhode Island and Providence plantations, Connecticut, the Massachusetts Bay, and New Hampshire, in America.

THE STAMPT ACT

It was Prime Minister George Grenville who introduced the Stamp Act to the British Parliament on March 22, 1765 which was later passed by the Parliament and approved by the King.

The act was intended to regulate policies that serve as means of raising revenue from anything that uses paper, effective November 0, 1765. 3The Stamp Act required all legal documents, licenses, commercial contracts, newspapers, pamphlets, and playing cards to carry a tax stamp.  What raised disagreements was the fact that the implementation of the levying was extended to the colonies and plantations in America, a system which was then only implemented in Great Britain. Where the controversy lies was that the Stamp Act was said to have been passed by the British Parliament in the absence of a required debate and should require a representation of the colonists who are to be taxed.

Their argument was that they should not be taxed since the act was passed without their consent.

THE QUARTERING ACT

In the preliminary statement of the Quartering Act, the Parliament introduced the act this way: 4“An act for better providing suitable quarters for officers and soldiers in his Majesty’s service in North America.” Opposition to this act was due to the fact that it required the colonial citizens to” house and feed, in their private homes, British officers and troops” (Elizabeth J.). The Quartering Act was presented by the British Parliament to the King on June 02, 1774 and which was consequently approved. The provisions of the Quartering Act are as follows:1.      British groups should be provided with sufficient quarters other than the barracks.

This covers 4“all officers and soldiers within any town, township, city, district, or place, within his Majesty’s dominions in North America.”2.      The Act also extends to all authorized personnel under the power of the law. They were given the responsibility, empowered and directed to provide all soldiers and officers with quarters.

3.      The Act also required that such soldiers and officers be provided with the quarters as soon as possible in the absence of barracks, to be specific, within 24 hrs after the demand of the soldiers and officers.4.      If the 24 hours allowance will not suffice, the Quartering Act authorizes the governor of the province to make inhabited houses, out-houses, barns and other buildings be used and taken.

5.      The provisions of the Quartering Act will be enforced until March 24, 1776.

TOWNSHEND ACT

Having countless disagreements and conflicts on the earlier taxation policies, the British Parliament was forced to find another means of raising revenue.

The British Chancellor of the Exchequer in the name of Charles Townshend was assigned to do the job. The new fiscal program was called the Townshend Revenue Act, passed in June 1767. “This was designed to raise revenue to be used in part to support colonial governors, judges, customs officers, and the British army in America” (D. van Rijsbergen).

Paper, tea, glass and paints imported by the American colonies were levied with the power of the said act. Townshend made it sure that the collection of duties be made efficient by tightening the customs administration and authorized the colonies’ superior courts to issue writs of assistance.

TEA ACT

In protest to the Townshend Revenue Act, the American colonies decided to boycott British goods by an agreement of non-importation.

The result was to bankruptcy of the East India Company despite its overwhelming stock of tea. The British Parliament then was forced to repeal the Townshend Revenue Act but the tax imposed on tea importation was retained. It was the Lord North’s ministry who drafted and passed the Regulating Act for India with the purpose of controlling the activities of the Company (M. Bloy).

Thus, the Tea Act was drafted and passed into law on May 10, 1773 with the purpose of 6“allowing a drawback of the duties of customs on the exportation of tea to any of his Majesty’s colonies or plantations in America.” The provisions of the Tea Act has actually two main expressed and implied purposes: First, to increase Bohea Tea deposits sold by the India Company by extending assistance to them, second was to authorize commissioners of the treasury to issue license to East India Company duty free and lastly, which is the implied purpose of the act is to challenge the American colonists on the issue of taxation.The specific provisions of the Tea Act were the following:1.      The tea imported by the Americans was to be taxed at source, and that is, in India.

This provision should assure that there will be no tax to be collected from the companies.2.      From the source, the tea was to go directly to America, specifically in the East India Company. This provision allowed the tax on tea cheaper far cheaper than ever before.

Before the implementation of the Tea Act, importation of the product was to be imported in Britain and re-exported to the colonies.3.      The Tea Act gave the East India Company with the sole authority to market the tea in America. This meant that the company will have the exclusive right to sell tea to America through its appointed special consignees.

COERCIVE OR INTOLERABLE ACTS

The continuing resistance of the colonists to the British taxation laws led the Parliament to draft policies that will empower the government to punish the colonies. The British Parliament was alarmed by the political activities of the colonies that seem to be indicating their independence from the mother country. Such political activities include the setting up of governing authorities different with that of the British government.

In example, instead of a King, they had a Royal Governor; instead of a House of Lords, they had a Council; instead of a House of Commons, they had an Assembly (Elizabeth J). The best means that the mother country could do then to control them was to impose trade taxes which the colonies rejected and boycotted. For this reason, the King was determined to punish them for such insulting acts. Thus, the British Parliament drafted and passed the Coercive Acts in 1774.

The Coercive Acts, which the colonists referred to as the Intolerable Acts were set of policies that aimed at primarily regulating the political affairs of the colonies. These acts include the following:1.      The Boston Port Bill – the bulk of tea shipped by the East India Company in Boston was rejected by the Americans and refused to pay for the imported goods. Because of this, the Boston Port Bill was drafted and passed authorizing the closure of the Port of Boston.

The closure will continue until Boston pay for the cost of the tea and the taxes due to the Parliament. Because of this bill, the economy of Boston, which was dependent on the port, suddenly bagged down. It might have been however a blessing for Massachusetts Company and the rest of the colonies that this bill was imposed. It is because the closure of the port incited the colonies to work together to help Boston get up.

In protest, the business establishments in Boston were closed and the protesters demonstrated and marched on streets of Boston. Other colonies supported the company by bringing in donations of rice, wheat, sugar and flour. Sheep from New York and Connecticut also came in as support. In September 1774, the Continental Congress, composed of representatives from the colonies, agreed to boycott British products by means of strict non-importation and non-exportation agreement.

2.      The Massachusetts Government Act – this act gave the governor of the colony to appoint the members of the council instead of being elected by the Assembly. The Governor was given the sole power to choose or appoint its local officials including the members of the judiciary. This act also restricted the town meetings only to the place permitted or authorized by the Governor.

The Act also provided for the power of the sheriffs to appoint the juries instead of being elected.3.      The Administration of Justice Act – this act provided for the removal of any British official who was then serving in the companies who was accused of capital offense. The official could either be removed from the colony and be transferred to another or be brought to England for trial.

4.      The Quebec Act – this act gave guarantee of religious tolerance and civil equality to the Catholics of Canada. The French territories were also extended with the authority given by this act. IV.

TIMELINE OF THE AMERICAN REVOLUTION

With abuse of authority, unfair economic practices and undue political intervention, the colonies resorted to rebellion to their mother country led to the American Revolution and their independence in 1776. The series of taxation policies imposed by the King fueled the rage of the colonies against Britain, thus served as prelude to the American Revolution. Below is a brief description of the major events relative to the taxation policies before the revolution, as adapted from 5The History Place: American Revolution:1764 – The Currency Act was enacted which considerably threatened the economic stability of the colonies. James Otis then published the “The Rights of the British Colonies Asserted and Proved” in July after a town meeting in Boston in May.

In August of the same year, Otis was able to convince Boston merchants to unite and formally agreed to boycott British luxury goods.1765 – In March, the Stamp Act was enacted and took effect on November 01, 1765. Being primarily affected lawyers, publishers, land owners, ship builders and merchants united and opposed the new act. It was also during this month that the Quartering Act was enacted.

An underground organization who called themselves the Sons of Liberty was formed in July in opposition of the Stamp Act. Their violent means forced American merchants to refrain from importing British goods. British stamp agents also resigned because of threats from this group. A resolution aimed at repealing the Stamp Act was sent to the King in October after nine of the colonies met in New York.

When the Stamp Act took effect on November 01, daily business and transactions did not operate in protest of the act and in December of the same year, over 200 merchants joined the boycott of English imports.1766 – The Stamp Act was repealed in March. In August, violence erupted because of the colonists in New York’s refusal to adhere to the Quartering Act which led to the suspension of its legislature in December.1767 – The Townshend Revenue Acts were passed in June leading to the Bostonian’s boycott of English luxury goods in October.

1768 – In February, Samuel Adams of Massachusetts called for united opposition of the Townshend Acts from the colonies by distributing a Circular letter. In August, Boston and New York joined hands and boycott British goods until Townshend Acts were repealed.1769 – Merchants in Philadelphia joined Boston in the boycott of British goods which later encouraged New Jersey, Rhode Island, and then North Carolina in October.1770 – The famous Boston Massacre occurred on March 5.

Because of this event, the British troops were withdrawn in Boston where Thomas Preston, the British captain, was arrested along with eight other soldiers for the murder of three Bostonians. The Townshend Acts were finally repealed in April, import duties except for tea were removed and the Quartering Act was revised.1773 – The Tea Act took effect on May 10 imposing lower taxes on tea trade. In September, a half-million-pound shipment of tea arrived in Boston which the Bostonians still boycotted.

In November, the colonists met and decided to send the ship containing tea back to England without paying any duty. The Boston Tea Party occurred on December 16, 1773 making way for activists to dump all containers of tea into the harbor.1774 – The series of Coercive Acts were passed in the British Parliament empowering the Mother Country to shut down Boston Port with the Boston Port Bill. In May, Bostonians agreed to boycott tea and were joined by the colonies of Providence, New York and Philadelphia.

The Quebec Act was also enacted later in May, enabling Canada extend to territories claimed by Virginia, Massachusetts and Connecticut. In June, the revised Quartering Act was enacted and in September, Massachusetts arsenal of weapons at Charlestown was seized. On September 17, the First Continental Congress, composed of 56 delegates from each colony, formally declared their opposition to the Coercive Acts. On October 14, the Congress adopted the Declaration of Resolves aimed at opposing the Coercive Act and enabling them to self-rule.

1775 – Massachusetts as declared to be in a state of rebellion on February 09 by the British Parliament. Patrick Henry then delivered a speech in Virginia on March 23 with the famous line, “Give me liberty or give me death!” In response, King George III approved the New England Restraining Act that required New England colonies to exclusively trade with England and consequently banned fishing in the North Atlantic. On April 18, a plan of seizing ammunition at Concord by the British was discovered and so Boston’s Minute Men were alerted. The next day, the encounter between the troops and the Minute Men occurred marking the beginning of the American Revolution.

CONCLUSION

By looking into the taxation policies and their purposes, this paper has proven that the “Taxation without representation” policies were actually issued and enacted not just for economic purpose but also with political ends. By examining the series of events, we have seen that such taxation policies aimed at controlling the colonies and making them strongholds of the British Parliament’s economic system. However, enforced without the consent of the colonies, the taxation policies became weapons of the Americans in their rebellion against their Mother Country.

The Taxation Policies served as wake up call for the Americans to begin to self-rule and later, with their insistence and bravery, they were able to win the war which rewarded them their freedom.

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