The Problem Of Colonial Taxation - The Imperial Problem
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When Parliament resolved that the colonials should bear some part of the total cost of defending the empire, it ran afoul of the colonial belief that only their colonial assemblies were authorized to tax them. The spirit of independence that more than a half century of "salutary neglect" had induced now confronted Parliament with an insoluble problem.
Colonial Assemblies and Taxation. In theory Parliament had retained the right to tax the colonies; in fact, it had surrendered this power to the colonial assemblies. The Crown's sporadic efforts to modify the taxing powers of the assemblies had met stubborn opposition. A subtle byproduct of the power to tax, as Governor George Clinton of New York noted, was the control by "the ruling faction" in each assembly of "nomination to all offices." Since executive officials depended upon the assembly for appropriation of their salaries, it was not often that they chose to defy the will of the assembly. Once Parliament had launched its imperial reorganization a full-scale conflict between itself and the assemblies was inevitable.
The Revenue Act of 1764. The dispute began to take shape when Parliament passed the Revenue Act of 1764, popularly known as the Sugar Act and in fact an amendment to the Molasses Act of 1733. Its purpose was to finance garrisons to keep the western Indians in check. Parliament attempted to make the tax palatable by reducing the tax on molasses from sixpence to threepence, although it increased the tax on sugar. The colonists were forbidden to import foreign rum while British rum was admitted duty-free. Heavy taxes were also placed upon such luxury items as imported wines, silks, and velvets. From these taxes, Parliament expected to obtain £ 25,000 in additional revenue but it had failed to reckon with the determined opposition of the colonists. "I think Parliament have overshot their mark," warned one merchant, "and you will not, in the event, have your Expectations in any measure answered from the Provisions of the late Act." The Massachusetts General Court under the guidance of James Otis flatly argued that these "measures have a tendency to deprive the Colonies of some of their most essential Rights as British Subjects, and . . . particularly the Right of assessing their own Taxes."
The Colonial Currency Act. Despite the negative response of the colonials, the Grenville ministry pressed its program of tax reform. It proposed to limit the right of the assemblies to issue paper currency. Since Parliament had already acted in this direction in 1751, with the New England Currency Act, the ministry's decision to extend the same restrictions to all the colonies, acted on by Parliament in the Colonial Currency Act of 1764, seemed just. Furthermore, the legislative actions which made colonial paper legal tender had seemed to British creditors a deliberate effort to pay obligations with depreciated currency. The colonials, on the other hand, viewed the Currency Act as part of a monstrous plan to milk them of all hard specie. Since the Sugar Act, if enforced, would cut them off from their most lucrative source of specie - the French and Dutch West Indies - while the Currency Act would compel payment of duties in specie, their view is understandable.
The Stamp Act. Grenville, however, was flirting with a proposal that eventually shook the empire to its foundations. He proposed to institute "certain stamp duties," similar to although smaller than English Stamp taxes, which would be used to support troops in the New World. Since only a third of the moneys needed for this purpose would be raised in the colonies, the British assumed that their own expenditures in support of the troops would provide the colonies with ample specie to meet losses resulting from the Currency Act. The Stamp Act which resulted was a complex piece of legislation consisting of one hundred and seventeen sections. It provided for the purchase in specie only of stamps costing from a halfpenny to £ 10, to be affixed to such printed matter as newspapers, legal papers, mortgages, college diplomas, tavern licenses, playing cards, and advertisements. With the passage of the act on March 22, 1765, a system of stamp distributors was set up to collect the tax. Seeking patronage, prominent Americans such as Jared Ingersoll accepted positions as stamp distributors, and Benjamin Franklin encouraged both friends and relatives in applying for similar posts. Grenville anticipated no further difficulties.
"No Taxation without Representation." Grenville's hopes were founded in part on the fact that the colonies had accepted, albeit grudgingly, the right of Parliament to regulate their trade. He overlooked the more important fact that the navigation acts and other trade regulations had never been effectively enforced. Flagrant violation had been the consistent colonial response; and the response to the Stamp Act soon followed a similar pattern. Appealing to the unwritten principle that no person in the British Empire could be taxed by a legislative body in which he was not represented, the colonials set up a cry of "No taxation without representation." In the Virginia House of Burgesses, Patrick Henry formulated resolutions, which were subsequently approved, that only the House of Burgesses could impose taxes upon a Virginian.
Opposition to the Stamp Act. Henry's protest evoked a sympathetic response in the other colonial legislatures. The Stamp Act galvanized their fears of ultimate parliamentary intentions. Previously British authority had tapped colonial purses, but always by way of requisitions - which the colonial legislatures were free to accept or ignore. Since this new act affected most businessmen, lawyers, and journalists, the protest that ensued was highly articulate. Clergymen denounced the action from the pulpit, while countless communities issued broadsides assailing parliamentary presumption. Nonimportation agreements were made between colonial merchants who were determined to exert influence upon Parliament through affected British businessmen. Throughout the colonies, Sons of Liberty went into action to oppose the Stamp Act. In Massachusetts, Andrew Oliver, the newly appointed stamp distributor, had his life threatened and his home wrecked by a mob, and was so thoroughly intimidated that he applied for permission to resign his post. Within a short time similar demonstrations elsewhere had compelled stamp distributors throughout the colonies to resign their posts or to leave the law in abeyance.
In Boston, attacks upon officials responsible for enforcing trade regulations were commonplace. A particularly unfortunate incident was the sacking of the home of Lieutenant Governor Thomas Hutchinson with the attendant burning of a vast collection of early Massachusetts manuscripts. Efforts to punish the lawbreakers proved fruitless, since many of the most reputable citizens joined in support of the riots.
The Stamp Act Congress. Against this background of open illegality the Stamp Act Congress opened in New York on October 7, 1765. Delegates from the nine colonies chose to follow a moderate course. After eleven days of discussion they composed for the king a "declarations of the rights and grievances of the colonists in America," in which they acknowledged "alliegiance to the crown . . . and all due subordination to . . . the parliament of Great Britain," but claimed "all the inherent rights and privileges of [the king's] natural born subjects within the kingdom of Great Britain." The core of the Congress' argument was "that no taxes should be imposed on them, but with their own consent, given personally, or by their representatives," from which they deduced "that no taxes ever have been, or can be constitutionally imposed on them, but by their respective legislatures."
Repeal of the Stamp Act. British officials answered that the colonials received virtual representation in the Westminster Parliament. By this they meant that every real interest of the realm had its spokesman in the national legislature, an argument which received support when British merchants, severely hurt by colonial boycotts, flatly demanded repeal of the Stamp Act. The ferocity of colonial protest had begun to frighten British creditors, who feared that the more than £4,000,000 in colonial debts would not be repaid. As Horace Walpole subsequently recalled: . . . The weapon with which the Colonies armed themselves to most advantage, was the refusal of paying the debts they owed to our merchants at home, for goods and wares exported to the American provinces. These debts involved the merchants of London, Liverpool, Manchester, and the other great trading towns, in a common cause with the Americans, who foreswore all traffic with us, unless the obnoxious Stamp Act was repealed.
The Rockingham ministry, which had succeeded the Grenville ministry in July 1765, surrendered to the weight of protest and threw its support behind repeal of the act on grounds of its inexpediency. With the backing of the influential William Pitt, the act was repealed on March 18, 1768. Prior to repeal, however, Parliament, determined to assert and maintain its supremacy, passed the Declaratory Act. This asserted parliamentary supremacy over the colonial assemblies in all legislative matters, including the power of taxation. But no assertion, however strong, could make the colonials forget that in an open clash they had carried the day. Once again Parliament had retained the theory of power while surrendering its substance.