The Age of Revolution, 1763–1790 Overview

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At the end of the French and Indian War (17541763), British North America was a scattered patchwork of individual colonies that had been allowed to develop their own economic and political systems during a previous 40-year period of neglect by the government in London. By 1790, Americans had worked together to end British rule, cooperated to form a political union, created a centralized federal constitution, and were beginning to deal with the huge economic consequences and responsibilities of being a united nation. In order to undergo such a transition, Americans had to fight a bitter revolution and to endure difficult economic changes that would shape their country for decades to come.

Although the American colonies were primarily agricultural, farming varied from region to region. In the southern colonies, slave labor produced a large surplus of tobacco and wheat for overseas trade, frequently handled by wealthy Scottish merchants (called "factors")who held monopolies licensed by the British crown. Slavery was present in the South and in some of the northern colonies, like New York. It had a different function there, howevermany of the slaves in New York City worked as domestic servants. In general, slavery was much less important in other colonies, like Pennsylvania, where smaller family farms that produced goods mainly for their own use were the norm.

With the exception of some areas of the mid-Atlantic colonies, ordinary Americans owned land in numbers that far exceeded their counterparts in Europe. Merchants in New England and in the port cities of the middle colonies enriched themselves (and their British counterparts) by importing and exporting rum, ship masts, sugar, and tea, among other trade goods. During the early 1700s the British government had been content to let colonial economies develop on their own because, even though the colonists dodged many taxes, the mother country profited from colonial economic activity and the colonies played an important

This table highlights the different powers given to the federal government by the Articles of Confederation and the U.S. Constitution. The Articles of Confederation created a weak central government, unable to deal with the nation's economy. THE ARTICLES OF CONFEDERATION VS. THE CONSTITUTION
The Federal Government is Empowered to:Under the Articles of Confederation:Under the United States Constitution:
Declare War and make peaceYesYes
Control foreign affairsYesYes
Create a postal systemYesYes
Coin moneyYesYes
Impose taxesNoYes
Utilize state militiaNoYes
Trade regulationNoYes
Organize a court systemNoYes
Protect copyrightsNoYes
Take other necessary actions to manage the federal governmentNoYes

part of the economic theory of mercantilism that defined the relationship between governments and their colonies.

The close of the French and Indian War brought Great Britain's "benign neglect" to an end. The British government spent more than one million pounds on colonial defense during the war, and a series of new activist Prime Ministers decided that the colonies should bear a fair share of the taxes that would be needed to pay back Britain's war debt. Although the colonials paid taxes that were at least 25 times lower than the British living in England and only one-fifth that of the Irish, they did not react well to attempts to raise their taxes over the next ten years. The vast majority of the colonial population were loyal British citizens, but they had grown used to levying their own taxes in local assemblies for the upkeep and improvement of the colony.

Economic resistance sparked a movement for political change as colonists protested an increasingly strict series of commercial laws and taxes passed by the British Parliament between 1764 and 1774. The British government attempted not only to control trade (which they had done since the first Navigation Acts in 1651 and 1660). They also tried to raise taxes to pay off the shortfalls in the British Exchequer and they passed restrictions on colonial paper money that was virtually worthless in Britain. The Sugar Act (1764) and the Tea Act (1773) tried to increase revenue by taxing these vital imports and they tried to stop smuggling. To do all this they appointed Customs Agents and founded Admiralty Courts. Another set of lawsthe Stamp Act (1765), the Townshend Revenue Acts (1767), and the Declaratory Act (1766)placed duties on a wide variety of goods, such as legal documents, glass, and lead. Parliament also restricted American trade outside the British empire and declared Parliament's authority to legislate for the colonies "in all cases whatsoever."

Colonists resisted all of these measures through a variety of means. Intellectuals like Philadelphia lawyer John Dickinson wrote pamphlets denouncing Parliament's right to tax without colonial representatives giving their consent. Merchants and workingmen formed paramilitary clubs called the Sons of Liberty. Crowds of ordinary men and women harassed individual tax collectors, held public protest meetings, and even resorted to dumping East India Company tea into Boston Harbor in December 1773 at the Boston Tea Party. The "Committees of Correspondence" encouraged communication among resistance leaders in different colonies, and after 1774 the First Continental Congress organized boycotts of British luxury items like tea and silk cloth.

Disagreements over economic issues led Americans to begin to question the rationale of political authority of Great Britain. When Parliament dissolved the Massachusetts legislature, closed Boston Harbor, shut down colonial courts, and quartered troops in private homes in 1774, some Americans prepared to take resistance to a higher level. The restrictive economic policies, even though several of them had been repealed, inspired colonists to work together as never before, and reaction spread far beyond Massachusetts. In the Quebec Act of 1774 the British tried to enforce a previous restriction on American settlement west of the Allegheny Mountains (designed to keep settlers from clashing with Native Americans and to facilitate the collection of taxes). This raised the ire of the frontier population who, to that point, were largely indifferent to the quarrels of their city cousins.

Though not all Americans agreed that greater resistance was necessary, some colonists began to stockpile weapons and to train for war. The conflict turned violent on April 19, 1775, when British troops were dispatched to capture weapons and agitators in Lexington and Concord, Massachusetts. They met armed resistance from citizen militias. Meanwhile, a revolutionary assembly called the Continental Congress mobilized for armed conflict, and the American Revolution (17751783) began.

In 1775 the Second Continental Congressnot yet a proper national legislaturewas ill-prepared to finance a war. Although the Congress on July 4, 1776 produced a stirring Declaration of Independence based on the ideas of representative government that had been advanced by British philosopher John Locke, the American Revolution had to confront a serious financial challenge. Seven years of warfare created both economic problems and opportunities as the upheaval of war affected the circumstances of individual Americans. Loyalists who opposed the war and the secession from Great Britain often found their property confiscated or destroyed by unsympathetic "mobs" or by local governments. One hundred and eighty thousand men volunteered for military service in the Continental Army or the state militias. Women assumed control of businesses and farms in unprecedented numbers while their fathers or husbands were away. African American slaves freed themselves from bondage by seeking protection from the British Army or joining the American armed forces themselves. Farmers faced confiscation of their property by foraging armies, especially as the war shifted to the middle states and to the South. Some city dwellers carried on business under enemy occupation.

The government faced constant conflict over how to finance the war and supply the military. The Continental Congress had no powers to enforce state tax contributions to pay for the war, so they mainly solved their financial difficulties through securing loans and by printing money. Congress and the states ordered almost $400 million worth of paper money to be printed, despite the fact that hard currency reserves (the gold and silver that was supposed to back up paper currency at the time) probably never exceeded $30 million. The unfortunate result of so much paper currency was inflation, which continued throughout the war. Financial problems persisted, although foreign loans flowed in after France signed a treaty of alliance with the United States in 1779. The national government was almost bankrupt by 1780, and troops threatened to mutiny over lack of pay just as the fighting grew fiercer. Prominent Philadelphia merchant Robert Morris was appointed superintendent of finance in early 1781, and his efforts to shore up national credit as well as his advocacy of a charter for the Bank of North America probably helped the American army triumph at the climactic Battle of Yorktown in October 1781. Morris remained at the helm of the national economy until the war was formally concluded in 1783.

Some individuals, such as "privateers" who were commissioned to capture British ships and keep the profits for themselves, or merchants who charged outrageous prices for food, profited from the war. Others, mainly the poor or the Loyalists (who abandoned their houses and fled the country), suffered from high prices or from the disruption that the war caused to the agricultural economy. The British imposed a blockade on the eastern seaboard and both imports and exports declined. This led some enterprising merchants in cities like Philadelphia to consider founding a manufacturing sector to produce goods that could no longer be imported. State controls on prices and wages did little to even out the economic effects of the war.

The relative weakness of the central government, which Americans had chosen in reaction to British rule, caused many financial difficulties during the American Revolution that continued after the war. The Articles of Confederation, which were proposed in 1777 as the United States' first national written constitution, called for a Congress in which each state had one equal vote. But the problems with such an arrangement became clear when the document itself was not accepted by all the states until 1781. Under the Articles, the national government controlled credit and could charter banks, but could not directly tax American citizens. Realizing that taxation would be necessary to pay off war debt, Morris proposed an amendment to the Articles that would have allowed Congress to impose a 5 percent tax or "impost" on imports. Even though by 1782 twelve states had ratified the amendment, the proposal failed because Rhode Island, the smallest state, refused to agree. Constant squabbling among the states, over western land claims and other issues, contributed to continued financial chaos throughout the 1780s.

The fact that the Revolution was not only a successful rejection of British rule but also contained elements of a social revolution became clear when, after the war a new breed of leaders came to power in the United States, particularly in state legislatures. Businessmen, merchants, and even tradesmen who had acquired a comfortable standard of living now questioned the traditional authority of the landed elite that, in tandem with the British officials, had controlled colonial American society. In the South, the slave-holding class grew worried as the first organized antislavery movement in American history took aim at the basis of their wealth. Tenants in western New York revolted against their landlords and demanded equal opportunity to buy land. But although the Revolution was "made" through the blood and the sweat of ordinary Americans, it was led by a class of entrepreneursthe commercial and financial elite of New England and Philadelphia as well as the rich, slave-holding farmers of the South. These leaders of the economy argued that the pursuit of profit was not incompatible with the "virtuous" American political ideal.

Inflation continued after the war, and some people began to view paper currency as almost worthless. Other people, small farmers mostly, found it easier to pay the mortgages with cheap money. Meanwhile, a trade imbalance with Great Britain plunged the United States, which still relied on the former "mother country" for the majority of its imports and exports, into a depression. While the national government under the Articles of Confederation could not impose taxes to pay off debt, many individuals were heavily taxed by their states. Veterans who received western land grants in return for wartime service often sold off their claims to land speculators, who in turn drove up prices for those who chose to relocate to the west. Urban poverty increased in every region. When creditors began to demand that individual debtors pay their bills in hard currency, dramatic social unrest resulted. The most famous incident occurred in 1786 when Revolutionary veteran Daniel Shays led a band of unhappy debtors who took over a government arms depot in western Massachusetts. Shays's rebels was put down by the Massachusetts militia, and conservatives all over the country worried that financial unrest might cause the downfall of the nation.

Ultimately, political leaders were convinced that the national government needed to be revamped in order to solve the country's economic problems. Delegates from each state met in Philadelphia in May 1787 to discuss a possible alteration of the Articles of Confederation, but by the time the convention had concluded in September, they had debated and drafted a whole new Constitution. This Constitution proposed a more powerful federal government that would exercise authority over internal and external trade, taxation, national debt, and the money supply. The Constitution created a two-branch legislature (as well as an executive and judicial branch), and provided an easier mechanism for amendments.

When the Confederation Congress sent the document to the states for ratification, its supporters, the Federalists, claimed that the new government was necessary to resolve the nation's financial ills. Alexander Hamilton, James Madison, and John Jay urged the public to accept a powerful central government. On the other side of the issue stood a loose group, the Anti-Federalists, who opposed ratification and wished to maintain the power of the states. The Anti-Federalists, including Samuel Adams and John Hancock, disliked the Constitution for different reasons, one of which was the lack of a bill of rights. After Federalists promised to add a bill of rights, the conventions in 11 of the 13 states (the necessary two-thirds margin) approved the Constitution by June 1788.

George Washington, leader of the army during the American Revolution, took office as he first president of the United States in 1789. As a member of Virginia's slave-holding elite, Washington was just the type of man who had exercised the greatest economic power in colonial America. Now he came into office as the democratically elected head of a republic. The country still faced financial instability, and it was unclear whether the new Constitution would solve all of the economic challenges posed by the American Revolution, but the citizens of the United States could look forward to economic opportunities never dreamt of by colonial subjects of the British crown.

See also: American Revolution, Articles of Confederation, Boston Massacre, Boston Tea Party, French and Indian Wars, Proclamation of 1763, Stamp Act, Sugar Act, George Washington


Carp, E. Wayne. To Starve the Army at Pleasure: Continental Army Administration and American Political Culture, 17751783. Chapel Hill: University of North Carolina Press, 1984.

Christie, Ian, and Benjamin Labaree. Empire or Independence: 17601776. New York: W.W. Norton, 1977.

Jensen, Merrill. The New Nation: A History of the United States During the Confederation, 17811789. New York: Alfred A. Knopf, 1950.

Kulidoff, Allan. Tobacco and Slaves: The Development of Southern Cultures in the Chesapeake, 16801800. Chapel Hill: University of North Carolina Press, 1986.

McCusker, John, and Russell Menard. The Economy of British America, 16071789. Chapel Hill: University of North Carolina Press, 1985.

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The Age of Revolution, 1763–1790 Overview

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The Age of Revolution, 1763–1790 Overview