Navigation Acts, Economic Burden on the American Colonies (Issue)
NAVIGATION ACTS, ECONOMIC BURDEN ON THE AMERICAN COLONIES (ISSUE)
The economic burden of the Navigation Acts on the American colonies has been a subject of debate both among the eighteenth century colonists and among scholars in the twentieth century. The debate has mostly been over whether the economic burden of the Navigation Acts was sufficient to warrant the American Revolution (1775–1783).
The most important Navigation Acts were enacted in 1651, 1660, 1663, 1673 and 1696. They were expressions of the economic doctrine of mercantilism. This doctrine asserted that foreign trade was a form of economic warfare with other trading nations and that the winner in this war would be the nation that accumulated the most gold and silver. The role of colonies in the mercantilist system was subordinate to the "mother country." They were to furnish staple foodstuffs and raw materials to the mother country as well as a market for the finished goods of the mother country. The most important Navigation Acts of seventeenth century England decreed that only colonial or English ships could trade with the colonies; that certain "enumerated" colonial products could be shipped only to England; that American exports to Europe had to pass through English ports, to be taxed; and that colonial goods shipped to England could not compete with English goods.
Some of these acts hurt colonial trade. Especially in the grain-growing middle colonies and the Chesapeake, there was consternation at the fact that the colonies could trade their main export staples only with England. They would have preferred broader market opportunities. And, given the many coves and inlets on the eastern seaboard, American merchants took the opportunity to smuggle goods and to trade with whomever would give the best price.
Thus the Navigation Acts presented both benefits and burdens to the American colonies. New England benefited from the monopoly in the shipbuilding and shipping industries. Because of the proximity to the forests of upper New England, Massachusetts shipyards already enjoyed lower costs than those in Britain and produced many ships for British merchants. Once built and on the water, the colonial ships fared well in the imperial trade, especially on routes between New England and the West Indies. American crews could be paid and dismissed at home ports while British ships at the same ports were forced to bear the expense of frequently idle deck hands.
The early decades of the eighteenth century were a period of "benign neglect" of colonial trade by Great Britain. The English government was preoccupied with a series of wars with France that grew out of commercial competition. Only after the conclusion of the expensive and exhausting "Seven Years' War" (1756–1763) , known in the colonies as the "French and Indian Wars" (1754–1763) did the English Parliament begin to re-examine the trading policy with its colonies.
After 1763 the English Parliament decided to force the colonies to pay their share of maintaining the British fleet which, in their view, spent much of its time defending the colonies. After the war British policy shifted from a loose commercial system to a tightly regulated imperial one. The new taxes that they attempted to impose—the sugar tax, the stamp tax, and the tax on tea—became the focus of contention between the colonies and the British authorities.
Whig historians such as George Bancroft (1800–1891) and Progressive historians such as Charles Beard argued that the economic burden of the Navigation Acts was considerable. These historians point to the central problem of indebtedness. Because of the chronic imbalance in colonial trade stemming from the Navigation Acts, they chafed under the colonial regime. Even wealthy colonies like Virginia and Maryland masked huge debts. Lesser planters borrowed from larger ones, who in turn were perpetually indebted to British "factors" (brokers). The Progressive historian Charles Beard concluded that it is "generally known the debts due to British merchants and other private citizens constituted one of the powerful causes leading to Revolution."
More recent historians have re-examined the data and concluded that things were not all that bad. Robert Paul Thomas estimated that the gross burden of the administrative empire and the Navigation Acts on imports and exports was $3.1 million in 1770 but that the figure had to be weighed in light of the benefits of membership in the empire. Thomas estimated that the burden was approximately $1.24 per person or two percent of colonial per capita income. But when this was set against the benefits and especially military and naval protection ($1.775 million overall, and a little less than $1 per person) the net costs were less than one million dollars, or about 41 cents per person in 1770. For Thomas as well as a growing number of scholars after him the Navigation Acts posed no serious financial hardship to the colonists. These scholars considered that if these were considered burdens they had been placed on political and ideological, not economic, scales.
Other colonies benefited also from the British policy of subsidizing the production of some colonial staples. The 1748 sixpence per pound bounty on indigo was decisive in boosting the indigo industry in South Carolina. But when the bounty disappeared after the American Revolution so did the industry. Likewise in North Carolina bounties on lumber and naval stores such as tar, pitch, and turpentine yielded cash payments somewhat greater than those on indigo. The general protection that the British markets offered also benefited all the colonies, even those who exported unsubsidized goods. Colonial exports received higher prices in Britain because competing non-imperial products bore special high tariffs.
But the Navigation Acts bore many burdens as well. Most imports and exports within and outside the empire were required to be routed through England first. For this reason colonists had to pay higher prices for most goods imported from the European continent and other non-imperial sources. The Navigation Acts required that roughly three-quarters of all colonial exports be shipped through Britain first. The result was that almost two-thirds of all colonial exports were subject to laws that reduced both export volume and price. Americans were forced to pay premium prices for protected English manufactures like lace and linen because they could not buy them from lower-cost continental sources. Meanwhile southern planters had to bear the costs of re-exportation, shipping, and lower prices when their tobacco and rice which was first shipped to England demanded higher prices on the international markets. Because other foreign vessels were excluded from imperial trade, colonists bore higher shipping costs as well. In the long run colonists paid higher prices and earned smaller incomes than they would have earned without the restrictions of the Navigation Acts.
See also: French and Indian War, Mercantilism, Navigation Acts, Stamp Act, Sugar Act
McClelland, Peter D. "The Cost to America of British Imperial Policy." American Economic Review, LIX, 1969.
McCusker, J., and R. Menard. The Economy of British America, 1607–1789. Chapel Hill, NC, University of North Carolina Press, 1985.
Thomas, Robert Paul. "A Quantitative Approach to the Study of the Effects of British Imperial Policy upon Colonial Welfare: Some Preliminary Findings." Journal of Economic History, XXV, 1965.
Walton, Gary M. "The Economic History and the Burdens of the Navigation Acts." Economic History Review, 2d Ser., XXIV.