Taxation in Colonial America [Course Book ed.] 9781400828708

Table of contents :
Contents
Illustrations
Preface and Acknowledgments
Introduction
Part One. Founding the American Colonies
Introduction
Chapter 1. The First Wave
Chapter 2. The Middle Wave
Chapter 3. The Third Wave
Appendix
Part Two. Turmoil In England - Growth In The Colonies, 1607–1688
Introduction
Chapter 4. Constitutional Government and Politics in England, 1607–1688
Chapter 5. Imperial Governance: Constitutional and Commercial Policy, 1607–1688
Chapter 6. The Colonial Constitution, 1607–1688
Chapter 7. Taxation of the New England Colonies, 1620–1688
Chapter 8. Taxation of the Middle Colonies, 1624–1688
Chapter 9. Taxation of the Southern Plantation Colonies, 1607–1688
Appendix. Taxation in the American Colonies, 1688
Part Three. War in Europe - Opportunity in the Colonies, 1688–1714
Introduction
Chapter 10. Constitutional Government and Politics in England, 1688–1714
Chapter 11. Imperial Governance: Constitutional and Commercial Policy, 1688–1714
Chapter 12. The Colonial Constitution, 1688–1714
Chapter 13. Taxation of the New England Colonies, 1688–1714
Chapter 14. Taxation of the Middle Colonies, 1688–1714
Chapter 15. Taxation of the Southern Plantation Colonies, 1688–1714
Appendix. Tax Burdens in the American Colonies, 1714
Part Four. Salutary Neglect in the Colonies, 1714–1739
Introduction
Chapter 16. Imperial Governance and the Colonial Constitution, 1714–1739
Chapter 17. Taxation of the New England Colonies, 1714–1739
Chapter 18. Taxation of the Middle Colonies, 1714–1739
Chapter 19. Taxation of the Southern Plantation Colonies, 1714–1739
Appendix. Taxes in the American Colonies, 1739
Part Five. War, Debt, Money, and Taxes: Prelude to Imperial Intervention, 1739–1763
Intervention
Chapter 20. Imperial Governance and the Colonial Constitution, 1739–1763
Chapter 21. Taxation of the New England Colonies, 1739–1763
Chapter 22. Taxation of the Middle Colonies, 1739–1763
Chapter 23. Taxation of the Southern Plantation Colonies, 1739–1763
Part Six. An American Tax, 1763–1775
Introduction
Chapter 24. British Politics, Imperial Governance, and Colonial Government and Politics, 1763–1775
Chapter 25. British Taxation of the American Colonies, 1763–1775
Chapter 26. Taxation of the New England Colonies, 1763–1775
Chapter 27. Taxation of the Middle Colonies, 1763–1775
Chapter 28. Taxation of the Southern Plantation Colonies, 1763–1775
Conclusion
Appendix
Bibliography
Index

Citation preview

Taxation in Colonial America

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Taxation in Colonial America

a lv i n r a b u s h k a

princeton university press princeton and oxford

Copyright © 2008 by Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 3 Market Place, Woodstock, Oxfordshire OX20 1SY All Rights Reserved Library of Congress Cataloging-in-Publication Data Rabushka, Alvin. Taxation in colonial America / Alvin Rabushka. p. cm. Includes bibliographical references and index. ISBN 978-0-691-13345-4 (hardcover : alk. paper) 1. Taxation—United States—History—17th century. 2. Taxation—United States—History—18th century. 3. United States— History—Colonial period, ca. 1600–1775. I. Title. HJ2368.R33 2008 336.200973'09032—dc22 2007026175 British Library Cata loging-in-Publication Data is available Th is book has been composed in Adobe Caslon Printed on acid-free paper. ∞ press.princeton.edu Printed in the United States of America 1

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For Alexander, Nicholas, Hunter, and Julia The Promise of America

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cont ent s


list of illustrations

xi

preface and ac know ledg ments

xvii

introduction 1
part one Founding the American Colonies 19 chapter 1 The First Wave 23 chapter 2 The Middle Wave 42 chapter 3 The Third Wave 56 appendix List of Tax Incentives in Founding and Settlement of the American Colonies 64
part two Turmoil in England—Growth in the Colonies, 1607–1688 65 chapter 4 Constitutional Government and Politics in England, 1607–1688 71 chapter 5 Imperial Governance: Constitutional and Commercial Policy, 1607–1688 92 chapter 6 The Colonial Constitution, 1607–1688 118

cont ent s

chapter 7 Taxation of the New England Colonies, 1620–1688 144 chapter 8 Taxation of the Middle Colonies, 1624–1688 199 chapter 9 Taxation of the Southern Plantation Colonies, 1607–1688 228 appendix Taxation in the American Colonies, 1688 267
part three War in Europe—Opportunity in the Colonies, 1688–1714 271 chapter 10 Constitutional Government and Politics in England, 1688–1714 275 chapter 11 Imperial Governance: Constitutional and Commercial Policy, 1688–1714 301 chapter 12 The Colonial Constitution, 1688–1714 325 chapter 13 Taxation of the New England Colonies, 1688–1714 355 chapter 14 Taxation of the Middle Colonies, 1688–1714 399 chapter 15 Taxation of the Southern Plantation Colonies, 1688–1714 416 appendix Tax Burdens in the American Colonies, 1714 437
part four Salutary Neglect in the Colonies, 1714–1739 441 chapter 16 Imperial Governance and the Colonial Constitution, 1714–1739 445

[ viii ]

cont ent s

chapter 17 Taxation of the New England Colonies, 1714–1739 454 chapter 18 Taxation of the Middle Colonies, 1714–1739 490 chapter 19 Taxation of the Southern Plantation Colonies, 1714–1739 519 appendix Taxes in the American Colonies, 1739 556
part five War, Debt, Money, and Taxes: Prelude to Imperial Intervention, 1739–1763 559 chapter 20 Imperial Governance and the Colonial Constitution, 1739–1763 563 chapter 21 Taxation of the New England Colonies, 1739–1763 575 chapter 22 Taxation of the Middle Colonies, 1739–1763 624 chapter 23 Taxation of the Southern Plantation Colonies, 1739–1763 657
part six An American Tax, 1763–1775 713 chapter 24 British Politics, Imperial Governance, and Colonial Government and Politics, 1763–1775 717 chapter 25 British Taxation of the American Colonies, 1763–1775 749 chapter 26 Taxation of the New England Colonies, 1763–1775 766 chapter 27 Taxation of the Middle Colonies, 1763–1775 797

[ ix ]

cont ent s

chapter 28 Taxation of the Southern Plantation Colonies, 1763–1775 826 conclusion 865 appendix

871

bibliography index

[ x ]

915

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i l l u s t rat ion s


Figures Figure 13.1. 1690 Massachusetts Bill of Credit (Five Shillings) Figure 13.2. 1691 Massachusetts Bill of Credit (Twenty Shillings) Figure 19.1. Exterior View, Yorktown Customs House Figure 19.2. Interior View, Yorktown Customs House Figure 19.3. Interior View, Yorktown Customs House Figure 24.1. Colonial America, 1763 Figure 24.2. Obelisk Erected on the Boston Common in Celebration of Repeal of the Stamp Act Figure 24.3. The Repeal, or Funeral Procession, of the Stamp Act Figure 24.4. A Mob of Bostonians Pouring Tea into the Mouth of a Loyalist Tax Collector Who Has Been Tarred and Feathered Figure 24.5. The Boston Tea Party Figure 26.1. Currency Exchange Table, 1775

361 362 525 526 527 718 742 743 744 747 767

Tables Part I: Appendix. List of Tax Incentives in Founding and Settlement of the American Colonies 7.1. Connecticut Direct Taxes, 1651–1688 7.A. Ratios of Legal Rating of Sterling and Colonial Currencies Expressed in Pence Based on Full-Weight Spanish Dollar Part II: Appendix (A). Composition of Taxes in Colonial America, 1688 Part II: Appendix (B). Per Capita Taxes in the American Colonies, 1688 12.A. Colonial Legislatures in 1714 13.1. New England Bills of Credit Outstanding, Silver Price per Ounce, and Sterling Exchange 13.2. Legal Rating of Colonial Currencies Based on Full-Weight Spanish Dollar and Relation of Colonial Currencies to Sterling 13.3. Massachusetts Direct Tax Levies, 1692/93–1713/14 [ xi ]

64 181 196 268 269 354 366 370 378

list of illust rat ions and table s

13.4. New England Auditor General’s Financial Statements, 1701/02–1711/12 13.5. Connecticut Direct Taxes, 1689/90–1713/14 13.6. Rhode Island Direct Tax Levies, 1690–1714 13.7. New Hampshire Taxes, 1693–1714 13.A. 1702 Ratios of Sterling (54d.) and Colonial Legal Values of Full-Weight Spanish Piece of Eight and Other Foreign Silver Coins against Each Other 13.B. Cross-Rates of English Sterling and Colonial Currencies in 1714 14.1. New York Direct Tax Levies, 1690–1714 14.2. New York Provincial General Revenue (Excluding Direct Taxes), 1690–1695 and 1698–1709 14.3. Pennsylvania Intercolonial Duty on Tobacco Exports, 1704/05–1711/12 15.1. Virginia Quitrents, 1690–1715 15.2. Virginia Hogshead Receipts and Disbursements, 1702–1712 15.3. Maryland Assessments on Taxables, 1694–1713 Part III: Appendix A. Per Capita Taxes in the American Colonies, 1714 17.1. New England Bills of Credit Outstanding (), Silver Price per Ounce, and Sterling Exchange 17.2. Massachusetts Taxes, 1715/16–1738/39 17.3. Massachusetts Duties and Tonnage, 1715/16–1738/39 17.4. Massachusetts Treasurer’s Statements, 1713/14–1738/39 17.5. Massachusetts Annual Levies Compared with Receipts of Taxes and Interest, 1715–1738 17.6. Connecticut Direct Taxes, 1714/15–1739/40 17.A. Cross-Rates of English Sterling and Colonial Currencies in 1739 18.1. New York Direct Tax Levies, 1721–1729 18.2. New York Duties, 1722–1725 18.3. New York Summary of Taxes, 1714–1739 18.4. Pennsylvania Excises, Duties, Interest, and Provincial Payments, 1718–1739 19.1. Virginia Quitrents, 1715–1722 19.2. Virginia Poll Tax, Export Duties, and Tonnage, 1714–1722 19.3. Maryland Assessments Levied on Taxables, 1716–1734 19.4. South Carolina Quitrent Revenue and Provincial Tax Revenue, 1729–1740 Part IV: Appendix A. Per Capita Taxes in the American Colonies, 1739

[ xii ]

381 385 388 392

396 398 403 404 409 422 425 431 438 457 462 464 466 473 475 485 500 502 508 512 534 535 539 552 557

list of illust rat ions and table s

21.1. New England Bills of Credit Outstanding ( Old Tenor), Silver Price per Ounce, and Sterling Exchange, 1739–1751 21.2. Massachusetts Apportioned Direct Taxes, 1739/40–1762/63 21.3. Massachusetts Duties and Tonnage, 1739/40–1762/63 21.4. Massachusetts Excises, 1739/40–1762/63 21.5. Massachusetts Treasurer’s Statements, 1734/35–1753 21.6. Massachusetts Treasurer’s Statements and House of Representatives Audit Committee Reports, 1753/54–1762/63 21.7. Massachusetts Lotteries, 1744/45–1762/63 21.8. Connecticut Direct Taxes, 1740/41–1762/63 21.9. Rhode Island Bills of Credit, Dates Due for Redemption, and Tax Levies for Their Redemption, 1754–1763 21.10. Rhode Island Lotteries, 1759–1762 21.11. New Hampshire Taxes to Redeem Bills of Credit, 1753–1763 22.1. New York Bills of Credit, Schedule of Payments for Redemption, Total Payments Due, and Actual Tax Receipts, 1746–1763 22.2. New York Indirect Taxes and Interest Income, 1739–1763 22.3. New York Quitrents Collected and Discharged, 1749–1765 22.4. Pennsylvania Excises, Interest, and Provincial Payments, 1739/40–1753/54 22.5. Pennsylvania Bills of Credit, Schedule of Payments, Total Bills Redeemed, Taxes Received, British Reimbursement, and Loan Interest, 1755–1769 22.6. New Jersey Bills of Credit, Schedule of Payments for Redemption, Total Payments Due, Annual Tax Levies, and British Reimbursement, 1753–1780 23.1. Virginia Quitrents Collected and Discharged, 1749–1763 23.2. Virginia Hogshead Receipts and Expenditures, 1745–1763 23.3. Virginia Poll Tax Rates, 1738–1762 23.4. Virginia Treasury Certificates, Tax Rates, and Schedule of Payments, 1754–1762 23.5. Maryland Quitrents, 1748–1761 23.6. North Carolina Quitrents, 1739–1748 23.7. North Carolina Poll Tax Rates, Revenue, and White Per Capita Taxes, 1748–1763 23.8. South Carolina Quitrents and the Percentage of Land on Which Quitrents Were Paid, 1739–1763 23.9. South Carolina Taxes, 1739–1763 24.1. English Exports, 1701–1775 24.2. British National Debt, British Government Spending, and Annual Interest Cost, 1739–1775

[ xiii ]

577 584 586 589 590 596 601 605 611 613 619

633 636 640 643

644

653 668 670 671 675 679 689 692 701 708 724 725

list of illust rat ions and table s

24.3. Colonial Contributions to the Seven Years’ War, Parliamentary Reimbursements, and Provisions for Redemption of Remaining Colonial Debts 25.1. Plantation Duty Revenue, 1763–1775 25.2. Sugar Act of 1764 Revenues, 1765–1774 25.3. Stamp Act of 1765: Consignments, Cash, Returns, and Balances 25.4. Sugar Act, Stamp Act, Townshend Act, and Navigation Act Revenues, 1765–1774 25.5. American Tea Imports and Duty Collected, 1761–1775 25.6. Indigo Exports, Bounties, and Earnings, 1763–1775 25.7. Indigo Bounties, Total British Bounties on American Imports, Drawbacks on Goods Exported to America, and Export Bounties on British Goods Exported to America, 1763–1775 26.1. Massachusetts Treasurer’s Certificates, 1763/64–1773/74 26.2. Massachusetts Apportioned Direct Taxes, 1763/64–1774/75 26.3. Massachusetts Duties and Tonnage, 1763/64–1774/75 26.4. Massachusetts Treasurer’s Statements and House of Representatives Audit Committee Reports, 1763/64–1774/75 26.5. Connecticut Bills of Credit, Taxes Levied, and Due Dates of Redemption 26.6. Connecticut Direct Taxes, 1763/64–1774/75 26.7. Rhode Island Direct Tax Levies, 1763–1774 26.8. Rhode Island Lotteries, 1763–1774 26.9. New Hampshire Tax Levies, Revenues, and Arrears, 1764–1774 27.1. New York Bills of Credit Outstanding, Annual Cancellations, Direct Taxes, and British Reimbursement, 1763–1774 27.2. New York Indirect Taxes, Interest Income, and Annual Government Support, 1764–1775 27.3. Pennsylvania Bills of Credit Outstanding, Annual Cancellations, Property Taxes, Excises, Tonnage, Negro Duties, Total Taxes, and Interest, 1763–1775 27.4. Delaware Interest Income and Expenditures, 1765–1771 27.5. New Jersey Bills of Credit Outstanding, Changes in the Stock of Bills, and Taxes Due in the 1769 Act, 1763–1775 28.1. British Imports and Reexports of Virginia and Maryland Tobacco, 1764–1774 28.2. Maryland Proprietary Income, 1768–1774 28.3. North Carolina Poll Tax Rates, Revenue, and White Per Capita Taxes, 1764–1769 28.4. South Carolina Quitrents, 1764–1774 [ xiv ]

728 752 753 754 755 759 762

765 770 772 774 776 780 781 787 789 794 804 807

814 819 820 836 843 848 852

list of illust rat ions and table s

28.5. South Carolina Expected versus Actual Tax Collections, 1764–1769 855 28.6. South Carolina Slave Duties, Other Duties, Direct Taxes, and Total Taxes, 1764–1775 856 28.7. Georgia Annual Tax Bills, 1763–1773 861 Appendix Tables following page 871 A.1 Estimated Population of the American Colonies A.2 Estimated White Population of the American Colonies A.3 Estimated Negro Population of the American Colonies

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pr efac e and ac know l e d g ment s


T

h e f o ur - h undr e dt h anniversary of the founding of the Jamestown settlement in Virginia on May 13, 1607, provides a timely opportunity to rediscover America’s colonial heritage of taxation and government. To that end this book describes and analyzes taxation in the thirteen original American colonies from Jamestown to the beginning of the American Revolution, the midnight ride of Paul Revere on April 18, 1775. The book covers external taxes imposed by the three founding nations of England, the Netherlands, and Sweden on their respective American colonies; locally levied provincial direct taxes on polls, a head tax, property, and income; locally enacted duties, excises, and tonnage on trade and consumption; county, town, church, and education taxes; and other miscellaneous charges. Part I sets forth the tax privileges and exemptions that were incorporated into the founding charters of the colonies. Excepting Pennsylvania, the other twelve were granted a variety of tax incentives and exemptions to encourage investment, colonization, and settlement. In turn, many of the founding corporations or proprietors of the colonies offered tax abatements and incentives to lure settlers. Parts II through VI represent periods of relative continuity, followed by major change. Part II covers 1607 to 1688, from the founding of Virginia to the Glorious Revolution in England, a period of growth in the colonies and turmoil in England. Part III circumscribes 1688–1714, from the accession of William and Mary of the Netherlands’ House of Orange to the end of the reign of Queen Anne, who left no heirs. It was a quarter century of unremitting European warfare with its colonial American counterparts, King William’s and Queen Anne’s wars. Part IV encompasses 1714–39, a period of general peace known as Sir Robert Walpole’s era of “salutary neglect” of the American colonies, from the installation of George I of the House of Hanover on the British throne to the beginning of war with Spain. Part V surveys 1739–63, a quarter century of recurrent warfare with France, save a brief peaceful interlude, concluding with the Treaty of Paris that formally ended the French and Indian War. Britain’s victory eliminated the threat to its colonies from France, but the price of victory was high taxes and a large public debt. British ministers began to search for revenue in the American colonies [ xvii ]

pr efac e and ac know ledgment s

to finance the stationing of British troops in North America to secure its territorial gains and relieve the burden of taxation on Britons. Part VI, 1763–75, chronicles twelve years of colonial resistance to British taxes and other imperial restrictions that boiled over into the Revolution. Taxation in colonial America is set against the constitutional, political, and economic backdrop in Britain in which the British government imposed laws and regulations on the colonies, and also conditions in the colonies that influenced internal tax policy. Each part includes an examination of constitutional government and politics in England, the constitutional and commercial policies of imperial governance, and the development of the colonial constitutions and political practices based on imperial dictates and local conditions. The treatment of taxation is divided into three groups: (1) the New England colonies of Massachusetts, Connecticut, Rhode Island, and New Hampshire; (2) the middle colonies of New York, Delaware, New Jersey, and Pennsylvania; and (3) the southern plantation colonies of Virginia, Maryland, North and South Carolina, and Georgia. These clusters reflect similar patterns of settlement, economic development, political institutions, monetary arrangements, and tax regimes. Each chapter sets forth the specific taxes imposed by Britain and those levied by local legislatures and towns in each of the colonies, and the means of payment (gold and silver coins, wampum, furs, agricultural commodities, bills of exchange, and paper money, first issued in Massachusetts in 1690). Extant quantitative data are used to calculate or estimate levels and rates of taxation that permit comparisons to be drawn between the burdens of taxation in the colonies and between the colonies and Britain. Recurring themes include the enactment of tax incentives to encourage immigration and specific economic activities, avoiding or evading British and locally levied taxes, selecting taxes pertinent to conditions in each colony, inventing systems of public finance to reduce the need for explicit taxes, and the struggle of locally elected representatives to wrest control over taxes and public spending from British governors and royal officials. Th is book strives to fi ll a gap in studies of colonial American taxation. Extant publications consist largely of studies of individual colonies for part or all of the colonial period, of which many were completed as doctoral dissertations between 1892 and 1915 and unpublished theses between 1928 and 1953. Other works published between 1890 and 1980 include books and articles about specific taxes, such as the Sugar Act, Stamp Act, or Tea Act, or for specific periods, such as the French and Indian War. Revenue figures in English and colonial records are incomplete and often collected in ways that make it difficult to distinguish among individual colonies or specific taxes. Drawing on public documents and private papers in British and American archives, most scholars have sampled data [ xviii ]

pr efac e and ac know ledgment s

for selected years to illustrate the general structure of taxation in one or more colonies, or tried to estimate tax burdens for a few sample years. None has published an analysis of taxes in all thirteen colonies for the entire colonial era. No single book can cover the entire colonial experience. Thousands of books and articles have been written about the thirteen American colonies, addressing a large variety of topics. They include, among others, exploration and discovery, natural history and historical geography, land and boundaries, expansion, native Indian life, immigration, commerce and the economy, diet and health, religion and churches, county and town, prominent personalities, education, arts and letters, society, science and technology, philosophy, politics, war, law, architecture, holidays, popular life and recreation, crime and violence, slavery, intergroup relations, and the role of women. Each of these topics helps inform the circumstances within which issues of taxation were perceived, debated, enacted, evaded, or resisted. Where pertinent, aspects of these experiences have been incorporated into the treatment of taxation in colonial America.1 Archivists and librarians are among the most helpful and conscientious persons in academic research. For answering my queries and helping me secure materials, I want to thank the following individuals: Carol Ganz, Connecticut State Library; Jennifer Fauxsmith, Massachusetts Archives; Patricia F. Watkinson, Library of Virginia; Bette M. Epstein, New Jersey State Archives; James Barkley, South Carolina State Archives; Jonathan Stayer, Pennsylvania State Archives; Ann Upton, Haverford College; Julia Hudson, Friends House, London; Lynne Cookson, Public Record Office/ The National Archives, United Kingdom; Mari Takayanagi, House of Lords Record Office, United Kingdom; Georgia B. Barnhill, American Antiquarian Society; Sally Pierce, Boston Athenaeum; Marianne Martin, John D. Rockefel ler, Jr. Library, Williamsburg; Mary Ann Philyaw, Comte de Grass Chapter, National Society Daughters of the American Revolution, Virginia; and Eric Heath, Joan Loftus, Linda Wheeler, Mary Munill, Miriam Palm, and Benjamin Stone, Stanford University. 1

To commemorate the bicentenary of the end of the American colonial era, Milton M. Klein and Jacob E. Cooke edited a series of single-volume, modern, interpretative histories of each of the thirteen colonies. The books were written by experts of each colony, published between 1973 and 1981 by Charles Scribner’s Sons, New York, or KTO Press (Millwood, NY). The volumes on New York and South Carolina were published in paperback in 1996 and 1997, respectively, by Oxford University Press and the University of South Carolina Press, respectively. Individual titles and authors are cited in the appropriate chapters throughout the book. Each volume contains a lengthy bibliographical essay that surveys primary and secondary sources. Secondary sources include general works and specific works that focus on one or more of the topics enumerated in the paragraph in the text. Readers who want to explore aspects of colonial history in any of the thirteen colonies will find these bibliographical essays a good starting point.

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For guidance on searching British records, I thank Robert C. Nash of Manchester University, David J. Ormrod of the University of Kent, and Patrick O’Brien of the London School of Economics. I benefited from meeting with Ron Hoffman and his colleagues of the Omohundro Institute on Early American History and Culture at the College of William and Mary. At Princeton University Press, I want to thank Seth Ditchik, editor for economics and finance, for working with me to see this book through the review, approval, and production phases, Natalie Baan, production editor, and Dimitri Karetnikov, illustration specialist. I also thank Jennifer Backer, who copyedited the manuscript, and David Luljak, who completed the enormous task of compiling the index. I want to thank the Hoover Institution, in par ticular its director, John Raisian, for providing an environment in which it is possible to undertake research of this magnitude. Among the many distinguished and supportive members of the Hoover Board of Overseers, I want to thank David Traitel, who sparked my interest in this subject. I am honored to hold the David and Joan Traitel Senior Fellowship at the Hoover Institution.

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Taxation in Colonial America

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introduction


O

n m ay 13, 1607, twenty-seven-year-old Captain John Smith, leading the Susan Constant, the Godspeed, and the Discovery, made landfall in Jamestown, Virginia. The London Company, sponsors of the voyage, had been granted a charter by King James I of England to establish a colony in the part of America called Virginia. To foster its development, James exempted the company from all taxes for seven years on all goods, chattel, armor, munitions, and furniture exported from England to the colony. A second charter of 1609 exempted the company’s employees and agents from all customs and taxes in Virginia for twenty-one years. One hundred sixty-eight years later, the shots heard round the world at Lexington and Concord signaled the start of the American Revolution. The colonists had resisted more than a decade of impositions by Parliament—the Revenue (Sugar) Act of 1764, the Stamp Act of 1765, the Townshend Acts of 1767, and perhaps most famous of all, the Tea Act of 1773, which prompted the Boston Tea Party. From the founding to the Revolution, taxes were uppermost among the concerns of the colonists. Colonial politics were governed more by disputes over taxes and how they would be spent than all other matters, such as freedom of conscience, French threats on the frontier, and security of land titles. This book is the story of taxation imposed from outside, and levied inside, on colonial Americans. It encompasses the kinds, amounts, and burdens of taxes, and the political fights over the right to levy and control their use. The term “colonial America” signifies the thirteen original colonies that formed the United States of America. Other designations include the American colonies, the English colonies of North America, British North America, the first British Empire, the plantations, and the provinces. Colonial America comprises the Dutch West India Company’s settlement of New Netherland (1624–64) and the New Sweden Company’s colony of New Sweden (1638–55) until both gave way to English rule. British colonies in Canada, the West Indies, and Florida are not included. Brief mention is made of the several counties in Maine that came under the jurisdiction of Massachusetts in 1652, Plymouth Colony until its absorption into Massachusetts in 1691, and New Haven before its annexation by Connecticut in 1664. [ 1 ]

i n t r od uc t ion

Scholars and historians have chronicled numerous aspects of taxation in colonial America, but none has written a comprehensive account of all thirteen colonies for the entire colonial era. A fi rst wave of studies was written and published as doctoral dissertations between 1892 and 1915 by Columbia University, the Johns Hopkins University, and the American Economic Association. Numerous unpublished theses were completed between 1928 and 1953, drawing upon British and colonial archives housing public documents and private papers. Historians have published a large number of books and articles on specific taxes, such as the Navigation Acts, Negro slave duties, the Stamp Act, and royal quitrents, an older form of property tax, and the impact of wars with Indians and the French on colonial tax burdens. Taxation in colonial America was a relatively popular research topic until about 1980 but has since received only minor attention among historians. This book covers British taxes imposed on the colonies and the various taxes enacted in the colonies. The list includes British import duties on American products, British taxes on trade between the colonies, royal taxes on colonial land, colonial duties on trade with other colonies, and a wide variety of internal taxes levied by colonial legislatures, vestries, counties, and towns— poll or head taxes, property taxes, “faculty” or income taxes, required labor contribution, license fees, retail excises, import duties, export duties, tonnage fees on shipping, religious taxes, and levies to support community projects and schools. Also mentioned are tax exemptions, for example, those granted the president, faculty, and students of Harvard College, tax preferences for goods imported in locally built ships, and premiums or bounties for the production of iron, hemp, flax, and silk, to name a few products. The description and analysis of colonial taxation are divided into the three geographical clusters of the New England colonies of Massachusetts, Connecticut, Rhode Island, and New Hampshire, the middle colonies of New York, Delaware, New Jersey, and Pennsylvania, and the southern plantation colonies of Virginia, Maryland, North and South Carolina, and Georgia. These clusters reflect similar patterns of settlement, economic development, political institutions, monetary policies, and systems of taxation. Taxation in colonial America neatly divides into five periods. The first is 1607 to 1688, from Jamestown to the overthrow of King James II by William and Mary of the Netherlands’ House of Orange, known in England as the Glorious Revolution of 1688. These years were a period of rapid growth in the colonies and chronic turmoil in England. The second is 1688 to the end of Queen Anne’s reign in 1714, a quarter century of unremitting European warfare with its colonial counterparts in King William’s and Queen Anne’s wars. The third is 1714 to 1739, a period of general peace, from the accession of George I of the German House of Hanover until the beginning of the War with Spain. During this “era of salutary neglect,” the colonies [ 2 ]

i n t r od uc t ion

Dating Colonial Events

T

he task of dating colonial events prior to the uniform use of the modern Gregorian calendar (n.s. for new style) in 1752, which dates the beginning of each year on January 1, is complicated by the use of different calendars in Europe during the period in which the American colonies were founded. Until 1582, all of Eu rope used the calendar authorized by Roman emperor Julius Caesar in 46 b.c. The Julian calendar (o.s. for old style) started the year with the fi rst day of spring, setting March 25 as its official “new year’s day.” March was treated as the fi rst month of the year and February the twelfth, although the fi rst twenty-four days of March were counted as part of the preceding year. Leap years added a day in February because it was then regarded as the twelfth month. European powers shifted to the new Gregorian calendar at different times. The Julian calendar was based on a year of 365.25 days, whereas the astronomical calendar is actually 365.242199 days. Thus each year the seasons shifted by eleven minutes and fourteen seconds, or one-and-a-half days every two centuries. By 1545, the vernal equinox, which was used to determine the date of the movable feast of Easter, had shifted by ten days, making it difficult for pious Christians to observe Christmas and Easter within their proper seasons. On February 24, 1582, Pope Gregory XIII corrected this error with a papal bull which decreed that the date following the Feast of Saint Francis of Assisi, celebrated on Thursday, October 4, 1582, would be changed to Friday, October 15, 1582. The ten days of October 5–14 were suppressed. Gregory changed the official start of each year from March 25 to January 1 and declared that leap years would take place only in centennial years exactly divisible by four hundred, thus excluding 1700, 1800, and 1900 as leap years. Th is provision eliminated the differential of one-and-a-half days every two centuries. The Protestant Reformation divided Europe’s Christians into warring factions. Spain, Italy, France, Holland, and the Catholic provinces of Germany adopted the new calendar in 1582. Switzerland, Scandinavia, and Germany’s Protestant districts did not complete the switch until 1701. Great Britain retained the Julian calendar until the mid-eighteenth century, by which time the discrepancy between the two had grown to eleven days. To end Great Britain’s long duration as odd man out, Parliament passed the British Calendar Reform Act of March 1751, which declared the day following September 2, 1752, to be September 14 in Great Britain and its colonies, and the new calendar would thereafter begin on January 1. To illustrate these differences, in the English calendar of the day, March 23, 1643, was March 23, 1644, according to the Swedish calendar and modern usage, and was April 2, 1643, according to Dutch usage. That date was often written in the English colonies as March 23, 1643/44, indicating that it was March 23 in the official English year 1643, but in fact March 23 in the year 1644 beginning January 1. From 1664 onward, distinctions among English, Dutch, and Swedish

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Dating Colonial Events (continued) dating were largely eliminated with the English conquest of New Netherland from the Dutch, who seized New Sweden nine years earlier. Before then, the same event recorded in British, Dutch, or Swedish documents would have different dates. Both the dates and days of the week in England differed from those of continental Eu rope, which explains how different dates can exist in different historical documents and histories. Cited dates in the text of this book reflect period colonial or British usage apart from those of New Netherland and New Sweden that refer to Dutch and Swedish accounts. Th roughout the text I use the modern calendar for dates between January 1 and March 24, and on occasion the colonial style that signifies both usages. Historians vary in their efforts to compensate for the suppressed days when trying to reconcile different sources. An event that occurred on May 27, 1652, might be cited as having occurred on that Julian date, rather than adjusting for the ten suppressed days and using the Gregorian date of June 7, 1652. A prominent illustration is the Battle of the Boyne. King William and Queen Mary of Orange, the new Protestant rulers of England in 1689, defeated the forces of the ousted Catholic king James II in Ireland in a battle that began on July 1, 1690. The battle is recalled each year in the celebrations of the Orange Order on July 12, with the difference due to the advance of eleven days with the change to the Gregorian calendar in 1752. The date of the battle is still recorded in historical accounts as July 1. Th is discussion of calendars and dates draws from Louis Jordan, John Hull, the Mint and the Economics of Massachusetts Coinage (Hanover, NH, and London: University Press of New England for the Colonial Coin Collectors Club, 2002), xvii–xix, and Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999), 286–87. Table 16.3 in Purvis, “Perpetual Calendars for Historical Dates under the Julian (o.s.) and Gregorian (n.s.) Systems,” covers 1580 through 1799 inclusive (287–91).

were left to develop largely on their own without much direction or interference from Great Britain. The fourth is a period of chronic warfare that began in a war with Spain in 1740 and ended in 1763 with Britain’s defeat of France in the French and Indian War. Britain’s victory ended the threat to the colonies from France but left Britain with high taxes and a large public debt. The final period is the twelve years of turmoil and insurrection between 1763 and 1775 brought about by British efforts to tax the colonies that erupted into the American Revolution. British politics, in par tic u lar the contest between the Crown and Parliament for power, the Navigation Acts and other trade rules that governed Britain’s commercial ties with its colonies, and the evolution of constitutional government in the colonies each affected the level and [ 4 ]

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composition of colonial taxes. Each of the five parts of this book reviews these circumstances to set the context in which taxes were imposed or levied.1

Terminology

I

h av e t r ie d to preserve the flavor of the colonial era by using the terms that the colonists themselves employed in their discussions of taxation and expenditure, and in their political efforts to take and secure control of the public purse from their imperial overlords. Many of these terms confl ict with contemporary usage. A good example is the word “Negro.” The colonists wrote and spoke of Negro slaves. Indeed, many of the colonies taxed the importation of Negro slaves, most notably South Carolina. Other colonies levied poll taxes on Negro slaves that were paid by their owners. The term “Negro” has fallen out of use and is regarded as pejorative in contemporary academic circles. It has been replaced by a succession of terms such as “black” or “African American.” To give another example, women did not vote for representatives to, or serve in, colonial assemblies. Nor did many women engage in business to any substantial degree. To use gender-neutral terms distorts the reality of male domination of economics and politics in the colonial era. Where women were important, for example, Queens Mary and Anne of England, the language in the text is gender specific. Historical terms that have fallen out of usage are defined or explained in the text or in footnotes where their meaning is unknown or unclear. Imposing modern twenty-first-century usage of terms on the colonial era in place of contemporary usage is potentially misleading if modern usage conveys meaning that differs from the historical use of seventeenth- and eighteenth-century language.

Money

T

h e de s c r i p t ion and analysis of taxation in the colonies cannot proceed without a thorough treatment of the money of the day. 2 Taxes

1

From 1607 until the Act of Union with Scotland in 1707 that created Great Britain, reference is generally made to England as the colonial power. From 1707 to the Revolution, Great Britain, or Britain, is used to denominate the colonial power. Despite the political union, numerous trade statistics were separately maintained between England and Scotland. 2 An extremely valuable, comprehensive treatment of money in the American colonies appears in John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). McCusker describes the history of money, including coins and paper currency, in each of the colonies and the values of each colony’s currency or currencies against sterling, the rate of exchange, on London. McCusker’s data

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are paid in some form of money, broadly defined. Until 1690, the colonies had little control over their monetary circumstances. The British government regulated the kinds and values of money that were used in the colonies. To give but one example, it banned the right to mint silver and gold coins in the colonies. Later, from 1704, it set maximum limits on the value of the coins of Spain, France, and other European countries that circulated in the colonies. Nor were there substantial deposits of gold or silver that could be mined in British North America. Between 1652 and 1682 Massachusetts briefly minted coins known as pine tree shillings, and Maryland briefly experimented with minting coins, but neither was an important source of specie in the colonies. Newly arriving immigrants brought some coins with them, but these quickly drained abroad to pay for imported goods that were not, or could not be, produced in the colonies. An early form of money that was used in trade with Indians was wampum, oblong shells fashioned from the inner whorls of cowries or tiny seashells found on the mud or just below the surface of water along the coast, which were ground and polished, drilled through the center to string them with fibers of hemp or tendons of wild beasts, and woven into belts, aprons, headpieces, and other decorative items. From time to time, colonial legislatures designated commodities as money and set their value for tax purposes and payment to public creditors. These included a wide variety of animal skins, corn, wheat, rye, barley, peas, dried fish, livestock, pork, beef, cheese, sugar, molasses, rum, cotton, wool, tallow, timber, tobacco, rice, indigo, naval stores, and other items. These legally defined commodities were called “current money” or “country pay,” in contrast with specie or cash. The value of commodities was frequently adjusted to reflect market conditions. Premiums were often given for payment of taxes in coins. The colonies placed different lawful values on foreign coins of Spain minted in Peru and Mexico, the most common circulating coins in the colonies, and those of France, Germany, Sweden, Portugal, and other Eu ropean countries. A Spanish piece of eight, or dollar, was worth more in some colonies than in others, which often resulted in the flow of specie to the colonies that placed a higher value on the silver content of coins. The export of specie could have a debilitating effect on the colonies that experienced a loss of money with which to conduct trade and pay taxes. To correct this problem, Queen Anne issued a proclamation in 1704 that sought to regulate the value of coins in the colonies. Queen Anne’s proclamation make it possible to compare the level of taxes paid in the separate colonies with each other, and with taxes paid in Britain, by equating the values of the different colonial currencies with each other and with sterling.

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set an upper limit of foreign coins at one-third above their official rate in England. Colonial money valued at 33.33 percent above sterling, based on its silver content, was known as Proclamation Money or Lawful Money. The values of most, but not all, foreign coins were based on an assay of their silver and gold content undertaken by Sir Isaac Newton in 1702. The proclamation met with only limited success. To give but one example, New York evaded the proclamation by defining the lawful value of silver in terms of Lyon dollars, a Dutch coin, which was not included in Newton’s assay. The most important monetary development in the colonies, arising out of war time necessity to pay returning soldiers in Massachusetts from a failed expedition against French forces in Canada, was the printing of paper money, the first quasi-official government money in the Western world. The paper currency issued in 1690 was called “bills of credit” to circumvent the English government’s ban on the printing of money in the colonies. Within several decades, most of the colonies issued their own bills of credit denominated in pounds, shillings, and pence, defined in troy ounces of silver, with values that differed from each other and from the official value of sterling in Great Britain. The colonies created several kinds of paper currency. One of the two most common was bills of credit that were backed with pledges of taxation or promises of taxation to guarantee their redemption, retirement, or “sinking,” usually by burning the notes paid in taxes before members of the colonial legislatures. The other most common was known as loan office bills, a land bank that loaned paper money at interest on the basis of collateral in land, houses, silver plate, and even slaves in several of the southern colonies. Interest on loan office bills was sufficient to finance the lion’s share of the cost of civil administration in several New England and middle colonies during the second quarter of the eighteenth century. Loan office bills established the precedent of low to no taxation for long periods in several colonies. It comes as no surprise, then, that political turmoil erupted when efforts to levy and raise taxes intensified with the outbreak of the French and Indian War in 1754 up to the Revolution. British concerns over the issue of “excess” paper currency, which they deemed the cause of its depreciation and the source of losses to British merchants, led to multiple laws governing the issue and legal tender status of colonial currency in 1751 and 1764. These restrictions added to colonial resentment of the efforts of Great Britain to tax the colonies. Other designations of official paper money, some with and some without legal tender status, included treasury tax anticipation notes, public orders, tobacco notes that represented private ownership of tobacco held in public warehouses in Virginia and Maryland, and indigo notes in South Carolina. Many merchants resorted to barter and two- or three-way book [ 7 ]

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credit to trade with farmers in rural areas. Private forms of paper money used in the colonies included bills of exchange, a form of checking account, drawn on British merchants to pay for imported goods and internal bills of exchange to pay colonial creditors, promissory notes issued by wealthy individuals, and a few small issues of private merchant money. Each form of money and its significance for taxation in the colonies are explained as it was invented, used, or adapted for payment in commercial or public transactions. A full treatment of the wide varieties of money used in the colonies is central to understanding the politics and reality of colonial taxation.

Accuracy and Comprehensiveness of Data

H

istor ians ar e often frustrated by the limitations of dealing with the past, which often prevent the compilation of comprehensive series of data. This applies to the American colonies. Examples of lost or missing data include the customs records housed in the port of New London, Connecticut, which were destroyed when the town was burned to the ground by British forces under the command of Benedict Arnold during the Revolutionary War. War, weather, fi re, and age have damaged or destroyed records in Virginia. A fire destroyed a large number of manuscripts in the New York State Library, which precludes a comprehensive accounting of the colony’s public finances between 1758 and 1764, with only fragmentary records surviving for 1764. The accounts of New York quitrents, a form of property tax, between 1728 and 1779 are in documents that are closed to research due to severe burn damage. Comprehensive accounts of excises are available only for 1715–33. In North Carolina records were scattered around several locations, preventing a comprehensive compilation. 3 The full text of some laws enacted in the colonies cannot be found. Comprehensive audited accounts of receipts and expenditures are rare, especially in the early years of the colonial period. Better records exist in some colonies during the latter years of the colonial period. Even in the colonies that kept the best records— Massachusetts, for example—data are missing for a number of years. Insofar as external taxes imposed on the colonies are concerned, British customs records often combined several colonies into one set of numbers, for example, tobacco from Virginia and Maryland, or combined receipts of taxes on several commodities into one category, making it difficult to estimate the taxes borne by the inhabitants in any given colony or the producers 3 Disagreements between the inhabitants of rival regions over the location of the provincial legislature and related government offices led to rotation of meetings in Edenton, Bath, New Bern, and Wilmington between 1736 and 1746. Without a central capital, government documents were often lost, destroyed, or difficult to recover. A. Roger Ekirch, “Poor Carolina”: Politics and Society in Colonial North Carolina, 1729–1776 (Chapel Hill: University of North Carolina Press, 1981), 90.

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of a specific product. Many records have been lost to fire, water damage, and years of neglect. The London Customs House fires of 1715 and 1814 destroyed numerous records. Records listing receipts from duties on British imports of colonial rice that were stored in the House of Commons were destroyed by a fire that burned down the old houses of Parliament in 1824. Even detailed records on every commodity produced in each of the thirteen colonies would not give a full picture of the impact of taxes because smuggling and tax evasion, which by their nature are impossible to quantify, were widespread in Britain and the colonies. A voluminous correspondence between officials in the colonies and London deals with taxes and public expenditures, but numbers included in the documents cannot always be taken at face value. Royal governors often exaggerated and misrepresented local conditions to absolve themselves of blame in their failure to secure sufficient appropriations from colonial legislatures to meet the costs of provincial administration, deal with piracy, Indians, and smuggling, and carry out other responsibilities. Some governors were especially prone to be less than candid in their correspondence, especially if it was in their financial and political interest to side with the colonists in any dispute with London. Many governors acquired large estates in the colonies during their tenure, in effect becoming colonists themselves. Data and their limitations are discussed in the course of describing and analyzing taxation in the thirteen American colonies for each of the five chronological periods previously described.

Public Accounts

S

o ur c e s of information on the payment of provincial taxes include the records of collectors of property and poll taxes, specially designated receivers of import and export duties, collectors of excises, entries recorded in ledgers and journals, annual or other periodic statements of colonial treasurers, and audits of treasurers’ accounts by committees of elected lower houses of the colonial legislatures that were recorded in their proceedings. The quality of accounting and reporting varied among the colonies, generally improving from the middle of the eighteenth century. Knowledge of accounting practices in the colonies was reasonably widespread. Merchants often sent their sons to England or to reputable client merchants to learn business practices and bookkeeping. Others served as apprentices to merchants and learned bookkeeping while conducting daily business. Public schools in Massachusetts provided elementary instruction in bookkeeping by the late seventeenth century, and private teachers of bookkeeping advertised for students by the early eighteenth century. The first American book on bookkeeping, The Secretary’s Guide, or Young Man’s Companion, fifth edition, was published in Philadelphia by Andrew Bradford, [ 9 ]

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editor, in 1737. The segment on bookkeeping consumed fourteen pages of the 258-page book, which covered reading, writing, arithmetic, and bookkeeping. The book stressed the importance of double-entry bookkeeping to track profit in commercial transactions and the current business situation.4 The system of bookkeeping was the standard business accounting system of debits and credits. In private business in England and the colonies, a debit was equated with a charge and credit with a discharge. As a charge was something that is received, the rule became that debit is what is received (or to be received) and credit is what is paid (or to be paid). In the public accounts, debits represented the sums due to the treasurer that he collected from or was owed (receivables) by taxpayers, with credits the funds he transferred or owed (payables) to the legislature or the governor that had the authority to spend. The colonial treasurer served as intermediary between taxpayers and, in the colonies with land banks, borrowers of loan office bills and the spending authority. Between 1940 and 1950, under the direction of William Summer Jenkins, the Library of Congress in association with the University of North Carolina photographed all of the extant materials that were accessible in the files and archives of the states. The collection, consisting of seventeen hundred microfilms, is known as the Early State Records. The documents include sporadic records of the colonial treasurers in Connecticut, Maryland, Massachusetts, New Hampshire, North Carolina, Pennsylvania (Penn’s personal accounts), and South Carolina. The collection also includes the proceedings of the lower and upper houses of the thirteen original colonies recorded in respective journals, but these are not complete. Records of some of the proceedings are missing. Some are handwritten and very difficult to read, with more recent journals being printed. The treasurers’ statements were reproduced in several, but not all, of the legislative journals in the colonies. The quality of public accounts varied among the colonies. The chartered colonies of Massachusetts and Connecticut were quick to require statements from their colonial treasurers. Those of Massachusetts displayed outstanding taxes due from the towns, current receipts from direct and, where applicable, indirect taxes, and other revenues, balanced against approved payments. The first extant treasurer’s account in Massachusetts dates from 1632, with annual statements from 1692 save a handful of missing years and some years in which the figures are incomplete. Between 1740 and 1753 the treasurer’s annual account was complicated by the need to report receipts 4 Peter L. McKickle, “Young Man’s Companion of 1737: America’s First Book on Accounting?” Abacus 26, no. 1 (1984): 34–51; W. T. Baxter, “Accounting in Colonial America,” in A. C. Littleton and B. S. Yamey, eds., Studies in the History of Accounting (Homewood, IL: Richard D. Irwin, 1956), 272–87; and Osamu Kojima, Accounting History (Nara, Japan: A. N. Offset Company, 1995), 395–97. Original Japanese edition published in 1987 in Tokyo by Moriyama Book Store.

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and outlays in several currencies. During 1740–42 the treasurer kept accounts in two currencies designated Massachusetts Old Tenor and Middle or New Tenor. During 1744–53 the accounts included a third currency of New New Tenor or Last Emission. From 1753 the accounts were kept solely in Lawful Money, which was set at Queen Anne’s proclamation rate of 133.33 Massachusetts currency to 100 sterling. The treasurer’s ledgers and journals are available from 1753, but they exclude receipts of and payments from indirect taxes of duties and excises. The financial statements of Connecticut’s treasurers for 1673–1712 are almost impossible to read and decipher. The records of Connecticut’s colonial treasurers held in the Connecticut State Library are available only from 1743. Later statements, for example the account book of Treasurer Joseph Talcott for 1755–70, list tax receipts of the towns and approved payments, but the system of debits and credits is not as comprehensive as in Massachusetts. Good records were generally kept in the proprietary colonies of Pennsylvania and Maryland since the Penns and Calverts personally profited from their ownership of land. Records in New Hampshire and Virginia are intermittent, available in detail for some years, sporadic or nonexistent in others. There are no extant comprehensive treasurer’s records in New Jersey prior to 1776. In the colonies that relied on interest income as a principal source of revenue for many years, there was little need to establish systems of assessing, collecting, and recording taxes, especially direct taxes on property and income. The important information was contained in the financial records of the commissioners of loan offices. When taxes replaced interest as the principal source of public income, it was necessary to establish fiscal regimes to collect and track public funds. In those colonies, it was difficult to overcome taxpayer resistance after decades of minimal or no taxation, which resulted in the accumulation of arrears that often exceeded annual receipts. There are no extant treasurer’s accounts in Rhode Island and the handwritten Journal of the House of Deputies does not include audited public accounts. Under the best conditions, colonial treasurers transmitted periodic statements to members of audit committees of representative assemblies for their approval, or presented statements directly to all the elected members. The statement could cover less than a year, one year, more than a year whenever the accounting period was changed to reflect changes in tax laws, or many years to report on the status and collection of arrears. One kind of tax, the property tax, might be levied to run for a year from summer to summer, while an excise might run from fall to fall. Thus annual or other periodic accounts of revenue from different sources encompass different time periods. Regular end of calendar or fiscal year records of cash flow, of receipts and outlays, were not standard. Information in the accounts was often incomplete, riddled with arrears, and victimized by embezzlement. Tax laws [ 11 ]

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enacted in colonial legislatures stipulated amounts to be collected, but the levies rarely matched actual receipts of taxes. In some cases, the only extant data are the amount of taxes stipulated in law and recorded on the debit side of the treasurer’s statement, without listing the actual amount of tax collected. During 1701–12 in New Hampshire, for example, the colonial treasurer and receiver-general, Sam Penhallow, listed as a debit the approved tax on polls and estates but not actual receipts of the tax, although he listed actual receipts of duties and excises. He also listed bills of credit as a debit when these became a source of public finance. His itemization of credits consisted of a list of approved payments to the colony’s creditors and the balance remaining due the colony. Nowhere in this period is there a comparison of approved levies, total taxes collected, and outstanding arrears, or the cumulative debt of the colony expressed in its outstanding bills of credit in circulation. Data on quitrents in Virginia are extant for 1690, 1695, 1700–1722, and 1750–65, but lacking in other years; data on the two-shilling export duty per hogshead of tobacco are extant for 1702–12 and 1750–65, and sporadic for other years. Data on quitrents in South Carolina are extant for 1729–74 but only for 1735–48 in North Carolina, with occasional figures for other years. Data on poll and property taxes in North Carolina are available for 1748–69. Figures on tax revenue in Georgia are extant from the beginning of royal administration in 1754. Numerous persons were responsible for collecting revenue. Sheriffs and town or county collectors were tasked with assessing and collecting provincial property and poll taxes. Excises were often farmed out to the highest bidder or assigned to county collectors of excises. Other persons were designated collectors of port duties. Licenses were sold to retailers of liquor and other goods. Vestries were empowered to collect church taxes and justices of the peace to levy taxes for local purposes. Receipts of each source of revenue were to be delivered to the appropriate authorities, usually colonial treasurers or loan office commissioners. Collectors were permitted compensation with a fi xed fee or percentage commission of gross collections, delivering only net revenues that remained to the central authority. Allowances were granted for insolvencies. Pennsylvania maintained separate collectors of direct taxes in each of the nine counties, separate collectors of excises in the nine counties, a separate collector of duties and tonnage, and separate commissioners of the loan offices in the nine counties. Monies were delivered to the colonial treasurer, who paid creditors from his proceeds. In the annual audited accounts of Pennsylvania printed in the legislature record, omissions from individual counties were common. Extrapolation is required to fi ll in missing data. Some accounts are virtually impossible to decipher. Apart from stains and other damage to surviving records, revenues from specific sources were often earmarked for certain categories of expenditure. For example, the [ 12 ]

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proceeds of direct taxes might be used to redeem bills of credit that were issued to finance participation in military conflicts, with the proceeds of duties and excises used to pay salaries and other incidental costs of civil administration. At times treasurers might transfer funds from one account to another to meet expenditures, crediting one and debiting the other, but these transfers are difficult to follow and reconcile with later statements. Arrears of taxation plagued every colony, with annual accounts reporting arrears as far back as twenty years in some colonies. Money was transferred back and forth between loan officers and treasurers, which makes it difficult to tell which source of revenue was used to redeem bills of credit or meet the expenses of civil administration. Bills of credit received in mortgage payments, interest, or taxes were often reloaned or spent, rather than burned. Some sources of revenue were under the control of the local assembly while others accrued directly to royal or proprietary governors. For example, an export duty on tobacco and quitrents were under the control of governors in Virginia and Maryland, some of which might be spent locally or remitted to the Crown or Lord Baltimore in Britain. Direct taxes on polls and property, excises, and import duties were generally under the control of locally elected assemblies. Rarely, if ever, were receipts and expenditures of the two different sources of authority combined in a comprehensive accounting of total revenue in these two colonies. Another complicating factor in deciphering colonial accounts was the practice in some colonies of permitting colonial treasurers to intermingle public and private funds, lending public funds to private parties when the funds were not required for immediate payment. In such cases, the treasurers were allowed to keep the interest from these loans as part of their compensation. Th is created a problem when pressing need for expenditure could not be met from funds on hand in the Treasury. There was a spectacular case in Virginia known as “the Robinson affair,” in which the colonial treasurer loaned or embezzled over 100,000 Virginia currency to his close colleagues and friends. It took several decades to recover the funds from his estate, with the clearing of his debt achieved through a favorable accounting quirk after the Revolution broke out. An independent auditing of the accounts in the year preceding Robinson’s death resulting in public disclosure of the missing funds noted that approval of the accounts he had presented the previous few years revealed no deficits. Th is case indicates that legislative approval of a colonial treasurer’s statement does not ensure its accuracy. Records of county, town, and religious taxes levied and paid are generally located in the towns and vestries, not in a central repository. Dispersal of records makes it extremely difficult to compile a comprehensive tally of local taxes. Scholarly investigations of local taxes in colonial America have [ 13 ]

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invariably been based on a sample, rather than an examination of the full set, of records. Problems in the public accounts that hamper the compilation of comprehensive data on taxes that were levied and collected in each colony are discussed in the respective chapters. In many of the tables throughout the book I have presented the numbers in pounds, shillings, pence, and farthings, rather than rounding to the nearest pound. The colonists were obsessed with every last farthing in revenue and expenditure. To present the figures down to farthings, quarters of a pence, helps convey their concern. I report provincial revenue figures in local provincial currencies, for example, Massachusetts pounds, Virginia pounds, Proclamation or Lawful Money, and so forth, except when revenues were collected and stated in sterling. I specify in the text whether revenues are stated in provincial currency or sterling. I provide tables that display the values of the different colonial currencies and British sterling with each other to compare tax levels and burdens among the colonies and between the colonies and Britain. I have occasionally found differences in the numbers printed or written in primary sources with those published by other scholars, as well as differences between my calculations and those of other scholars who relied on the same primary sources. I have tried to explain and/or reconcile these differences in each case. Sometimes the differences are small, at other times substantial.

The Incidence and the Burden of Taxation

I

n addi t ion to tabulating the taxes imposed by Britain or levied by the colonists’ representatives, this book seeks to estimate and comment on several other measures of the impact of taxation on the colonists. A fi rst is per capita taxes, the average tax paid by residents in each colony in the years for which data are available. In the southern plantation colonies, per capita taxes are generally estimated for white settlers, who paid taxes on themselves and their slaves. It can be said that the labor income of slaves was heavily taxed, but that income belonged to slave owners who paid the tax, not the slaves. An important point of comparison throughout the book is average taxes paid in the colonies with those in Great Britain. The much heavier taxes levied in Britain, which prompted the British government to impose a series of taxes on the colonies to relieve some of the burden on British taxpayers, was a principal factor in bringing about the Revolution. Another measure is the distribution of the tax burden in each colony. This is much more difficult to determine given the limited information on the distribution of wealth, income, and patterns of consumption subject to taxation. Even though the overall level of taxation in the colonies was extremely light, winners of elections to the lower houses in the colonies [ 14 ]

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frequently sought to shift taxes from themselves to the losers. Colonial history is replete with conflict between landowners and traders, town and country residents, coastal and up- or backcountry dwellers, leading families and their factions, and other divisions. That the overwhelming majority of the colonists resented paying even low taxes is evident from reports and laws dealing with noncompliance, arrears, and even the occasional violent rebellion. The distribution of the tax burden was often a hot political issue, but even those who bore the brunt of taxation were lightly taxed. There is a point of collection for all taxes. On property that point is from the owners of land and such other real property as structures, animals, farm equipment, and so forth. On polls, that is, on each taxable individual defined in law, it is from each head of household, who pays tax on himself, his wife, his children sixteen years of age and older, indentured servants, and slaves. On income and trade it is those who receive income from wages and profits, who maintain inventory, or other measurable economic activity. On trade it is from the duty paid by importers and exporters on the volume of imports and exports. On consumption it is from the sellers of liquor and other goods. On tonnage, a charge based on the size of a vessel, it is from the master or owner of a ship. On capital it is from the recipient of interest received on a bond, mortgage, or loan. Some, but not all, economists call this the incidence of a tax—who pays it. In this definition, the point of collection is the incidence of the tax. The impact of each tax, the loss in income or wealth represented by the amount of tax, is not necessarily fully borne by those who pay at the point of collection. The burden of a tax must take into account the losses of economic activity associated with the tax, whether it is imposed on property, labor, trading, or consumption. A few examples may help clarify the distinction between the incidence and burden of a tax. Take British import duties, for example. Duty on imported colonial tobacco is paid by merchants at the point of collection in British ports. The price of tobacco in Britain includes the purchase price of leaf in the colonies, the cost of shipping, insurance, unloading in British ports, import duty, distribution to retailers, a markup for the cost of capital employed in the business, a margin for profit, and the final cost of retailing the product. The duty, along with the other costs of production and distribution, is embedded in the price consumers pay for the privilege of smoking. It appears from this chain of activity that the duty on tobacco is passed from importers to consumers in the price the latter pay to smoke it. The foregoing overlooks the possibility that demand for tobacco would increase from a lower price if no tax were imposed on its importation. Increased demand for tobacco could mean higher prices paid to colonial planters, thereby raising their income. Increased demand for tobacco would increase [ 15 ]

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the demand for shipping, insurance, storage, and employment in getting it to market. By raising the price of the product, the tax depresses income at every stage of its production, transportation, distribution, and consumption. This means that the tax is partly borne by shippers, sailors, importers, distributors, retailers, and planters in the form of lost income, apart from that borne by consumers. There is no systematic way to estimate the precise proportions of the burden, but it bears noting that it cannot be solely attributed to planters, importers, or consumers. British trade regulations, known as the Navigation Acts, required all colonial tobacco to be shipped directly to Britain. Colonial tobacco consumed in continental Europe first had to be shipped to Britain, although most of the duty was rebated on reexportation. This restriction on marketing may have also reduced the potential income of colonial planters. However, planters enjoyed Royal Navy protection, which reduced insurance premiums on shipping, a global marketing network provided by British merchants, and access to British capital and credit. These benefits partly, perhaps wholly, offset any potential losses from trade restrictions. In the case of indigo, Parliament provided bounties to encourage its production and sale in Britain. The growth of output and its rising importance in South Carolina’s economy suggest that bounties, a subsidy, were beneficial to producers. A similar line of reasoning can be applied to each of the different taxes levied in the colonies. Take duties and excises imposed on liquor. Duties and excises are passed through to the final price paid by consumers. Higher prices due to the taxes reduce demand to some degree, which means less need for shipping, internal transportation, and retail outlets, reducing employment and income in those sectors. In the case of liquor, anecdotal evidence and statistics reveal an apparently insatiable thirst for beer, rum, wine, brandy, and other hard drinks, which suggests that consumers bore the brunt of the tax, even though it was collected from importers and retailers. Another consideration is that some of the liquor was purchased by sailors, foreign merchants, and other visitors in the principal port towns. There is no way to know the share of rum that was drunk by the inhabitants of, rather than visitors to, New York City. We can say that some portion of the tax on rum was exported. The lack of systematic, reliable data precludes a comprehensive tabulation of total taxes paid to British or colonial tax collectors. Even more difficult is apportioning the burden of each tax, be it direct property, poll, income, and capital taxes or indirect duties, excises, and tonnage. In general, the most difficult taxes on which to assign burdens are British import duties on colonial products. The most straightforward are direct taxes imposed on wealth and income. In between are internal trade taxes. I comment on the likely burden of some specific taxes in attempting to estimate the share borne by the colonists.

[ 16 ]

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The level of taxes in the colonies varied with the need for revenue. Periods of warfare with the French and Spanish and their Indian allies in the seventeenth and eighteenth centuries required substantially more money than during extended periods of peacetime. Often new taxes were added to the existing mix to pay the additional costs of defense. The amounts and composition of taxes in the colonies are correlated with periods of war and peace. In addition to taxes that were levied to finance public expenditures, the colonists were also subject to a wide range of fees and charges for specific ser vices. Examples include legal proceedings, securing land titles, conveying property, loading and unloading ships, marriage and divorce, and so forth. Religious dues or levies were of a similar nature, except when imposed on those who were not voluntary members of a congregation or who wished to follow a different religious path from that authorized by the legislature. These ser vices provide private benefits to those who pay the stipulated fees. Fees stand in marked contrast to taxes, which support public purposes that provide benefits to most or all of a population, for example, having a militia to defend the colony against Indian uprisings or invasion, constructing roads and bridges, paying salaries of government officials, purchasing supplies, or providing stipends for representatives during sessions of the legislature. Fees paid to public officials for private benefits to cover the cost of the ser vices rendered are comparable to payments to merchants for goods or ser vices for private consumption. Including fees in the computation of taxes as some historians have done overstates the level of taxation. Of course, fees could be excessive and the colonists did what they could to minimize these charges. It is true that officials depended more on fees than taxes for their livelihood in the colonies than is the case in the modern era, in which fees rarely cover the full cost of private benefits and ser vices that the government provides to individuals. One reason is that the scope of government was much more limited in the colonial era, reflecting the preferences of the colonists.

Population

A

br ief no t e on population is in order. In 2006 Cambridge University Press published a millennial edition of Historical Statistics of the United States: Earliest Times to the Present. Volume 5, Part E, “Governance and International Relations,” includes a chapter on colonial statistics, edited and with an introduction by John J. McCusker.5 The Cambridge edition is 5

John J. McCusker, ed., Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations” (Cambridge: Cambridge University Press, 2006), S-627–72.

[ 17 ]

i n t r od uc t ion

a revised, updated edition of an earlier statistical abstract supplement published by the U.S. Bureau of the Census with the cooperation of the Social Science Research in 1960, Historical Statistics of the United States: Colonial Times to 1957.6 Population figures for the colonial period in the 2006 edition appear in table Eg1-69, titled “Population, by Race and by Colony or Locality: 1610–1780.” 7 Beginning with the year 1610 and ending in 1780, the table lists the total, white, and Negro decennial population in each of the thirteen colonies. Three appendices at the end of this book present the annual total, white, and Negro population in each colony from the fi rst reported decade of its founding through 1780. The years in between the decennial estimates are based on linear interpolations, which assumes an increase of one-tenth each year during each decade. Annual numbers were derived to estimate annual per capita taxes. Any difference in tax burdens for a specific year stemming from the choice of population figures from a different scholarly or historical source for that year will not materially alter the trends in these calculations.

N

o sing l e bo ok can cover the entire colonial experience. I am indebted to the authors of the thousands of articles and books that have been written about the thirteen American colonies, which have addressed a wide variety of topics. They include exploration and discovery, natural history and historical geography, land and boundaries, expansion, native Indian life, immigration, commerce and the economy, diet and health, religion and churches, county and town, prominent personalities, education, arts and letters, society, science and technology, philosophy, politics, war, law, architecture, holidays, popular life and recreation, crime and violence, slavery, intergroup relations, and the role of women. These topics help to inform the circumstances within which issues of taxation were framed, debated, enacted, assessed, collected, repealed, amended, evaded, or resisted. Where pertinent, aspects of these experiences have been incorporated into the treatment of taxation in colonial America. 6

[U.S. Bureau of the Census], Historical Statistics of the United States: Colonial Times to 1957 (Washington, DC: GPO, 1960). An updated edition was issued in 1975. 7 The table appears on pages S-651–55. Documentation for the table appears on S-654–55. Sources of original data include reports of the colonial officials to the Lords Commissioners of Trade and Plantations, which were based on a census, militia lists, and tax lists. One of the leading sources that presents figures of population for twenty-eight specific years between 1625 and 1775 in some or all of the colonies is Evarts Boutell Greene and Virginia D. Harrington, American Population before the Federal Census of 1790 (New York: Columbia University Press, 1932), 3–7. A broad variety of statistics on population to 1763, including distributions by age and sex, along with statistics and discussion on numerous other topics appears in Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999), 128–67.

[ 18 ]

pa r t on e
Founding the American Colonies

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A

l l c o un t r i e s and territories have constitutions, written or unwritten, formal or informal, explicit or implicit. A constitution is a system of fundamental laws and principles that prescribes the nature, functions, and limits of a government or another institution. In most countries, the constitution consists of a single document or a set of documents. The United Kingdom is an example of a country that does not have a formal written constitution that can be found in a single document or set of documents. The British system of government and laws has evolved on the basis of such documents as the Magna Carta (Great Charter), a great body of law, and numerous customs, conventions, precedents, and clearly established forms of procedure that define the functions of, and relationships between, the Crown, Parliament, and other institutions of government and the British people. The establishment of colonies in the New World required the European powers to provide for the structure of local colonial government and the relationship between the mother countries and their colonies, or an imperial constitution. England’s American colonies were treated as dependencies of the Crown, not of the English people or their representatives in Parliament. Parliament only took a direct and important role in colonial commercial affairs with passage of the Navigation Acts beginning in 1650. Even after the doctrine of parliamentary supremacy was firmly established in the Glorious Revolution of 1688, royal prerogative—the Crown, the Privy Council, the secretary of state, the Board of Trade, the Treasury Board, the Commissioners of Customs, and other departments—played the dominant role in colonial affairs until the conclusion of the French and Indian War in 1763. Thereafter, Parliament played the leading part in colonial policy. The thirteen American colonies that formed the United States of America were founded as private enterprises underwritten by joint-stock companies, wealthy proprietors, or religious groups. With the exception of Connecticut and Rhode Island, which were settled by migrants from Massachusetts Bay but later received royal charters in 1662 and 1663, respectively, the founding corporations and proprietors of the American colonies received charters (sometimes called letters patent or grants) from the English and Swedish crowns and, in the case of New Netherland, the governing States-General of the United Provinces (the Netherlands). These charters were the initial constitutions of the colonies. Royal charters represent a grant of powers and privileges to their recipients. They defined the territory of each colony. They organized the structure of government and the division of responsibilities and powers among governors, appointed executive councils, and representative assemblies. They set forth the franchise and established a system of elections to representative bodies. They specified the rights and liberties of the inhabitants. They authorized land grants to settlers. They empowered governors to organize militias for defense. And so forth. [ 21 ]

i n t r od uc t ion t o part one

Every charter save that of Pennsylvania included incentives for settlement in the form of exemptions from English taxes in the English colonies, and Dutch and Swedish taxes in New Netherland (New York) and New Sweden (Delaware). Exemptions ran for seven to ten years. Some charters offered exemptions for specific crops that would be grown in the colonies and exported to England. Proprietors often granted temporary exemptions from quitrents (a form of property tax) to the early settlers. Founders of proprietary colonies invariably received a temporary exemption from local taxes in the colonies they established. The monarchs and governments of the colonizing European powers placed strong emphasis on tax exemptions to populate their American colonies. The founding of the American colonies was synonymous with tax incentives.1 1

Many of the colonial American charters were revoked by, or surrendered to, the Crown when the colonies were transformed from corporate or proprietary to royal status. By 1775 only Maryland, Delaware, and Pennsylvania remained privately chartered. The only charter that explicitly structured the government of a royal province was that granted to Massachusetts Bay in 1691, replacing its previous charter that was revoked in 1684. All other royal colonies largely inherited and partially modified the institutions and practices of their corporate or proprietary predecessors. The effectual constitutions of royal colonies consisted of commissions to royal officers, the governor, and certain other lesser colonial officials, and instructions to governors, constrained by the customs and conventions that had arisen during the periods of corporate or proprietary governance. See Leonard Woods Labaree, Royal Government in America: A Study of the British Colonial System before 1783 (New York: Frederick Ungar Publishing, 1958), 1–8.

[ 22 ]

c h ap t e r 1
the first wave

B

e g i n n ing i n the fi fteenth century, dreams of gold, silver, spices, and other trading opportunities prompted Eu ropean adventurers to explore and claim vast tracts of land in Africa, Asia, and the Americas for their sovereigns and hefty rewards for themselves. The Portuguese, Spanish, French, Dutch, Swedes, Danes, and English engaged in the world’s greatest land rush. The Portuguese and Spanish divided up most of Latin America.1 The French seized portions of Canada and several Ca ribbean islands. The Swedes and Danes occupied parts of Delaware and several Ca ribbean islands. Dutchmen briefly ruled New York and settled two groups of Ca ribbean islands. The English (British after union with Scotland in 1707) established colonies along the Atlantic Coast stretching from Newfoundland to Georgia along with Bermuda and several Ca ribbean Islands. 2 England came relatively late to exploration and colonization of the Americas. Not until the ascent of Queen Elizabeth to the throne in 1558 was England ready to launch its pursuit of empire. Legal claims of English sovereigns to portions of North America had previously been laid at the close of the fifteenth century. On March 5, 1497, in the eleventh year of his reign, King Henry VII granted letters patent to John Cabot and his three sons, Lewis, Sebastian, and Sancius, for the discovery of new and unknown 1 In 1494 Portugal and Spain negotiated the Treaty of Tordesillas, named after the village of Tordesillas on the high plateau of Castille. It ratified an earlier treaty that Granada and the Canary Islands belonged to Spain and that Portugal’s King Joa~o ruled the Algarve (southern Portugal) and his possessions in Africa. It further established a line of demarcation between Spanish and Portuguese spheres of influence drawn 370 leagues (a league is a unit of distance equal to three statute miles) west of the Cape Verde Islands. All islands and continents on the east side of the line went to Portugal, the west side to Spain. Portuguese sailors Gaspar and Miguel Corte-Real explored Newfoundland, Labrador, and Nova Scotia during 1499–1502, but established no settlements. 2 The subject of this book is the original thirteen colonies that formed the United States of America upon the conclusion of the American Revolution. The colonial activities of the Eu ropean powers in Asia and Africa are omitted from this study, except as they bear upon the development and taxation of the American colonies (e.g., patterns of trade, especially the slave trade).

[ 23 ]

chap t er 1

Land Tenure in the American Colonies

A

fter William the Conqueror, the law of medieval England granted to the king absolute (allodial) ownership of all the land. All persons with rights in land, from the highest lords to the lowliest peasant, derived their titles and rights from the king. Each holder of land rights paid the person above him in ser vices, goods, or money. This structure, land ownership in exchange for payment, was the basis of English feudalism. Feudal ownership established a military caste whose object was to protect the king. The legitimacy of property titles rested on the legitimacy of the Crown, constrained after 1215 by the Magna Carta. All subsidiary tenures were held “of the king.” In medieval times the king granted land under varying conditions, for varying terms of years. Persons could transfer the rights they enjoyed in their land through sale, lease, or other arrangements. Land rights, passing from one generation to the next, were granted in exchange for allegiance (homage and fealty), and for real and monetary assistance in special circumstances. The lords, those at the top of the feudal structure who received their grants of land directly from the king, held tenure in capite. Subordinate classes that owned land which descended by direct inheritance, requiring only a payment known as a relief to confi rm the inheritance, and the land did not revert (escheat) to the Crown, held tenure in socage. Military tenants of the Crown were the foundation of the feudal system. Feudal lords could lease and sell their lands and acquire tenants of their own, but their ultimate loyalty was due to the Crown. Gradually these feudal obligations were transformed into payments of rents and ser vices. However, lands that were repeatedly sold and changed ownership still retained an obligatory reserved ground rent to be paid to the master tenant, the king. The ground rent was originally a commutation in money of certain medieval villein (feudal serf ) obligations, such as laboring on the lord’s land a number of days in the week and paying him a portion of the output of the villein’s land and stock. The ground rent evolved into a quitrent, which designated any form of payment which absolved, or made quit, the tenant in respect of personal service or any other obligation to the lord. Payment of a quitrent left the owner “free and quit” of other duties, payments, and obligations. After 1660, when most military tenures were abolished by Parliament, free and common socage became the primary basis of ownership. Colonial land tenure was, in the main, “free and common socage.” In principle, though not always enforced, lands were subject to payment of a quitrent (to the Crown, a corporation, or proprietor) but were “free” because they could be sold, leased, and inherited. Quitrents could be real or nominal, either an actual sum of money (e.g., a penny an acre) or symbolic (e.g., a peppercorn, Indian arrows, beaver skins, a red rose). A colonial charter’s stipulation that lands were to be held in free and common socage transferred to the colonies the evolutionary transformation of the peasantry of England from free tenants and

[ 24 ]

The First Wave

Land Tenure in the American Colonies (continued) villeins into freeholders. Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies, with an introduction by Charles M. Andrews (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 14–18, 25–32. Land tenure in the American colonies, that of free and common socage, could be acquired by purchase, along with annual payments of quitrents to the seller, whether it be the king, a corporation, or proprietorship chartered by the king. Quitrents became fi xed and certain, replacing all other feudal obligations. Land held in free and common socage could be sold, devised by will, and inherited without any reversion or additional payments to the king, reserving only a small quitrent. Free and common socage of land tenure was specified in all of the colonial charters, from Virginia in 1606 to Georgia in 1732. As the original proprietor of the soil in all English dominions, both in the home islands and overseas, the Crown possessed the sole power to make grants of vacant land. The patent granted to John Cabot fi xed his standing as a tenant of the Crown. The patents to Sir Humphrey Gilbert and Sir Walter Raleigh required allegiance to the Crown, thus acknowledging their obligation of fealty, but did not specifically name the right to reserve a quitrent, a transfer of royal rights in the soil to the grantee. However, Gilbert set an important precedent when he included a quitrent of ten shillings per hundred acres in his proposals for settlement. Later charters more clearly specified these rights. To summarize, quitrents, whether payable to the Crown, a corporation, or a proprietor, represented the traditional feudal payment from freeholders whose land tenure was in free and common socage. The original colonial patents that established the thirteen American colonies amounted to contracts between the Crown and the colonists. This contract required the exact specification of each land grant (the borders of the colony) to ensure that rights in land in the colony could be freely bought and sold and transferred without troublesome disputes. In the same way that all lands in England were considered feudal possessions of the English Crown, so too were all lands in America discovered by English subjects. The kings and queens of England had the right to confer portions of their American territories upon persons of their own choice who, in turn, holding their land were empowered to make grants of land to settlers. The same principle, occupation and ownership by “right of discovery,” applied to the monarchs of Portugal, Spain, Sweden, France, and Denmark, and the government of The Netherlands. Papal bulls justified the colonizing ventures of Catholic Portugal and Spain. For example, see the “Bull of Pope Alexander Conceding America to Spain 1493,” in The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of

[ 25 ]

chap t er 1

Land Tenure in the American Colonies (continued) Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), 1:41–42. English colonization of America did not occur in empty lands. All of the colonies had Indian populations, some large, some small. The establishment of crown ownership, and thus the tenure of the American colonists, implies the removal of Indian rights or ownership. Beginning with the patent from Isabella and Ferdinand to Columbus (“Privileges and Prerogatives Granted by Their Catholic Majesties to Christopher Columbus—1492,” in Thorpe, Colonial Charters, 1:39–40), Europeans presumed that lands in America not belonging to Christian monarchs could be taken by the legal doctrine known as “right of conquest.” Eu ropean tradition gave Christians a natural right of conquest and dominion in the non-Christian world. All of the Eu ropean colonizing nations accepted the doctrine of the right of conquest. The superiority of European civilization, especially in the means of war, and Christianity enabled the doctrine to be enforced, thus impairing the patrimony of the Indians. Since Indians were internally divided, often at war with each other, and too few to resist waves of European immigration, the settlers were able to acquire land from Indians by purchase or conquest as their growing population required. The colonial powers gave little recognition to the Indians’ aboriginal property rights in land. On some occasions, the English monarchs attempted to deal fairly with Indian tribes. Individuals in the colonies were generally forbidden to purchase land directly from Indians, but this restraint was often disregarded or overlooked. Primary acquisition of Indian lands was reserved for the agents of the Crown, the colonial governments. Official acquisition of Indian land became the sole source of title for whites and Indians alike since, in the eyes of the colonial powers, Indian tribes had no real title to their lands. Indian titles did not exist except for the right of occupancy, which amounted to land rights as that of a tenant-at-will, and only at the convenience of the settlers. To be respected by the colonists, Indian titles had to be derived from the same source of legitimacy as their own titles. Indian titles were deemed inferior in the eyes of the Crown and the settlers. Early estimates of the Indian populations of the American colonies were used to justify taking Indian lands on the basis of the doctrine of “effective use.” The smaller the Indian population, the greater the claim that Europeans could assert to the land. Misunderstanding of rights in land resulted in periodic wars and conflicts between the colonists and the Indians, as Indians did not understand the system of individual ownership that was the basis of exclusive white titles to land rights. A fuller discussion of these disagreements and wars appears throughout this book. This treatment of land ownership and rights in the American colonies follows that of Jonathan R. T. Hughes, Social Control in the Colonial Economy (Charlottesville: University Press of Virginia, 1976), 23–88, and The Governmental Habit Redux: Economic Controls from Colonial Times to the Present (Princeton: Princeton University Press, 1991), 22–28

[ 26 ]

The First Wave

lands. 3 The letters patent authorized Cabot and his sons to explore “all parts, countries, and seas of the East, of the West, and of the North . . . upon their own proper costs . . . and in what part of the world so ever they be, which before this time have been unknown to all Christians . . . to set up our banners and insignia in every village, town, castle, island, or mainland of them newly found.”4 In return, Cabot and his sons were required to restrict the shipment of any merchandise from their possessions to the port of Bristol,5 paying to the king one-fifth of the capital gains earned in each voyage after deducting all necessary costs and charges.6 As a special incentive to Cabot and his sons, all merchandise was to “be free from all paying of customs of all and singular they shall bring with them from those places so newly found.” The king also granted John Cabot and his sons7 the license to restrict visits of other English subjects to lands that the Cabots had discovered, possessed, and occupied. Violations were to result in forfeiture of both ships and goods. All Englishmen were instructed to give the Cabots assistance in arming and furnishing their ships for their voyages of discovery. The first English charter upon which English claims to the American colonies was based involved a quid pro quo. Cabot would bear the costs of 3

The Avalon Project at Yale Law School has compiled a collection of colonial charters, grants, and related documents. All Avalon documents cited in this book were downloaded and printed on February 27, 2003. The original source from which these documents was posted is Thorpe, Colonial Charters. The list of general charters and charters and grants specific to the thirteen American colonies can be found at http://www.yale.edu/ lawweb/avalon/states/statech .htm (February 27, 2003). Other pre-eighteenth-century documents can be found at http://www .yale.edu/ lawweb/avalon/pre18.htm (February 27, 2003). The text of the letters patent granted to John Cabot and his sons is found in Thorpe, Colonial Charters, 1:45–47, and http://www.yale .edu/ lawweb/avalon/cabot01.htm (February 27, 2003). 4 For ease of reading, I have transcribed the cited portions of this grant, and other charters and grants to follow, into modern English. The fi rst letters patent issued by an English monarch contained the provision of exploration and occupation of land that “before this time had been unknown to all Christians,” that is, to lands not previously claimed on behalf of other monarchs or nations. Th is provision, and other clauses requiring that foreign rights be respected, is typical of the charters granted by the English Crown to colonial adventurers. However, lands acquired from other monarchs by conquest overruled the principle of no previous Eu ropean settlement. 5 The restriction of the shipment of any merchandise to a specific English port was a harbinger of the Navigation Acts that would be enacted in Parliament. The fi rst Navigation Act passed by Parliament in 1650, followed by several more trade acts right up to the American Revolution, established a system of regulated trade throughout the English (British) Empire, often limiting the shipment and sale of colonial goods to English subjects or to England itself. The Navigation Acts and other trade measures receive detailed discussion and analysis throughout the book. 6 The letters patent do not include a precise defi nition of capital gains. 7 Grants and charters typically extended the benefits accorded to grantees to their heirs and deputies without a time limit.

[ 27 ]

chap t er 1

Sources of Royal Revenues

P

ort duties were an important part of the king’s revenues in 1498. Upon the issue of the Magna Carta in 1215, the king’s revenues derived from rents collected on his vast possessions in land, special prerogatives to maintain the court (purveyance, the right to impress carriages and horses for the ser vice of the king in removing his household or in the conveyance of timber, baggage, and goods; preemption, the right to purchase provisions and other necessities for the royal household at an appraised value; and prisage, the right to take a cask or two from wine-laden ships on their arrival at a port); several feudal aids (e.g., when the king made his eldest son a knight, when he married his eldest daughter, and to ransom his person if he became captive); fines and extortions; charters and grants to towns and villages to hold fairs, markets, or monopolies; extortions; and other specific taxes on real property. Additional revenues were to be imposed only with the approval of the Great Council of barons summoned for this purpose. By the beginning of the fifteenth century, the formation of a separate chamber, consisting of knights, citizens, and burgesses, the House of Commons, deliberating apart from the House of Lords, acquired the right to originate and approve additional grants. The right to levy duties on imports and exports at the ports was a source of ongoing contention between the king and the two houses of Parliament. The modern term “duties,” meaning payments to the Crown upon merchandise at the ports, encompassed (1) customs, payments by merchants to the Crown for protection from numerous tolls and charges at the hands of lords and local port authorities; (2) subsidies granted by Parliament, which originated when Parliament agreed to grant the king a subsidy in exchange for the king’s removal of an excessive toll on wool exports; and (3) royal imposts, which only emerged as a potential dispute in the seventeenth century. The word “subsidy” in seventeenthcentury English parlance does not mean monetary assistance granted by a government in support of an enterprise regarded as being in the public interest, or financial assistance given by one person or government to another. Rather, it refers to money granted by Parliament to the Crown. Stephen Dowell, A History of Taxation and Taxes in England: From the Earliest Times to the Year 1885, vol. 1, Taxation from the Earliest Times to the Civil War, 2nd ed. (London: Longmans, Green, and Company, and New York: 15 East 16th Street, 1888), xii–xix. During the War of the Roses (1455–85), customs formed the main source of revenue from taxation. All the sovereigns of the house of Tudor (Henry VII, Henry VIII, Edward VI, Mary, Elizabeth) received life grants of the subsidies on wool, skins and leather, tunnage or tonnage (a tun, or ton, is a large cask for liquid equivalent to about 252 gallons or 954 liters), and poundage, which constituted the port duties. The origin of tonnage on wine and poundage on goods commenced in 1347 with a charge of two shillings (2s.) a ton on wine and six pence (6d.) in the pound on goods as a convoy tax, an insurance premium, for the purpose of paying the wages of ships of war required to protect traders. Six

[ 28 ]

The First Wave

Sources of Royal Revenues (continued) pence in the pound amounts to a tax rate of 2.5 percent. There are twenty shillings in a pound and twelve pence in a shilling, summing to 240 pence in a pound sterling. Dividing 6 by 240 yields a ratio of 2.5 percent. Parliament subsequently granted a subsidy equivalent to these funds. Releasing the Cabots from customs represented a major concession of the king’s revenues.

discovery, but would enjoy an exemption from English customs for merchandise shipped to England. Cabot undertook voyages in 1497 and 1498. He discovered the North American continent, but failed to possess and occupy any lands in the New World. For most of the next century, England was preoccupied with securing internal stability and developing its economy. Although exploration and settlement of the Americas were put on hold for nearly a century, English fishermen grew increasingly active off Newfoundland. To encourage the development of a navy and fishing, Parliament enacted a series of statutes. An act of 1562–63 added Wednesdays to Saturdays as fish days and permitted any subject for the four years beginning April 1, 1564, to transport fish in any English ship out of the realm without paying customs duties. After expiration in 1568, the customs exemption was revived and continued for six years in 1570.8 Elizabeth’s burgeoning mercantile class envied and feared the great wealth that Spain was drawing from its American colonies. Spanish wealth and power were seen to threaten England’s commercial independence and its recently established Protestant religion. England cheered its “sea dogs,” Sir John Hawkins, Sir Francis Drake, Sir Richard Grenville, and Thomas Cavendish, who captured Spanish treasure ships and pillaged Spanish outposts. Their seizure of Spanish gold, silver, jewels, spices, lumber, and other goods hinted at great wealth to be acquired in the New World. Unless England established colonies in the New World, Spain would remain preeminent across the Atlantic and perhaps the dominant power in Europe. Colonies in America would extend England’s empire to the New World and provide closer bases for attacks on Spanish shipping. On June 11, 1578, Queen Elizabeth issued letters patent to Sir Humphrey Gilbert to colonize America.9 The queen’s grant to Gilbert, and his 8 Harold A. Innis, The Cod Fisheries: The History of an International Economy, rev. ed. (Toronto: University of Toronto Press, 1954), 30. 9 Thorpe, Colonial Charters, 1:49–52, and http://www.yale.edu/ lawweb/avalon/ humfrey .htm (February 27, 2003).

[ 29 ]

chap t er 1

heirs and successors, authorized him to discover, possess, and govern lands not possessed of any Christian prince or people. The Crown was to receive the fifth part of all gold and silver ore discovered.10 Residents of Gilbert’s colonies were to “enjoy all the privileges of free denizens and persons native of England.”11 Gilbert was empowered to devise and establish laws and ordinances conforming, as near as possible, to the laws and policy of England and to the true Christian faith or religion professed in the Church of England. Gilbert was not accorded any exemption from English customs in the grant.12 Walter Raleigh, Gilbert’s half brother, successfully renewed his charter on March 25, 1584.13 As before, it reserved to the Crown one-fifth of all gold and silver ore discovered. It gave Raleigh jurisdiction over all lands, but preserved the rights of English subjects trading to and fishing in Newfoundland. It authorized Raleigh to transport goods from England as deemed necessary upon the approval of the Lord Treasurer and any four members of the Privy Council. The grant required settlement of a colony within six years. Raleigh’s men sailed on April 27, 1584, sighting land on July 4.14 They established a base on Roanoke Island, met natives for the fi rst time, and examined Indian methods of farming, shelter, and boat construction, and 10 The choice of one-fi fth followed the Spanish royal quint, the fi fth part taken by the Spanish Crown from the operations of privately run Spanish mines in Central and South America. 11 Denizenship was a status conferred upon an alien by letters patent issued by the monarch, which enabled a foreigner to hold lands as well as inherit and transmit property to his children born after denization was granted. Letters granting the status of denizen were matters of prerogative that could be issued only by the Crown. Such letters rested solely on the monarch’s will and could be withdrawn. A colonial governor, as vice-regal, could grant letters of denizenship to aliens resident in a par ticu lar colony, but this status was confi ned within its borders and did not extend to other colonies or English dominions. Naturalization granted the rights of a natural-born subject of England, which could be conferred by a general act applying to a class of people or a special act applying to a par ticu lar individual. Residents of conquered territories became subjects by conquest, usually after swearing an oath of allegiance to the new sovereign. A. H. Carpenter, “Naturalization in England and the American Colonies,” American Historical Review 9 (January 1904): 290–92. HTML by Dinsmore Documentation, May 18, 2002, http:// dinsdoc.com/carpenter-2.htm (March 5, 2004). 12 Gilbert sailed to the West Indies in 1578, but accomplished little for England. He engaged the Spanish off their home coast and decided to settle a colony at Cape Breton (Nova Scotia). During a voyage from Newfoundland to Cape Breton, one of his ships was wrecked and Gilbert decided to return home with his colonists. During a storm in the North Atlantic, the ship carry ing Gilbert sank and he was lost at sea. 13 Thorpe, Colonial Charters, 1:53–57, and http://www.yale.edu/ lawweb/avalon/raleigh.htm (February 27, 2003). 14 A summary of Raleigh’s attempts to establish a colony appears in Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 6–25.

[ 30 ]

The First Wave

what minerals might be available. After six weeks they returned home with glowing reports of their expedition. On January 6, 1585, Queen Elizabeth named the new country Virginia, after herself, the Virgin Queen, and knighted Raleigh for his ser vice to England. In April 1585, seven ships set sail with some six hundred men, reaching Roanoke Island before the end of July. Despite several efforts at resupply, the settlement did not survive, and Raleigh’s grant expired in 1590.

Virginia

K

i ng ja m e s I (James VI of Scotland), Elizabeth’s successor, granted the First Charter of Virginia on April 10, 1606.15 The charter authorized investors in the Virginia Company to establish a colony in the part of America called Virginia. The grant covered all the land along the seacoast, in the mainland “from sea to sea,” and offshore islands within 100 miles of the coast lying within 34° to 45° north latitude, from near Cape Fear (North Carolina) to what is now Bangor, Maine. The Virginia Company was a private corporation, which included Sir Walter Raleigh’s nephew, Raleigh Gilbert, and others who had supported previous efforts at colonization. The charter authorized the formation of two companies, one based in London and the other based in Bristol, Exeter, and Plymouth. The Londonbased company was empowered to establish a colony on lands between 34° and 40° north latitude, which would be called “the first Colony.” The West Country-based company would be empowered to establish a colony on lands between 38° and 45° north latitude, to be called “the second Colony.” The two colonies, or “plantations” as they were also called, were to be at least a hundred English miles apart. Both companies were required to establish a local council, consisting of thirteen persons, which would govern their respective colonies, and a council of thirteen persons in England, which would provide superior management and direction for the colonies and be at the ser vice of the king regarding colonial matters. As in the earlier letters patent and grants, one-fifth of all gold and silver discovered in the colonies was reserved for the Crown, along with one-fifteenth of all copper. The governing councils were authorized to mint coins in whatever metals, manner, and form they deemed most effective to promote economic transactions between the two colonies and the natives. The councils were granted the power to levy a 2.5 percent tax on all goods bought and sold in the colonies by subjects of any English realm. Non-subjects trading in the colonies were to be taxed at 5 percent. The proceeds of these taxes were to be 15 Thorpe, Colonial Charters, 7:3783–89, and http://www.yale.edu/ lawweb/avalon/states/ va01.htm (February 27, 2003).

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wholly employed within the colonies for twenty-one years, after which they were to revert to the Crown. To foster the settling and development of the colonies, James granted a seven-year exemption from all customs, subsidies, and duties otherwise chargeable on the export of goods, chattel, armor, munitions, and furniture shipped to the colonies. Other provisions of the charter stipulated that all colonists and their children should enjoy all “Liberties, Franchises, and Immunities . . . as if they had been abiding and born, within this our Realm of England, or any other of our said Dominions.” The colonists were to enjoy the rights of Englishmen. The First Charter of Virginia contained an early precursor to the Navigation Acts, which regulated trade and commerce within the English Empire and between Englishmen and foreigners. All persons transporting goods from any English dominion intended for the colonies were forbidden to subsequently carry those goods for sale in foreign countries without direct approval of the Crown on pain of forfeiture of both vessel and goods and chattels. A last stipulation in the charter was that lands within the colony were to be held “as of our Manor at East-Greenwich, in the County of Kent, in free and common Socage only, and not in Capite.” Only the London company actually attempted to settle a colony. It sent a first contingent of 105 colonists, which landed at Jamestown on May 13, 1607. On arriving, a sealed casket was opened, which named a list of councillors to rule the settlers. Only thirty-five settlers survived their first year in the New World, falling to fire, food shortages, summer sickness, and Indian attacks. Subsequent contingents of settlers fared little better. The London company, believing that a different system of local governance would be more conducive to success and some prospect of future profits, petitioned the Crown for a revised charter. On May 23, 1609, King James granted the Second Charter of Virginia.16 It authorized a change in governance, which abolished the local council and arranged for the appointment of a single executive. As before, it reserved the fifth part of all gold and silver ore for the Crown. To increase revenues for local administration, the charter doubled locally imposed duties on Englishmen and foreigners from 2.5 and 5 percent, respectively, to 5 and 10 percent, for the sole use and benefit of the colony for twenty-one years. Settlers were to enjoy the liberties of Englishmen. The Crown recognized the difficulties that plagued the Virginia Company in its efforts to lure settlers to Virginia. The seven-year exemption 16 Thorpe, Colonial Charters, 7:3790–3802, and http://www.yale.edu/ lawweb/avalon/states/ va02.htm (February 27, 2003).

[ 32 ]

The First Wave

from customs, subsidies, and other impositions on the export of supplies from England was renewed to 1616. The second charter further exempted the treasurer and company, its factors17 and assignees, from all subsidies and customs in Virginia for twenty-one years. It also exempted the company forever from all other taxes and impositions upon any goods or merchandise imported into or exported out of any English dominion, save payment of a 5 percent customs charge in England. Thereafter, the company was free to reexport those goods for sale to any foreigner without any additional toll, provided they were shipped out within thirteen months of their fi rst landing. On March 12, 1611, King James granted the Th ird Charter of Virginia18 for the purpose of improving the government and economic prospects of the Virginia colony and enlarging the company’s jurisdiction to islands within three hundred leagues off the coast of Virginia. The third charter renewed and enlarged the seven-year tax exemption on exports of goods and merchandise from England to Virginia to include exports from Virginia to England. It authorized the company to hold lotteries to raise funds—the company was losing money and investors had not yet received any dividends—and contained other legal, judicial, and administrative provisions. In 1612, John Rolfe discovered that tobacco native to Central and South America would flourish in Virginia. In 1613 a shipment of tobacco to England sold for a considerable profit. However, the Virginia Company resisted the colony’s shift to a single staple, encouraging the production of food and fisheries, and the development of iron, glass, lumber, and shipbuilding industries. These plans at diversification failed, and the company turned to lotteries in England to raise money to sustain its activities. Complaints to Parliament about the demoralizing effects of too much money being raised by lotteries at the expense of English trade and industry prompted the Privy Council in 1621 to deprive the Virginia Company of its third charter right to hold lotteries.19 The final straw was an Indian uprising in 1622, which killed between three and four hundred of the colony’s 1,240 inhabitants. The surviving colonists retreated to the safety of their fortifications, but they were unable to plant crops or hunt. Hundreds more died from hunger and disease. The population of the colony rapidly declined. Blaming the company for its failure to supply and defend the colonists, James revoked the charter 17

A factor is someone who acts for someone else, for example, an agent. Thorpe, Colonial Charters, 7:3802–10, and http://www.yale.edu/ lawweb/avalon/states/ va03.htm (February 27, 2003). 19 Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore and London: Johns Hopkins University Press, and the Maryland State Archives, 1984), 105–6. The volume was originally published in 1953 by the Mariners’ Museum, Newport News, VA. 18

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chap t er 1

of the London company and declared Virginia a royal colony on March 24, 1624. 20

Massachusetts and New England

T

he f o unding of Massachusetts (Plymouth Plantation and Massachusetts Bay) and the other New England colonies of Connecticut, Rhode Island, New Hampshire, and the Maine counties subsequently incorporated into Massachusetts in 1660 rests on a series of charters, including the Virginia charters, the Charter of New England 1620, 21 the Charter of the Colony of New Plymouth Granted to William Bradford and His Associates 1629, 22 and the Charter of Massachusetts Bay 1629. 23 Before reviewing the several charters, a brief history of the settlement of Massachusetts and the origin of these charters is in order.24 The first durable settlement in Massachusetts, the Pilgrims of Plymouth Plantation, rested on a patent obtained from the London-based first Virginia Company. The Pilgrims obtained 7,000 in financing for their expedition from a London company of some seventy merchants led by Thomas Weston, a prosperous ironmonger looking for promising investment opportunities. The merchants formed a joint-stock association with shares valued at 10 each, the approximate cost of transporting one colonist to America. A share could be purchased with cash (making one an adventurer) or by agreeing to emigrate to the new settlement (making one a planter). All of the emigrants would be provided with food, drink, and clothing from the fund, and all of the profits from trade, working, and fishing would go into this fund. At the end of seven years, all capital and profits, houses, lands, goods, and chattels would be equally divided between the London investors and the Pilgrims. The Mayflower departed from Plymouth, Devon, with 102 passengers on 20 The development of Virginia and the taxation of its colonists is discussed in part II, chapter 9. 21 Thorpe, Colonial Charters, 3:1827–40, and http://www.yale.edu/ lawweb/avalon/states/ mass01.htm (February 27, 2003). 22 Thorpe, Colonial Charters, 3:1841–46, and http://www.yale.edu/ lawweb/avalon/states/ mass02.htm (February 27, 2003). The charter granted to William Bradford and his associates in 1629 placed the original Pilgrim settlement of 1621 at Plymouth on a constitutional foundation until Plymouth became a part of the province of Massachusetts in 1691. 23 Thorpe, Colonial Charters, 3:1846–60, and http://www.yale.edu/ lawweb/avalon/states/ mass03.htm (February 27, 2003). 24 Th is section of the founding of the several Massachusetts settlements is based on Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 23–27. The legal wrangling over the various patents and indentures involving the several Massachusetts settlements is discussed in Frances Rose-Troup, The Massachusetts Bay Company and Its Predecessors (Clifton, NJ: A. M. Kelley, 1973). A reprint of the fi rst edition (New York: Grafton Press, 1930), chapters 1–3, pp. 1–31.

[ 34 ]

The First Wave

September 6, 1620. Forty-one men signed the famous Mayflower Compact, the Agreement Between the Settlers at New Plymouth 1620, 25 off Cape Cod on November 11, 1620. They landed at Plymouth Rock on December 22, 1620. Unfortunately, almost half the colonists died before the summer of 1621. By the end of that summer, the small Pilgrim community stabilized under the leadership of William Bradford. Its fi rst crop was good, and the Pilgrims celebrated their famous first Thanksgiving. However, the London merchants who backed the venture grew disillusioned and sold their claims in 1626 to a group of London partners. The latter, in turn, relinquished all claims to the real estate and property of the settlers for 1,800 to be paid over nine years. Plymouth Plantation received royal recognition in a separate charter granted in 1629. The second Virginia Company of West Country England had attempted, but failed, to establish a colony in 1607 at the mouth of the Kennebec River on the Maine coast. In 1620, Sir Ferdinando Gorges, a founding member of the second company and an indefatigable colonizer, established the Council for New England in Plymouth, Devon, as successor to the second company. In 1620 James granted to Gorges and the council the Charter of New England, which awarded the right to plant, govern, and hold New England as proprietors of the North American continent between 40° and 48° northern latitude. The charter established a council of forty persons in Plymouth, Devon, to govern New England. The council was empowered to make and establish laws, orders, constitutions, ordinances, instructions, forms, and ceremonies of government necessary for the administration of New England not contrary to the laws and statutes of England. The council issued grants to numerous individuals and groups seeking to establish settlements in New England. In the spring of 1628, a group of six men received a grant from the council for all the land lying between lines three miles north of the Merrimack River and three miles south of the Charles, a part of which had already been granted to Gorges. The group enlarged its members with funds from wealthy Puritan investors and took the title the New England Company for a Plantation in MassachusettsBay. In order to secure their patent against the counterclaims of Gorges and others, the investors in the new company obtained a royal charter in March 1629, incorporating their organization as the Governor and Company of the Massachusetts Bay in New England. Because the charter did not include any reference for the place of residence of the company, the directors moved the company’s headquarters to Massachusetts Bay itself in 25 Thorpe, Colonial Charters, 3:1841, and http://www.yaleedu/ lawweb/avalon/amerdoc/ mayflower.htm (February 27, 2003).

[ 35 ]

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1630. Gorges, other council grantees, and their heirs would be in confl ict over land rights in parts of New England for more than a century. The first of the three charters authorizing the settlement of Massachusetts and New England was the Charter of New England 1620, granted to Gorges’s Council for New England, successor of the second Virginia Company. Many of the provisions in the Virginia charters were standard in this and subsequent royal grants. All profits from any economic activities in the colony belonged to the council and its successors and assignees forever, except that one-fifth of any gold and silver ore discovered was reserved for the Crown. The council was authorized to transport persons, including strangers who would become English subjects, and all manner of things necessary for the establishment and defense of the colony and for trade with the natives (e.g., armor, weapons, munitions, shot, food, clothing, implements, furniture, and animals). The charter granted the council a seven-year exemption from any customs or subsidy on goods taken out of or into England: “And for their further Encouragement . . . the said Council . . . shall be free and quit from all subsidies and customs in New England for the space of seven years, and from all taxes and impositions for the space of twenty-one years upon on all goods and merchandise . . . either on importation . . . or exportation . . . into England or any of our dominions . . . except only the five percent due for customs.” Thereafter, within the space of thirteen months of their first landing, all such goods could be freely exported. The council was authorized to distribute and assign lands to the colony’s residents in proportion to the investments of the adventurers and the special ser vice of any person who deserved to be rewarded. Other provisions, also standard in royal charters, included the rights of Englishmen, limiting settlement to Protestants (Catholics could settle upon taking an oath to the Church of England), and monopoly rights of the council to trade in New England. The council was authorized to punish those who failed to honor their contracts of employment in New England. As mentioned above, in 1629 the Pilgrims obtained from Charles I, successor to James I in 1626, the Charter of the Colony of New Plymouth Granted to William Bradford and His Associates to secure their rights. The 1629 charter noted the right to settlement on the basis of land grants authorized under the Charter of New England 1620 granted to the Plymouth Council for New England. The 1629 charter was granted “in consideration that William Bradford and his associates have for these nine years lived in New England aforesaid and have there inhabited and planted a town called by the name of New Plymouth at their own proper costs and charges . . . and . . . have increased their plantation to near three hundred people . . . confirm unto the said William Bradford” a precisely specified part of Massachusetts under the jurisdiction of the Pilgrims. Bradford and his [ 36 ]

The First Wave

associates were obligated to remit a fifth of all gold and silver ore to the Crown and another fifth to the president and Council for New England. The Charter of Massachusetts Bay 1629 fi rst chronicled the transfer of, and then gave royal approval to, certain lands from the Plymouth Council for New England to the group of six investors previously mentioned and the additional investors, all named, with whom they became associated. Land was to be held in free and common socage. One-fifth of all gold and silver ore was reserved for the Crown, but none was required for the Council for New England. The charter established the Governor and Company of Massachusetts Bay in New England with the right to purchase and distribute land as if it were an English corporation. The 1629 charter specified a political structure of a governor, a deputy governor, and eighteen assistants26 to be chosen by the freemen (stockholders)27 of the company. The charter named the initial officials. It set out the process of government, requiring that the governor, deputy governor, and assistants hold four general sessions, termed courts or assemblies, to admit freemen and elect and constitute officers to manage the affairs of the company and make laws for the administration of the colony. It further required an annual general court or assembly to elect replacements for officers who died or were removed for misconduct. The 1629 charter granted a seven-year exemption, until 1636, from customs and subsidy for all shipments of goods and merchandise to and from England. The company was exempted from all taxes, subsidies, and customs in New England for seven years, and upon the payment of 5 percent customs on imports and exports in England, a twenty-one-year exemption on all other taxes and impositions. The remaining provisions mirrored the Charter of New England 1620, protecting fishing and curing rights of English subjects, and assuring the rights of Englishmen. The 1629 charter did not provide for the imposition of local tolls on trade reserved for the exclusive use of the company as had previous charters for Virginia. Massachusetts cycled through a number of charters, which revised or restated the rights of the company and the settlers. In 1635 the Plymouth Council for New England surrendered its charter to Charles I. 28 In 1640, 26 The concept of assistant was akin to the king’s councillors, a formal executive advisory group with specific powers. Assistants, or magistrates as they were also called, subsequently also served as members of upper houses of colonial legislatures. Assistants as members of upper houses in Massachusetts, Connecticut, and Rhode Island were locally elected, while upper house members in other colonies were appointed and approved by the Crown and Privy Council. 27 A religious test, membership in the church, was also applied for most of the seventeenth century. 28 Thorpe, Colonial Charters, 3:1860–61, and http://www.yale.edu/ lawweb/avalon/states/ mass04 .htm (February 27, 2003).

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William Bradford and his associates surrendered the Patent of Plymouth Colony to the freemen of the corporation of Plymouth colony. 29 The Commission of 1688 and the Charter of 1691 are discussed in part III. The colonies of Connecticut, 30 Rhode Island, 31 and New Hampshire32 were, in part or in whole, offshoots of Massachusetts Bay. Formal constitutional arrangements were established by the settlers themselves in Connecticut in 1639 and 1643, confirmed by royal charter in 1662; in Rhode Island in 1640 and 1641, confirmed by royal charter in 1663; and in New Hampshire in 1639 and 1641, confirmed in the Royal Commission of John Cutt in 1680. 33

New Netherland

S

e v e ral e u r o pe an voyages of discovery in the sixteenth century reached or entered the Hudson River, but no settlements were planted. In 1609, the most famous of these explorers, the Englishman Henry Hudson, contracted with the Dutch East India Company, which had been founded in 1602, to try to find a northeasterly route to the Orient. His 29

Thorpe, Colonial Charters, 3:1861–62, and http://www.yale.edu/ lawweb/avalon/states/ mass05.htm (February 27, 2003). 30 The establishment and political development of Connecticut are discussed in Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979), 3–48. The nucleus of the Connecticut colony was the towns of Wethersfield, Windsor, and Hartford, founded on the Connecticut River during 1634 and 1635. The early settlers largely migrated from Massachusetts Bay owing to religious and political differences with the Puritan colony and for economic opportunities in the river valley. The founding history is reviewed in part II, chapter 7. 31 The establishment of Rhode Island is discussed in Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 1–33. Rhode Island’s founding is synonymous with the religious differences of Roger Williams and other outcasts from Massachusetts Bay, who established the four original towns of Providence, Portsmouth, Newport, and Warwick in the decade beginning in 1636. Early economic and political development are in James, Colonial Rhode Island, 48–74. The founding history is reviewed in part II, chapter 7. 32 The establishment of New Hampshire is discussed in Jere R. Daniell, Colonial New Hampshire: A History (Millwood, NY: KTO Press, 1981), 17–38. See also David E. Van Deventer, The Emergence of Provincial New Hampshire (Baltimore and London: Johns Hopkins University Press, 1976), 3–20. Between 1623 and 1641 immigrants from England and Massachusetts Bay established four small settlements along a sixteen-mile strip of the northern New England coastline, southward from the Piscataqua River to an imaginary line three miles north of the Merrimack River, the northern boundary of Massachusetts. Dover was established by a patent given by the council to a London fishmonger, Edward Hilton. Piscataqua was founded by Gorges, Captain John Mason, and seven London merchants, who formed the Laconia Company, receiving some indefi nite grants from the council hoping to tap into the rich fur trade near Lake Champlain and Lake Ontario. Exeter was founded by religious exiles from Massachusetts. Hampton was established under the direct supervision of Massachusetts to enlarge its influence and because of a valuable salt marsh in the region. The founding history is reviewed in part II, chapter 7. 33 These various documents are reviewed in part II, chapter 7.

[ 38 ]

The First Wave

voyage up the Hudson River provided the fi rst stimulus to European colonization in New York.34 In 1611 Dutch merchants began to visit the Hudson River Valley to trade with the natives for furs. Responding to the growing fur trade, thirteen Dutch merchants from the cities of Amsterdam and Hoorn formed the New Netherland Trading Company in 1614. They petitioned and received from the States-General of the United Provinces, Holland’s governing body, a three-year monopoly to make four voyages for fur trading in the Hudson River Valley. They established a trading post named Fort Nassau on Castle Island just below Albany. However, the area was not colonized and the company’s monopoly expired in 1618. A new monopoly was established on June 3, 1621, when the Dutch West India Company received a charter that granted it a twenty-four-year monopoly on all Dutch trade and navigation with the Americas and West Africa. The charter empowered the company to build forts and fortifications to assist its trading activities and, to that end, appoint governors and other public officers to keep order and justice. “Moreover, they must advance the peopling of those fruitful and unsettled parts, and do all that the ser vice of those countries, and the profit and increase of trade shall require.” This sentence in the second clause was an admonition to establish colonies in Asia and the Americas. If required, and at its own expense, the company could employ Dutch troops to establish, secure, and defend its trade. Clause 9 stipulated that “this company . . . may pass freely with all their ships and goods without paying any toll to the United Provinces.” If, after eight years, the freedom from tolls shall be revoked, or if the country is engaged in war, all goods carried into or out of the Netherlands to and from the West Indies and Africa shall be rated no higher than they would formerly have been rated in peacetime or in war time. The company’s goods were not to be taxed at rates above those previously in force for the remaining sixteen years of the charter if it was necessary to remove the toll-free exemption after eight years. Numerous clauses specified the governing structure of the company, the number of managers, their representation from the different provinces of the Netherlands, minimum investment of four to five thousand guilders to serve as a manager in the company, terms of ser vice and election of successors, the location, conduct, and business of meetings and per-diem allowances for managers in attendance, and a full accounting of all gains and losses every six years. Investors were not permitted to withdraw their capital during the life of the charter. 34

A brief account of the early history of New York, or New Netherland as it was called under Dutch administration, is found in Michael Kammen, Colonial New York: A History (Millwood, NY: KTO Press, 1996), 1–2, 23–47.

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The charter specified routes of trade. All vessels returning from a voyage were to return to their starting point unless poor weather conditions forced a landing in another location. The chamber of each province represented in the company was required to direct and manage the vessels and goods it sent out. Goods landed in another province were to be under the sale of managers of the originating province or, if travel was not possible, by the receiving province on behalf of the originating chamber. The company was a conglomeration of separate provinces, each trading on its own account, within the framework of a national charter.35 Clause 35 stated that all goods were to be sold by weight using the weight standards of Amsterdam, ensuring uniformity. Provided that goods put onboard ship were sold by the one weight, they were not subject to “any excise, import or weigh-money.” When sold, however, goods were subject to the same impost and weigh-money as other goods similarly charged. Clause 39 granted the company a subsidy of a million guilders to be paid in five installments of two hundred thousand guilders on a matching basis. 36 Once half the funds were paid, the government was to receive a proportional share of the profits earned by the company. The government also promised in the event of war to supply sixteen warships and four sailing yachts, which would have to be manned, supplied, and paid for by the company. The company, for its part, would have to add another twenty ships. Resources permitting, the government promised to aid the company in times of war. Prizes of war were to be distributed one-tenth to the StatesGeneral of the United Provinces and the remainder to the company in proportion to the investment of capital of the several chambers. 35 The government of the company was vested in the five chambers of Amsterdam, Zealand, the Maeze, North Holland, and Friesland. Amsterdam was given four-ninths control of the company, Zealand two-ninths, and the other three each one-ninth. The number of managers was specified for Amsterdam at twenty, Zealand twelve, and the other three each fourteen. Commissions of 1 percent were to be divided into the same four, two, one, one, and one proportions of the controlling stakes. No commissions could be charged on military supplies. 36 The guilder, also called a florin, was valued at three per piece of eight, which was a Spanish silver coin valued at 4s. 6d. in England. One guilder was thus equal to 18d. sterling. One million guilders amounted to 333,333 Spanish pieces of eight, or 75,000 English sterling, an enormous sum of money at the time. The most important Dutch coin, used mainly to facilitate the export trade, was the Lyon dollar (the Leeuwendaalder), fi rst minted in 1575. After independence from Spain, six of the seven Dutch provinces and some of the major cities issued Lyon dollars. The Lyon dollar contained 427.16 grains of .750 fi ne silver and passed locally for between 36 and 42 stivers (one guilder was divided into 20 stivers, or pennies). It was lighter than the large denomination ducatoon (491 grains of .920 fi ne silver and passing at 3 guilders) and the rijksdaalder (448 grains of .920 fine silver and passing at 21 ⁄2 guilders). A comprehensive description of the metallic content of these and other coins used in the American colonies, and their respective values against silver and each other, is presented in chapters 7 and 13. Th is description of Dutch coins is taken from http/www.coins.nd.edu/ColCoin/ColCoinIntros/ Lion-Dollar.intro.html (July 8, 2003).

[ 40 ]

The First Wave

The company solicited subscriptions through October 31, 1623, when it commenced operations. The development of New Netherland fell to a committee of the Amsterdam chamber consisting of five wealthy merchants. In 1624 it reestablished the post of Fort Nassau as Fort Orange (now Albany). In 1625 it planned the first permanent settlement on Manhattan island, which materialized in 1626 at the lower tip of Manhattan. 37 To encourage settlement, the company took a page from the tax exemption in its charter. The company paid for the passage of emigrants, provided them with homes along the Hudson, fortified settlements to protect them, and offered tools, seed, and clothing for one year at Dutch prices. It also “offered them immunity from every form of taxation, direct and indirect, during a term of ten years.”38 Both the company and its settlers were encouraged and rewarded with lengthy tax exemptions. To summarize, the first wave of colonial settlements was founded on tax incentives. The Virginia companies, the several Massachusetts companies, and the Dutch West India Company enjoyed tax exemptions granted by the English Crown and the States-General of the United Provinces of the Netherlands. The exemptions and other privileges varied among the companies and colonial settlements, but the pattern was clear. Freedom from taxation, in part or in whole, and subsequent limited taxation were embedded in the constitutional foundations of the early colonies. 37

The development of New Netherland under the Dutch West India Company until the establishment of New York as a proprietary province of the Duke of York in 1664, and again in 1674 after a one-year restoration of Dutch administration in 1673–74, is reviewed in part II, chapter 8. 38 John Christopher Schwab, History of the New York Property Tax: An Introduction to the History of State and Local Finance in New York, vol. 5, no. 5 (Baltimore: American Economic Association, 1980), 18. Schwab’s statement rests on a sentence found in Loketkas, W. 1. Co., No. 30; Vreyheden By de Vergaderinghe van de negenthiene van de Geoctroyeerde West Indische Compagnie, 1630. Later, in 1656, a similar ten-year exemption was offered by the city of Amsterdam to anyone who would settle on the Delaware River.

[ 41 ]

c h ap t e r 2
the middle wave

D

ur i ng t h e middle third of the seventeenth century, the seeds of fi ve new American colonies took root. All were proprietary ventures. One began as migrants from Virginia sought new land in what became North Carolina. The founding of these colonies rested on charters granted by the English Crown and, in the case of Delaware, the Swedish Crown.

Maryland

O

n june 10, 1632, King Charles I granted the Charter of Maryland to Cecilius Calvert, Baron of Baltimore and son of George Calvert, the first Baron of Baltimore, “that he may transport, by his own industry and expense, a numerous colony of the English nation, to a certain region” that constitutes most of modern Maryland.1 The charter defined the boundaries of a province named Maryland, the name deriving from the Latin in the charter, Terra Maria, in honor of the queen. The grant gave Lord Baltimore the rights of the Crown to the soil of Maryland, with all “rights, jurisdictions, privileges, prerogatives, royalties, liberties, immunities, and royal rights, and temporal franchises whatsoever . . . to be had, exercised, used, and enjoyed, as any Bishop of Durham, within the Bishopric or County Palatine of Durham . . . ever heretofore has had, held, used, or enjoyed, or of right could, or ought to have, hold, use, or enjoy.” Lord Baltimore’s authority was indirectly that of the Crown. According to English law, the owner of a county palatine had royal rights as fully as the Crown had in his palace. The language in the grant was both practical and theoretical. The rights included those that had ever been used in the County Palatine of Durham or that could have, but had not, been used. 1

The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), vol. 3, 1669–77 (Latin) and 1677–86 (English translation), and http://www.yale.edu/ lawweb/avalon/states/ma01.htm (February 27, 2003).

[ 42 ]

The Middle Wave

Lord Baltimore became absolute lord and proprietor of the province and head of its government, a king in his own right. Turning first to taxes, the charter declared that the Crown “at no time hereafter, will impose, or make or cause to be imposed, any impositions, customs, or other taxation, quotas, or contributions whatsoever, in or upon the residents or inhabitants of the province aforesaid for their goods, lands, or tenements.” The disclaimer of the Crown to the right of taxing the settlers included goods and merchandise brought into or out of the province.2 Lord Baltimore, for his part, was required to remit a nominal quitrent of two Indian arrows each year and a fifth of all discovered gold and silver ore. As proprietor, Baltimore was empowered to ordain, make, and enact laws “of and with the advice, assent, and approbation of the freemen of the province . . . or of their delegation or deputies . . . who shall be called together for the framing of laws.” Lord Baltimore was granted executive powers of government to appoint officials, establish courts, pardon crimes, and so forth. To encourage settlement, except for persons expressly forbidden, Englishmen and their families were free to migrate to Maryland and take with them and their servants all necessary goods and provisions, save the payment of standard export taxes to the Crown. Residents of Maryland would enjoy the freedom to import into and export from the province all commodities and merchandise and transport them to England, paying only the standard import charges imposed on other English subjects. Baltimore received the power to impose taxes and subsidies on trade in the ports, harbors, and creeks that he erected in Maryland “to be reasonably assessed by them, and the people there as aforesaid . . . to assess and impose the said taxes and subsidies there upon just cause and in due proportion.” All territorial revenue was to be treated as the proprietor’s private income, of which some was generally used locally and some sent to him in England. Baltimore received the right to make land grants in free and common socage, collect customs and rents, and, at his discretion, erect manors that conferred the power of subinfeudation, which carried the privileges of the lords of estates in England to hold a domestic court, settle property disputes among tenants, and other feudal arrangements. 3 The charter protected the rights of Maryland inhabitants as Englishmen and subjects of the Crown. George Calvert had long been interested in colonial ventures. He held shares in the Dutch East India and Virginia companies. Despite the absence 2

As described in part II, chapter 5, taxes were subsequently imposed despite the charter immunity. 3 A detailed discussion of land tenure in Maryland appears in Lewis Mayer, Ground Rents in Maryland: With an Introduction Concerning the Tenure of Land under the Proprietary (Baltimore: Cushings and Bailey, 1883), 10–39.

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of any returns from the Jamestown settlement, in 1620 he purchased an interest in a patent previously granted to a syndicate “for the Colony and Plantation of Newfoundland.” At a cost of 25,000, he attempted in 1621 to settle a place he called Ferryland on the east coast of Newfoundland. In 1623, he obtained a patent from James for the whole southeast coast of Newfoundland, calling his province “Avalon.”4 In 1625 Calvert declared himself a Catholic, resigned his position in the government as secretary of state, which he sold for 6,000, and was elevated by the king to the Irish peerage as Baron of Baltimore.5 Calvert quickly realized that Newfoundland’s cold climate precluded a successful colony and looked south to the Chesapeake. He visited Jamestown but was met with suspicion for his “Romish religion.” Despite the efforts of Virginians to block a charter, Baltimore succeeded, but died two months before it was issued and thus the grant as lord proprietor fell to his son. The charter of Maryland was largely a copy of that of Avalon. The essence of proprietorship is profit. The primary resource of the proprietor is land. The key was to lure settlers who would pay quitrents in exchange for land rights. The fi rst expedition arrived at the mouth of the Chesapeake on February 27, 1634, and shortly thereafter concluded an agreement with local Indians. Baltimore advertised his province in pamphlets and prescribed the conditions on which lands should be granted from a land office, passed under his seal or his representative in the province. In addition to quitrents, Baltimore later collected caution money, a fee paid at the time of taking out a warrant, consideration money, the return of the certificate on which the land patent was issued from the land office, and alienation fines. Anyone who transported five laborers at a cost of 20 each would receive a manor of two thousand acres. Although making up a large share of land that was patented in the colony’s early years, the few manors that were established soon disappeared from the scene. Most immigrants took up smaller grants. Each male was entitled to receive one hundred acres of good land for himself, an additional one hundred acres for his wife and each servant, and fifty acres for each child under the age of sixteen. This allocation was known as the “headright system,” a formula of land for heads, which enabled men of modest means to acquire substantial tracts of land. A few years later the amounts were cut in half. Most of the free settlers who migrated to Maryland in the seventeenth century responded to the offer of 4

Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 4–5. Catholics were welcome to settle in Maryland, but Baltimore’s governors were advised to instruct Roman Catholics to be silent on matters of religion. Catholics were not welcome in Virginia, Maryland’s southern neighbor, and were largely unwelcome, and subjects of political discrimination, in other colonies. 5

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land, which was much more difficult for persons of modest means to acquire in England. Baltimore’s charges were specified. The fi rst quitrent was four hundred pounds of good wheat annually for two thousand acres, or ten pounds for every fi fty acres, an equivalent rent of 12d. (1s. sterling) for every fi fty acres, which was the smallest holding. For every one thousand acres granted, Lord Baltimore might anticipate an annual income of 1.6 By 1640, six years after the fi rst settlers arrived, the population of Maryland reached 583, but even this small group had convened an assembly in 1635 to make laws.7 In 1642, the quitrent for future grants was changed to 2s. for every hundred acres.8

New Sweden

S

w e dish and Dutch in origin, Delaware was at various times part of or shared a common governor with New Sweden (1638–55), New Netherland (1631–33 and 1655–64), New York (1664–82), and Pennsylvania (1682–1775).9 The basis of the first European settlement in Delaware is found in several charters, one issued by the States-General of the United Provinces in 1629 and several others issued by or on behalf of the Swedish Crown in 1626, 1638, and 1640. European settlement of Delaware Bay began in 1624 when the Dutch West India Company placed a small colony of French-speaking refugees, Walloons from southern Belgium, on Burlington Island in 1624. In 1626 it built Fort Nassau at the present location of Gloucester, New Jersey, as a base for the fur trade. Little came of these settlements. As it became apparent that the Dutch West India Company was not going to expend much effort in settling New Netherland, in June 1629 the Dutch government temporarily relaxed the company’s monopoly on trade and settlement in New Netherland when it authorized the Charter of Freedoms and Exemptions to any patroon, master, or private person who would 6

Except in Virginia, quitrents were rarely collected in full. The classic treatment of quitrents is found in Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919). 7 In 1650, the assembly passed an act to prohibit the levying of taxes and duties without the consent of the people or their representatives. Newton D. Mereness, Maryland as a Proprietary Province (New York and London: Macmillan, 1901), 340. 8 The development of Maryland as a proprietary province until 1688 is reviewed in part II, chapter 9. 9 The history of the Swedish settlements on the Delaware is recounted at length in Amandus Johnson, The Swedish Settlements on the Delaware: Their History and Relation to the Indians, Dutch, and English: 1638–1664, 2 vols. (New York: D. Appleton and Company for the University of Pennsylvania, 1911). A brief summary appears in John A. Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978), 6–27.

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plant a colony there. A qualified entrepreneur would become a patroon if he transported at least fifty people to settle and cultivate the land. The freedoms authorized a patroon to purchase from the Indians a tract of land sixteen miles long on one shore of the Delaware River, or eight miles on both shores, running inland as far as was practical. The patroon would enjoy manorial rights over his land and he and his colonists would enjoy a ten-year exemption from all taxes. Three major stockholders in the company seized the opportunity. In 1629 agents of the three stockholders purchased with cloth and axes a tract of land called Swanendael (in modern Dutch, Zwaanendael), so named because of the large number of swans in the area. With the remainder of their trade goods they purchased furs and returned to Amsterdam with a large shipment that excited the stockholders. Since the 1629 Charter of Freedoms and Exemptions was only good for four years, the shareholders sought additional partners. The most important, David de Vries, dispatched a ship from Holland in December 1630 with men, livestock, provisions, and whaling equipment, which arrived on the banks of Lewes Creek, just north of modern Lewes, in April 1631. After buying some additional land, the investors registered their purchase with Dutch West India Company director Peter Minuit and his council at New Amsterdam on June 3, 1631. Before a second expedition to send additional settlers and supplies could sail, news arrived that every man in the settlement had been massacred by Indians. After spending forty thousand guilders,10 the proprietors called off their attempt to settle a colony in 1633. In 1635, they sold their land and patroonship privileges to the Dutch West India Company. Th is failure discouraged any further Dutch attempts to settle the western shore of the Delaware. Dutch influence in Sweden’s commercial life prompted a group of Dutch merchants to approach the Swedish Crown for a charter to develop a 10 The value of the Dutch guilder was defined in chapter 1. The main coins in use in Sweden were the Swedish daler and riksdaler. The daler, the name derived from the German (Bohemian) currency thaler, was introduced in 1534 and set equal to four German marks. In 1604, the name of the daler was changed to riksdaler. The old name, daler, was still used as a bookkeeping entry, specified at the value of four German marks. The riksdaler, with a silver weight of 25.5 grams, was used primarily in Sweden’s foreign trade. In 1620, due to a shortage of silver, Sweden also introduced a copper monetary standard, which became the main domestic currency. In the official journal of the company, riksdalers, florins, and copper dalers were always converted into silver dalers, and company officials were paid in notional silver dalers. A riksdaler was worth 1 1 ⁄2 (book entry) dalers and 21 ⁄2 Dutch guilders. With the guilder valued at three per piece of eight, 1.2 riksdalers were equal to a piece of eight, or 4s. 6d. in England. A comprehensive description of the metallic content of these and other coins used in the American colonies, and their respective values against silver and each other, is presented in the remaining parts of this book. Johnson, Swedish Settlements on the Delaware, 1:41, and “The History of the Swedish Monetary System,” http://www.algonet.se/~hogman/slmynt _eng.htm (October 22, 2003).

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trade in America outside the activities of the Dutch West India Company. Trading companies were not new to Sweden. The Swedish government had chartered a number of trading companies since 1607. In 1615 a general trading company was founded in Stockholm, which was granted a ten-year charter to carry on foreign trade and erect warehouses. It was exempted from all taxes in 1615 and for the next three years it would pay no import duty and only one-quarter of the usual export duty. Thereafter it would pay half of the ordinary rate on imports and exports. Other companies were chartered with a monopoly of the foreign copper trade, for trade with Finland and Livonia, with Russia, with India and Persia, and elsewhere. A salt company was formed in 1641 that was authorized to import salt from Portugal into certain cities duty free.11 The first Dutch effort was undertaken by William Usselinx, a principal founder of the Dutch Company, who felt his ser vices had been insufficiently rewarded. On June 6, 1626, Usselinx secured the signature of King Gustavus Adolphus on a charter that established the South Company with a life of twelve years, to be in force from May 1, 1627, to May 1, 1639.12 The charter of 1626 set forth the relationship of the company to the Swedish government and foreign powers. The company was to pay a duty of 4 percent on all exports and imports (reexports of previously taxed imports could be exported duty free), but coined or uncoined silver and gold received in payment for merchandise was to be duty free. The Swedish government was to receive a fifth of gold and silver ores and a tenth of all the produce in the colonies. Tax incentives were included to attract immigrants. Settlers were to receive a comprehensive ten-year tax exemption, similar to that offered by the Dutch West India Company to its colonists. After ten years, they would pay a 5 percent duty on imports and exports, which would be reserved for the use of the colonial government.13 Between 1618 and 1648, the Thirty Years’ War in Europe dominated the interests of Sweden’s people and its government. The South Company never sent an expedition to America. The Swedish king died on the battlefield in 1632 and the directors of the company turned to other interests. Usselinx returned to Holland and the company was liquidated in 1640 after its assets had been sold and reinvested in a new company. Meanwhile, another corporation interested in trade with the New World, the New Sweden Company, was chartered in 1637. Half the firm’s capital of thirty-six thousand guilders was subscribed by the Dutch and half 11

Johnson, Swedish Settlements on the Delaware, 1:47. Th is date follows the Swedish, not the Dutch, calendar. 13 M. M. Daugherty, Early Colonial Taxation in Delaware (Wilmington: Delaware Tercentenary Commission, 1938), 7–8. 12

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by the Swedes. The company was given a monopoly of trade between Sweden and the New World and parts of the Old World. It included the two Dutchmen Peter Minuit, who had been recalled from New Amsterdam in favor of Peter Stuyvesant, and Samuel Blommaert, and the two Swedes Count Axel Oxenstierna, who ran Sweden as a regency on behalf of sixyear-old Christina, heir of Gustavus Adolphus when New Sweden was founded, and Admiral Klas Fleming, president of Sweden’s Board of Trade.14 The two ships that sailed from Gothenberg, Sweden, in November 1637 were Swedish vessels carry ing Swedish colonists, but the Dutchman Peter Minuit was in command with Dutch skippers and a crew that was half Dutch. The expedition arrived in March 1638 and constructed Fort Christina. A first shipment of seven hundred beaver, otter, and bear pelts arrived in Holland later that year and was sold as the share of the Dutch investors. To eliminate political friction, the Dutch investors sold their stake in the company to the Swedes in 1641 for 18,495 guilders, or 7,398 rixdalers. The company was reorganized with new money, some from the Old South Company, some from the Swedish Crown, and the rest from prominent Swedes who were part of the council of state that administered the country on behalf of Christina. Government officials soon took over the operations of the company. In conformity with Swedish law, the company sent three civilians and thirty-two military men at a cost of 2,619 rixdalers per year, of which the governor’s salary consumed 1,200 rixdalers. The expenses were covered by an excise tax on tobacco imported from Holland into Sweden, together with a third of confiscated, smuggled tobacco.15 To repeat, planters in New Sweden were exempted from the very tobacco tax that underwrote the colony’s expenses, which was borne by Swedish smokers of imported Dutch leaf. The colony was later instructed to finance the cost of its government from its own resources. To this end, duty was levied on imported liquor, ad valorem (on the value of ) duty of 2–4 percent on goods imported in Swedish boats, and duty of 4–6 percent on goods in foreign boats. The company’s monopoly on fur trade was opened to settlers, who paid a 2 percent tax on exported furs. In 1655, when Swedish rule gave way to the Dutch period, the annual cost of local government was 4,404 rixdalers.16 (The Dutch period 14 The charter was lost so little of the powers of the New Sweden Company is known. However, Amandus Johnson infers from the recommendations of Minuit and Blommaert that the company was probably given an exclusive right to trade on the Delaware for twenty years, and that goods shipped from Holland for trade with the Indians were to be allowed into Sweden free of duty, along with all articles coming from America for a period of ten years. Swedish Settlements on the Delaware, 1:107. 15 Daugherty, Early Colonial Taxation in Delaware, 8–9. 16 Daugherty, Early Colonial Taxation in Delaware, 9.

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The Middle Wave

lasted nine years until the English period began in 1664 under the Duke of York.)17 One other founding episode merits a brief comment. On January 24, 1640, the Swedish government granted a charter to some Dutch parties that wished to settle in New Sweden. They were to locate about twenty English miles north of Fort Christina, and were to be granted as much land as could be improved within ten years. To acknowledge Swedish authority, they were to pay a tax of three guilders a year for each family, but were otherwise free from duties, excises, and all other contributions to the colony of New Sweden for ten years, after which they would pay 5 percent on all imports and exports. As Dutchmen, they were granted religious liberty in New Sweden. One ship was sent under this charter. As noted in the charters granted by Kings James I and Charles I of England in chapter 1, settlements were permitted where no Christian people had previously claimed land and taken up residence. There is speculation that Charles I transferred his rights to the Delaware territory to Sweden during 1630–34, and was a basis on which Sweden maintained its claim against Holland.18

Carolina (North and South)

T

he l ost Colony of Roanoke Island (North Carolina), based on patents issued to Sir Humphrey Gilbert and Sir Walter Raleigh, was briefly reviewed in chapter 1, as was the first successful English settlement at Jamestown in 1607. Early expeditions southward from Virginia into what is North Carolina discovered large tracts of pine forests and fertile soil, and that tar and pitch could be provided for England’s navy. King James I ordered a writ of quo warranto19 to be issued against the failing Virginia Company. He secured from the King’s Bench a decision to 17

The development of Delaware under Swedish, Dutch, and then En glish rule is reviewed in part II, chapter 8. 18 Johnson, Swedish Settlements on the Delaware, 1:175–77. 19 Quo warranto, in English law, is the name given to an ancient prerogative writ calling upon any person usurping any office, franchise, liberty, or privilege belonging to the Crown. The called-upon person is to show “by what warrant” he maintained his claim. The onus lay on the defendant. A non-user or misuser of an office also had to maintain his claim against such a writ. If the Crown succeeded in its action, judgment of forfeiture or ousterlemain (being ousted) was given against the defendant. The procedure was regulated by statute as early as 1278 (the statute of Quo Warranto, 6 Edward I, c. 1), passed in consequence of the commission of quo warranto issued by Edward I. In the case of Virginia, the King’s Bench ruled that the Virginia Company had misused its privileges in failing to protect the colony. The most famous historical instance of quo warranto was an action taken against the corporation of London by Charles II in 1684, in which the King’s Bench adjusted the charter and

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vacate its charter. He imposed royal control on the colony, which meant that the territory south of Virginia came under control of the Crown. His successor, Charles I, proclaimed the territory part of the royal dominions. On October 30, 1629, he granted a patent to his attorney general, Sir Robert Heath, for territory lying between 31° and 36° north latitude, the region lying from about thirty miles north of the Florida state line to the southern shore of Albemarle Sound in North Carolina. Heath named the territory Carolana after Charles.20 The patent granted the rights and privileges “as any Bishop of Durham . . . ever heretofore had held, used, or enjoyed or of right ought or could have, hold, use, or enjoy.” Heath was required to remit a fi fth of all gold and silver metal discovered and provide a gold crown weighing twenty ounces should the king or one of his heirs ever enter the region. Heath was empowered to make laws with the assent of the freeholders of the province and establish other institutions of government. Goods and merchandise could be freely taken from England to Carolina on payment of usual export charges. Once all customary trade duties were paid, goods shipped from Carolina to England could be freely reexported to other countries. Heath failed to establish a colony. England’s Privy Council ruled against settling French Huguenots, Heath’s fi rst selected group of immigrants, insisting that only those who acknowledged the Church of England could reside in Carolina. After several other failed attempts to transport privileges to be forfeited to the Crown (later reversed during the reign of William and Mary and, in further limitation of the prerogative, that the franchise of London was never to be seized). From time to time, the Crown sought to recover privileges it had granted in patents, charters, and grants through the use of quo warranto. The Crown lost most of these writs, based on strict adherence to English law. Important examples are discussed throughout the book. See http://31.1911encyclopedia.org/Q/QU/QUO_WARRANTO.htm (the 1911 edition) (July 15, 2003) and http://dictionary.oed.com/cgi/entry_main/00215912 (on-line Oxford English Dictionary) (July 15, 2003). Crown attorneys often invoked another legal approach, that of scire facias, to revoke colonial charters. Scire facias is a judicial writ, requiring the sheriff to bring the party concerned before the court to “show cause” why execution should not be taken against him, or why letters patent, such as a charter, should not be revoked, on the grounds that the Crown was deceived in its grant or it was to the injury of the subject. Except for the revocation of royal charters, this writ has been superseded by other legal procedures. See http://dictionary.oed.com/cgi/entry_ main/00215912 (on-line Oxford English Dictionary) (July 15, 2003). 20 A brief history of the founding of Carolina, later divided into North and South Carolina, appears in Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 29–55; Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 47–53; and M. E. Sirmans, Colonial South Carolina: A Political History, 1663–1763 (Chapel Hill: University of North Carolina Press, 1966), 3–19.

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colonists, Heath transferred his proprietary rights in 1638 to Lord Maltravers, whose attempts to settle the territory also failed. By the early 1650s, Virginians were moving south to acquire new land. The governor, Sir William Berkeley, and his council were making land grants that extended beyond the southern limits of their jurisdiction into what was regarded as Virginia’s frontier. By 1663, some five hundred people had moved into North Carolina. Both England and its colonies were thrown into turmoil during the Civil War between royalists and Puritans. Parliament and the Cromwells ruled between the beheading of Charles I in 1649 and 1660, when Charles II was restored to the throne. Charles owed a large debt to those who remained in England supporting his cause, those who fled England, and those who upheld the royal cause in the colonies. Eight of his major supporters requested, as a mark of the king’s gratitude, a tract of land in America over which they would be lords and proprietors. On March 24, 1663, he granted the Charter of Carolina, 21 which encompassed the same land previously given Sir Robert Heath. In 1665 he amended the charter, enlarging the area to the present North Carolina–Virginia line to include an already settled area at Albemarle situated above the 1663 charter’s northern boundary, and south to below the Spanish town of St. Augustine, Florida. 22 The 1663 charter granted the rights of the Bishop of Durham, with lands granted in free and common socage, in exchange for one-fourth of all gold and silver ore discovered and a yearly rent of twenty marks of lawful money in England.23 The proprietors could make laws with the advice and assent of the freemen or their delegates, and establish institutions of government. All English subjects, in England and its colonies, were free to immigrate to Carolina with provisions, purchase land, and enjoy the rights of Englishmen. The proprietors and the residents of Carolina were free to trade in any English dominion and ship goods and merchandise to and from England, subject to the usual customs rates of each destination. Apart from the customary royal duty on products shipped to England, Scotland, or Ireland, no other taxes would be imposed upon the inhabitants of Carolina. 21 Thorpe, Colonial Charters, 5:2743–53, and http://www.yale.edu/ lawweb/avalon/states/ nc01.htm (February 27, 2003). 22 Thorpe, Colonial Charters, 5:2761–71, and http://www.yale.edu/ lawweb/avalon/states/ nc04.htm (February 27, 2003). The descendants of Sir Robert Heath presented confl icting claims to Carolina before the Privy Council in June 1663. The council vacated Heath’s charter on the grounds that no English colony had been hitherto planted in the said province. Thus the amended charter was issued in 1665 to ensure that the proprietors would have a charter dated after the invalidation of the Heath patent. Robert K. Ackerman, South Carolina Colonial Land Policies (Columbia: University of South Carolina Press, 1977), 10. 23 The mark is a money of account with a value of two-thirds of a pound (13s. 4d.), but there was no mark coin in the sixteenth century. It was used in high-value transactions, such as selling land, calculating feudal fi nes, and estimating dowries.

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The Crown was keen to encourage the development of certain crops and products that would free England from dependence on foreign imports, thereby reducing the outflow of silver to rival European powers. To that end, the charter granted a seven-year exemption from customs, import charges, and other duties on silk, wine, currants, raisins, capers, wax, almonds, oil, and olives after the first importation of four tons of any of the enumerated goods in any vessel from Carolina. The charter also permitted customs-free export, from any English dominion to Carolina, of all tools that would be useful or necessary for the planters and in improving their premises. With the consent of the freemen, the proprietors could impose local customs and subsidies on trade. They could make land grants, establish markets and fairs, create manors, award titles and honors, and call men to arms. The proprietors looked upon Carolina as an investment on which to earn a handsome return, chiefly through quitrents on land grants.24 In response to a request by members of the Cape Fear Company to plant a colony on the Cape Fear River, the proprietors issued “A Declaration and Proposals of the Lord Proprietor of Carolina, Aug. 25–Sept. 4, 1663.”25 The document authorized the settlement of the south side of the Charles River, providing for the appointment of a governor, councillors, and assemblymen to make laws, with liberty of conscience in religious matters, and all provisions of the charter applicable to the settlers. In par ticular, the seven-year tax exemption on enumerated agricultural provisions was extended to all settlers, along with specified headrights based on family size for five years. A quitrent of 1/2d. an acre was imposed, in part to reimburse the proprietors for the costs of establishing the colony. The proprietors would underwrite courthouses and other public buildings. The Cape Fear Company abandoned the settlement, relocating to Massachusetts. The proprietors offered concessions, essentially conditions of plantation, to some Barbadians, who moved to Cape Fear in May 1664. The first settlers would receive five hundred acres for every thousand pounds of sugar they contributed to the cost of exploring and settling the colony. The concessions also included a precisely defined headright system. To encourage the settlement of the three counties of Albemarle, Clarendon, and lands west of Cape Romania, the proprietors issued in 1665 a general document titled “Concessions and Agreements of the Lords Proprietors of the Province of Carolina.”26 It authorized the establishment of three governments, each 24 A comprehensive discussion of land grants in South Carolina appears in Ackerman, South Carolina Colonial Land Policies. 25 Thorpe, Colonial Charters, 5:2753–55, and http://www.yale.edu/ lawweb/avalon/states/ nc02.htm (February 27, 2003). 26 Thorpe, Colonial Charters, 5:2756–61, and http://www.yale.edu/ lawweb/avalon/states/ nc03.htm (February 27, 2003).

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with a governor, a council, an assembly of deputies, land grants, and naturalization of strangers. An elected assembly would have the sole power to levy taxes and assessments, excepting the lands of the proprietors before their sale to others. The proprietors reserved a quitrent of 1/2d. for every acre and the right to veto legislation. The proprietors prepared a model land grant for Clarendon County, which exempted all inhabitants from the half-penny quitrent until 1670, but stipulated that the land was to be settled within three years. Cape Fear reverted to wilderness. The settled region of Albemarle County established a legislature, which met in spring 1665. Since Virginia settlers could acquire tracts of land double those allowed in Carolina, the assembly asked the proprietors for the same privileges. In May 1668, the proprietors issued the Great Deed of Grant, which conferred similar treatment to Carolina settlers. Rent was set at 2s. for every hundred acres, payable in tobacco at 1d. per pound. To encourage settlement, the Albemarle assembly immediately passed a law that exempted newcomers from routine taxes for a year.27 The Carolinas are famous for the attempt by the great English philosopher John Locke to set up a model feudal community in the New World. Locke was the architect of what became known as the Fundamental Constitution of 1669. It was never fully applied, but one of its provisions that took hold was the waiving of quitrents for twenty years until 1689 to encourage immigration.

New Jersey

N

e w je r s e y came into being as a separate colony in 1664, several years after Charles II was restored to the English throne in 1660. 28 In March 1664, without any reference to Dutch claims or earlier English grants, James, Duke of York, brother of Charles II, received a grant of land including parts of Maine, all of Long Island, Martha’s Vineyard, Nantucket, and the Hudson River, and all the land from the west side of the Connecticut River to the east side of Delaware Bay. 29 All of what was to become New Jersey became a proprietary region of the duke. The duke appointed Richard Nicolls as governor of his proprietorship. Nicolls looked upon the fertile lands of northeastern New Jersey as a desirable area to attract settlers from New England. The duke’s patent awarded 27

The development of North and South Carolina under proprietary rule is reviewed in part II, chapter 9. 28 A brief history of the early settlement and establishment of an English colony in New Jersey appears in John E. Pomfret, Colonial New Jersey: A History (New York: Charles Scribner’s Sons, 1973), 1–48. 29 Pomfret states that Charles II’s gift to his brother, James, was “the shortest and most hastily executed colonial charter on record.” Colonial New Jersey, 5.

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him full proprietary rights, with no provision for an elected assembly. In 1665, Nicolls proclaimed a code of governance, the Duke’s Laws, which largely applied to New York. Although there was no provision for an assembly, as in New England, local governments were accorded a high degree of autonomy, and religious toleration was granted to all Protestants. The duke’s rule over New Jersey was short-lived. In mid-1664, he signed an indenture titled “The Duke of York’s Release to John Lord Berkeley, and Sir George Carteret, 24th of June, 1664.”30 The duke granted his two friends all the territory east of the Delaware and south of a line connecting 41° 40' on the Delaware with 41° north on the Hudson. New Jersey was named for the birthplace of Sir George Carteret, the isle of Jersey in the English Channel. The grant of New Jersey was a reward for loyal ser vice to the Stuarts. In 1664 the inhabitants of New Jersey consisted of a small number of Dutch, who spilled over from Manhattan, some Swedes, Finns, and Dutch, who had migrated over from the western side of the Delaware, and the Lenni-Lenape (Delaware) Indians. The lords proprietors, Berkeley and Carteret, set out to lure settlers from New England. On February 10, 1665, they issued “The Concessions and Agreement of the Lords Proprietors of the Province of New Caesarea, or New Jersey, to and With All and Every the Adventurers and All Such as Shall Settle or Plant There—1664.” 31 The concessions set out a system of government with a governor, a council, and a lower house consisting of twelve elected representatives or deputies chosen by the freemen. The three sitting together would constitute the General Assembly, which was empowered to pass laws, subject to a veto of the proprietors, and to levy taxes, excluding unimproved lands of the proprietors. All who swore allegiance to the king and faithfulness to the proprietors were to be freemen of New Jersey, and strangers could be naturalized as English subjects. The concessions guaranteed liberty of conscience for Protestants. Land would be divided into tracts, reserving one-seventh of each for the proprietors. Remaining lands would be sold, and held in free and common socage, subject to a proprietary quitrent of 1/2d. of English lawful money an acre. The first payment was due on March 25, 1670, which amounted to an exemption from quitrents of six years to the first wave of settlers.32 Initial 30

Thorpe, Colonial Charters, 5:2533–35, and http://www.yale.edu/ lawweb/avalon/states/ nj01.htm (February 27, 2003). 31 Thorpe, Colonial Charters, 5:2535–44, and http://www.yale.edu/ lawweb/avalon/states/ nj02.htm (February 27, 2003). The English year was 1664 while the modern calendar year was 1665. 32 In the waning years of Dutch rule over New Netherland, before it became New York in 1664, Dutch settlers had suffered serious, sometimes catastrophic, setbacks at the hands of Indians. In 1656, Peter Stuyvesant secured an ordinance that required settlers to reside in compact villages for better defense. He purchased from the Indians all lands west of the Hudson.

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headrights were generous at a hundred fifty acres per head of household, another hundred fifty for each male servant, and seventy-five for each female servant. Allotments were gradually reduced in subsequent years. Indentured servants were to receive seventy-five acres after completing their contracts. Unplanted land grants after three years would revert to the proprietors. All lands utilized for public facilities and two hundred acres for each minister were exempt from all rents, taxes, and other charges. Within a few years, six towns were settled, each sending two elected representatives to the provincial assembly. In 1672 the proprietors augmented the 1664 concessions with the requirement that inhabitants had to hold their lands by patent from the proprietors in order to be considered a freeholder of the province with the right to vote or hold office. 33 To summarize, the proprietors and companies that founded and settled the middle wave of colonies, Maryland, New Sweden (Delaware), Carolina (North and South), and New Jersey, received or stipulated tax exemptions in their founding grants, patents, charters, or concessions. Proprietors and settlers were exempt from goods taken from England to Maryland, settlers in New Sweden received ten-year tax exemptions, enumerated crops in Carolina were exempted from English import duties, and settlers in New Jersey were free of quitrents between 1664 and 1670. To be sure, such other factors as liberty of conscience, electing representatives, and the opportunity to own land also prompted migration across the Atlantic. A group of former residents requested permission to return to their previous lands, which was granted on the condition that they organize themselves into compact villages. They received an inducement, a multiyear exemption of all tithes, taxes, and other fees and charges. Pomfret, Colonial New Jersey, 15. 33 http://www.yale.edu/ lawweb/avalon/states/nj03.htm (February 27, 2003). The development of New Jersey, its takeover by Holland and return to English rule during 1673–74, and its division into East and West New Jersey under proprietary rule are all reviewed in part II, chapter 8.

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c h ap t e r 3
the third wave

T

he l ast two of the original thirteen colonies to receive charters were Pennsylvania in 1681 and Georgia in 1732.1 Both were proprietary ventures with markedly different objectives. Pennsylvania was to become home to “a holy experiment” to Quakers and other religious dissenters who felt persecuted in the British isles. Georgia was to give debtors new life as freemen in the New World. 2

Pennsylvania

O

n m ar c h 4, 1681, Charles II granted thirty-six-year-old William Penn a “Charter for the Province of Pennsylvania.”3 The territory

1 This book is limited to the thirteen original colonies that formed the United States of America. It does not include Britain’s other North American colonies in Canada before 1775 (Newfoundland, Nova Scotia, Prince Edward Island, and Quebec), Bermuda, the Bahama Islands, Jamaica, the Leeward Islands (Antigua, British Virgin Islands, Montserrat, Saint Kitts, Nevis, Barbuda, and Anguilla), territories that were colonized before 1775 but became part of the Windward Islands in 1885 (Dominica, Grenada, St. Vincent, Tobago, Dominica), and Barbados. British East Florida and British West Florida, which were ceded by Spain to Britain in 1763 at the end of the Seven Years’ War (French and Indian War), were returned to Spain by the Treaty of Paris in 1783. Otherwise, they might have constituted the fourteenth and fifteenth original colonies that formed the United States. 2 In 1536 an act of union joined Wales to the kingdom of England. Another act of union in 1707 joined Scotland with England and Wales. Before 1707, the combined territory of England and Wales is typically called England. After 1707, the new country became Great Britain, or Britain for short. (Northern Ireland was incorporated into Great Britain in 1800, and the four constituent jurisdictions became the United Kingdom of Great Britain and Northern Ireland.) Th roughout the text, “England” and “the English” are used, respectively, as the colonial power and people before 1707, after which “Britain” and “the British” are used, unless some aspect of colonial taxation is limited to England or Scotland, but not both. 3 The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), 5:3035–44, and http://www.yale.edu/ lawweb/avalon/states/pa01.htm (February 27, 2003). A collection of documents covering the founding of Pennsylvania beginning with Penn’s petition to the king in May 1680 and ending with his departure from Pennsylvania to England in 1684 appears in Jean R. Soderlund, ed., William Penn and the Founding of Pennsylvania, 1680– 1684: A Documentary History (Philadelphia: University of Pennsylvania Press for the Historical

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encompassed land lying north of Maryland, south of New York, and extending five longitudinal degrees westward from the Delaware River (East and West New Jersey were situated on the east bank of the Delaware). Penn’s father, Sir William, was an admiral in the English navy. Admiral Penn had advanced money and ser vices to Charles II for supplying the English navy, amounting to some 16,000 excluding interest on the sum and back pay, a claim inherited by young William Penn. To redeem the claim, Penn petitioned Charles in 1680 to grant him a tract of land in America. It was easier for the king to pay his debt in American land than in silver and gold. As an expression of fealty to the Crown, Penn was obligated to remit to Charles an annual payment of two beaver skins on the first day of January in each year and a fifth of all gold and silver ore discovered. To perfect his title, in August 1682 William Penn purchased a quit-claim deed from the Duke of York to the lands west of the Delaware River embraced in the duke’s patent of 1664. The charter provided for institutions of government, but differed from previous grants in specifying that a copy of all laws be sent to the Privy Council within five years of passage for review, which would be subject to a veto within six months of receipt. After six months, if no veto were cast, the laws would stand. All emigrants from England were free to transport themselves, their families, and provisions to Pennsylvania, paying only standard English export duties. For his part, Penn was to receive customs and subsidies assessed and imposed by an assembly of residents “upon just cause” and in “due proportion” on goods brought into or out of specified forts, harbors, creeks, havens, keys, and other trading venues. The charter stipulated that no “imposition, customs or other taxation, rate or contribution whatsoever” would be imposed by the Crown on the dwellers and inhabitants of Pennsylvania, on their lands and property, or on the goods and merchandise imported or exported into the province without the consent of the proprietor or his chief governor, the consent of the assembly, or by an act of Parliament in England.4 Society of Pennsylvania, 1983). The founding and early development of the colony are briefly described in the introduction, 3–10. The founding charter appears on 41–49. A brief summary of the early history of Pennsylvania appears in Joseph E. Illick, Colonial Pennsylvania: A History (New York: Charles Scribner’s Sons, 1976), 1–44. The charter appointed Penn and his heirs “true and absolute Proprietaries,” which ran against the more recent trend of asserting direct royal control over several American colonies, including the transformation of New Hampshire into a royal colony and the nullification of the Bermuda and Massachusetts charters. 4 The royal prerogative was steadily eroding in favor of acts of Parliament throughout the sixteenth and seventeenth centuries. The culmination of the confl ict was the English Civil War that ended with the Restoration of Charles II. The Stuart Restoration did not include all the former royal powers. Parliament secured greater control of trade and finance, the judiciary, and the army. Feudal tenures confiscated in 1646 remained with their purchasers. Joint-stock companies replaced foreign trading companies and royal grants of monopoly rights were terminated. Robert Ross Staley, “The Economy of the Holy Experiment: Pennsylvania, 1681–1713” (M.A.

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At the time the charter was issued, about two thousand people were scattered along the western bank of the Delaware.5 These included Swedish, Dutch, Finnish, and English settlers from earlier colonization activities in New Netherland, New Sweden, Maryland,6 and New Jersey. Pennsylvania was also inhabited by several Indian tribes and some fur traders in the interior regions who came from Maryland and New York. After receiving his charter, Penn advertised his new colony for four months. He began to sell shares of Pennsylvania land to investors who became known as the First Purchasers. Penn needed money to cover his outof-pocket costs of colonization and sought investors who would migrate to Pennsylvania, or transport servants and tenants to populate the colony. On July 11, 1681, Penn pledged himself to a series of Conditions or Concessions to the First Purchasers.7 Penn offered to sell land at 100 per five thousand acres,8 or 10 per five hundred acres for those wishing to make smaller investments. Between July and October 1681 he sold over three hundred thousand acres to nearly three hundred First Purchasers, an average of a thousand acres per sale. By 1685, First Purchasers bought more than seven hundred thousand acres, for which they paid about 9,000 sterling.9 Buyers were also required to pay an annual quitrent of 1s. per hundred acres, 0.12 pence an acre (slightly more thesis, Stanford University, 1948), 10. The Glorious Revolution of 1688 established virtually complete parliamentary supremacy when William and Mary of Orange were brought into England to rule as king and queen. The growing role of Parliament in colonial matters is reflected in the provision of the charter granted to Penn, which allows a change in taxation if supported by an act of Parliament. 5 See the section on Delaware in chapter 2 for the history of the Dutch and Swedish occupation of the portions of Pennsylvania that now belonged to William Penn. 6 The border with Maryland remained a contentious issue until it was finally settled in 1762 when Charles Mason and Jeremiah Dixon surveyed the boundary line, which has since been called the Mason-Dixon line. 7 Thorpe, Colonial Charters, 5:3044–47; Soderlund, William Penn, 72–76; and http://www .yale.edu/ lawweb/avalon/states/pao2.htm (February 27, 2003). 8 A sale price of 100 per five thousand acres amounts to 4.8d. an acre. First Purchasers were given bonus land in the new capital city at a rate of ten acres for every five hundred in the country. When Penn landed in his colony for the fi rst time, the population of the province stood at about three thousand five hundred. Within the fi rst year of his proprietorship, several dozen ships transporting about two thousand immigrants arrived in Philadelphia, and several thousand more immigrants followed in the next few years. By 1685, some eight thousand people, mostly Quakers from England, Wales, and Ireland, migrated to Pennsylvania. Rapid population growth had an immediate effect on land values. By January 1683 Penn’s sale price had risen 40 percent so that 100 only bought three thousand acres instead of five thousand. At year’s end, the purchase price had doubled Penn’s original offer. By 1685 even the worst lots in Philadelphia had quadrupled over their initial price and new unsettled lots were not available within twelve miles of Philadelphia. Staley, “The Economy of the Holy Experiment,” 44. 9 At 100 per five thousand acres, 9,000 sterling could purchase about four hundred and fi fty thousand acres. However, not all the purchases were made fully in cash. First Purchasers

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than two farthings, with a farthing equal to a quarter of a pence), but the first payment was not due until 1684. Investors who purchased large blocs of acreage were required to settle a family upon every thousand acres within three years. Settlers were required to leave one acre of trees for every five acres of land cleared, especially to preserve oak and mulberry trees for silk and shipping. Penn withheld a tenth of all land as a proprietary reserve for himself. About half of the First Purchasers actually migrated to Pennsylvania with their families and numerous servants, chiefly from southern and western England and the cities of London and Bristol. These sales enabled Penn to recoup a portion, but not all, of the cost he bore in establishing the colony during its first two years.10 The concessions also offered land for servants. Each settler who transported a servant would receive a bonus, or headright, of fifty acres, and each servant would receive fifty acres upon the completion of his ser vice. A servant was to be charged quitrents of 2s. per year, a rate of 1/2d. an acre. His former master was to pay a quitrent of 4s. per year, 1d. an acre, when he took up the other fifty acres. These quitrents were four to eight times higher than those on purchased lands. Settlers who could not afford to buy land were invited to become tenants and rent up to two hundred acres from Penn at 1d. an acre. On April 25, 1682, Penn issued his “Charter of Liberty.” 11 It established a government of the province to consist of a governor and the freemen in the form of a provincial council and a general assembly to make laws, choose officers, and transact public business. Less than a month later, on May 5, 1682, Penn issued his “Frame of Government of Pennsylvania.”12 It restated the twenty-four articles in the Charter of Liberty and added forty laws agreed upon in England, which Penn hoped would be quickly ratified without modification in the province itself. The second of the forty laws provided that every inhabitant who bought a hundred acres of land, paid his passage, had taken up a hundred acres at an annual rent of 1d. an acre, and had cultivated at least ten acres would be deemed a freeman of Pennsylvania. Likewise, every servant who had completed his period of servitude, taken up fifty acres, and paid his rent was gave mortgages and short-term bonds for some of the price, which explains how they were able to acquire more than seven hundred thousand acres. 10 Th roughout his life, Penn lived well beyond his means and was plagued with debt problems. The acquisition of Pennsylvania afforded an opportunity for a fresh source of income to relieve his debts, but land sales did not generate sufficient income to bail him out of debt. Penn incurred substantial costs in establishing the colony, and he had little success in collecting quitrents on the land he sold. Soderlund, William Penn, 5, 71–72. 11 Thorpe, Colonial Charters, 5:3047–52, and http://www.yale.edu/ lawweb/avalon/states/ pa03.htm (February 27, 2003). 12 Thorpe, Colonial Charters, 5:3052–64; Soderlund, William Penn, 118–33; and http://www .yale.edu/ lawweb/avalon/states/pa04.htm (February 27, 2003).

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deemed a freeman. Those who paid municipal taxes of “scot and lot”13 were also deemed freemen. All freemen qualified for the franchise and election to the Provincial Council or the General Assembly. The fourth law stipulated that no money or goods shall be raised or paid by any resident except by a law made for that purpose, that is, no taxation without representation. The ninth law stated that all fees shall be moderate, having been settled by the council and assembly, and were to be posted in every court. The tenth law provided for work houses for felons, vagrants, and idle persons, and the twenty-eighth required that all children be taught some useful trade or skill to avoid idleness and to ensure self-support. Upon his arrival in the colony in late 1682, Penn summoned a convention of delegates from the three counties of Pennsylvania (Philadelphia, Chester, Bucks) and the three lower Delaware counties (Kent, Sussex, New Castle) to approve the frame of government and the laws agreed upon in England.14 An assembly of forty-two men met as a single body with Penn at Chester for only four days in December 1682 and passed seventy-one laws, most of them based on the laws agreed upon in England set forth in the frame. The General Assembly of March 10 to April 4, 1683, was a more elaborate affair in which two separately organized chambers, eighteen elected men in the council and fifty-four elected men in the assembly, met twice daily. Much of the session consisted of drafting changes that would appear in Penn’s Second Frame of Government of April 2, 1683, which served as the colony’s operating constitution for a decade. Altogether, the legislature passed eighty-one new laws and ratified fifty-two of the seventy-one laws that had been enacted in the brief December 1682 session. Several of the remaining nineteen were replaced by the new legislation.15 13

“Scot and lot” was a graduated tax levied by many English cities on inhabitants who owned property in a city or town. Those who paid usually had the right to vote for officeholders. 14 The three lower counties in what is now Delaware were included in the convention because they had petitioned in a document dated December 6, 1682, to unite with Pennsylvania, a request that was granted. Soderlund, William Penn, 192–93. The inclusion of the three lower counties into the administrative structure of Pennsylvania was achieved in a document signed on February 2, 1683, the “Frame of Government of Pennsylvania: The Frame of the Government of the Province of Pennsylvania and, Territories thereunto annexed, in America.” Thorpe, Colonial Charters, 5:3064–69, and http://www.yale.edu/ lawweb/avalon/states/pa05.htm (February 27, 2003). Penn charged the residents of the lower counties higher quitrents than he demanded of the residents in Pennsylvania. Lord Baltimore of Maryland exploited this situation by offering lower taxes to Delaware residents who would transfer their allegiance to him from Penn. Kent County, Delaware, was in revolt by spring 1684 and a border war erupted between the two proprietors. Th is discriminatory tax created major problems for Penn, causing him to return to England to appeal to the Crown against the activities of Baltimore. 15 The legislature discouraged the exportation of animal skins from Pennsylvania by imposing a tax on all hides that were sent anywhere but England. Soderlund, William Penn, 260, 265. On March 30, 1683, the legislature agreed to defray the costs of each county’s public business by taxes. A day later, council members voted to allow members of the council and assembly

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In recognition of Penn’s ser vices and expenses in establishing the colony, the General Assembly offered to levy a tax on all imports and exports for his benefit. In a spirit of generosity, Penn declined the offer. The very first set of laws thus excluded the imposition of a local tax that would be reserved for the proprietor, apart from his receipt of quitrents and proceeds of land sales.

Georgia

T

he “c hart er of g eor g ia” was approved by the Privy Council on January 27, 1732, signed by King George II on April 21, and passed the privy seal on June 9, its official date.16 British colonization of Georgia came well after efforts by its European rivals. A small number of French Huguenots attempted to establish a colony as early as 1562, but it was exterminated by Spaniards who occupied the Georgia coast in 1565 at St. Augustine. With the English settlement of Charles Town (Charleston), South Carolina, in 1670, the territory between it and St. Augustine became a region of contention between England and Spain.17 As early as 1717, a detailed idea for a buffer colony between South Carolina and Spanish Florida was proposed by Sir Robert Montgomery, a Scottish baronet. His plan failed as neither he nor the Carolina proprietors who shared his interest in the project had the funds to establish a new colony. The establishment of the Georgia colony rested largely on the efforts of James Edward Oglethorpe and some philanthropic friends. Oglethorpe was dismayed by the conditions of English jails, in which an architect friend, Robert Castell, died of smallpox. As a member of the British House of Commons, Oglethorpe moved for an investigation of the nation’s prisons. In 1729 he was appointed chairman of a committee that looked into conditions inside English prisons during 1729–30. The disclosure of terrible conditions in the prisons resulted in the release of some ten thousand prisoners, mostly debtors. During the investigation, Oglethorpe thought about to pay “but half taxes” compared with other inhabitants of the colony. The assembly rejected the council’s proposal. A measure to tax rum and other liquors was introduced into the assembly on April 2 and, after debate, was left undetermined. The legislature, both houses, also approved a measure to set the value of a Spanish peso, or piece of eight, at 6s. local currency. Soderlund, William Penn, 256–57, 259, 261. The fi rst few years of the development of Pennsylvania up to 1688 are reviewed in part II, chapter 8. 16 Thorpe, Colonial Charters, 2:765–77, and http://www.yale.edu/ lawweb/avalon/states/ga01 .htm (February 27, 2003). The paragraphs on the origin of Georgia that follow are based on Kenneth Coleman, Colonial Georgia: A History (New York: Charles Scribner’s Sons, 1976), 1–36. 17 See footnote 1 in this chapter.

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establishing a charity colony in America to which some of the released debtors could be sent. In 1730 Oglethorpe and several friends applied for a charter to settle a charitable colony on land south of the Savannah River. The charter they received created “the Trustees for Establishing the Colony of Georgia in America.” It transferred from South Carolina the territory between the Savannah and Altamaha rivers and westward from their headwaters to the Pacific and constituted it into a separate province by the name of Georgia. The trusteeship was to last for twenty-one years, after which the Crown would determine the future governance of the colony. The charter established a Common Council of fifteen trustees that was authorized to make laws and carry out general functions of government, but the Crown and Privy Council retained the right to veto its laws. The charter excluded provision for a legislative assembly and, to prevent any confl ict of interest, stipulated that trustees could not own land, hold any office of profit or trust, or receive any salary or income because of their efforts on behalf of the colony. Residents of Georgia and foreigners who were naturalized were to enjoy the rights of free subjects born in Britain, and were to enjoy free exercise of their religion except for Roman Catholics.18 Command of the militia was to remain in the hands of the governor of South Carolina. The charter stated that land granted by the corporation was to be held in free and common socage, reserving annual quitrents to the Crown of 4s. per hundred acres payable in money or notes deemed current (lawful) in the province of South Carolina. However, to encourage the growth of Georgia, land grants were exempt from quitrents for ten years.19 To prevent speculators from acquiring large blocs of land that would make it difficult for immigrants to acquire land, no one person could receive more than five hundred acres. All rents and profits received by the trustees were to be used within the colony for its enlargement and improvement. 18

Fear of French and Spanish Catholics in North America prompted this provision. Roman Catholics were often referred to as “papists,” “popish,” or “Romish.” Fear of and restrictions on Catholics (e.g., denial of the franchise or the right to hold elective office) were widespread throughout the American colonies for most of the colonial period. 19 In 1735, the trustees raised quitrents on grants to investors to 20s. per hundred acres, well above the charter rate of 4s. Th is was the highest quitrent in any American colony. In response to petitions from local planters and concern in the British House of Commons that the rents were too high, the trustees suggested that quitrents on pine barren land be abolished and crown rents be reduced from 4s. to 2s. per hundred acres. The Privy Council failed to act on these suggestions. In 1745, as the initial ten-year exemption was due to expire, the trustees directed that rent rolls be drawn up in preparation for collection of quitrents. Satisfactory rent rolls were not prepared and quitrents were never collected under the trusteeship. Not only was there a failure to collect quitrents after the ten-year exemption expired, but the trustees generally failed to levy or collect taxes during the entire trusteeship period, owing largely to the impoverished state of the small Georgia population.

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Initially, Parliament was unwilling to appropriate public funds to support the settlement of Georgia. However, almost overnight, Parliament changed its mind and voted 10,000 to supplement the philanthropic contributions of the trustees. Overall, Parliament supplied a total of 136,800, 52 percent, of all the money that financed the operation of the trusteeship government during 1732–52. The trustees themselves raised 260,160 to transport, settle, and supply some 5,600 colonists for twenty years. 20

P

ennsy lvania was the sole American colony that did not include a tax exemption of one sort or another in its founding charter of concessions and frame of government approved by William Penn. The charter guaranteed that Pennsylvania colonists would be exempt from English taxes, apart from those regulating trade in the Navigation Acts, which explains why the legislature approved the taxation of skins exported to any foreign country, except England. Penn’s frame of government firmly established the principal of “no taxation without representation.” To encourage settlement, Penn postponed the collection of quitrents for three years on land sold to the First Purchasers. The charter of Georgia included a ten-year exemption from quitrents to encourage migration to the last of the original thirteen colonies established in North America. 20

Milton LaVerne Ready, “An Economic History of Colonial Georgia, 1732–1754” (Ph.D. thesis, University of Georgia, 1970), 307. The trusteeship of colonial Georgia ended on June 23, 1752. A final meeting of only four of the trustees issued terminal orders and defaced their official seal. However, the trustees remained in charge for another two years until the new royal government commenced operations with royal appointees in 1754.

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appendix

a p p e n di x to part  List of Tax Incentives in Founding and Settlement of the American Colonies Colony

Tax Incentives

Virginia

(1) First charter exempted all goods, chattel, armor, munitions, and furniture shipped to Virginia from all customs, subsides, and export duties for seven years. (2) Second charter exempted the treasurer and company, its factors and assignees, from all subsidies and customs in Virginia for twenty-one years. Upon payment of 5 percent customs charge in England, all goods and merchandise shipped into or out of any English dominion exempted forever from all other taxes and impositions. (3) Second and third charters extended the seven-year tax exemption.

Massachusetts and Plymouth

(1) Charter of 1620 granted Council of New England exemption from all customs and impositions in New England for seven years, and exemption on shipping all goods to and from English dominions for twenty-one years upon payment of 5 percent customs in England. (2) Charter of 1629 granted Massachusetts Bay exemption from customs and subsidy for all goods shipped to and from England for seven years, and similar twenty-one-year exemption as in 1620 charter.

New Netherland

(1) Dutch West India Company granted exemption from tolls in the Netherlands for eight years, and reduced rates for the next sixteen if full exemption removed. (2) Settlers subsidized with transportation and homes and granted immunity from all direct and indirect taxes for ten years.

Maryland

(1) Crown disclaims the right to levy taxes on residents or goods shipped in or out of the province. (2) Proprietors and settlers only pay standard export taxes on goods taken from England to Maryland.

New Sweden

Settlers exempt from all taxes for ten years.

Carolina

(1) Charter grants exemption from English customs, import charges, and other duties on silk, wine, currants, raisins, capers, wax, almonds, oil, and olives, after the first importation of four tons of any of the enumerated goods, for seven years. (2) Tools useful or necessary for planters exempt from export duties. (3) Albemarle assembly exempted newcomers from routine taxes for a year.

New Jersey

Land purchases by settlers from 1664 exempt from quitrents of 1 ⁄2d. per acre to proprietors until 1670.

Pennsylvania

First Purchasers of land in 1681 exempt from quitrents of ls. per hundred acres to William Penn for three years.

Georgia

Land grants exempt from quitrents of 4s. per hundred acres to Crown for ten years.

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pa r t t wo
Turmoil in England—Growth in the Colonies, 1607–1688

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P

art i i traces the history of taxation of the American colonies from the founding of the Jamestown settlement in Virginia in 1607 to the Glorious Revolution of 1688 in England. The seventeenth century witnessed dramatic change in England. The English constitution, its system of government and politics, was transformed from administration by the authority and prerogative of the Crown and Privy Council to supremacy of Parliament in military and fiscal matters. The seventeenth century witnessed the beheading of King Charles I, the English Civil War, the Long Parliament under the control of the Cromwells, the Restoration of Charles II, and the deposition of James II in favor of William and Mary of the Netherlands’ House of Orange. England was also beset with plague, fire, war, and steadily rising tax burdens. On the other side of the Atlantic, the American colonies were steadily taking root, establishing a solid presence along the Atlantic coast from Maine to South Carolina. The colonists brought with them English institutions of government and law as stipulated in their founding charters, but adapted them to local economic and geographical circumstances. Colonial settlers increased from a few hundred in 1607 to reach a combined estimated population of 4,246 in 1630 in Maine, New Hampshire, Plymouth, Massachusetts, New Netherland, and Virginia. By 1640, new settlements had taken hold in Rhode Island, Connecticut, and Maryland. With the establishment of the Carolinas, New Jersey, and Pennsylvania, the colonial population reached 198,500 in 1688,1 although it was still minuscule against some 4,900,000 in England.2 After an initial period of high mortality, the colonists quickly acclimated to their new circumstances. Better economic conditions, access to land, and the absence of devastating wars3 and violent religious disputes4 attracted thousands of Eu ropean freemen and indentured servants.5 The 1

Population figures are taken and derived from Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), table Eg1–59, “Population, by Race and by Colony or Locality: 1610–1780,” S-627–72. The three appendices to this volume present annual total, white, and Negro population figures for all thirteen colonies for 1610–1780. 2 E. A. Wrigley and R. S. Schofield, The Population History of England, 1541–1871: A Reconstruction (London: Edward Arnold, 1981), table A3.3, 533. 3 The colonists fought a number of Indian wars during the seventeenth century, which set back their development, but the damage in lives and property paled against such Eu ropean confl icts as the Th irty Years’ War of 1618–48. 4 Although religious disputes were widespread throughout the colonies, they did not result in massive loss of population or major confl icts, as they had in Eu rope. Protestant dissenters and Catholic immigrants, many of whom sought refuge in the colonies, fared better than their English counterparts. 5 It has been estimated that from half to two-thirds of all migrants to the colonies came as indentured servants, though servants rarely exceeded a tenth of the population at any one time.

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colonial diet was better and communicable diseases were less destructive. Infant mortality soon fell below that in Eu rope. Skilled or unskilled artisans, day laborers, and seamen earned double to triple the wages of their English counterparts. Both push and pull drove migration to the colonies. The English government wanted to populate its New World possessions as a bastion against French, Spanish, and Dutch colonization of the Americas. It encouraged migration by granting tax incentives for settlement in the founding charters of the colonies. Proprietors granted prospective immigrants similar tax exemptions to encourage settlement. The colonies pulled in tens of thousands of immigrants by offering the opportunity to acquire land and the prospect of a better life. An English tenant farmer or urban dweller had little prospect of advancing beyond his position. Most land was already taken up and wages in England were relatively stagnant. Average real earnings varied little over the period 1607–87, sometimes rising, sometimes falling. (Average real earnings are average nominal earnings divided by the consumer price index to determine real increases in income and, correlatively, purchasing power.) Setting 1913 equal to an index of 100, average real earnings in 1607 were 38.0. In successive decades, every ten years from 1617 to 1687, the index number stood at 41.2, 41.4, 38.4, 37.2, 42.1, 47.6, 42.7, and 47.3.6 Wages were higher in the colonies than in England, especially during the earliest decades of colonization and for frontier areas undergoing rapid development. Wages in the colonies were sufficient to allow landless families to accumulate savings for a mortgage and enjoy a relatively comfortable style of living for the time.7 Table 4.181 in Thomas Purvis’s Colonial America to 1763 shows wage rates for day labor in Virginia to be double or more those in England during 1600– 1640. Subsequent tables display daily wage rates or annual compensation in Massachusetts in 1633, Springfield, Massachusetts, during 1638–96, Massachusetts during 1650–1709, New Haven in 1640–41, New Netherland in 1645, Maryland during 1638–76, and South Carolina in 1710, and income of tobacco farmers in Maryland in 1704. Correspondence and returning travelers told of higher wages and greater opportunities in the New World.8

6 Economic History Ser vices, “What Were the UK Earnings and Prices Then?” http://eh. net/ hmit/ukearncpi/index.php ( July 2, 2004). The site provides three historical series, average nominal earnings, consumer price index, and average real earnings pertaining to the average worker in the United Kingdom for the period 1264–2002. 7 Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999). 8 These tables are reproduced from scholarly studies of the different colonies published between 1956 and 1989 and several historical documents. Purvis, Colonial America to 1763, 113–15.

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Turmoil in England—Growth in the Colonies, 1607–1688

Part II consists of six chapters. Chapter 4 describes the changing English constitution and major political developments in England as they bore upon the American colonies. Chapter 5 examines the application of England’s commercial policy to its empire, guided by the doctrine of mercantilism and the Navigation Acts that regulated trade between England and its colonies and between the colonies themselves. Chapter 6 describes the legal and administrative structure of colonial government, along with major constitutional and political developments in the colonies. Chapters 7, 8, and 9 describe the economic development, the creative resort to money with which to pay taxes, and the tax systems of the New England colonies (Massachusetts, Connecticut, Rhode Island, and New Hampshire), the middle colonies (New York, New Jersey, Delaware, and Pennsylvania), and the southern plantation colonies (Virginia, Maryland, North Carolina, and South Carolina).

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c h ap t e r 4
Constitutional Government and Politics in England, 1607–1688

I

n 1 6 07 the English constitution and government consisted of the Crown, the Privy Council, an executive and advisory body of high officeholders, and two houses of Parliament, a hereditary House of Lords and an elected House of Commons. By 1688, the supremacy of Parliament was fi rmly established in principle, with the Commons taking the lead in the most important matter of taxation. Nevertheless, except for the period of Puritan rule under Oliver Cromwell and his son in mid-century, Parliament generally accorded primary responsibility for the American colonies to the Crown, the Privy Council, and the various executive departments of government. From time to time, Parliament placed limits on their power by enacting specific laws regulating colonial affairs. In some instances, Parliament legislated to strengthen royal declarations or impose trading regulations on the colonies for the benefit of English merchants, shipping, and manufacturers. The ebb and flow of parliamentary intervention in royal management of colonial affairs was felt in the colonies, especially during the English Civil War, and affected their constitutional and political development. Taxation in England, with implications for the colonies, was at the center of confl ict between the Crown and Parliament.1

1

See footnote 9 in chapter 1. Religious differences were also at the center of English political life during the seventeenth century. Protestantism was established as the official English religion with the settlement of Queen Elizabeth in 1559. For more than a century thereafter, Protestants feared, and sought to prevent, the restoration of Catholicism as the official religion of the country. The Glorious Revolution of 1688, with the deposition of James II and the accession of William and Mary as joint sovereigns of England, largely ended this anxiety. In addition to the confl ict between Protestants and Catholics were differences among the Protestants themselves, between the official Anglican church and Presbyterians, Congregationalists, Quakers, and other nonconformists. As a political issue, religious confl ict was sometimes more important than taxation. The two issues often coincided. Protestants equated parliamentary control over taxation with the prevention of a French- or Spanish-style absolute Catholic monarchy. The French or Spanish kings were not dependent on representative assemblies for fi nancial support in the seventeenth century.

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chap t er 4

Evolution of the English Constitution and Government Prior to 1607

F

r om t h e time of the Norman conquest in 1066, the king was deemed to be the highest authority in the land, restrained by customs and the need to maintain the support of an armed aristocracy. 2 In the feudal system of England, the nobles gave financial support and ser vice to the Crown in exchange for grants of land. The king depended on his barons and the barons depended on their king. Successful kings usually took the advice of their nobles. Those who disregarded their counsel often failed. Without money and an armed force, kings had little authority or power to rule. The main threat to political stability was the frequent attempt of the king to extract additional revenue from his barons which they regarded as excessive or unreasonable. Traditional sources of feudal revenue (see below) were sufficient to support the first century of Norman kings. During the latter part of the twelfth century, Richard the Lionhearted (1189–99) made repeated demands on his barons to support the crusades, the construction of a fortress in France, and his constant wars. Richard spent almost all of his time outside of England. Relations between him and his increasingly English barons grew strained. The breaking point came under his successor, King John (1199–1216), who lost his French domains of Normandy, Maine, Anjou, and Brittany, military campaigns undertaken without the barons’ consent. John also became embroiled in a quarrel with Pope Innocent III over the selection of the Archbishop of Canterbury. John lost this struggle at the cost of an annual tribute of a thousand marks sterling to the papacy and full restoration of church property he had seized. During his reign, John levied ten scutages, almost on an annual basis, at an increased rate of two-and-a-half marks over the previous standard rate of two marks. 3 Finally, a group of northern barons refused to accede to a

2 Especially important institutions that developed between the Norman conquest and the Stuart Restoration in 1660 were the Privy Council and the common law. For the Privy Council, see Albert Venn Dicey, The Privy Council (London and New York: Macmillan, 1887). The role of the common law is found in Arthur R. Hogue, Origins of the Common Law (Indianapolis: Liberty Press, 1974), a reprint of a 1966 edition by Indiana University Press. An early eighteenthcentury summary appears in Sir Matthew Hale, The History of the Common Law of England, edited and with an introduction by Charles M. Gray (Chicago and London: University of Chicago Press, 1971). Hale’s book was originally published in three editions in 1713, 1716, and 1739. The text in Gray’s edited edition is reproduced from the third edition. A set of excellent essays on the formation and growth of Parliament appears in R. G. Davies and J. H. Denton, eds., The English Parliament in the Middle Ages (Manchester: Manchester University Press, 1981). Th is segment of chapter 4 draws from all three volumes. 3 In 1159, for the fi rst time, the military obligation of the tenants of the king (the barons and knights, the latter the subvassals of the barons and also known as the lesser nobility) by knight ser vice was commuted for a money payment, a tax on the knight’s fee. Money and mercenaries were better suited to the king’s military ambitions and requirements than the

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further increase in the rate of scutage to three marks to support John’s quest to recover the lost duchy of Normandy, claiming financial exhaustion from previous expeditions, and that they were not obliged to serve in or pay for an expedition to Flanders.

Magna Carta

A

s h i s rule grew increasingly perilous in the face of rebellion, John agreed to meet with his barons at Runnymede in 1215.4 In 1215 the Magna Carta (Great Charter)5 was formulated. It was reissued in 12166 and again in 1217,7 reaching its final form in 12258 and placed in the statutes of England as “the first statute of the realm.” inconvenient feudal arrangements that generally limited the term of compulsory military service to forty days a year. Moreover, the barons felt at home in their En glish possessions and had little interest in foreign expeditions. The tax was termed scutage, or shield money. The initial rate of money payment in England was two marks, in English money 1 6s. 8d. on the knight’s fee of 20 annual value, a tax rate of 6.67 percent. Th ree marks would be a rise to 10 percent. Stephen Dowell, A History of Taxation and Taxes in England: From the Earliest Times to the Year 1885, vol. 1, Taxation from the Earliest Times to the Civil War, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 38–42. 4 Prince John fi rst tried to resolve his fi nancial problems by summoning representatives of the counties to meet with him in 1212 to order their support. Th is effort failed. In 1213, he issued a writ of summons for a national assembly of knights of the shires to meet with him, at the same time and place, to discuss national aff airs. The 1213 meeting is the fi rst for which a writ of summons has survived. The two meetings in 1212 and 1213 are seen by some scholars as the fi rst meetings of what later became the House of Commons, even though the fi rst appearance of the word “parliament” does not appear in official records until 1233. J. C. Holt, “The Prehistory of Parliament,” in Davies and Denton, Th e English Parliament in the Middle Ages, 5– 8, 20. 5 The text of the Magna Carta appears in Harry Rothwell, ed., English Historical Documents, 1189–1327 (New York: Oxford University Press, 1975), 316–24, and in the on-line edition of the Encyclopedia Britannia at http://www.britannia.com/ history/magna2.html (December 1, 2003). 6 Rothwell, English Historical Documents, 327–32. 7 Rothwell, English Historical Documents, 332–37. 8 Rothwell, English Historical Documents, 341–46. The reissue of the Magna Carta in 1225 was agreed in a feudal assembly in which the participants—archbishops, bishops, abbots, priors, earls, barons, knights, and free tenants—granted a “fi fteenth” to the Crown. Free tenants were included as stipulated in the charter. See also Holt, “The Prehistory of Parliament,” 25. A new form of general tax to meet the expenses of the fi rst crusade was introduced in 1188 by Henry II on “movables.” Movables applied to landowners on their cattle, farming stock, and agricultural produce, and to burghers or townsmen on their furniture, money, and merchandise. To fi nance the second crusade, a levy of a tenth on movables was imposed. The levy on movables established a system of assessment and collection. The basis of the tax varied from all rents and property to specific rents or items, thus broadening or narrowing the tax base. The fractional parts, or rates, varied from a low of a fortieth to a high of a fourth, the latter to ransom King Richard in 1193. In 1225, on the coming of age of King Henry III, an assessment of a

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The importance of the Magna Carta cannot be overstated. It was a formal expression of law which the king, his judges, and other officials were in principle expected to honor. It signified that the absolute power of an English monarch was constrained by a written contract between him and his taxpaying aristocracy. The charter addressed freedom of elections to the church, the relations of the king with his barons, and issues of national administration particularly dealing with property, and gave the barons the power to execute the terms of the charter through a committee of twentyfive barons to lead the aristocracy against the king if he failed to keep his promises.9 Article 12 stipulated that “No scutage or aid shall be imposed in our kingdom without its general consent, unless it is for the ransom of our person, to make our eldest son a knight, and to marry our eldest daughter. For these purposes only a reasonable aid may be levied.” Article 14 spelled out the meaning of general consent: to assess an aid or scutage, religious leaders and greater barons were to be summoned individually by letter, while those holding lands granted directly by the Crown were to receive a general summons issued by sheriffs and other officials, to meet on a fi xed day and at a fi xed place for a stated purpose with at least forty days’ notice.10 The principle was clear: no general taxation without some form of representation. If John had been able to live within his means, it is doubtful that he would have consented to the charter or any document limiting his prerogative. It is fair to say that the origin of the English constitution and ultimately Parliament rested on a tax revolt. fi fteenth was granted in consideration of the reissue of the charter and for the defense of the kingdom threatened by King Louis VIII of France. The amount raised was 57,838 13s. 6d., a large sum of money at the time. See Dowell, A History of Taxation and Taxes in England, 1:59– 65. The Latin text of the Ordinance of the Saladin Tithe of 1188 appears in David C. Douglas and George W. Greenaway, eds., English Historical Documents, 1042–1189 (London: Eyre and Spottswoode, 1953), 420–21 and in Dowell, A History of Taxation and Taxes in England, appendix 1, 1:227–28. A schedule of assessments for the tax on movables in the borough of Colchester in 1295 and 1301 appears in Dowell, A History of Taxation and Taxes in England, appendix 2, 1:229–36. The list of items, occupations, and trades is extremely detailed, although many items raised insignificant revenue. For example, the tanner Henry Pakeman was assessed and taxed on a cup, a silver buckle, four silver spoons, two tablecloths, two towels, barks, skins and utensils used in tanning, and barrels and vats for his brewing activities. The total assessment of the borough in 1301 amounted to 518 1s. 43 ⁄4d. and the total of fi fteenths was 34 12s. 7d. The number of assessments was 390, giving a per capita average assessment value of 1 6s. 6d. for property and an average tax of about 1s. 9d. 9 Reissues of the Magna Carta dropped the enforcement provisions in the 1215 document, which probably reflected the reality of English political conditions. Many English monarchs tried to relieve themselves of the restraints imposed by the Magna Carta. 10 Reissues of the charter also replaced articles 12 and 14 with a single concluding article that limited aids and scutage to previous historical custom.

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The Magna Carta was reissued and confirmed three times during the reign of John’s son, Henry III (1216–72), and eventually confirmed some thirty times before the close of the Middle Ages. Each confirmation further strengthened the proposition that the king himself was subject to the rule of law.11 The early gatherings of religious leaders and nobility laid the foundation of a national lawmaking body.

Taxation and the Origin of Parliament

T

h e g r ow i ng administrative apparatus of the Crown and the evolution of Parliament were closely intertwined. In general, the Crown was allowed to choose its own agents, ministers, and officials to help govern the kingdom and administer justice. Th is body of officials, themselves nobles, were the great officers of state and constituted a permanent or continual council of the Crown. It included such formal officeholders as the chancellor, the great justiciary, the Lord Treasurer, the lord steward, the chamberlain, the earl marshal, the constable, two archbishops, the comptroller of the household, the chancellor of the Exchequer, the judge, the king’s sergeants, and others appointed at the king’s discretion.12 From time to time, for the determination of large and important matters, the king sought the assistance of his nobles, who were summoned by writ to meet with him to give aid and consent. Such meetings were sessions of the court of the king (curia regis), which became known as the great council. Its jurisdiction was extremely wide, encompassing judicial, executive, and quasi-legislative judgments with the force of law. A small council of administrators traveling with the king, the permanent council, could meet at any time during the year for it was always in the king’s presence. Taxation was the most important issue affecting the great council. The king could achieve most of his objectives with the assistance of his permanent council, except impose taxes on the nobles themselves, which required their consent. Taxation had not been a significant problem for the early successors of William the Conqueror as kings collected sufficient revenue from royal domain lands, crown tenants, various feudal aids, land taxes, the taxation of movable property, port duties, and exactions from the boroughs.13 11

Hogue, Origins of the Common Law, 45–55. The power, patronage, privileges, responsibilities, and remuneration of the major and other lesser officials of the Crown in the seventeenth century are described in a trilogy of studies written by G. E. Aylmer: The King’s Servants: The Civil Service of Charles I, 1625–1642 (New York: Columbia University Press, 1961); The State’s Servants: The Civil Service of the English Republic, 1649–1660 (London and Boston: Routledge and Kegan Paul, 1973); and The Crown’s Servants: Government and Civil Service under Charles II, 1660–1685 (Oxford: Oxford University Press, 2002). 13 Dowell, A History of Taxation and Taxes in England, 1:13–82. 12

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As royal expenses outgrew these sources of revenue, resort to the great council became more frequent. The officers of the court became a separate body of salaried officials serving the royal court, while the great council, which later incorporated commoners and then split off into a separate House of Lords, was most concerned with its property rights and tax burdens. The origins and powers of Parliament emerged from the growing importance of the great council in response to requests for additional taxation. During the 1250s, Henry III encountered rising opposition from his nobles who were angry at the cost of rebuilding Westminster Abbey and a proposed campaign to make one of his younger sons king of Sicily. In 1258 they extracted from Henry the Provisions of Oxford, which established a permanent baronial council to take control of certain key appointments. Their leader was Simon de Montfort, the Earl of Leicester. Henry subsequently renounced these provisions and war broke out between de Montfort’s barons and Henry’s supporters. During the confl ict, de Montfort sought support from the middle classes by summoning representatives from the counties, towns, and lesser clergy. His famous Parliament of 1265 included two representative burgesses from each borough and four knights from each shire, admitted in principle to full standing with the great council of nobles.14 This was the first time that commoners were formally represented in a national political body. The House of Commons subsequently originated from this initial gathering, taking the form of an occasional convocation of representatives of non-noble social classes to provide the consent of the counties and towns to taxes imposed by the king. Its meetings were often held in conjunction with those of the great council.

Strengthening of Parliament dwar d i (1272–1307) validated the role of Parliament.15 He summoned to his Model Parliament of 129516 prelates, nobles, two knights from each county, two citizens from each city in the same county, and two burgesses from each borough17 to be elected without delay, along with representatives of the lower clergy. Edward’s parliaments enacted numerous

E

14

In 1965 Queen Elizabeth II participated in the celebration of the 700th anniversary of de Montfort’s Parliament, marking the date as an important event in the development of the English constitution. 15 G. L. Harriss, “The Formation of Parliament, 1272–1377,” in Davies and Denton, The English Parliament in the Middle Ages, 29–60. 16 The text of the summons of a baron and of representatives of shires and towns to Parliament in 1295 is found at http://www.britannia.com/history/docs/parliament.html (December 1, 2003). 17 A borough is a town having special privileges and rights, typically set forth in a municipal charter.

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statutes, which served as a formal basis for the common law.18 By the end of his reign, Parliament began to reflect the concerns of England’s growing political community. In 1327, it was sufficiently powerful to depose King Edward II (1307–27) on the grounds that he had broken his coronation oath and disregarded the ordinances of 1311 by which Parliament insisted on its right to counsel the king. Edward III (1327–77) chose to work with, rather than against, his nobles. He accorded Parliament prominence in taxation and the recording of grievances. Under his reign it became the norm that there should be no taxation without Parliament’s consent. By the end of his reign, Parliament’s membership was settled and it had divided into the two houses of Lords (the great council) and Commons. The statutes enacted by Parliament in the mid-1300s codified trade regulations, defined the duties of local royal officers, reformed legal abuses and procedures, dealt with the status of alien merchants, and prescribed weights and measures, among others. In 1377 the king agreed that statutes could not be annulled except in Parliament and by common assent. Acts of Parliament were considered binding on everyone, including the king, thus establishing in principle its legislative supremacy.19 18

Hogue, Origins of the Common Law. Hogue defines the common law of the twelfth and thirteenth centuries, which remains at the heart of English and American law, as consisting of the law of land and tenures, the law of property rights and ser vices, together with rules of procedure for the administration of justice. He argues that the barons asserted the supremacy of law to protect their rights against sudden revolutionary changes in property law, an important part of the Magna Carta. The supremacy of law took institutional root in the medieval evolution of the House of Commons. The growth of the common law in explicit written form and formal procedure represents the sum of established customs in the form of writs, judicial decisions, treatises, royal ordinances, and parliamentary statutes. The common law develops its general principles on reasoning expressed in decisions about actual legal controversies. The common law maintains the doctrine of the supremacy of the law, which requires that all agencies of government, including the king, must act upon established principles. All acts of government are subject to examination in the courts, which, in turn, are compelled to follow established procedures, or “due process,” to reach their decisions. The common law is thus a body of rules prescribing social conduct, enforced by ordinary royal courts, developed on the basis of actual legal controversies and decisions, the procedure of trial by jury, and the doctrine of supremacy of law. English common law was regarded as part of every Englishman’s legal heritage in the American colonies. 19 There is a large literature that strives to explain and interpret the rise of Parliament. These include the Whig school that identifies opposition to the Crown with the cause of liberty and parliamentary democracy, with special emphasis on the Commons. Some stress the royal character of medieval Parliament, with many members of the Commons as dependents of the Lords. Others argue that Parliament’s survival and development required its participation in royal government. It is not my purpose to choose among these schools, but simply to identify the main events and trends that led to the structure of the English constitution and government at the beginning of the seventeenth century.

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By the mid-fourteenth century, the clerical representatives withdrew to their own convocations, leaving only nobles and commoners in Parliament. The knights of the shires, a minor landholding aristocracy, gradually joined with the burgesses and chose representation in the House of Commons by the end of the century.

Rise of the House of Commons

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h e ho u s e of Commons gradually superseded the Lords in many matters, especially taxation. In 1401, it claimed the right to grant supply20 only after the king agreed to redress grievances set forth in petitions submitted to him. In 1407, Henry IV (1399–1413) acknowledged that taxes must originate in the Commons. In 1414, Henry V (1413–22) agreed that “nothing be enacted to the Petition of the Commons contrary to their asking” and agreed to full equality of the Commons and Lords on legislation. Statute legislation gradually replaced petitions as bills were sent to the king and ultimately enacted by the Commons, Lords, and the king together. Although the Crown still enjoyed substantial prerogative, kings and queens required the consent of Parliament to all taxes on lay persons and to all statutes. Parliament got tougher with requests for more taxes and their use. Grants of taxes often attached conditions stipulating how money was to be spent, who paid it out, and that accounts were to be rendered to it. Grants of additional revenue often entailed further encroachment on royal prerogative. Parliament also became England’s lawmaking body. Until the midfourteenth century, the king and his council usually proclaimed ordinances, which were turned into statutes if it was felt that royal proclamations required greater authority or permanence. Acts of Parliament bound all Englishmen. It became standard practice for the king to inscribe his royal sign manual at the top of approved bills to signify his authority and royal prerogative. Statute law gradually superseded common law in status as no judge or official could prescribe against a statute. 21

Development and Expansion of Royal Administration

C

onc ur r e nt w i t h the rise of Parliament and its powers was the expansion of royal administration beginning with Henry III. No king or

20

“Supply” or “supplies” are the English terms for tax and other revenue granted by Parliament to the king, a sum of money from specific sources for a given period of time (e.g., annual, several years, life of the king). “Supply” is the equivalent of the contemporary word “appropriation.” 21 A. R. Myers, “Parliament, 1422–1509,” in Davies and Denton, The English Parliament in the Middle Ages, 145–46.

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a handful of trusted officials could manage the growing business of court. Various officials began to take responsibility for royal business, some attending to military matters, some financial concerns, some royal grants, and so on. Over time, departments of the Crown began to meet in par ticular places for specific purposes, which led to the emergence of separate royal courts. These included the Exchequer, which dealt with royal finances; the court of Common Pleas, which was concerned with disputes between subjects not involving the king; the general eyre, justices who traveled on circuits through the counties; the court of King’s Bench, which dealt with pleas of the Crown based on the royal right and duty to preserve the peace and which had appellate jurisdiction over appeals of error from the court of Common Pleas; and such specially commissioned bodies as courts of Assize that handled disputes about property rights, courts of oyer and terminer, in which two or three justices would handle a single case, and courts of Gaol Delivery to try prisoners awaiting trial in jail. 22 By the time of Richard II (1377–99), the English government had evolved into several well-defined institutions. 23 The main organs of government were the Crown, a council, a Parliament of two houses, and numerous distinct law courts, supported by the idea of fi xed laws.24 During the fifteenth century, until the accession of Henry VII in 1485, the king’s council of executive assistants was a relatively stable body. Councillors received large salaries, were bound by an oath of confidence, held regular sessions, and specialized in the business of law, finance, and other fields of administration. During the reign of Henry V, the council became known as the Privy Council. Privy derives from the privacy of the council’s meetings and the secrecy of its resolutions in ser vice to the Crown. An analysis of the council’s records shows a primary focus on crown finances, raising and spending revenue, eliminating arrears in taxes and payments, when to impress labor (a royal prerogative) or extort money from nobles, requests for loans, and avoiding frequent requests of Parliament for funds. A second major task was dealing with aliens and trade, which became a means to raise money in exchange for trade protection, trade monopolies, and other favors. A third task was dealing with the church, the struggle with Rome over the appointment of bishops, and cases of heresy or sorcery, issues that were central to the founding and growth of the American colonies. The fourth task was assisting the king with preserving peace, which it did when it functioned as a law court. In this capacity, the council often came into confl ict with 22

Hogue, Origins of the Common Law, 152–65. A. L. Brown, “Parliament, c. 1377–1422,” in Davies and Denton, The English Parliament in the Middle Ages, 109–40. 24 Dicey, The Privy Council, 2–24. 23

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Parliament and its common law lawyers, who disliked civil law and who sought to prevent summons of English subjects, including themselves, who could become victims of extortion. 25 When Henry VII (1485–1509) seized the throne, a century and a half of relative tranquility followed the previous half century of civil war, the War of the Roses between the houses of Lancaster and York. Parliament was eager to grant the king the authority to maintain law and order.26 During the reign of Henry VIII (1509–47), the Church of England separated from the Roman Catholic Church, and for the next two centuries English politics was obsessed with royal succession: whether England would remain Protestant or whether Catholicism would be restored. During the last few decades of this period, which lasted from 1485 to 1640, the first wave of American colonies was established. The Privy Council became the initial instrument of colonial policy and gradually evolved into more formal branches of government that undertook responsibility for colonial affairs.

The Seventeenth Century

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he sy st em of central government at the beginning of the seventeenth century included several main branches. 27 At the center were the king, the Privy Council, and the two secretaries of state for the Northern and Southern departments. The royal household dealt with little outside the court itself, but was costly in relation to the Crown’s total income and expenditure. The financial departments, especially the Exchequer, were responsible for the bulk of royal revenue and expenditure. The law courts formed a large part of government, consisting of the common law courts (King’s Bench, Common Pleas, and Exchequer), Chancery (equity), and the Star Chamber (the extralegal activities of the Privy Council). Other departments included the Mint, the Ordnance Office, and the Navy. The church hierarchy enjoyed a close partnership with the royal government. Local government was administered at the county level by the lord lieutenant, typically a member of the Privy Council, or his deputy. The lieutenants and other gentry administered justice in their capacity as justices of the peace. Sheriffs oversaw parliamentary elections and selected juries. Taxes were usually collected by special commissions. Counties were split into units called divisions, subdivided into hundreds, and further subdivided into 25

Summarized from Dicey, The Privy Council, 40–75. Myers, “Parliament, 1422–1509,” 141–84. 27 A survey of the English constitution and government in the seventeenth century is found in G. E. Aylmer, The Struggle for the Constitution, 1603–1689: England in the Seventeenth Century, 2nd ed. (London: Blandford Press, 1968). 26

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parishes, which were administered by constables, a system of administration copied in many of the American colonies. Governments of corporate towns, or boroughs, were run by a mayor and a body of aldermen, or ruled by a bailiff. In the larger boroughs, a body of freemen or their representatives assisted in government, but in the smaller villages, affairs were governed by one or more large landowners. Appointments to various offices were largely based on patronage. The king selected his councillors, ministers, and others, who dispensed favors to their friends, relatives, and clients. There was a revolving door between private employees of high officials and royal ser vice. Executive positions were routinely bought and sold, often held for life, and in some cases heritable. High office was often a path to great riches, and several key officials acquired great fortunes while in office, building homes almost as large as the king’s palaces. Thomas Osborne, the Earl of Danby, received an annual salary of 8,000 as Lord Treasurer, in effect the chief minister of Charles II. His salary was larger than the annual income of many landed peers, and significantly larger than the annual peacetime costs of administration in each of the American colonies during his time. Other important officials also received substantial salaries.28

James I, 1603–1625

T

h e r e ig n of James I was an important period in English constitutional history. He substantially expanded the scope, size, and cost of government. His extravagant spending habits kept him at odds with Parliament throughout his reign. At the beginning of his reign, only a small minority of Englishmen played any role in government. 29 The House of Lords was the forum of a small number of peers, especially those who did not hold office at court. The next layer, the landed gentry, numbered in the thousands, representing a fraction of 1 percent of the inhabitants of England and Wales. Its political 28 Aylmer, The Crown’s Servants, 102. In the 1660s, 8,000 sterling was equal to about 9,200 Massachusetts currency, many times the size of the colony’s budget. The Lord Treasurer’s salary exceeded the annual combined budgets of all the New England colonies in the 1660s. Thomas Howard, Lord Treasurer to King James I, built Audley End in Essex, which James described as “Too large for a king but might do for a lord trea surer.” Robert Cecil, the fi rst Earl of Salisbury and chief minister to James I, built Hatfield House in Hertfordshire in 1611. The finest example of later Elizabethan architecture in England, Burghley House, was built by William Cecil, the most able and trusted adviser of Queen Elizabeth. The size and magnificence of these houses are illustrated in Historical Houses, Castles and Gardens 1999 (London: Johansens, 1999), 64, 84, 101. 29 The brief description of England’s social classes and their role in government is summarized from Aylmer, The Struggle for the Constitution, 33–40.

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forum was the House of Commons, although many members were sons or younger brothers of peers. Other members were lawyers and professionals. London, the center of English business and trade, gave rise to a mercantile elite. London enjoyed great bargaining power with the Crown, which often needed to borrow money.30 Some of London’s leading citizens were knighted, a few became peers, and many became established members of the gentry. The urban middle classes (small merchants, retailers, master craftsmen, skilled workers, self-employed artisans) and the rural middle classes (lesser gentry, prosperous yeomanry, upper-level peasantry) might have the vote or hold local office but seldom entered Parliament. The English masses, well over half the population, had no say in government or public affairs.31 The main sources of confl ict between James and Parliament were the intertwined matters of taxes, religion, and foreign policy. 32 The view of Parliament was that James should live on his own income from crown lands, feudal dues, purveyance, grants of monopolies, sales of licenses and exemptions, and customs duties. “Extraordinary” revenues, any funds beyond these traditional sources, had to be voted by Parliament. When James ascended the throne, assessments were out of date and markedly eroded by inflation. To collect the same real revenue as before, more subsidies were required. The Crown enjoyed the right to raise an extra tax in war time for the navy called “ship-money,” which James’s successor, Charles I, used to bypass Parliament, but this and other measures cost Charles his head. It had become increasingly difficult for the king to compel loans. The Crown could raise money by selling its capital assets (timber, jewels, and land), but these were one-time sources of revenue and further diminished future income from assets. A century of gradual inflation had eroded the real revenue of the Crown.33 30

In 1544, Henry VIII secured a major loan from merchants in Antwerp, but this source of borrowed funds ended after 1574 due to high rates of interest and concern over dependence on foreign sources of credit. During Elizabeth’s reign, total borrowing in England amounted to 461,000, of which only 85,000 bore interest. Most of the loans were repaid by 1600. James I and his successors were more heavily dependent on loans than were his predecessors. Several wars left a national debt of 2.5 million at the conclusion of the Second Anglo-Dutch War of 1664–67. The City of London played an increasing role in providing loans, and thus held most of England’s public debt. C. G. A. Clay, Economic Expansion and Social Change: England, 1500– 1750, vol. 2, Industry, Trade and Government (Cambridge: Cambridge University Press, 1984), 269–70. 31 The absence of an established aristocracy and the opportunity for upward mobility were factors drawing immigrants to the colonies. 32 Th is section draws on Aylmer, The Struggle for the Constitution, 41–63. 33 In marked contrast with the relative poverty of King James’s government, the French kings collected more money from the gabelle, a tax on salt, than did the entire royal revenue in England. A flush stream of revenue enabled French kings to rule as absolute monarchs without any need for an English-style parliament to provide additional revenue. Parliament, especially

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Religion was also a major source of conflict between James and Parliament. The Church of England had been established as a result first of Henry VIII’s breach with Rome, second of the Protestant reformation under Edward VI (1547–53), and third of the Elizabethan church settlement of 1559 (Elizabeth was excommunicated by the Papal Bull of 1570). The Church of England was under siege from potential Catholic insurrection until the Glorious Revolution of 1688, and challenged in several more battles in the first half of the eighteenth century. The Protestant majority feared Catholic restoration and a Spanish-style absolute monarchy, which would have resulted in religious persecution and the diminution or abrogation of parliamentary rights and constitutional liberties. Englishmen equated Protestantism with the cause of parliamentary government and the rule of law, and Catholicism with foreign intervention and absolute monarchy. The radical wing of English Protestantism, the Puritan movement, was keen to use the Commons as a vehicle to strengthen its position. The Church of England was the only officially recognized church in the country. It not only had to struggle with what policies to follow in dealing with Catholics, it also had to decide how to deal with Puritans, most of whom were inside the church. Within the Puritan movement were separatists, who wanted to split off from the church and set up independent congregations, and Presbyterians, modeled on the Scottish and Geneva churches, but who wanted to work within the Anglican church. There were more moderate Episcopalian or Anglican Puritans who did not want to introduce a system of church government by elders, but who wanted to push the Anglican church more Protestant than it was, further away from any Catholic tendencies.34 During James’s reign, Parliament often refused additional supplies. To help finance his administration, James imposed a new branch of customs styled “new impositions” without the assent of Parliament. Disagreement with Parliament over English involvement in the Th irty Years’ War led James to govern without seeking support from Parliament. How was he able to finance his expenditures without the votes of Parliament? During his reign, James collected revenue from three main sources: parliamentary grants, the old customs and subsidies, and the sale of titles. The main sources of direct taxation were the tenths and fi fteenths35 and the the Commons, feared the threat of absolute monarchy if the English Crown ceased to require Parliament’s consent for supplies. 34 The establishment of Plymouth, Massachusetts Bay, and Maryland reflected English religious divisions as Puritans, Separatists, Catholics, and other nonconformists sought refuge in the New World. Further disagreements led to the founding of Connecticut and Rhode Island. 35 See footnote 8 in this chapter.

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old subsidies.36 Together they yielded about 100,000 per annum. A grant from the clergy, which typically went hand in hand with a grant of Parliament, at a rate of 4s. in the pound yielded another 20,000. 37 In 1603, James’s first Parliament made a life grant of the customs subsidies based on precedent that extended over the reigns of a succession of sovereigns.38 The lifetime grant was made on the basis of the old rates for wool and leather, 3s. tonnage on wines, and 5 percent poundage on the value of merchandise exported or imported, with double the rates on alien merchants. James placed additional “impositions” on top of the standard 5 percent duty on a wide range of goods. The combined yield of customs, subsidies, and imposts generated 127,000 in 1604, similar to the yield from direct taxes. Under James tobacco was specifically taxed for the first time, including all tobacco from Virginia. To maximize this source of revenue, James banned the growing of tobacco in England.39 By 1623, tobacco produced 8,380. Improvements in tax administration coupled with an increase in commerce raised customs revenue from about 148,000 in 1613 to 284,000 in 1619 to over 323,000 in 1623. The steady rise in customs partly explains James’s ability to govern for long periods of time without votes of supply from Parliament. James also sold titles for cash.40 He created a new hereditary knighthood, the order of baronets, for which he charged 10,000. A viscount cost 15,000 and an earl 20,000. During his reign, he increased the number of peers from about sixty at the end of Elizabeth’s reign to more than one hundred by his death. The proceeds of these sales generated as much as 500,000 during his reign. Toward the end of his reign, parliamentary and clerical votes of supplies provided less than a quarter of James’s revenue. Customs receipts, the sale of titles, and other miscellaneous sources produced over three-quarters, rendering James substantially independent of Parliament. This independence, coupled with the dilution of the peerage by the sale of titles, concerned Parliament and set the stage for intensified confl ict with the Crown.

Charles I, 1625–1649

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h e ac c e s s ion of Charles I did little to improve relations with Parliament, as struggles continued over money.41 The Commons resented the additional impositions that James had added to the customs, and refused 36

The origin and meaning of subsidies are described in chapter 1, footnote 9. Dowell, A History of Taxation and Taxes in England, 1:159–60. See also Clay, Economic Expansion and Social Change, chapter 11, “The Financing of the Government,” 253–63. 38 Dowell, A History of Taxation and Taxes in England, 1:182–91. 39 Th is topic is treated at length in chapter 9. 40 Dowell, A History of Taxation and Taxes in England, 1:209. 41 Th is section draws on Aylmer, The Struggle for the Constitution, 66–75. 37

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to vote the new king the traditional tonnage and poundage. Since the late fifteenth century, these had been awarded to the Crown for life in the first parliament of every reign. Charles received them for only one year, which he took as a personal insult. Parliament also criticized his excessive leniency toward Catholics and the appearance of Catholic-style ritual in the Church of England. Having called two parliaments into session in 1625 and 1626, and having failed to secure the traditional tonnage and poundage, Charles tried once more with a third parliament in 1628. He dissolved this parliament in 1629 and for the next eleven years he ruled personally. He added new duties that were known as “new new impositions.” He increased rates on dutiable items and strengthened the efficiency of customs collection. He was the beneficiary of a commercial recovery, which produced higher revenue from customs than ever before. He imposed fines on knights who refused to be re-knighted. He sold commercial monopolies to corporations, circumventing the Monopolies Act of 1624, which precluded sales to individuals. In the 1630s, he raised about 80,000 a year from the sale of monopolies of starch, coal, salt, and soap, a total that rose to 100,000 by 1639. He imposed heavy fines on fl imsy charges. He extracted ship money, a traditional war time fee demanded from towns for building naval ships, even though England was at peace during some of this period.42 During the 1630s ordinary royal revenues increased from just over 600,000 to nearly 900,000 a year. However, administrative and military expenditures grew even faster, which compelled the king to borrow and pushed him deeper into debt. In 1640 a taxpayers’ strike broke down the collection of ship money. His funds ran out and his credit collapsed43 due to unsuccessful military misadventures in Scotland. Charles had attempted to 42 Ship writs formed an extraparliamentary method of collecting a tax on property. Ship writs were imposed after Charles had exhausted his efforts to increase revenue from other sources. Historically ship writs had been used to assemble a navy in time of war. England did not have a permanent royal navy until the time of Henry VIII. During the Spanish Armada, the English fleet hired two-thirds of its ships from private merchants, who were paid from the proceeds of ship writs. The attack on Algiers in 1618 by James I employed eighteen vessels, of which twelve were hired from private merchants. On this occasion, the port towns had been required to provide ships and ship money in the amount of 48,500. On October 20, 1634, writs were issued to the maritime counties and towns to supply ship money. The Crown raised 104,252. An emboldened Charles extended the ship writs inland with a second issue on August 18, 1635, collecting 208,900. Despite internal opposition, Charles issued a third set of writs in August 1636, which generated 202,240, followed by three more in 1637–39. Several years later, an act of Parliament declared ship money illegal. Dowell, A History of Taxation and Taxes in England, 1:210–23. A list of ships, men, and total tonnage by counties appears in appendix 5, 243–44. 43 Charles had become increasingly dependent on loans raised in London, whose merchants provided funds on the security of future revenues. Many of the revenues he was raising were not recognized as constitutional and legitimate by the parliamentary opposition. If Charles

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force a new prayer book on Scotland, which resulted in rebellion. Charles’s forces were ill prepared owing to a lack of funds, causing the king to call first the Short Parliament in 1640, which failed to reach an agreement on the provision of funds, shortly followed by the Second or Long Parliament of 1640.

Civil War and the Emergence of the First Republic

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h e f i r st session of the Long Parliament was important in a constitutional sense.44 Parliament passed the Triennial Act of 1641, a formidable challenge to royal prerogative, which stipulated that there had to be a parliament at least once every three years and that it could be summoned and elected without the king’s approval if necessary. Ship money was banned by statute. Acts were passed against monopolies. Some of the “new new impositions” were suspended. Tonnage and poundage were voted only for a few months, thus increasing the king’s dependence on Parliament. Charles and Parliament failed to agree on control of troops for repression of an Irish rebellion that erupted in November 1641. He tried to arrest five members of Parliament. These and other disputes culminated in civil war. In 1642 Parliament placed the army and navy directly under its supervision, and declared this bill law even if the king refused his signature. The forces of Charles and Parliament commenced hostilities at Nottingham in 1642. Cromwell and his army, representing the supporters of Parliament (Roundheads), defeated the king’s forces (Cavaliers) in 1645. The Puritans were funded by a more efficient administrative and financial system they had developed, resting on excises (see below), wealth, and property taxes. These yielded far more than the older tonnage and poundage, impositions, subsidies, forced loans, and ship money combined. In 1646, Charles surrendered to Scottish forces, which turned him over to Parliament. In 1648 he was put on trial for treason, convicted, and beheaded in 1649. In November 1648, the Long Parliament was reduced to a “Rump” Parliament by the forced removal of 110 members by Cromwell’s army. Another 160 members refused to take their seats in protest of this action. The remaining members abolished the monarchy, the Privy Council, the courts of Exchequer and Admiralty, and even the House of Lords. England was ruled by an executive Council of State and Rump Parliament. England was a republic, which lasted eleven years, for the fi rst time in its history.

called another Parliament, it might disavow these sources of revenue, thus imperiling repayment of the loans. 44 Th is section draws on Aylmer, The Struggle for the Constitution, 140–62.

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Oliver Cromwell was a strict Puritan with a commanding voice. He forced submission from the nobility, suppressed rebellions in England, Ireland, and Scotland, and then turned to internal matters. He ended the Rump Parliament in 1653, dissolved a successor parliament in 1655, strained national fi nances to sustain an army of 35,000, fought a war with the Dutch over foreign trade, and effectively established himself as a monarch in new clothes as Lord Protector of the Realm. His death and the brief term of his son Richard (1658–59) ended with the Restoration of Charles II in 1660.

Charles II, 1660–1685

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lt ho ug h r oyal rule was reestablished with Charles II in 1660, it did not mean the reimposition of royal supremacy and a diminished Parliament.45 In fact, Parliament was significantly strengthened. A convention was called in 1660 in advance of an elected parliament to deal with England’s most pressing problem, that of providing revenue for the returning king and his administration. The king surrendered his traditional feudal dues. The excises imposed by republican Parliamentarians in 1643 were made permanent and half, estimated at 100,000, was to replace the feudal dues. The convention agreed to a hearth tax (levy on the number of fireplaces in houses). The king was to receive revenue from restored crown lands, and the whole existing customs revenue was confirmed, either in perpetuity or for his lifetime. The convention’s peacetime target was set at 1,200,000 a year, a level that was not reached until the mid-1670s. Keeping the king on a tight leash was an objective of the convention and subsequent parliaments. Nonparliamentary taxation never reappeared on any appreciable scale. Even though the Crown still retained considerable discretionary power over the calling, adjourning, and dissolving of Parliament, the legislature was accepted as an integral part of government. In 1665 and 1667, the Commons strengthened its control by making grants of additional taxation conditional on par ticular kinds of expenditure. Charles II was perennially short of money. Three events in the middle of his first decade were ruinous: the outbreak of bubonic plague, especially severe in London, in 1665; the Great Fire of London in 1666, which burned most of the old City of London to the ground; and the Second AngloDutch War, an imperial confl ict taken to drive the Dutch out of New York but which resulted in a military disaster in 1667. The financial consequences of the Second Anglo-Dutch War and preparations for the next one, which materialized in 1673–74, combined with 45

Th is section draws on Aylmer, The Struggle for the Constitution, 163–94.

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general court extravagance on mistresses and other activities, brought England to the brink of national bankruptcy. In January 1672, all payments to royal creditors were suspended for a year, which severely harmed London goldsmiths and other financiers. Moreover, parliamentary suspicion grew over the acceptance of French money by King Charles and the admiration of his cousin’s absolutist rule, preference for the Catholic faith, and dislike of middle-class republicans. The succession problem became the principle issue in the waning years of Charles II. Ordinary rules of succession pointed to his brother, James, Duke of York, an openly admitted Catholic with a Catholic second wife, as the legitimate heir to the throne of England. A child of this marriage would be a Catholic heir to the throne, thus overturning more than two centuries of Protestantism as the religion of England. The crisis came to a head in 1678–79 when it was revealed that Charles had been accepting a subsidy from the French king Louis XIV. Charles survived the crisis and installed his brother on the throne. On his deathbed, Charles converted to Catholicism.

James II, 1685–1688 a m e s ii peaceably ascended the throne in February 1685.46 The House of Commons was initially favorable toward him, voting the largest peacetime revenue in English history. Harmony was short-lived, however. James sought to restore the Church of England to the Catholic religion. He gradually replaced moderate Tories (former royalists) and others with his Catholic friends and supporters. He packed the army with Catholic officers, which raised fears of military rule. He suspended the Test Act, which precluded Catholics from holding military or civil offices under the Crown. He called in borough charters and installed Catholics. He replaced local officials with Catholics. He attacked chartered corporations (such as Magdalen College, Oxford), and after 1685 prorogued Parliament and dissolved it without another meeting. All of this was in pursuit of strengthening royal prerogative.47 In February 1688, James’s second wife, the Catholic queen, gave birth to a son, which presaged a popish dynasty for years to come. A group of Whigs (former Roundheads, men of property dedicated to expanding trade abroad and maintaining Parliament’s supremacy in politics), Tories (former Cavaliers, royalists intent on preserving the king’s authority over Parliament), and Anglican bishops joined together to invite William, Prince of Orange, and his wife, Mary, to bring an army to England to

J

46

Th is section draws on Aylmer, The Struggle for the Constitution, 208–14. These efforts to reestablish royal prerogative were even more pronounced in the American colonies, as described in parts II and III. 47

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confirm Protestant rule. Their landing in 1688 was the first successful foreign invasion of England since 1066. James II lived out the rest of his life in exile in France. The Great Settlement, which became the Glorious Revolution, is taken up in part III.

English Taxation in 1688

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it h taxe s at the core of the centuries-long confl ict between the Crown and Parliament, it is instructive to review the system of taxation that emerged during the brief republican years of Cromwell and the final reigns of the House of Stuart.48 Parliament, whose consent was required for new, higher, or extraordinary taxation, had kept the English Crown on a tight leash.49 At the onset of the sixteenth century, the Crown secured about 40 percent of its ordinary revenue from its landed estates, a share that continued at the beginning of Elizabeth’s reign. By the early 1630s, income from royal lands fell to about 14 percent of crown revenue. The cost of foreign wars, growth in the cost of government, and rising prices required higher crown outlays while the alienation of royal lands reduced landed income. Cromwell’s Parliament enacted the old annual or semi-annual subsidies on property, later replaced by a system of monthly assessments, apportioning amounts to par ticu lar counties and towns, which were held responsible for collection.50 Assessments were based on the style of living as evidence of means, which resulted in much higher assessments than under previous kings. At its peak, this tax generated an annual high of 120,000. Another 100,000 a year was raised as a weekly meal tax, the price of one meal a week. Parliament also retained the port duties, continuing the tonnage for wine and poundage for goods with new rates for poundage. Higher rates were imposed on Spanish wines and additional duties imposed on exports of lead and tin. A small additional duty on all imported merchandise was imposed to redeem captives taken at sea by Turks, Moors, and other pirates. 48

Stephen Dowell, A History of Taxation and Taxes in England from the Earliest Times to the Year 1885, vol. 2, Taxation from the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 3–34, and Clay, Economic Expansion and Social Change, 251–81. 49 The doctrine of colonial self-support stemmed, in part, from the chronic shortage of royal revenue. The English government could not readily afford to subsidize its colonial governments. Royal officials in the colonies were to be supported by supplies granted from local assemblies. As might be expected, this situation resulted in political confl ict between the colonists and royal officials, mirroring that of Parliament versus Crown, throughout the colonial era. 50 The system of apportionment to towns and counties was the basis of assessment and collection in the New England colonies.

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In 1643, Parliament levied a variety of retail excises on many articles of consumption. Excises extended to alcoholic beverages, meat, salt, and clothing, although meat and salt were subsequently removed from the list in 1647. Many articles were charged at specific rates, with the rest at 5 percent valuation. Excises were estimated to yield as much as 1,300,000 a year in the late 1650s. As previously mentioned, the convention that preceded the return of Charles II to England granted the Crown annual revenue of 1,200,000. While in excess of the 900,000 that was considered to be the revenue in the time of Charles I, it was inadequate given the debts and financial condition of England in 1660. The lifetime grant of revenue included the old port duties, embodied in an act with a new book of rates and a code of customs law. This act was known as the Great Statute. Parliament adopted certain excises of the Commonwealth, of which 100,000 was to replace feudal dues, fees, and other fiscal prerogatives. The excises were divided into hereditary and temporary to differentiate the sums appropriated. The restoration of royal lands gave the Crown additional revenue, but Charles II alienated portions of his lands, which reduced the annual revenue from them to 100,000 in 1663. In 1662, Parliament approved a hearth tax at 2s. per hearth in every dwelling house, which generated about 170,000 a year. Additional duties were laid on wine, beer and other liquors, and proceedings in law courts. Extraordinary taxes, to disband the army and pay off the soldiers, consisted of a poll or capitation tax,51 the old Tudor subsidy, and the monthly assessment of the Commonwealth. The first poll in 1660 collected 252,167. Another in 1666 to finance the Dutch war yielded 500,000. In 1688, when James II was deposed, the principal taxes in force yielded about 1,800,000. The hearth money generated 200,000, the old port duties 577,000, special duties granted in 1685 on wine and vinegar, tobacco and sugar, and various luxury goods from France and India produced 415,000, and internal excises about 620,000. The population of England in 1688 was about 4,900,000, which puts the per capita tax burden at about 7s. 3d. a head.52 National income in England and Wales in 1688 is estimated 51

The poll tax was a principal source of revenue in many of the American colonies. It is necessary to distinguish the incidence of taxation, who pays the tax, from the burden of taxation, on whom it falls. Merchants pay import duties, but can pass some, perhaps most or all, of them on to final consumers in the form of higher prices depending on the products in question and on the elasticity of demand in response to the higher prices resulting from duties. So too with excises for shopkeepers. Some imported and retailed goods, especially wine and spirits, are consumed by visiting businessmen and seamen. To that extent the tax is paid by foreigners. Tonnage is partly borne by resident and non-resident shipowners and partly by consumers of imported products. In attempting to estimate tax burdens, it is relatively straightforward to determine from whom taxes are collected, but not so easy to estimate on whom the burden actually 52

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at 54.4 million, which amounts to 11.1 per head. Per capita taxation of 7s. 3d. amounts to a tax rate of 3.3 percent. This ostensibly moderate rate would rise sharply during the eighteenth century, and was well above those paid in the colonies.53

Summary

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h e de p o s i t ion of James II and the installation of William and Mary on the English throne ended more than five centuries of confl ict over the purse strings of England. By 1688, Parliament controlled the level of taxation and, when it deemed necessary, circumscribed the prerogative and actions of the Crown by statute. The Crown and its officials continued to hold sway in domestic governance, colonial administration, and foreign policy. But since the executive was always short of funds, the need for additional funds gave Parliament a major say in the conduct of government policy. The next chapter sets forth the development of the constitutional and commercial policy of imperial England. In general, the Crown sought to exercise and retain the maximum degree of royal prerogative in colonial affairs. However, as was true of the English constitution and government during the seventeenth century, Parliament came to play an increasing role in colonial policy, especially in the determination of commercial policy.

falls. Higher taxes may result in less production, reduced trade, lower consumption, or some combination of the three in unknown amounts. It is fair to say that residents of England bore almost all English taxes. Th is certainly held for the poll tax, hearth money, consumption of imported goods, and internal excises. Visitors to England would have consumed only a minuscule share of the country’s imports. The distinction between the incidence and burden of taxation becomes more important in such colonies as New York, which derived a large share of their revenue from duties and excises on wine and spirits. 53 Population fi gures are from E. A. Wrigley and R. S. Schofield, Th e Population History of England, 1541–1871: A Reconstruction (London: Edward Arnold, 1981), table A3.3, 531–34. National income data are from B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), 821. An earlier estimate of 50.8 million appears in Phyllis Deane and W. A. Cole, British Economic Growth, 1688–1959: Trends and Structure, 2nd ed. (Cambridge: Cambridge University Press, 1969), table 1, p. 2.

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c h ap t e r 5
Imperial Governance: Constitutional and Commercial Policy, 1607–1688

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he const itut ions of the American colonies, which stipulated governance, the rights of settlers, security arrangements, land grants, relations with the mother country, and other institutions and policies, derived initially from English royal authority.1 All lands in America discovered by English subjects became possessions of the Crown, which had the right to give portions of its territories to persons and organizations of its choice to be administered in accordance with royal decrees. Crown charters granted to corporations, proprietors, and settlers who broke off from Massachusetts to establish their own communities in Connecticut and Rhode Island, or the application of direct royal administration in Virginia after 1624 based on its charters of 1609 and 1612, supplied the legal foundation of the colonies. Colonial constitutions were derivative of, and subordinate to, the English constitution. Imperial governance was based on several factors. One was the prevailing ideas of the day that defined legal, economic, and military imperatives. Another was the rivalry between the Crown and Parliament for influence in English political life. A third was physical reality—how effectively English administrators could manage colonies three thousand miles away. A fourth involved economic interests of England distinct from those of the colonists.

Imperial Governance: Ideas

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s c ho ol of thought known as mercantilism is commonly regarded as an important basis of imperial governance. Historians disagree on the extent to which the doctrine was coherent or fragmented, and whether it guided the development of political and commercial policies or grew out of a patchwork mosaic of practical expedients.2 England’s seventeenth-century 1 A detailed discussion of the imperial constitution, the constitutional arrangements linking England with its overseas possessions or empire from the grant to Sir Humphrey Gilbert in 1578 to the Quebec Act of 1774, appears in A. Berriedale Keith, Constitutional History of the First British Empire (Oxford: Clarendon Press, 1930). 2 Throughout the seventeenth century, English writers and pamphleteers addressed the subjects of trade, shipping, precious metals, and other overseas and domestic economic regulations

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economy witnessed rivalries between farmers and manufacturers, merchants in chartered companies and those who preferred free trade, London and the outports, trading with Portugal and those who wished to trade with France, local artisans and importers of furniture from the East Indies, merchants seeking low freight rates and shipowners seeking high rates, and owners desiring low wages for seamen and the sailors who sought high ones. Despite differing, there was widespread agreement that the growth of England’s that made up the doctrine of mercantilism. The leading writers (with the dates of their most important works in parentheses) who focused on different dimensions of mercantilism are John Wheeler (1601), Gerrard de Malynes (1601, 1622, 1636), Thomas Mun (1621, 1664), Edward Misselden (1622, 1623), Ralph Maddison (1640), Sir Robert Cotton (1651), Henry Robinson (1641, 1652), Josiah Child (1668, 1669), Sir William Temple (1673), John Cary (1695, 1696, 1717), Samuel Clement (1695), John Locke (1691, 1696), John Pollexfen, (1697), and Charles Davenant (1698, 1699). All of them explored how trade, regulation, and money could strengthen national power and wealth. Opponents of their views, who could be classified as free-trade heretics, included Roger Coke (1670, 1671, 1675), Nicholas A. Barbon (1696), Sir Dudley North (1691), and Sir William Petty (1690s). They were well in advance of the free-trade views of Adam Smith (1776). However, they published their tracts after the institutions of mercantilism, especially those regulating colonial trade, were fi rmly in place. The arguments of these authors are presented in Lars Magnusson, Mercantilism: The Shaping of an Economic Language (London and New York: Routledge, 1994); Philip W. Buck, The Politics of Mercantilism (New York: Henry Holt, 1942), 22–30, with a summary list of other seventeenth- and eighteenth-century pamphleteers in his bibliographical notes, 197–99; and Cathy D. Matson, Merchants and Empire: Trading in Colonial New York (Baltimore: Johns Hopkins University Press, 1998), 37–49. Magnusson examines numerous eighteenth-century writers up to Adam Smith, who repudiated mercantilist thinking in favor of free trade, along with several twentieth-century reassessments of mercantilist ideas and trade practices. Magnusson states that mercantilism was not a well-structured doctrine or an all-encompassing phenomenon that governed Eu ropean thinking. However, within seventeenth-century English discussion, there was specific mercantilist language that emphasized the means to achieve national wealth and power through trade and the accumulation of money. Th is view was reinforced by the observation that densely populated Holland had achieved great wealth through trade and manufacturing, and that more-efficient Dutch shipping threatened the growth of English commerce. To eliminate this threat, three Anglo-Dutch wars were fought between 1652 and 1674. Buck argues that the pamphleteers shared a general consensus in favor of extensive control over foreign trade through the use of tariff s, bounties, prohibitions, and regulations to secure a favorable balance of trade. Mercantilism also included control of the domestic economy, for example, keeping wages low, establishing work houses to avoid the unemployed and idle from becoming a burden on the nation, and controlling domestic consumption, especially luxuries, but the influence of mercantilism was greatest on trade and colonial regulation. Matson’s interpretation of the contemporary literature is that many authors, using tiny Holland as an example, supported free trade and rejected the need to keep domestic wages low. Their views were defeated by coalitions of parliamentary representatives, which enacted legislation to keep colonies undeveloped and staples-producing. Matson’s interpretation of mercantilist thinking serves as background for her treatment of how New York colonists sometimes sought protection and sometimes greater freedom in their international and domestic trade. The various Navigation Acts, royal orders, and regulations that constituted the mercantile system are described in the last segment of this chapter.

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world trade and the development of colonies would be beneficial, especially in protecting the nation from war time interruptions in commerce. Perhaps a good place to begin is with a dictionary definition: mercantilism is “[t]he theory and system of political economy prevailing in Europe after feudalism, based on national policies of accumulating bullion, establishing colonies and a merchant marine, and developing industry and a favorable balance of trade.”3

Balance of Trade

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h r o ug ho u t t h e seventeenth century, Europe was plagued with wars of political and dynastic rivalries. England’s rulers deemed the creation of a powerful state vital to national defense and some ability to intervene abroad when national interests were threatened. Even though English monarchs faced difficulty securing funds from Parliament to intervene in continental confl icts, the country was involved in nine foreign wars in the seventeenth century. Military forces required money. As England had no gold or silver of its own, foreign trade and the accumulation of precious metals were seen as the keystone to national security. To acquire specie, English pamphleteers emphasized a favorable balance of trade. The principle that lay at the heart of mercantilism was a favorable balance of trade that would produce a net inflow of silver and gold. An abundant supply of precious metals, especially silver coin, would enable the government to tax and borrow to finance its military operations. Silver coin, used to pay wages and suppliers, was deemed central to domestic prosperity.4 An outflow of silver, a decline in the domestic money supply, was believed to retard domestic production and employment. Englishmen perceived the flow of precious metals into Spain from its American colonies as the basis of its strength and power, and thereby a threat to English security and commerce. The English government tried to ban the export of specie but found it difficult to enforce. Indeed, in 1662 it permitted the East India Company to export specie to finance its trading activities in Asia. The general view of the government and informed opinion was that England had to acquire sufficient specie through an overall favorable balance of trade to offset this drain.5 3 The American Heritage College Dictionary, 3rd ed. (Boston and New York: Houghton Mifflin, 1993), 852. 4 The issue of paper money by the Bank of England, a private corporation, did not commence until 1694. The establishment of the Bank of England is discussed in part III, chapter 10. 5 Contemporary commentators focused on the balance of trade, rather than on the overall balance of payments, which would take into account earnings from invisible ser vices such as

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The Importance of Colonies in the Balance of Trade

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o c r eat e a strong state required some degree of independence from foreign sources of vital raw materials (e.g., timber for masts and spars on ships) and goods (e.g., cannon).6 The establishment of English colonies was based partly on the view that overseas settlements could supply numerous products to England. Since England could pay for raw materials from its colonies with manufactured goods, precious metals would not be drained out of England. As well, English colonies would prevent the Spanish, French, and Dutch from monopolizing the resources that could be found in America, Africa, and Asia. A fundamental mercantilist principle was that colonies should supply useful commodities to strengthen the mother country. In order of importance were precious metals,7 commodities that could not be produced in England which had to be imported from foreign countries, naval stores required to maintain a merchant marine and navy, and products that could be profitably traded in international markets. Mercantilism provided the ideas that governed colonial economic relations. These were that colonial interests were subordinate to the mother country, that trade with and of its colonies should be restricted to English subjects, that the surplus products of a colony should be sent to the mother country, and that the trade and resources of a colony should be kept out of the hands of rivals. Colonies were to provide a captive market for English freight and insurance and other methods of payment such as bills of exchange, barter, and mutual book credit. 6 Th is section on mercantilism draws from E. A. J. Johnson, American Economic Thought in the Seventeenth Century (London: P. S. King, 1932), 41–49; George Louis Beer, The Commercial Policy of England toward the American Colonies, Studies in History, Economics, and Public Law, vol. 3, no. 2 (New York: Columbia College, 1893), 3:8–9, 36–40, 43–45; Charles McLean Andrews, The Colonial Period of American History, vol. 4, England’s Commercial and Colonial Policy (New Haven and London: Yale University Press, 1938 and 1964), 2–3 and throughout; Lawrence A. Harper, The English Navigation Laws: A Seventeenth-Century Experiment in Social Engineering (New York: Columbia University Press, 1939), chapter 2, “The Mercantile Mind,” 9–18; Buck, The Politics of Mercantilism; Thomas C. Barrow, Trade and Empire: The British Customs Service in Colonial America, 1660–1775 (Cambridge, MA: Harvard University Press, 1967), 1–3; and C. G. A. Clay, Economic Expansion and Social Change: England, 1500–1700, vol. 2, Industry, Trade and Government (Cambridge: Cambridge University Press, 1984), chapter 10, “England and the Outside World,” 103–202, and chapter 11, “The Authorities and the Economy,” 203–50. It is important to view mercantilism through the thinking and writing of the day, not from the vantage of modern economic theory which holds that free trade is more conducive to prosperity than protectionism. The influence of mercantilism on policy reflected seventeenth- and eighteenth-century thinking that molded attitudes toward trade and relations with the colonies. 7 On this point, England forbade the export of sterling coins to its American colonies, which were to be a source of precious metals, not a drain on the mother country.

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manufactured goods. Monopolizing trade with its colonies could stimulate domestic employment and industry, thereby reducing industrial unrest, poverty, and idleness. In political terms, colonies were regarded as possessions, not an integral component of the English state. Even though colonists were granted the political rights of Englishmen, colonies were to be administered for the economic and military benefit of the mother country.

Shipping and Seamen

A

s e c on d i m p ortant principle of mercantilist doctrine was the development of England as a naval power. Because England was an island nation, its navy and merchant marine were central to its strength and security. The Royal Navy never constituted more than a third of English sea power, yet in the late seventeenth century it accounted for a quarter of royal expenditure. England’s naval strength rested on the ability to commandeer merchant vessels and their seamen, with payment to owners and sailors. More commerce meant more ships and seamen, which meant greater security. Developing a large merchant marine became an object of national policy. The provision of naval stores was especially important inasmuch as the development of a merchant marine and training of seamen were integral to the growth in foreign trade. Colonies were important to the growth of shipping. Their remoteness required large vessels for shipment of goods. Colonial sources of masts, tar, rosin, pitch, and cordage would reduce dependence on unreliable foreign sources. England and its colonies could become major builders of ships, which could be sold to other countries for specie. Trade with the colonies would increase the number of skilled seamen, shipwrights, and builders. Fishing also played an important role in expanding England’s merchant marine. Plenty of fishermen meant a large number of experienced seamen. In the middle of the sixteenth century, English monarchs encouraged the development of the Newfoundland fishery and expansion of the fishing industry.8 An act of 1548 regarding Lent was extended in an act of 1562–63 for “the better maintenance and encrease of the navy,” adding Wednesdays to Saturdays as compulsory fish days. The latter act also permitted any English subject for the four years beginning April 1, 1564, to transport fish in any British ship without paying customs, a provision that was revived and continued for six years in 1570.

8 See Harold A. Innis, The Cod Fisheries: The History of an International Economy, rev. ed. (Toronto: University of Toronto Press, 1954).

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England’s development of the Newfoundland fishery achieved several desirable results. It enabled the country to increase its shipping of salted dry fish and its indirect trade by using ships released in the long closed winter season. Dried cod kept well, which made it suitable for sailors on ships in warm southern waters. It expanded trade because English fishermen had to acquire solar salt produced in southern continental countries. Growing demand for cod required more ships and men. Rising prices in Catholic Spain due to the inflow of American silver provided an attractive market for fish, which enabled England to earn a share of Spanish specie. Newfoundland could also serve as a base in case of war with France or Spain. The expansion of fishing to the Gulf of Maine and New England was another source of trade and specie. It was in part the possibility of fishing that attracted the Pilgrims to Plymouth. The colonial fishing industry began to develop in earnest in New England in 1635. To encourage its prosperity, the colonial government of Massachusetts exempted vessels participating in the trade from taxation for seven years beginning in 1639. The cost of provisioning a ship also provided economic opportunities for the development of colonies. Provisioning and outfitting a hundred-ton ship with forty men ran to 140 sterling a year. Settlers could provide water, food, naval stores, and other products required to operate a ship.

Revenue and Population

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he de v e l opment of colonies also meant more revenue for England once initial exemptions from customs duties expired. Several colonial commodities imported into England could generate substantial duties to the Crown without a vote of Parliament. Another benefit was that colonies could provide an outlet for surplus population, which was considered a problem in the early decades of the seventeenth century. England could rid itself of convicts and the unemployed by transporting them to the colonies.

Imperial Governance: Constitutional Issues

I

mper ial g ov er nanc e raised several constitutional issues. First was how far royal prerogative extended to colonies once chartered. Second was the exercise of parliamentary authority to intervene in colonial affairs— whether to restrict royal prerogative or enact laws to regulate the political and commercial affairs of the colonies. The Long Parliament in mid-century shifted the locus of power from the Crown to Parliament; the Restoration restored some of the Crown’s previous authority, after which the exercise of authority by the Crown and Parliament depended on their mutual or separate interest in colonial affairs. [ 97 ]

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From the time of King Henry VII’s grant of letters patent of exploration and settlement to John Cabot in 1497, the Crown’s authority to make proprietary grants and establish companies for overseas trade and settlement rested on unchallenged royal prerogative. Parliament was content to leave the establishment of overseas colonies to the Crown. From time to time, Parliament encroached on the Crown’s prerogative with legislation that controlled the actions of English subjects and English corporations. At other times, Parliament intervened when a statute was deemed necessary to strengthen royal orders. The colonies were deemed politically and economical ly subordinate to the mother country.9 Although colonial governments often enjoyed considerable autonomy, the English constitution as interpreted in English courts took precedence over colonial constitutions and judgments of colonial courts. Acts of Parliament were superior to colonial legislation. The Crown and/or Parliament could regulate colonial commerce and trade by royal instructions or statute, which could be heavy- or light-handed as circumstances warranted. Historical relations with Ireland helped define England’s relations with its American colonies. Briefly, English rule over Ireland began with its conquest by King Henry II in 1171, which was followed by King John’s application of English common law to Ireland administered by English judges in courts established in Dublin. The War of the Roses between the houses of York and Lancaster ended in 1485, with Henry VII of Lancaster becoming the fi rst Tudor king of England. Henry appointed Sir Edward Poynings as his lord deputy of Ireland. Poynings arrived in 1494 with the goal of forcing the Anglo-Irish lords, many of whom were Yorkist supporters, to submit to Henry’s authority. Sir Edward convened a parliament at Drogheda, which met on December 1, 1494. Under his command, it enacted the Statute of Drogheda or “Poynings’ Law.”10 9

Massachusetts attempted to assert its inde pendence from En gland on the basis that its charter had been carried to the New World, which relocated its constitutional authority outside En gland. Th e rapid development of a self- assertive inde pendent colony quickly became apparent to Charles I. Bishop Laud’s Commission, which Charles appointed in 1634, was granted wide powers of legislation and judicial and executive control of the colonies, with the additional instruction to further the interest of the Church of En gland. A judgment on quo warranto was obtained in 1637, but it proved ineff ec tive because the patentees who were in Massachusetts were not within the control of En glish courts. Accordingly, the Massachusetts Bay Company disregarded several requests to return its charter. Finally, in 1684, the Crown was able to revoke its charter, which temporarily ended its claims of autonomy. 10 The Statutes at Large, Passed in the Parliaments Held in Ireland: From the Th ird Year of Edward the Second, A.D. 1310, to the Twenty-Sixth Year of George the Third, A.D. 1786 Inclusive (Dublin: G. Grierson, 1765–1801), 1:44: 10 Henry VII, c. 4. Text appearing in quotation marks has been translated into modern English.

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Poynings’ Law emasculated Ireland’s parliament. It set forth the process under which Ireland’s parliament could convene and enact legislation. First, Irish parliamentarians had to request the king’s lieutenant and council in Ireland to inform the Crown of all proposed legislation they wished to enact. Next, the king and his council had to approve the desired laws. On those conditions a parliament of Ireland would be summoned under the great seal of England. Poynings’ Law stipulated that “Any parliament not satisfying these conditions is deemed void and of no effect in law,” and that all recent laws enacted by Parliament in England would apply in Ireland.11 Poynings’ Law reduced the functions of the Irish Parliament to acceptance or rejection of measures in a form approved in England. Sometimes the Crown recommended or drafted laws for Ireland that it wished to impose. When the English government attempted to apply Poynings’ Law to several of its American colonies, it set off alarm bells among the colonists, especially regarding taxation, who had been granted the rights of Englishmen by royal ordinance or charter.

Royal Prerogative versus Parliament

R

oyal pr er o g at iv e generally governed colonial affairs until the outbreak of the English Civil War, when Parliament seized executive power and claimed the right to legislate without royal assent. Prerogative was used to direct the shipment of specific colonial products to England. A series of royal orders from 1621 to 1639 confined tobacco exports to London, extended thereafter to other English ports. Royal orders to Governor John Harvey of Virginia expanded the rule to all of the colony’s produce. To enforce these orders, Virginia was required to take bond from ships transporting tobacco to land it in England. The colony established the office of Registrar of Exports in 1636 to collect and provide information. In practice, enforcement of royal orders proved difficult, enabling the Dutch to gain a foothold in Virginia. To curtail Dutch competition in the colonial trade, the Privy Council urged in 1633 that trade be conducted wholly in English ships, but this, too, was widely disregarded. Prerogative was inadequate to control trade and shipping, but Charles was reluctant to ask for an act of Parliament to strengthen royal instructions. In an ordinance of 1643, Parliament created a commission of six lords and twelve commoners to manage colonial affairs. The subordination of overseas territories to Parliament was first expressed in an act of October 3, 1650, which prohibited trade with the insurgent, royal-sympathizing colonies of Virginia, Bermuda, Barbados, and Antigua; the act defined these 11

Poynings’ Law was not rescinded until 1782.

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lands as colonies and plantations subordinate to and dependent on England. Parliament passed a follow-up measure, the Navigation Act of 1651, which directly regulated trade with the colonies. Gradually the doctrine of the supremacy of imperial acts by Parliament took hold. Any acts passed in the colonies or plantations repugnant to the laws of England were declared illegal, null, and void. The growth of legislation gradually weakened the prerogative. Despite Parliament’s growing importance in setting government policy during the seventeenth century and ultimate supremacy after 1688, it generally relegated to the Crown and officers of state the responsibility for management of colonial affairs after the Stuart Restoration. Parliament largely remained aloof from or indifferent to colonial matters until well into the eighteenth century, although from time to time it enacted laws to protect the interests of England’s rising commercial classes.

Royal Prerogative versus Colonial Self-Government

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oyal au t hor i t y over the colonies entailed several legal issues. How far did prerogative extend to Englishmen who settled abroad on the basis of royal authority? Once a charter was granted, could the rights of Englishmen be revoked by royal decree? Were English settlers as secure in their liberties as those in England itself? As the fount of the colonial constitution, could the Crown exercise greater authority than it could in England where Parliament was an equal partner in government? In particular, could the Crown legislate on behalf of a colony as in Poynings’ Law, or was it confined to granting a colony of settlers a legislative system based on the English model, after which its authority was permanently restricted? Although this book is concerned only with the thirteen original colonies, an episode in the constitutional development of Jamaica shortly after its conquest from Spain in 1655 demonstrates how control over taxation was the key issue in the rise of local control and power, and why England’s repeated attempts to wrest this power from its mainland colonies led to the American Revolution. Jamaica set a precedent that prevented the Crown from applying Poynings’ Law to any of its American colonies, even though it continued to try in Virginia in the late 1670s and other colonies after 1688.

Jamaica

C

r omw e l l’s f or c e s seized Jamaica from Spain in 1655.12 Shortly after the restoration of the monarchy, Charles II issued a proclamation

12

Keith, Constitutional History of the First British Empire, 11–17, and Agnes M. Whitson, The Constitutional Development of Jamaica—1660 to 1729 (Manchester: Manchester University Press, 1929).

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that stipulated that children of natural-born English subjects living in Jamaica would be regarded as free denizens of England with all the same privileges as freeborn subjects in England. He followed the precedent of a provision in the 1606 Virginia charter rather than seek an act of Parliament. Although Jamaica was a conquered colony, rather than one settled on the basis of a royal charter, its colonists were granted the right to legislate based on the commission and instructions given the island’s fi rst and succeeding governors.13 In March 1675, Charles II granted the responsibility for colonial affairs to a committee of the Privy Council known as the Lords of Trade. The committee would have to deal with the constitutional issues emanating from Jamaica. An important principle of English financial policy was that local taxation should bear the full cost of colonial administration. The object of this rule was to eliminate any burden on crown revenues, which were always under duress. A necessary condition for effective royal control was securing a permanent local revenue from the colonies for the support of their colonial governments. A permanent revenue would ensure that governors could carry out instructions of the Crown and obey orders from England without being subject to terms and conditions imposed by local assemblies in exchange for grants of revenue to pay salaries and other administrative costs. By the 1670s, many of the American colonies had been founded, and the actions of local assemblies were proving troublesome to the Crown. The case of Jamaica was closely watched in the American colonies in that it presaged possible royal moves on their autonomy. Under a court ruling of 1606, English monarchs were empowered to impose what laws and constitution they pleased on a conquered colony and conquered subjects had no inherent right to English law, in marked contrast with royally chartered colonial settlements. But if such rights were granted and no power to revoke them was reserved in the royal ordinance applying to Jamaica, could the Crown alter Jamaica’s constitution or legislate for the colony? Civil government, including an elected assembly, was instituted in Jamaica in 1661.14 A full-blown constitutional crisis developed during 1676– 80. Jamaica’s legislature claimed the right to legislate for the colony and control local taxation. In 1675 it assumed the right to appropriate revenue from quitrents belonging to the king and to appropriate tax revenue for the use of the island. In the legislation, the legislature omitted any mention of the king, denied the right of his officials to take charge of the revenue, and 13 The constitutional relevance of a governor’s commission and royal instructions is explained in chapter 6. 14 The constitutional dispute between Jamaica and England that follows is summarized from Whitson, The Constitutional Development of Jamaica, 70–109.

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hampered his choice of officers by requiring exorbitant security from appointees. In 1676, the recently created Lords of Trade began its review of laws sent from Jamaica the previous year. It determined that some acts confl icted with the rights of the Crown, especially those dealing with the local use of crown revenue and the high security required of royal appointees. In 1677, the Lords of Trade began extensive deliberations on Jamaica. They decided that applying Poynings’ Law would curb Jamaican legislation that ran counter to royal interests. Lord Vaughn, Jamaica’s governor, had complained in correspondence with London of difficulties with both houses of the legislature, the Assembly and the Council, which obstructed him at every turn, especially in grants of supply. A new governor, Charles Howard, Lord Carlisle, was appointed to carry with him a number of bills for passage in Jamaica along the lines of Poynings’ Law intended to alter the colony’s constitutional arrangements. No legislative session was to be called without first obtaining royal approval. Drafts of legislation were to be first submitted to the king for review and, after revision, returned for enactment in final form. Language stipulating that acts previously approved by the governor and the legislature in Jamaica was to be altered to state that acts were approved by the Crown with the consent of the legislature. All monies appropriated by whatever means were for the use of the Crown without any mention of their use. Revenue was to be paid to the king’s receiver-general and allocated by the governor and his Council. All language stating that local taxes were for the use of the island was struck out. On November 16, 1677, the full Privy Council approved the report of the Lords of Trade and prepared instructions for Carlisle. The legal basis of the report stipulated that the Crown had the right to alter the system of lawmaking in Jamaica. The colony’s constitution would be based on the terms of the governor’s commission and instructions. The Crown could alter Jamaica’s constitutional arrangements when it wrote a new governor’s commission. On this view, previous royal orders could be modified. Although an assembly of freeholders that had the power to make laws with the consent of the governor and Council had been in force for several years, future legislation would follow Poynings’ Law. The Lords of Trade opined that when a governor’s commission was revoked, the colony’s constitutional privileges in his commission ceased to apply. Going beyond the application of Poynings’ Law to Ireland, the Lords of Trade considered it unnecessary for Jamaica’s legislature to pass an act similar to Poynings’ Law to remove its legislative freedom; it was sufficient for the Crown to alter the powers given Vaughn’s successor. Governor Vaughn had failed to obtain any grants of revenue from Jamaica’s Assembly, finding it difficult to govern with an empty treasury. His health began to fail and he left the colony in March 1678. Carlisle arrived on [ 102 ]

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July 18, 1678, summoned the Assembly, and opened it on September 2 with the hope of securing its consent to the new arrangements. To Carlisle’s distress, the Assembly held the upper hand. The Treasury was empty. For over a year no import duties had been collected and quitrents were in arrears. The planters were determined not to pay any taxes imposed by proclamation or ordinance and to preserve their legislative freedom. Distance and the time required for communication between Jamaica and England meant that the new lawmaking procedures were unworkable, especially if revenue bills were valid for only one year. Standing its ground, the Assembly refused to assent to the bills laid before it by Carlisle. In repeated sessions in 1678 and 1679, the Assembly insisted that it alone controlled finance. Conditions in England precluded immediate consideration of the issue. Parliament impeached the king’s chief minister in 1678. The king dissolved Parliament in January 1679, called new elections, but faced an increasingly hostile, newly seated Commons. The Lords of Trade were unable to devote any time to Carlisle’s problems. Indeed, Carlisle himself recommended a return to the old system. The issue was thus framed. Had the Crown deprived itself of the power it originally possessed to establish what kind of government it chose in Jamaica? The Lords of Trade did not regard the governor’s commissions and instructions as forever binding on the king. On May 28, 1679, they resolved that colonists could only claim these privileges if they had been granted by charter or other solemn instruments under the great seal, and that the Crown was not bound by previous commissions and instructions to governors under which the colony had been governed since 1661. The Lords of Trade asserted that the right of the Assembly of Jamaica to legislate derived from the temporary and probationary authority of the governor, not by any underlying constitutional grant. Not having heard from England, in July 1679 Carlisle called an assembly to secure a revenue grant—the appearance of eight French warships off Port Royal had created panic—to strengthen the island’s defenses. He sought a grant of eighteen months. The Assembly offered six months, but as part of the legislation it nominated a king’s collector and provided for the accounts to be rendered to it. When the receiver-general refused to submit his accounts for the Assembly’s inspection, it resolved that it had the sole right of originating bills of supply. Th is resolution closely followed in time a similar resolution of the English House of Commons. The Assembly rejected all of Carlisle’s proposed bills. The Council, for its part, disliked the new arrangements as there was no mention of it under the provisions of Poynings’ Law in Jamaica. Carlisle grew increasingly sympathetic to local concerns. Without money he could not govern. He dispatched the leader of the opposition in the Council and six members of the Assembly to England to plead their [ 103 ]

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cause before the king and Privy Council. Between April and October 1680, the issue received serious scrutiny. The Lords of Trade consulted two former governors, Lord Vaughn and Sir Thomas Lynch, on conditions in Jamaica and the practice of government since 1660. Lynch reported that Jamaicans believed that they enjoyed the rights of Englishmen, that the king had granted them these rights, that they had been confirmed by his commissions to subsequent governors, and that other English colonies had assemblies and the power to originate laws. Moreover, as a practical matter, even if the governor’s council agreed to continue a revenue act by proclamation, judges and juries would constantly decide against royal collectors and orders from England would be ineffective. The lords also questioned several Jamaican merchants whom they had summoned to attend on economic conditions in the island, which were described as gloomy. Chief Justice Francis North of England joined the deliberations and was asked to rule on the constitutional issues. On October 27, 1680, he reported to the committee that the Jamaicans would agree to enact a perpetual revenue to pay the governor’s salary and another for seven years for other charges of the government if the previous system of lawmaking was restored. Without reaching a final legal verdict, the following day the Lords of Trade announced that the current method of legislation in Barbados be applied to Jamaica. This was a euphemism for a complete return to the old constitutional system. Financing a colony, which required the consent of local taxpayers, triumphed over royal prerogative. The law officers of the Crown were either unwilling or unable to support the claims of the Lords of Trade. The political struggle ended when the new governor obtained a grant of revenue for twenty-one years in return for crown confirmation, for a like period, of a large number of acts desired by the Assembly. That agreement was renewed in 1703.15 The Assembly of Jamaica regarded itself as the local counterpart of the House of Commons, determined to gain like powers and privileges. Its officials and procedures were copied, as far as possible, from those of the Com15 Another compromise in 1728, passage of a permanent revenue act in return for royal confi rmation of a large number of acts, forestalled a defi nitive legal ruling until 1769. In that year, Lord Mansfield sought to resolve the issue by defi ning Jamaica as a settled, not conquered, colony on the grounds that the Spaniards had evacuated it before it was settled. After considerable delay, the important case of Campbell v. Hall, decided unanimously by the court of King’s Bench on November 28, 1774, settled the issue. It ruled that the promise of an assembly deprived the king of the power to legislate, and that the possession by the settlers through their representatives of a negative voice in all legislation and taxation could not be recalled. Any tax could only be imposed by an act of the local assembly or of Parliament, but not by royal prerogative. Nor could the king exempt inhabitants from the laws of trade or the authority of Parliament, or give individuals privileges not enjoyed by his other subjects. The powers of the Crown were subordinate to Parliament.

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mons. The virtual surrender of the Privy Council to the Assembly of Jamaica acknowledged that once certain constitutional privileges had been granted, even if by the weaker legal status of a royal ordinance and implemented in a governor’s commission and instructions, the Crown had forever deprived itself of absolute power. Thereafter, the issue was the effective power of locally elected representatives against colonial administration directed from England.

Imperial Governance: Administration

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he administ rat ion of England’s empire evolved from the Crown’s haphazard appointment of a succession of ad hoc committees in the first four decades of the seventeenth century to more formal bodies after the Stuart Restoration in 1660. Between 1660 and 1688, the structure of imperial governance gradually took shape. Parliament reenacted and newly enacted a series of laws, the Navigation Acts, that regulated colonial trade. The Crown established a succession of committees, some required by the acts, to impose greater order on the management of colonial affairs.16

James I and Charles I

E

ar ly i n the reign of James I, the Privy Council was the sole adviser of the Crown in colonial matters, but it was too large and too busy to spend much time on colonial affairs.17 A number of commissions were created to deal with Virginia both before and after its charter was vacated in 1624, but these were generally ineffective. Communications and instructions between Virginia and England largely bypassed it, going to and from the Privy Council, the secretary of state, or directly to the king, the sources of real authority.

The Long Parliament

T

h e e n g l i s h Civil War interrupted the Crown’s attempt to rely on royal prerogative to control colonial government and trade. In 1643 Parliament appointed the Earl of Warwick as governor-in-chief and Lord

16

These measures culminated with the Navigation Act of 1696, which provided for a network of vice-admiralty courts in the colonies, the dispatch of royal officers from England to collect revenues due the Crown, and the transfer of colonial customs officials into the English customs ser vice. To administer the 1696 act, King William III established the Board of Trade and Plantations, which managed colonial affairs for the next eighty-six years. The act of 1696 and the board’s early activities are discussed in part III. 17 This brief chronology follows Keith, Constitutional History of the First British Empire, 18–22.

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High Admiral of all the colonies in America, granting him wide authority to appoint and remove, or delegate authority to, colonial officials. His commission was replaced by the Council of State shortly after the establishment of the Commonwealth. Parliament created a Council of Trade in 1650, which ceased activities in 1652. The emergence of the Protectorate transformed the Council of State into Cromwell’s Privy Council, which established committees to deal with such specific colonial matters as the administration of Jamaica after its conquest in 1655. A standing committee was added in 1656 to supervise colonial affairs, but Cromwell never tried to impose administrative uniformity on the colonies. The trade acts of 1650–51 passed by the Long Parliament were England’s first comprehensive statutes regulating colonial trade. By 1660 the colonies had developed a sense of independence that precluded effective control on the basis of royal prerogative. Royal commissions were often disregarded by colonial officials, especially in New England. Successful imperial governance required statute law, which prompted Parliament to pass a series of acts that placed colonial trade on strict legal footing.

The Stuart Restoration

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h e st uart Restoration witnessed strengthened imperial organization and policy.18 Charles II inherited increasingly independent New England colonies, an unsettled form of government in Jamaica, and problems with his other American colonies. During his fi rst year, the Privy Council established separate bodies that dealt with the Ca ribbean, Jamaica, and New England whose decisions were to be carried out by the secretary of state. He was assisted by the creation on December 1, 1660, of the Council for Foreign Plantations, which included prominent colonial officials and several private individuals with expertise in colonial matters. The council was instructed to introduce a more uniform system of government in the colonies and to secure observation of the Navigation Act of 1660.19 At the same time, the king established a Council for Trade, whose members largely overlapped those of the Council for Foreign Plantations. The functions of both councils were advisory to the Privy Council, and because they lacked executive authority, their activity ceased at the end of 1664. From that point, the Privy Council resumed full authority over colonial affairs through the work of its own committees. In 1668 it established four committees, of which one had responsibility for England’s worldwide trade and its 18 The discussion in the following paragraphs draws from Keith, Constitutional History of the First British Empire, 59–61. 19 The Navigation Acts of 1660 (which, in large measure, validated the Long Parliament’s act of 1651), 1662, 1663, 1673, and 1675 are described in the last segment of this chapter.

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colonies. This assignment was too great for the committee, which brought about the revival of the Council for Trade in the same year and the creation of a Council for the Colonies in 1670. The latter council, which was instructed to develop trade in the colonies, had a small staff whose salaries and costs amounted to 6,500. In 1672 it was reformulated as a Council for Trade and Plantations. Frequent change in the administrative structure of imperial regulation was not conducive to effective enforcement of the trade acts. The new body scrutinized colonial legislation, prepared instructions for royal governors, sought information on colonial conditions, and examined complaints and memorials from the colonies, but, in keeping with its predecessors, it exercised no direct authority. Its reports were advisory to the Privy Council, which also had responsibility for foreign affairs, military affairs, and petitions and grievances of English subjects. Due to its cost and lack of executive power, the Council for Trade and Plantations was abolished on December 21, 1674. England’s public finances were in dire straits in the 1670s. In early 1672, crown borrowing had pushed the government’s debt to more than 1,173,000, when it suspended interest payments and repayment of principal to its creditors. Parliament intensified its scrutiny of public expenditure. Concern for economy in government reinforced the policy of colonial self-support. England’s treasury was not to be burdened with colonial expenses. Defense of the colonies from France, Spain, and Indians required some recourse to the English Exchequer, but military outlays to defend the colonies were limited and temporary. The use of military forces to suppress a rebellion in Virginia and sustain militias in several Ca ribbean colonies met with withdrawal and disbandment at the earliest opportunity. The only force supported with English funds was a grant of 1,000 to the garrison in New York, which was withdrawn in 1688. Only in Virginia was the Crown able to secure a standing source of revenue to support the local militia. The work of the Council for Trade and Plantations devolved on the Privy Council’s Committee for Trade and Plantations. On March 12, 1675, Charles II named a committee of nine of its members to deal with colonial affairs, instructed it to meet weekly, and required that a clerk of the Privy Council regularly attend. For the first time in the century, a royal committee developed a permanent organization with clerks, kept a journal of proceedings, systematically filed papers for a record, and expeditiously instructed and corresponded with colonial governors. The 1675 committee enabled the government to develop an administration through which it could exercise royal authority in the colonies. In 1688 all the lords of the Privy Council were made a standing Committee for Trade and Foreign Plantations. The period 1660–88 combined the legislature power of Parliament to regulate colonial trade with reserving to the Crown the prerogative of [ 107 ]

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colonial administration and judicial authority. To carry out imperial policy expressed in the Navigation Acts, it had to be effectively administered by crown officials. These included the Privy Council, the secretary of state, successive trade committees, the Admiralty and War Office, the Treasury, and the Commissioners of Customs. The latter placed its first royal officer in Virginia in 1671 to enforce provisions in the Navigation Acts regarding the transport of certain enumerated products and collection of duties. All colonial governors were instructed to enforce the trade acts, but implementation was lax. Oaths of enforcement were not administered to governors until 1677. Governors often delegated their work to local naval officers. Th is proved unsatisfactory, so appointment of naval officers, though local persons, was transferred to the Crown. Th is was no more effective because the Crown allowed English officers to appoint local deputies. Collection of customs duties remained lax. To remedy this problem, the Commissioners of Customs dispatched collectors to all the colonies between 1673 and 1678. To ensure accuracy and honesty, a comptroller and surveyor-general were appointed for each district to countersign the collector’s accounts. The new post of Surveyor-General of the Customs in America was created, which was paid from the imperial customs establishment. Otherwise, most collectors and comptrollers were paid a percentage of the revenue they collected. The principle of colonial self-support remained paramount. By statute, customs officers were empowered only to enforce the plantation duty act of 1673. The Navigation Acts of 1660 and 1663, the backbone of the trade acts, made supervision of shipping in America the responsibility of colonial governors. Collectors as imperial agents often found themselves in confl ict with local governments, which were more concerned with the welfare of the settlers than complying with the provisions of the acts. Evasion, smuggling, piracy, and other violations were widespread. Governors who became large landowners and businessmen in several colonies were more concerned with retaining the support of local leaders than complying with bureaucratic mandates issued three thousand miles away. The act of 1660 authorized commanders of ships of war to seize foreign vessels trading with the colonies and deliver them to admiralty or viceadmiralty courts, where they would not be subject to the procedures in the colonial common law courts. Admiralty courts acted without juries. Convictions resulted in a division of revenue between the Crown and the naval vessel. If a ship were seized in a colony, the proceeds would be evenly divided among the Crown, the governor, and the seizer or informer. Admiralty courts had been created during the Protectorate to condemn prizes of war and foreign ships found violating the act of 1651. The act of 1660 continued the courts. The creation and conduct of vice-admiralty courts varied [ 108 ]

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among the colonies. The Duke of York was given power to create such courts in his jurisdiction in 1662. When New Hampshire became a royal colony, its governor was made vice-admiral and a court was established. Some colonies, including Connecticut and Rhode Island, acted through their executive councils. Although duties imposed by the acts were modest, and most of the funds collected in the colonies were used to pay local officials, enforcement was difficult. Colonial governors often chose to disregard the acts, interfered with the efforts of royal officials, or enforced them only with great difficulty. Local common law courts tended to rule in favor of owners and masters of seized vessels, ruling to invalidate the judgments of vice-admiralty courts, halt proceedings in them, or use public funds to reimburse losses from their rulings. 20 Collections of customs duties fell short of expectations. Accounts are missing for some years, making it impossible to prepare a statement of costs and revenue. Records for the years between 1681 and 1684 show that the American colonies transferred a total of 944 to the English Exchequer, an average of 315 a year. Of that, roughly two-thirds was allowed to customs officers as salary. The only two colonies reporting during that period were tobacco-exporting Virginia and Maryland. Accounts are intermittent for the Carolinas and New Jersey, which show very small sums of revenue, almost all of which was used for local expenses. 21 20

Between 1680 and the end of 1682, Edward Randolph, chief royal customs officer in New England, made thirty-six seizures that he took to trial. All but two were acquitted. Legal action was taken against Randolph after he seized an Irish ship, whose captain instituted an 800 personal suit against him. He missed being imprisoned only by the interference of the governor. Collectors had to depend on the same colonial courts that willingly ordered his imprisonment to prosecute whatever seizures they made. Michael G. Hall, Edward Randolph and the American Colonies, 1676–1703 (Chapel Hill: University of North Carolina Press, 1960), 57. Lawrence A. Harper suggests that Randolph’s low conviction rate in New England was not typical of seizures overall. He states that information he collected disclosed that juries convicted illegitimate traders 54.4 percent of the time overall, in twenty-five out of forty-six trials. Rates were as follows: in the West Indies, seven of nine; New York, three of six; Pennsylvania, zero of one; Maryland, four of five; Virginia, five of six; and New England, six of nineteen. The conviction rate rises to 69.6 percent when Randolph’s seizures in New England are excluded. Harper does not indicate in the text which years are encompassed during these seizures, referring the reader to numerous books and articles in his bibliography. Harper’s numbers for New England differ from those reported by Hall during 1660–82. See The English Navigation Laws, 195. In the development of English law, common law courts exercised superintendency over other courts to ensure that the latter remained within their bounds. Common law courts could issue prohibitions to restrain other courts and, if they found that officials in other courts exceeded their jurisdiction, could punish in the common law courts those who committed violations. Judges and juries in colonial common law courts invariably found in favor of the colonists in suits brought by crown officials. 21 Barrow, Trade and Empire, 19.

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Imperial Governance: Economic and Commercial Policy

A

pr incipal tool of imperial commercial policy during 1607–88 was regulation of shipping. In the late fourteenth century, during the reign of Richard II, Parliament passed a number of measures to restrict the shipment of merchandise in or out of England to English vessels. 22 Subsequent legislation alternately strengthened or relaxed previous regulations. At times foreigners were exempted from the regulations, especially when English ships were unavailable; at other times, foreigners were more strictly regulated. During Elizabeth’s reign, legislation granted preferential duties on goods imported in English vessels staffed with an English captain and predominantly English crews. Other acts regulated apprentice laws of fishermen, gunners, and shipwrights; extended the discipline of soldiers to seamen and gunners; required planting of fl ax for sails and cordage; restricted the coastal trade to English vessels; granted preference to English-owned shipping in the carriage of certain commodities; encouraged the development of fisheries (e.g., fishermen could not be impressed except as provided by law, fishermen were relieved from taxation, packing and sale of wholesome fish were regulated, and the number of fi sh days was increased); and granted charters to trading companies to encourage shipping.

Royal Prerogative: Early Seventeenth-Century Commercial Policy

N

o s y st e m at ic commercial policy was enacted by Parliament during the early decades of the seventeenth century, which were marked by European warfare and the confl ict between Kings James I and Charles I and Parliament. Before passage of the Navigation Acts of 1650–51, regulation of shipping and colonial trade was based largely on royal prerogative. Prerogative was used to order the shipment of specific colonial exports, especially raw materials, to England, a facet of settlement that was overlooked in the colonial charters. For example, an order of the Privy Council in 1621 directed that all tobacco and other commodities produced in Virginia should fi rst be landed in London to pay customs, after which they could be reexported, a rule extended to all Virginia produce in 1628. 22

Th is section draws from Harper, The English Navigation Laws, 19–33, and Beer, The Commercial Policy of England toward the American Colonies, 8–13. Appendix 1, 387–414, in Harper’s book, titled “Brief Summary of the Laws of Trade and Navigation,” itemizes and describes all English laws, regulations, and treaties for the English coasting trade, trade of the colonies, English imports from Eu rope, and other preferential duties between 1660 and 1849.

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Prerogative is illustrated in the instructions given Sir William Berkeley as royal governor of Virginia. 23 By 1641 the tobacco trade was well established, generating revenue for the Crown and the colonial government of Virginia.24 To maximize crown revenue, article 30 in his instructions required that bond be given before any ship loaded with tobacco or other commodities left Virginia for England to guarantee that the vessel would proceed directly to England to pay customs and other duties, without stopping or going anywhere else. Article 31 stated that only English-owned ships could transport merchandise to and from Virginia under normal trading conditions. In cases of emergency, foreign shipping could be permitted to carry tobacco, but only after bond was posted to ensure that the foreign vessel proceeded directly to England to pay duties.

The Interregnum: Parliament’s Codification of Colonial Trade

T

h e e n g l i s h c i v i l war transferred imperial commercial policy from the Crown to Parliament. At the middle of the seventeenth century, Holland enjoyed superiority over England in the efficiency and cost of shipping. In 1595 the Dutch had introduced a new ship, the flyboat or flute. 25 It was a specialized merchant vessel with a design favorable to the carriage of bulk commodities. Its bottom was nearly flat, it was exceptionally long compared to its width, it was lightly built because armament, gun platforms, and reinforced planks were eliminated, and its rig was simple. In contrast, English and colonial vessels were heavily built, armed, and manned to meet the dual purpose of trade and defense. They cost more to build and required more men to operate complex sail patterns and man the armaments. Dutch shippers could charge peacetime rates one-third to one-half lower than English shippers for the same voyage. Concern over Dutch shipping with the English colonies of Virginia and Barbados prompted Parliament to take action. In 1650 Parliament passed its fi rst trade act, stipulating that foreigners could not trade with England’s American colonies without a license 23 Evarts Boutell Greene, The Provincial Governor in the English Colonies of North America (Gloucester, MA: Peter Smith, 1966), 214–25. A reprint of an earlier 1898 edition published by Harvard University Press. 24 Despite its desire to maximize customs revenue from the tobacco trade, the Crown was concerned that the Virginia colony was too dependent on a single crop, especially given the steadily declining price of tobacco. Article 27 instructed Berkeley to encourage Virginians to plant and produce hemp, flax, seed, mulberry trees, and vines, and to produce rope, hides, and leather. 25 Th is description follows James F. Shepherd and Gary M. Walton, Shipping, Maritime Trade, and the Economic Development of Colonial North America (Cambridge: Cambridge University Press, 1972), 81. They cite as a key source Violet Barbour, “Dutch and English Merchant Shipping in the Seventeenth Century,” Economic History Review 2 (1930): 261–90.

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from the English government. A year later it followed with the Navigation Act of 1651, which codified English trade. 26 The act had three major provisions. 1. All goods or commodities of any kind from Asia, Africa, or America must be imported into England or its dominions in English-owned ships of which the master and most of its crew must be English. 2. All goods or commodities imported into England or its dominions from Europe must be carried in English ships with an English master and largely English crew, or in foreign ships of the countries in which these goods were produced or manufactured. 3. All foreign goods or commodities imported into England must be brought from their place of growth or production, or from ports where these goods were usually shipped. Merchants from the Middle East and India were permitted to import merchandise from ports other than the country of production. Merchants could bring products of Portuguese and Spanish colonies from their mother countries, as they were the only places some products could be obtained. Silk products could be brought overland from Italy and shipped in English vessels from nonItalian ports. Bullion could be imported regardless of its origin or the nationality of ships in which it was carried. Other regulations required that salted fish, fish oil, whale fins, and whalebones had to be caught in English vessels and prepared by English subjects. 27 The English (not colonial) coastal trade was restricted to Englishowned ships. The law applied to England, Ireland, all English islands, and England’s colonies. For the purposes of the act, colonists in America were regarded as English subjects. The Navigation Act of 1651 concentrated its enforcement provisions on imports, where customs duties could be more readily collected. Each ship had to produce papers showing where its cargo had been loaded. Passengers could be interviewed to verify the written record and documents could be sent from foreign ports to the customs officers. It was more difficult to enforce the rule that European goods be imported only in English ships or in ships of the country producing them. No recorded seizures were made on this feature of the law. No provision was made for a system of registering ships or requiring English ships in the European trade to have English masters and crews. 26 Details of the Navigation Act of 1651 appear in Andrews, The Colonial Period of American History, 4:36–39; Beer, The Commercial Policy of England toward the American Colonies, 27–34; Harper, The English Navigation Laws, 34–49; and Keith, Constitutional History of the First British Empire, 50–56. 27 Acts and Ordinances of the Interregnum, II, 559–662, cited in Harper, The English Navigation Laws, 38.

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With respect to the colonial trade, the Admiralty was instructed to seize violators. Informers were promised a share of the proceeds. However, the act did not monopolize the colonial trade. It permitted foreign nations to trade with the colonies, requiring the use of English or their own ships. However, this provision was weakly enforced, and foreign vessels continued to trade regularly in the colonies. As late as 1650 Parliament had attempted to attract colonial trade through tariff concessions and other preferential measures. Foreigners were permitted to trade with the colonies. The act of 1651 extinguished these conciliatory approaches to colonial trade with a set of strict regulations for the benefit of English shipowners. The act, and subsequent Navigation Acts, were important in fostering the growth of shipbuilding in New England.

The Stuart Restoration

T

h e st uart Restoration declared null and void all laws passed by the Long Parliament. The new parliament reenacted the 1651 act in 1660, with several modifications. 28 The 1660 law, titled “Act for the Encouraging of Shipping and Navigation,” was designed to protect English and colonial shipping and regulate colonial trade for the benefit of England. The provisions of the act protecting shipping were as follows: 1. All goods imported into or exported from any English colony in Asia, Africa, or America must be carried in ships owned and built by English subjects in England, Ireland, Wales, Berwick, or any of the colonies. The master and three-quarters of the crew of such vessels must be English. [This precluded foreign ships of Spanish, French, Dutch, Danish, or other countries from trading with the colonies or importing English colonial products into England. The English government exempted silver coin and bullion from this provision because of their monetary significance.]29 2. All goods grown, produced, or manufactured in Africa, Asia, and America must be imported into England in ships navigated, built, and owned as above. 3. All goods of foreign growth or manufacture must be imported into England, Ireland, Wales, Guernsey, Jersey, or Berwick directly from

28 Details of the Navigation Act of 1660 and subsequent acts through 1673 appear in Andrews, The Colonial Period of American History, 4:50–143; Beer, The Commercial Policy of England toward the American Colonies, 35–48; Harper, The English Navigation Laws, 50–62; and Keith, Constitutional History of the First British Empire, 64–73. 29 Clause xv of the act stated “Provided that this act or anything herein contained extend not to bullion.” Cited in Andrews, The Colonial Period of American History, 4:62n2.

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the place of production or from ports where the goods and commodities are usually shipped. [These provisions, if enforced, would ensure the monopoly of the carry ing trade between England and its colonies.] Other provisions of the act restricted trade to the home market. It enumerated sugar, tobacco, cotton, indigo, ginger, and speckle-wood, and other dying woods such as fustic and brazilleto.30 Enumerated products were to be exported only to England and its colonies. Ships sailing from the colonies had to give bond, 1,000 for ships under a hundred tons and 2,000 over a hundred tons, to ensure that they would carry these enumerated products directly to England, Ireland, 31 or Wales. If a ship arrived at a colonial port from England or Ireland to load any of the enumerated items, it had to produce a certificate of the bond to the governor. Loading a ship without giving bond meant forfeiture of both ship and goods. The act permitted colonists to export enumerated commodities to other colonies, from which it was possible to reexport them to European countries, but this omission was later corrected. New England and other northern colonies could export their grain, fish, and naval stores to any destination. England only enumerated the commodities it did not possess or could not produce. The act excluded aliens from conducting business as merchants or serving as factors in the colonies, a rule that was strictly enforced. Local naturalization, granted by the governor or local legislature conferring the status of a denizen, only carried local validity. However, royal annexation of New York conferred the status of English subjects on its inhabitants, which permitted Jewish and Dutch residents of New York to act as merchants and factors. In 1662, Parliament passed the Statute of Frauds, a corollary to the Navigation Act of 1660, which clarified the meaning of English masters and sailors. English was to mean “only his Majesty’s subjects of England, Ireland, and the plantations,” thus excluding residents of the Channel Islands, the Isle of Man, and Scotland. Inhabitants of those jurisdictions were subject to alien customs on bringing plantation goods into England. The act of 1662 was directed at Scotland because the Scots were using more efficient Dutch-built vessels. Until union with England in 1707, Scotland was considered an alien kingdom that did not belong to the English Crown and over which the Privy Council lacked jurisdiction. The Channel Islands were 30

The act also enumerated certain commodities imported from Eu rope that must be carried in English ships or, if alien duties were paid, in ships belonging to the country of origin. The Eu ropean list was much longer but is not pertinent to this book. 31 A later statute in 1670 stated that the word “Ireland” was to be left out of the giving of bonds, which precluded enumerated goods from being shipped directly there. All commodities had to be shipped to England and could be sent to Ireland after English duties were paid. The act of 1696 precluded even non-enumerated commodities from being shipped directly to Ireland.

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excluded because it was believed that the islanders were cooperating with the French in conducting their trading business. The second of the important Navigation Acts, the Act for the Encouragement of Trade known as the Staple Act, was approved in 1663. Its object was to make England the staple for all European goods imported into the colonies. All commodities from other countries to the plantations were to be shipped through England as the sole exporting center. Similarly, European imports from the colonies first had to pass through England. Drawbacks of customs duties were allowed on reexportation of most goods, thus diminishing the burden of taxation on both colonial producers and English consumers. The Staple Act exempted certain commodities such as salt from the Portuguese Cape Verde Islands for the fisheries of New England, servants, horses, and provisions from Ireland and Scotland, and wines from Madeira and the Azores. The Navigation Acts contained a large loophole, which resulted in a loss of English customs revenue, variously estimated at annual amounts of 10,000 to 100,000. The colonists were able to engage in direct trade with Europe by the simple expedient of proceeding from one colony to another without posting bond, paying no customs at the port of departure, and from that subsequent colonial port sailing directly to Europe or other destinations. Captains of any English or colonial vessel could carry enumerated commodities from one colony to another without paying customs duties at either end and without going to England at all. Th is form of coastwise traffic had been allowed to enable the colonies to acquire what they needed from each other for their own consumption and to build up a coastwise trade for their own benefit. To prevent direct colonial trade with Europe, in 1673 Parliament added a supplementary clause to the Navigation Acts, which required all vessels to pay a duty at the port of clearance. Known as the plantation duty, the payment was 1d. a pound on tobacco and other amounts for other enumerated commodities. 32 The captain was to post a bond with the governor, naval officer, or collector that if he did not unload the products in another colony, he would take them directly to England. The act affected trading between the colonies, requiring a large number of customs officers in colonial ports. The plantation duty largely affected colonial-built and colonialowned vessels doing local business. English officials insisted that the act 32 The specified duties were white sugar 5s. per hundredweight, brown sugar 1s. 6d. per hundredweight, cotton 1 ⁄2d. per pound, indigo 2d. per pound, ginger 1s. per hundredweight, logwood 5 per ton, fustic and other dyeing woods 6d. per hundredweight, and coconuts 1d. per pound. A hundredweight is a unit of weight in the English imperial system equal to 50.8 kilograms or 112 pounds. These rates were based on the subsidy granted by Parliament in 1660 on imports into England.

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was chiefly to direct enumerated commodities to England rather than raise revenue. The English schedule of tariff rates of 1660 granted generous preferences on colonial products, which substantially offset losses due to restrictions on colonial shipments to other destinations. Import duties largely fell on English consumers, which meant that colonial producers may have lost some sales from higher prices as a result of the tax. However, importers received large refunds, called drawbacks or rebates, on goods reexported to European markets, which eliminated most of the effect of the import tax on sales. Similarly, refunds of import duties were given on foreign manufactured goods shipped through England. Most of the enumerated commodities imported into England were subsequently reexported, which suggests that there would be little difference in earnings from sales of colonial products shipped to Europe through England than if direct shipment was permitted. So too for goods shipped from Europe through England. In 1660 English duty on colonial tobacco was 2d. per pound, increased to 5d. in 1685. The revenue of the English government in 1688 amounted to about 1,800,000. In 1689, the tobacco colonies of Virginia and Maryland generated 130,000 in net annual income (after accounting for refunds) to the English Treasury, about 7.2 percent of total tax revenue.33 Between 1660 and 1689, all but 1 ⁄2d. a pound on tobacco was refunded on reexportation. Crown revenue was in addition to the business and income generated by the shipment, insurance, processing, internal distribution, and reexportation of tobacco. New England merchants were constantly charged with smuggling and evasion of the Navigation Acts. In January 1676 the Lords of Trade received a petition signed by twenty-four London merchants engaged in the export trade to America stating that New Englanders were conducting illegal commerce with Europe, importing goods to undersell English merchants in the colonies. One estimate offered by mercers and silk weavers to the Lords of Trade put the loss of annual royal duties at 60,000. 34 Edward Randolph, England’s surveyor-general in America, put the loss at 100,000 a year.35 33

Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore: Johns Hopkins University Press, 1984), 123–24. Reprinted from the original 1953 edition published by the Mariners’ Museum in Newport News, VA. 34 Bernard Bailyn, The New England Merchants in the Seventeenth Century (New York: Harper and Row, 1964), 152–53. Originally published in 1955 by Harvard University Press. 35 Bailyn, The New England Merchants in the Seventeenth Century, 157. Randolph may have overestimated the extent of smuggling to strengthen his own position in the colonies. It is impossible to know the exact amount of business lost to English merchants and revenue to the Crown as smugglers do not keep records. Smuggling was considered a major problem by the Lords of Trade. It was an important factor in the revocation of Massachusetts’s charter in 1684 and the subsequent appointment of a royal governor.

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The Navigation Acts had little impact on the colonies through 1688. The English government did not establish an effective customs ser vice in the colonies until passage of the Navigation Act of 1696. Thereafter, the acts were enforced with varying degrees of vigor and gradually became a source of growing confl ict between England and its American colonies.

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c h ap t e r 6
The Colonial Constitution, 1607–1688

T

he de v el opment of the colonial constitution from the founding of the Virginia colony in 1607 to the Glorious Revolution of 1688 was a period of gradual, but only partial, consolidation of crown control over a disparate collection of corporate, proprietary, self-settled, and royal colonies. As the period came to a close, many in the English government wanted to impose a standard system of royal administration over its American colonies. To that purpose, the Crown endeavored to revoke the charters of the corporate and proprietary colonies, especially in New England, or secure their surrender. The achievement of royal government in most of the colonies did not materialize until after passage of the Navigation Act of 1696 and other royal and parliamentary measures in the eighteenth century. Maryland, Pennsylvania, and Delaware remained under proprietary governance until the Revolution, but the Crown secured partial control through its approval of governors and review of legislation. This chapter reviews the evolution of the constitutional and political structure of the colonies up to the Glorious Revolution. The main topics are the instruments of royal authority that served as the basic law of the colonies and the development of local political institutions. The latter includes the system of elections and voting and the constitutional documents agreed upon by the colonists themselves without reference to royal approval. Although Parliament steadily gained influence and power in its legal and political struggles with the Crown during the seventeenth century, the colonial constitution was predicated on royal authority.1 Colonial political institutions evolved from the provisions in royal charters or from 1

A comprehensive treatment of the colonial constitution appears in Leonard Woods Labaree, Royal Government in America: A Study of the British Colonial System before 1783 (New York: Frederick Ungar Publishing, 1958), a reprint of an edition published by Yale University Press in 1930. Other studies include Elmer Beecher Russell, The Review of American Colonial Legislation by the King in Council, studies in History, Economics, and Public Law, vol.64, no.2 (New York: Columbia University, 1915); A. Berriedale Keith, Constitutional History of the First British Empire (Oxford: Clarendon Press, 1930); Evarts Boutell Greene, The Provincial Governor in the English Colonies of North America (Gloucester, MA: Peter Smith, 1966), a reprint of an edition published by Harvard University Press in 1898; and Robert J. Dinkin, Voting in Provincial America: A Study

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compacts agreed upon by the settlers. In the early years, executive, legislative, and judicial authority was often concentrated in the hands of a governor and his council. Colonial governments gradually took the form of the English system of government. A governor represented the Crown, a body of proprietors to whom the Crown had granted semi-sovereign status, or a narrow franchise of voters. A council served as the counterpart of the Privy Council and House of Lords. An assembly became the colonial equivalent of the House of Commons. The Crown, with the advice of its officials, appointed the governor and his councillors in the royal colonies, stipulated the rights and powers of proprietors in the administration of their colonies, granted limited self-government to Connecticut and Rhode Island, and defi ned the scope of colonial legislative authority. With passage of the Navigation Acts, Parliament played a direct role in ordering the commercial development of the colonies, but did not pass legislation regulating local colonial administration until after the French and Indian War. In the proprietary colonies, the governor received his authority from a quasi-feudal dignitary or body of proprietors, but these arrangements were vested in royal charters that created private jurisdictions outside the direct control of the Crown. The proprietors created a variety of constitutions in their “concessions,” “fundamentals,” “fundamental constitution,” “frame of government,” and “charter of liberties.” In Rhode Island, Connecticut, and Massachusetts, the settlers elected their governors, the latter until 1684, and also their councils. West New Jersey temporarily elected its executive officials during 1683–85. The documents that defined the governor’s powers and instructed him in his duties are the basis of the colonial constitution. Over time, these instruments were also applied to the proprietary colonies, especially crown approval of the appointment of governors. Proprietary and elected governors were also required to enforce the Navigation Acts and other parliamentary statutes. To understand the legal status and political development of the colonies, it is necessary to explicate the different English documents that governed colonial affairs. 2 of Elections in the Thirteen Colonies, 1689–1776 (Westport, CT, and London: Greenwood Press, 1977). The colonists also played a role in the development of their constitutions. Seventy-five documents they drew up between 1611 and 1780, of which seventy-two were written before 1688, appear in Donald S. Lutz, ed., Colonial Origins of the American Constitution: A Documentary History (Indianapolis: Liberty Fund, 1998). Development of representative government is described in Michael Kammen, Deputyes and Libertyes: The Origin of Representative Government in Colonial America (New York: Alfred A. Knopf, 1969). 2 Instruments of royal authority are presented in Labaree, Royal Government in America, 6–36.

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Instruments of Royal Authority

I

nst rument s of royal authority reflect a hierarchy of legal status, ranging from charters and commissions at the highest level to correspondence at the lowest. The hierarchy, with explanations that follow, consists of the following items. I. Letters patent under the great seal of England (a) Charters (b) Commissions II. Instruments under the lesser seals or the sign manual (a) Writs or letters of privy seal (b) Instructions to governors (c) Royal proclamations (d) Commissions under the signet and sign manual (e) Royal warrants (f ) Royal letters III. Orders-in-council IV. Commissions under the great seal of the Admiralty V. Correspondence of officials and departments (a) Letters from the secretary of state (b) Letters from the commissioners of the Treasury and of the Admiralty (c) Letters from the Board of Trade (after 1696)

First in importance are the letters patent and commissions that were issued under the great seal of the kingdom of England. The foundation of the colonial constitution is the royal charter, which was granted to corporations, proprietors, and the self-settled communities of Connecticut in 1662 and Rhode Island in 1663, largely confirming their self-determined political arrangements.3 Part I identified several principal features of these charters, which generally involved the participation of the freemen in the making of laws and approval of taxes. The charters granted by the States-General of the United Provinces and the Swedish government provided the constitutional basis of their respective settlements in New Netherland and New Sweden. Letters patent were also used for the commissions that appointed governors in the royal colonies. Letters patent signified that the governor enjoyed 3 The charter of Massachusetts was revoked in 1684. Its constitution was reestablished with a temporary commission issued in October 1685 to Joseph Dudley to serve as president of a provisional government. He was followed by Governor Sir Edmund Andros, who arrived with his formal commission on December 20, 1686, establishing the Dominion of New England that united the New England colonies. The dominion was dissolved following the Glorious Revolution, with the colonies restored to their previous separate status.

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the highest expression of royal prerogative in the colonies as the representative of the Crown. The commission granted the governor the power to establish and govern a colony, established legal political authority in his person as sovereign of a colony, and commanded all colonial officers and inhabitants to comply with its terms. The powers granted in a governor’s commission were enjoyed at the pleasure of the Crown, and lapsed on the death of a monarch or upon a revocation issued under the great seal. Numerous governors were recalled for misconduct, failure to follow royal instructions and enforce the Navigation Acts, or incompetence. Others were recalled because they fell out of political favor in England. The next category of royal instruments relevant to the colonies was those issued under the seals of the English government. The royal sign manual was the principal form of royal authentication on documents relating to colonial America. The king’s signature was attached on instructions to governors, proclamations, commissions to lieutenant governors, royal warrants, and letters. Such documents were invariably countersigned by the secretary of state or some other ministerial officer, and usually also bore the signet. After the governor’s commission, the most important document was the royal instructions, which specified how the governor was to execute his powers. Instructions covered civil government, enforcement of the Navigation Acts, and other items that amended one of the general or trade instructions. The king’s signature or sign manual and signet were placed on the front page of royal instructions. Whereas the commission was to be publicly read upon the governor’s induction into office, the instructions were confidential for the use of the governor or members of his council. Together, the charter, the governor’s commission, and his instructions made up the building blocks of the colonial constitution. Royal proclamations dealt with specific matters (e.g., colonial rating of coinage) rather than the general government of a province. Warrants and royal letters were used for swearing in colonial officers, granting the governor permission to return to England, instructing him in disputes with provincial assemblies, and the declaration of the disallowance or approval of a colonial law.4 4 No systematic review of colonial legislation was undertaken by the Privy Council or Parliament, or its committees, prior to the Restoration of 1660. Nor does it appear that any colonial law was disallowed or confi rmed during this period. The third Virginia charter of 1612 stipulated that acts should not be contrary or repugnant to the laws and statutes of England. A similar provision appears in the patent of the Council of New England of 1620 and in the fi rst charter of Massachusetts Bay of 1628–29. Maryland’s lawmaking was similarly circumscribed. Prior to 1685, only the acts of the royal colonies of Virginia and New Hampshire were subject to review in England, and New Hampshire submitted no acts before that date. The power of disallowance applied largely to England’s island colonies in the West Indies. Russell, The Review of American Colonial Legislation, 16–17, 21–22.

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The Privy Council was actively involved in colonial affairs. Its decisions took the form of orders-in-council, which were sent to colonial governors and added to or clarified the exercise of royal authority. They were used to share information about colonial affairs with the Treasury, the Admiralty, the Board of Trade, the attorney and solicitor general, and the secretary of state. The commission to the governor as vice-admiral of his province issued under the great seal of the Admiralty differed from his commission from the Crown for civil affairs. This commission specified the governor’s powers over all admiralty and maritime affairs in his province. Governors often found themselves in confl ict with other royal officials over enforcement of the Navigation Acts, collection of fees and customs, and jurisdiction of courts. The last group of documents involved correspondence between governors and English officials and departments. The home office might ask the governor for information on colonial conditions, or the governor might ask an English official for advice on dealing with a par ticular problem. This voluminous correspondence provides insight into the practical matters of colonial governance. Instruments of royal authority were applied in a haphazard, ad hoc basis in colonial America during most of the seventeenth century. They took on a more orderly form in the eighteenth as several proprietary colonies were transformed into royal colonies, and as royal officials more systematically applied acts of Parliament to the colonies. Until the Glorious Revolution of 1688, constitutional and political development in the colonies largely proceeded in a chaotic and often self-chosen manner.

The New England Colonies

T

h e n e w e n g l and colonies of Massachusetts Bay, until its charter was revoked in 1684, Plymouth, which was absorbed by Massachusetts in 1691, Connecticut, Rhode Island, and New Hampshire, which became a separate royal colony in 1680, differed in their constitutions and political arrangements from the proprietary colonies in the mid-Atlantic and southern plantation colonies and the royal colony of Virginia. The main difference was a high degree of autonomy from direct or indirect English supervision. Apart from English revenue officers entrusted with enforcement of the Navigation Acts after 1660, public officials were locally elected, including the governor and his council. The conversion of Massachusetts into a royal colony replaced the previously elected governor with an appointee, but the first royal governor after the collapse of the Dominion of New England in 1691 was a native resident, Sir William Phips. Connecticut and Rhode Island retained their elected governors even after receiving royal charters fol[ 122 ]

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lowing the Stuart Restoration. New Hampshire entered a period of political turbulence after it became a royal colony, which did not ameliorate until well into the eighteenth century.

Massachusetts

T

h e c h art e r of the Massachusetts Bay Company created a corporation similar to that in the charters of 1609 and 1612 granted to the Virginia Company. On August 26, 1629, the shareholders (freemen) of the company voted to move their government to the New World. Freemen who chose to emigrate were also assistants, who constituted the General Court, the company’s governing body. A list of those desiring to be freemen was entered in the records of the General Court between October 1630 and May 1631. On May 18, 1631, the freemen approved an election agreement for an annual meeting of the General Court.5 The settlers became a self-governing community with an elected governor, deputy governor, assistants (the equivalent of a governor’s council), and deputies (representatives of the towns). In the agreement, freemen were defined as members of churches within the colony’s jurisdiction.6 On May 9, 1632, a follow-up agreement was reached on the functioning of the Massachusetts legislature.7 By a show of hands, the freemen would join with the governor, deputy governor, and assistants to select the latter three categories of officials. The governor was to be chosen from among the assistants. Two deputies were also to be selected from each settlement to confer with the General Court on the raising of public funds. At a meeting of the General Court on May 14, 1634, it was agreed that only the General Court could choose and admit freemen, make laws, appoint officers, levy taxes, allocate lands, and direct freemen of the settlements to choose two or three from each town to serve as deputies to it.8 A year later the magistrates’ court was established, staffed by the governor and the assistants. Other laws regulated the founding and fi nancial support of churches. Until 1691, both church membership and General Court approval were required for admission as a freeman, a point of growing contention among the increasing majority of non-freemen who lacked political rights.

5

Lutz, Colonial Origins, 40. An analysis of the Massachusetts franchise and elections appears in Richard C. Simmons, Studies in the Massachusetts Franchise, 1631–1691 (New York and London: Garland, 1989). Th is treatment of the selection of the governor and the assistants, and the election of deputies by the freemen of the colony, draws from Simmons. 7 Lutz, Colonial Origins, 43–44. 8 Lutz, Colonial Origins, 50–51. 6

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In the beginning, assistants were given the right to make laws without the concurrence of the freemen who selected them, but were subject to annual selection and removal by them. Assistants were the socially acknowledged leaders of the migration. While the office of assistant was created by charter, the position of deputy was created a few years after the charter was taken to the New World. Deputies exercised all the legislative and judicial functions that the charter conferred on freemen, while freemen continued to elect annually the deputies and participate in the selection of assistants. Vacancies among assistants were often fi lled by men who gained political and administrative experience as deputies. In 1641, Piscataqua and several neighboring areas in coastal New Hampshire came under the control of Massachusetts. In that year, Massachusetts promulgated its Body of Liberties, which contained ninety-eight clauses defining the legal, civil, and property rights of the inhabitants, the political rights of freemen, and the powers and duties of government officials.9 The English Civil War resulted in even greater autonomy in Massachusetts when kindred Puritans seized control of the English government. On March 7, 1644, the Massachusetts Bicameral Ordinance separated the legislature into two bodies, the assistants forming an upper house and the deputies forming a lower house.10 On November 13, 1644, an ordinance established the size and mode of electing the legislature.11 In 1648, the government issued its extremely lengthy Laws and Liberties codifying a number of laws passed over the years.12 In 1652, Massachusetts extended its jurisdiction over the Maine counties from Piscataqua north to the Kennebec River. The Maine communities were represented in the General Court—their inhabitants were admitted as freemen regardless of church membership—while legal administration remained in the hands of local civil magistrates. Massachusetts purchased the claims of the heirs of Sir Ferdinando Gorges to Maine, but lost New Hampshire, which became a separate royal colony in 1680. As the colony’s population expanded, non–church members increased, while the number of new church members declined. The minority of eligible voters, the freemen, declined from 14 percent of the population in 1640 to a mere 8 percent of a larger community. Freemen preserved the exclusive right to elect the colony’s deputies and assistants from 1634 through 1686. Early royal charters were often poorly drafted. The 1629 charter creating the Massachusetts Bay Company excluded any reference to the author9

Lutz, Colonial Origins, 70–87. Lutz, Colonial Origins, 90–91. 11 Lutz, Colonial Origins, 92–94. 12 Lutz, Colonial Origins, 95–135. 10

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ity of Parliament, which the freemen took to mean that it had no power over the colony. General Court passage of the 1641 Body of Liberties implied that the colony was bound only by laws of its own choosing. An act of the General Court dated June 10, 1661, shortly after the Stuart Restoration, was a brief restatement of the colony’s liberties, the creation of a political community based on the consent of its members.13 The end of the civil war enabled the English government to give colonial affairs more attention. Massachusetts’s restricted franchise, a significant departure from English practice, was one of the colony’s features that received immediate royal consideration. Under pressure, the General Court in 1664 ended the absolute identification between church and voting qualifications, but little changed in practice, as church membership continued to confine the admission to freemen. The colony and English officials were embroiled in other disputes. Charges were levied that the colony did not enforce the Navigation Acts. In 1682 the General Court adopted all the provisions of the Navigation Acts and appointed its own collectors to enforce them on the grounds that only the General Court, not Parliament, could make laws for Massachusetts. By this time English patience had worn thin. The Crown took umbrage at Massachusetts Bay’s virtual independence, finally revoking its charter under a writ of quo warranto in 1684. The establishment of royal government was delayed by the death of Charles II. The sitting governor and General Court continued to rule until 1686, when James II established the Dominion of New England and dispatched Sir Edmund Andros as governor with full power to rule with a council of twenty-eight appointed by the Crown over all the New England provinces, New York, and the two Jerseys.14 With the advice and consent of the council, Andros had the authority to make laws, collect old taxes, and impose new taxes for the support of the colonial government. No recourse to an elected assembly was required. The Glorious Revolution put an end to the dominion, and the separate colonies from which it was constructed were reestablished.15 The singular relationship between church and civil qualifications in Massachusetts was terminated. All freeholders were qualified to vote on the basis of an estate in land valued at 40s. annual income or 40 sterling.

13

Lutz, Colonial Origins, 158–60. The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), 3:1863–69. 15 The Charter of Massachusetts was issued on October 7, 1691. Thorpe, Colonial Charters, 3:1870–86. 14

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Between 1629 and 1686, the church-admitted, freeman-selected government enjoyed sweeping control over the colony’s society.16 Each town could exclude from residence anyone it wished and could expel those whose behavior was deemed offensive. Such dissenters as Antinomians, Anabaptists, Baptists, and Quakers were sent packing for their religious beliefs by orders of civil magistrates. The laws of the colony approved by the General Court were predicated on the belief that the laws of man and God were one and the same. For its part, the residents of New Plymouth established a self-governing colony, with a code of law set forth in a document of November 15, 1636.17 The document provided for the annual election of a governor and seven assistants by the freemen and specified their authority and duties. In March 1638 the freemen voted to elect representatives and join the governor and the assistants four times annually in passing legislation. The assembly remained unicameral, controlled its own membership, established a residential qualification, and was stable until Plymouth was absorbed into Massachusetts in 1691.

Connecticut

I

n 1 63 5 , Thomas Hooker established a settlement at Hartford. Connecticut’s General Court, mirroring that of Massachusetts Bay, met for the first time in Hartford on May 1, 1637, to form an independent government and raise funds for the Pequot Indian War. In 1639 the Fundamental Orders of Connecticut were approved, which set forth the structure of government.18 Fundamental Orders of New Haven were promulgated during June 4–14, 1639.19 As of February 5, 1645, a majority vote of deputies (lower house) and magistrates (upper house) was required for the passage of laws. In 1650, the Connecticut Code of Laws was promulgated.20 The Fundamental Orders of Connecticut were modeled on the commercial charter of the Massachusetts Bay Company. Two general courts were to be held each year.21 Connecticut freemen, residents within the jurisdiction who had taken an oath of fidelity and were then admitted by the General Court, were to choose a governor and six magistrates (equivalent to

16 Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 74. 17 Lutz, Colonial Origins, 61–67. 18 Lutz, Colonial Origins, 210–15, and Thorpe, Colonial Charters, 1:519–23. 19 Lutz, Colonial Origins, 221–26, and Thorpe, Colonial Charters, 1:1523–26. 20 Lutz, Colonial Origins, 241–49. 21 Th is segment draws from Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979), 20–31.

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assistants in Massachusetts) in an annual spring election. In contrast with Massachusetts, Connecticut’s magistrates were to administer justice according to established law, without reference to the word of God. No governor was to be elected more than once in any two years, and he had to have served as a magistrate and been a member of an approved congregation. A representative system of deputies coming from each town and newly elected for each of the two regular sessions of the General Court was to replace the initial assembly of freemen-stockholders. The orders served as the basis for government until Connecticut received its royal charter in 1662. The Fundamental Orders made no mention of the Crown. Connecticut was a self-governing colony with power situated in the General Court. In 1645 the General Court separated itself into two bodies, deputies and magistrates. Admitted inhabitants could vote for town officials and deputies to the General Court, while only freemen could vote for magistrates, the governor, and other officials. A vote of a town’s inhabitants determined admission. Those born in a town were more or less automatically admitted. In 1657, the General Court defined the status of admission as twenty-one years of age, having held office, or possessing a 30 estate. Th is meant an age and property qualification. The Code of 1650 stipulated the value of horses, cows, sheep, and other animals for the purpose of meeting the property requirement. Records of 1657 for the three main towns of Hartford, Windsor, and Wethersfield show average adult male assessments exceeding 100, which meant that most adult males qualified for the franchise. The Code of 1650 also called on assessors to rate smiths, carpenters, butchers, bakers, and others whose income was based on their “faculty,” business, or profession, rather than on their real or personal property. In 1661, Governor John Winthrop, Jr., was sent to England to obtain a charter to place the colony on a proper legal foundation because the Fundamental Orders had no legal standing other than the consent of its own members. Winthrop succeeded in getting a generous charter dated April 23, 1662, which made Connecticut virtually a self-governing colony within the scheme of English imperial governance.22 Charles II granted Connecticut wide latitude in its government as a counterweight to his dislike of the conduct of neighboring Massachusetts. In late 1664, Connecticut absorbed New Haven. The charter of 1662 barely changed governance in Connecticut. The name of the General Court was changed to the General Assembly, a unicameral legislature, but deputies were elected as before. The number of magistrates was doubled to twelve and the governor remained a presiding

22 Thorpe, Colonial Charters, 1:529–36, and http://www.yale.edu/ lawweb/avalon/states/ct03 .htm (February 27, 2003).

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officer with little power of his own. Only freemen could vote for deputies, although admitted inhabitants could vote for town officials. In 1678, the property qualification was raised to a 50s. freehold estate, a property producing at least that income per year. Laws passed in Connecticut never became subject to disallowance by the Crown. In 1698, Connecticut became bicameral.

Rhode Island

R

o g e r w i l l i a m s ’s disagreement with the system of government in Massachusetts prompted his departure for Rhode Island. Williams insisted that states were civil inventions that gained their legality from human acceptance, not from religious sanction, and he objected to limiting civil freedom to church members. Several communities were established by covenant in Newport on April 28, 1639, 23 Portsmouth on April 30, 1639,24 and Providence on August 27, 1640.25 During March 16–19, 1641/42, an agreement organized the government of Rhode Island.26 The Acts and Orders of 1647, a lengthy document, codified the laws of Rhode Island and Providence Plantations and resembles a comprehensive provincial constitution.27 On March 27, 1666, the General Assembly of Rhode Island divided itself into two houses, in which the deputies would sit apart in a separate house from the magistrates. In the beginning, Rhode Island towns had no ancient usages and no powers granted by the Crown, so they only had the powers conferred by their townsmen. 28 The towns were advised to join as local units under a central colonial government of their own by a patent obtained by Roger Williams from Parliament during the English Civil War on March 14, 1643, 29 and reiterated in a royal charter of July 15, 1663. 30 The 1643 patent allowed the English settlers to form a government along lines of their choosing, to make decisions by majority vote of the white men with the franchise, and to enact laws for civil government (with

23

Lutz, Colonial Origins, 165. Lutz, Colonial Origins, 166–67. 25 Lutz, Colonial Origins, 168–71; Thorpe, Colonial Charters, 6:3205–07; and http://www .yale.edu/ lawweb/avalon/states/ri01.htm (February 27, 2003). 26 Lutz, Colonial Origins, 172–75; Thorpe, Colonial Charters, 6:3207–09; and http://www .yale.edu/ lawweb/avalon/states/ri02.htm (February 27, 2003). 27 Lutz, Colonial Origins, 178–203. 28 Th is treatment of Rhode Island’s constitutional development draws from Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 50–107. 29 Thorpe, Colonial Charters, 6:3209–11, and http://www.yale.edu/ lawweb/avalon/states/ ri03.htm (February 27, 2003). 30 Thorpe, Colonial Charters, 6:3211–22, and http://www.yale.edu/ lawweb/avalon/states/ ri04.htm (February 27, 2003). 24

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terms generally harmonious with English law), with England reserving the right of Rhode Island’s relations with its other American plantations. In 1647, a majority of the freemen met to carry out the terms that had been arranged under the patent. The freemen formed a general court or assembly, which enacted legislation then and later. They selected eight officials to form a judiciary. The General Court adopted a code of laws drawn from English statutes and English common law. After a year, the freemen consigned their power to elected representatives, six chosen from each town. The legislature granted charters of incorporation to each of the towns that created town councils and local courts. Political development was retarded for over a decade as the towns failed to cooperate on a colony-wide basis. Local authority was often pitted against the General Court. Finally, in 1658, a provincial government effectively embraced the four original towns. The royal charter granted in 1663 prescribed the colony’s boundary and its form of government. The charter granted the governor and company as a corporation, that is, the freemen, the right to govern itself and dispose of the colony’s land. Every May the freemen were to elect a governor, deputy governor, and ten assistants. Every May and October the assistants (also known as magistrates) would meet with deputies from the towns in a general assembly. Actions of the assembly required the assent of a majority of the magistrates. The charter stipulated that new colonial legislation should conform to English law as nearly as circumstances would permit. The inhabitants were to enjoy all the rights of natural-born Englishmen, plus liberty of conscience. The General Assembly convened at Newport on March 1, 1664, and remained unicameral until its division into two bodies in 1696. Legislation approved by Rhode Island’s General Assembly was not subject to review by the king-in-council.

New Hampshire

B

e t w e e n 162 3 and 1641 immigrants from England and Massachusetts Bay established four small settlements along a sixteen-mile strip of the northern New England coastline. 31 The four communities rested on patents issued by the Crown to different companies and individuals. In 1641 Piscataqua came under the control of Massachusetts. Piscataqua town officials were permitted to remain in office, have the liberty of freemen to manage their own affairs, and send deputies to the Massachusetts General Court even though its residents were not church members. Massachusetts 31

David E. Van Deventer, The Emergence of Provincial New Hampshire, 1623–1741 (Baltimore and London: Johns Hopkins University Press, 1976), and Jere R. Daniell, Colonial New Hampshire: A History (Millwood, NY: KTO Press, 1981), 39–103.

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jurisdiction was extended to all the New Hampshire towns by 1643. A suffrage law of 1658 gave the vote to those who had taken the oath of fidelity, were twenty-four years of age, and owned a 20 ratable estate. In 1678 England established a royal colony in New Hampshire, creating a provincial government to manage its affairs. In May 1679 the Lords of Trade ordered Massachusetts to withdraw its officials from New Hampshire. The Commission of John Cutt of September 18, 1680, established a president and council for the province of New Hampshire.32 In January 1681 newly appointed royal officials took their oaths of office and set about establishing a government. The governor and Council were empowered to collect taxes until an assembly provided otherwise. In March the General Assembly of New Hampshire passed and the president and Council approved the General Laws and Liberties of New Hampshire, which closely mirrored similar documents of the other New England colonies. These were amended and extended in 1682, including details of taxation. In 1692 the single chamber legislature separated into two chambers, with the governor and Council recognized as an upper house. New Hampshire was plagued with myriad troubles. These included disputes over land titles, the efforts of towns to preserve their autonomy, the new royal government’s struggle to bring the towns under its effective control, the impact of voiding Massachusetts’s charter on public attitudes in New Hampshire, the formation and demise of the Dominion of New England, and spotty enforcement of the Navigation Acts. Although New Hampshire became a royal colony in 1680, it was barely under effective royal control in 1688.

The Middle Colonies

T

h e c r ow n abandoned its approach of direct rule over Virginia by granting or approving proprietary charters for the settlement of New York (1664), New Jersey (1664), and Pennsylvania (1681). In March 1664, Charles II formally annexed New Netherland as an English province and granted it to his brother James, Duke of York, as lord proprietor. The grant encompassed parts of Maine, all of Long Island, Martha’s Vineyard, Nantucket, and the Hudson River Valley. An English fleet sent by the duke seized New Netherland in September 1664. After a brief return of Dutch rule in 1673–74, New York was permanently restored to English rule in February 1674. New Jersey came into being as a separate colony in 1664, when

32 Thorpe, Colonial Charters, 4:2446–51, and http://www.yale.edu/ lawweb/avalon/states/ nh08.htm (February 27, 2003).

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the duke gave title to its lands to two friends as a reward for ser vice to the Crown. New Jersey was split into East and West New Jersey under the control of different groups of proprietors in 1676. In 1667, the western half of Connecticut was restored to its eastern half. Delaware was at various times part of New Sweden (1638–55), New Netherland (1631–33 and 1655–64), and Pennsylvania (1682–1775).

New Netherland

I

n 1 62 1 the Dutch West India Company obtained a twenty-four-year trading monopoly in America and Africa. 33 In June 1623, the StatesGeneral of the United Provinces recognized the company’s American area of New Netherland as a province. Over the next few years, the company dispatched a number of ships with colonists, livestock, and supplies to settle its territory. New Netherland grew slowly, reaching about three hundred people by 1630. In 1638 the company ended its trading monopoly, allowing other merchants to trade with New England and the Indians, subject to import and export duties and the use of company ships. By 1655, about three thousand persons inhabited New Netherland, including the three to fi ve hundred residents of New Sweden who were captured on September 24, 1655. There were also about two thousand English residents living on Long Island or in communities near the Connecticut border. The company administered New Netherland under its 1621 charter.34 The director-general of the company was both its ranking officer and the colony’s highest civil and military official. He was assisted by a secretary, council, schout-fiscal (sheriff and prosecuting attorney), and several other company employees. He was accountable only to his superiors in Holland. He and his council served both as executive and legislature, and also functioned as a court of last appeal. On occasion, he appointed prominent citizens as temporary advisers. In 1653, the administration of New Amsterdam was entrusted to a board of two burgomasters and five schepens. The director-general chose members of the board, which served as a local court and legislative body. In general, the ordinances it adopted mirrored those promulgated by the director-general and his council. In other towns, the director-general picked 33

A general survey of colonial New York is found in Michael Kammen, Colonial New York: A History (New York and Oxford: Oxford University Press, 1996). First published in 1975 by KTO Press in Millwood, NY. 34 Harold C. Syrett, “Private Enterprise in New Amsterdam,” William and Mary Quarterly, 3rd ser., 11, no. 4 (October 1954): 536–38.

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magistrates, who in turn nominated men for office. The several English towns of Long Island were able to secure charters from the director-general, which gave them a greater measure of independence than that of the Dutch towns.

New York

W

h e n t h e Duke of York acquired New Netherland in 1664, renamed New York, the Dutch bequeathed him a highly concentrated, executive system of government with virtually no colony-wide representation. The duke’s charter gave him complete power to organize his government as he saw fit, only reserving sovereignty and the right of judicial appeal to the Crown. 35 His fi rst appointee, Governor Richard Nicolls, brought with him in 1665 a frame of government and a civil and criminal code, which came to be known as the Duke’s Laws. 36 A meeting of thirty-four deputies from seventeen towns hesitatingly approved the laws in March 1665. However, the frame of government did not provide for an elected assembly. The governor and his council were the supreme governing body in New York. The governor was responsible for day-to-day administration and his handpicked council helped him make policy. They met annually with the high-sheriff and justices of the peace as a supreme court. The only unit of local government created by the Duke’s Laws was the county of Yorkshire, which was the area of English occupation. Each town was governed by a constable and eight overseers selected by the freemen. A mayor, aldermen, and a sheriff replaced the former burgomasters, schepens, and schout. Unlike New England, no provision was made for town meetings. New York returned briefly to Dutch rule during 1673–74, when the treaty signed at Westminster permanently restored York to his proprietary in October 1674. He appointed as governor Major Edmund Andros, whose instructions excluded any provision for an elected assembly. Andros was followed by Thomas Dongan, who received his commission in September 1682 but was delayed in his arrival in New York until August 1683. Dongan’s instructions ordered him to call elections for an assembly primarily to secure funds for the defense of New York. On October 17, 1683, New York’s fi rst legislative assembly met at Fort James. On October 31, 1683, it published a 35

A detailed treatment of New York’s constitutional and political development between 1664 and 1688 appears in Robert C. Ritchie, The Duke’s Province: A Study of New York Politics and Society, 1664–1691 (Chapel Hill: University of New Carolina Press, 1977). 36 The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), 1:6–110.

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“Charter of Liberties and Privileges” as a frame of government to protect the colonists’ liberty, property, and opportunity to assent to their laws and taxes. 37 The legislature also passed fifty laws. The charter was the colony’s first exercise in representative government. It was approved by Governor Dongan and his council, and signed and sealed a year later by the duke for its return to New York. It never arrived. When James became king upon the death of Charles II, the Lords of Trade reconsidered New York’s charter and recommended its disallowance. In May 1686, James sent Governor Dongan new instructions, declaring the charter disallowed and void. Dongan read the repeal to his council and the charter legislature did not meet again. The new royal commission and instructions again vested full power of legislation and taxation in the governor. As previously noted, James created a larger Dominion of New England, which lasted until William and Mary restored the original colonies in 1691.

New Sweden (Delaware)

D

utc h rul e in New Sweden in the early 1630s and during 1655–64 mirrored that in New Netherland. In 1641 Sweden assumed full control over the territory when Dutch investors sold their stake in the New Sweden Company to the Swedes. In 1643 New Sweden began a period of modest development with the arrival of Governor Johan Printz. Printz was granted absolute rule over the colony and instructed by the Swedish government to make additional settlements, increase trade, keep the peace, and make the colony self-sufficient. He achieved little growth or prosperity, and in 1655 the Dutch conquered New Sweden and absorbed it into New Netherland. New Sweden (Delaware) effectively became the Duke of York’s colony on August 29, 1664, when Stuyvesant surrendered to Colonel Richard Nicolls. After a short period, the duke’s government in New York extended its hegemony over Delaware, ruling it until 1682 when the territory came into the possession of William Penn. A number of grants issued by Charles II incorporated the Delaware settlements into Penn’s grant. In December 1682, Pennsylvania’s fi rst assembly passed an act of union that recognized Delaware as a distinct entity. Known as the three lower counties, it was to have equal representation in the Council and assembly. On occasion Pennsylvania’s General Assembly met in New Castle as a gesture of friendliness to Penn’s supporters in the lower counties. The Delaware counties were suspicious of the Quaker inhabitants of Penn’s

37

Lutz, Colonial Origins, 256–62, and Colonial Laws of New York, 1:111–16.

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three Pennsylvania counties, and pushed for greater autonomy in managing their own affairs. 38

New Jersey e w j e r se y became a separate proprietary39 on June 24, 1664, when the Duke of York transferred the province to Lord John Berkeley and Sir George Carteret, two friends of the Crown.40 On February 10, 1665, the proprietors issued their concession and agreement to prospective settlers, followed by a clarification in 1672 stipulating that the right to vote or hold office required holding land by patent from the proprietors in order to be considered a freeholder. New Jersey briefly came under Dutch rule in 1673– 74, after which it reverted to the proprietors. Eager to attract settlers from New England, the proprietors promised in their concessions a general assembly, freedom of trade, and liberty of conscience. The 1665 concessions provided for a proprietary governor, a council of six to twelve men appointed by the governor, and twelve elected deputies. The three parties would constitute a unicameral general assembly that would enact laws that did not contravene those of England or the proprietors’ instructions. The assembly was empowered to levy taxes, except on unimproved land of the proprietors. Over the next two years, six towns were created by immigrants from New England and Long Island. Each town conducted its own business by majority vote and was authorized to send two representatives to the provincial assembly. The first election was held in April 1668 and the fi rst assembly convened the following month at Elizabethtown. It broke up over disputes about land titles and taxes. The Duke of York settled the land dispute in favor of the proprietors, which resolved one of the fledgling colony’s early problems. The assembly became bicameral in 1672. In 1674, New Jersey underwent a significant transformation. In March Lord John Berkeley sold his share to two Quakers, Edward Byllynge and

N

38 In 1691, the lower counties broke away from Pennsylvania and selected their own deputy governor. The breach was temporarily healed two years later, but the foundation of separation had been laid. A frame of government adopted in Pennsylvania in 1701 (see segment on Pennsylvania below) included a clause that provided for the separation of the three lower counties from the province of Pennsylvania. 39 A summary treatment of the proprietary governments of East and West New Jersey appears in John E. Pomfret, Colonial New Jersey: A History (New York: Charles Scribner’s Sons, 1973), 22–76. More extensive discussions of the two proprietaries are found in his two earlier, more specialized volumes: The Province of West New Jersey, 1609–1702: A History of the Origins of an American Colony (Princeton: Princeton University Press, 1956), and The Province of East New Jersey, 1609–1702: The Rebellious Proprietary (Princeton: Princeton University Press, 1962). 40 Th is document and others up to 1672 are cited in chapter 2.

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John Fenwick. Two years later, Sir George Carteret agreed to a partition of the province along a line extending from the upper Delaware to Little Egg Harbor. These developments in the “Quintipartite Deed of Revision, Between East and West Jersey, July 1, 1676,” created the provinces of East and West Jersey.41 The two Jerseys proceeded on separate, but similar, tracks. The East New Jersey assembly adopted a number of acts based on the Duke’s Laws of 1665. The appointment of Edmund Andros as governor of New York in July 1674 resulted in unsettled conditions. Andros sought to impose customs on goods entering the Delaware River, a measure vigorously opposed by Carteret. Sir George died in January 1680, and the matter was resolved when the Crown ruled against Andros, who was recalled at the end of the year. In February 1682, the Carteret estate sold East New Jersey (see below). Meanwhile Lord John Berkeley, co-proprietor of New Jersey, sold his interest to Edward Byllynge and John Fenwick for 1,000 in an indenture executed on March 18, 1674. Byllynge and Fenwick jointly obtained a half interest in an as yet undivided proprietorship. Following the reconquest from the Dutch, Charles II issued a new confirmatory grant to the Duke of York, who issued a release to Sir George Carteret for ownership of the soil of the northern part of New Jersey, East New Jersey. Byllynge and Fenwick held the southern part, West New Jersey. The two men signed a deed that divided their proprietorship into one hundred parts or shares. Shares in West New Jersey were further divided, some into fractional shares, purchased by 120 individuals. The trustees of West New Jersey issued their Concessions of March 3, 1677, which provided for an elected assembly, with all adult males entitled to vote on measures of the assembly.42 The first assembly of West New Jersey met on November 21, 1681, at Burlington. Its fi rst order of business was to adopt ten fundamentals, “Province of West New Jersey, in America, the 25th of the Ninth Month Called November, 1681,” signed by the governor and speaker in the name of the entire assembly. Its objective was to keep the power of the government in the hands of the inhabitants, as opposed to that of the chief proprietor, Byllynge.43 They agreed to the structure of government, which called for a general free assembly chosen by the free people of the province. Provision was made for annual elections and all officials were to be accountable to the legislature. Raising taxes required the act, consent, and concurrence of the 41 Thorpe, Colonial Charters, 5:2551–60, and http://www.yale.edu/ lawweb/avalon/states/ nj06.htm (February 27, 2003). 42 The concessions were formulated in 1676. Thorpe, Colonial Charters, 5:2548–51, and http://www.yale.edu/ lawweb/avalon/states/nj05.htm (February 27, 2003). 43 Thorpe, Colonial Charters, 5:2565–67, and http://www.yale.edu/ lawweb/avalon/nj08.htm (February 27, 2003).

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General Assembly. The assembly fought with Byllynge until his death in January 1687, when his heirs sold Byllynge’s shares together with the right of government to Dr. Daniel Coxe, a court-favored individual. The assembly became bicameral in 1696. Turning to East New Jersey, Sir George died in 1680 and the Carteret estate sold East New Jersey in 1682 at auction to a group of twelve Quakers headed by William Penn for the sum of 3,400 sterling. By deed of lease and release, the purchasers bought the soil and the right of government. Within a year, shares were sold that increased the number of proprietors to twentyfour. The transfer was confirmed in the “Duke of York’s Confirmation to the 24 Proprietors: 14th of March 1682.”44 The twenty-four proprietors issued “The Fundamental Constitutions for the Province of East New Jersey in America, Anno Domini 1683,” which called for the establishment of a great council consisting of the proprietors and 144 persons chosen by the freemen.45 Approval of two-thirds of the council was required for legislation and taxes, but only twelve of the proprietors had to consent. Disputes between the assembly and the proprietors were resolved by English authorities in favor of the proprietors in a document dated November 23, 1683, titled “The King’s Letter Recognizing the Proprietors’ Right to the Soil and Government.”46 Subsequent sales of shares, especially to Scotsmen, increased the number of proprietors to eighty-five and also fostered a considerable Scottish migration between 1683 and 1688. The development of the colonial constitutions of both Jerseys came to a halt with the establishment of the Dominion of New England. Its original jurisdiction included Massachusetts, Plymouth, New Hampshire, Maine, and Rhode Island. Sir Edmund Andros, returned to America as governor in December 1686, annexed Connecticut in the fall of 1687 and both New York and the Jerseys in the spring of 1688. All dominion assemblies were suspended during the Andros regime, which lasted until April 1690. Subsequent constitutional development had to await the policies of William and Mary.

Pennsylvania

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n m ar c h 4, 1681, Charles II granted William Penn a proprietary charter for the province of Pennsylvania.47 On April 25, 1682, Penn

44

The actual date was March 14, 1683, in the modern calendar. Thorpe, Colonial Charters, 5:2567–73, and http://www.yale.edu/ lawweb/avalon/states/nj09.htm (February 27, 2003). 45 Thorpe, Colonial Charters, 5:2574–82, and http://www.yale.edu/ lawweb/avalon/states/ nj10.htm (February 27, 2003). 46 Thorpe, Colonial Charters, 5:2582–84, and http://www.yale.edu/ lawweb/avalon/states/ nj11.htm (February 27, 2003). 47 A survey of developments in colonial Pennsylvania up through the Glorious Revolution appears in Joseph E. Illick, Colonial Pennsylvania: A History (New York: Charles Scribner’s Sons, 1976), 1–75.

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issued his “Charter of Liberty,” which established a government consisting of a governor, a provincial council, and a general assembly. He followed that on May 5, 1682, with a frame of government, which restated the articles in the liberty charter and added forty laws agreed upon in England. Penn summoned his fi rst convention of delegates in late 1682, which met in a single body with Penn for four days, approving the frame and adding some laws to those previously approved in England. The General Assembly next met from March 10, 1683, to April 4, 1683, in two separate chambers, an elected council of eighteen and an elected assembly of fi ftyfour men. It approved a document that resulted in Penn’s second frame of government, which served as the colony’s governing document for the next decade.48

The Southern Plantation Colonies

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h e so u t he r n colonies consisted of one corporate colony, Virginia, which became a royal colony in 1624, and the two proprietary colonies of Maryland and Carolina, which officially split into North and South Carolina in 1712. Virginia from 1624, along with New Hampshire from 1680, were the only royal American colonies prior to 1688. Despite the desire of the Privy Council to extend greater royal control over England’s American colonies, Charles I granted the first Baron of Baltimore the proprietary of Maryland in 1632, and his son Charles II, after the Restoration, granted the proprietary of Carolina to eight of his supporters in 1663. Virginia and Maryland experienced ups and downs stemming from the English Civil War while the Carolinas were disrupted by conflicts between the proprietors and settlers. Virginia remained loyal to the Crown, which led Cromwell’s forces to take steps to forcibly occupy the colony in 1652. Lord Baltimore almost lost his proprietary on more than one occasion. The Carolina proprietors so mismanaged their possessions that they surrendered them to the Crown in the eighteenth century.

Virginia

T

he const itut ion of Virginia underwent several changes during the colony’s fi rst eight decades.49 In the fi rst charter of 1606, the

48

Details of these measures appear in chapter 3. A third frame of government was adopted in 1696, which confi rmed the right of the assembly to initiate bills equally with the council; previous frames accorded the assembly a right of consent, not of initiation. The third frame was followed by another charter in 1701. That document confi rmed the legislature’s parliamentary privileges and transformed the council solely into an advisory body of the governor. The legislature remained unicameral until the Revolution. These developments are discussed in part III. 49 A history of constitutional and political development in the fi rst four de cades of Virginia’s history, from which some of this discussion is drawn, appears in Jon Kukla, Political

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Crown retained considerable control by reserving the right to make regulations as it saw fit for the government of the colony. In the second charter, the Crown transferred the power to organize the government to a governing council elected by the company.50 By a writ of quo warranto, it annulled the Virginia Company’s charter in 1624 and assumed direct control. In Lord De La Warr’s commission of 1610, executive, legislative, and judicial functions were combined in the body of the governor. Th is concentration of power proved unsatisfactory. To secure broader support among the settlers, the Virginia Company authorized a local assembly in 1619, the first representative body in America. On July 30, 1619, two burgesses from each of eleven settlements met with the governor and councillors in a unicameral body, the General Assembly. It remained in session only five days, but followed parliamentary procedure. The elected body was confi rmed by “An Ordinance and Constitution from the Treasurer and Company in England Calling for a Council and Assembly in Virginia, July 24, 1621.”51 Two further assemblies met in 1621 and 1624 before Virginia became a royal colony. Subsequent assemblies that met in 1629, 1630, and 1632 imposed local taxation. Charles I acknowledged the General Assembly of Virginia as the colonists’ representative in negotiations with tobacco agents when he established a monopoly for the import of Virginia tobacco into England. Another recognition occurred when the Privy Council requested that the assembly deal with issues of navigational beacons and the preservation of cattle. Finally, in 1639, the General Assembly was specifically named in a royal governor’s commission. A major political event occurred in 1635 when the governor’s councillors removed him from office and sent him to England. Governor Sir John Harvey had insisted that as the Crown’s representative he could act without the approval of the Council. The councillors insisted that the governor was only a first among equals. The Council selected a temporary governor until the Crown appointed a successor. Harvey was acquitted in 1637 and returned to Virginia as governor, when he arrested the ringleaders of his ouster at the Institutions in Virginia, 1619–1660 (New York and London: Garland, 1989). Several hundred documents covering such topics as the beginnings of Virginia, the evolution of self-government at the provincial and local levels, social structure, indentured servants and slaves, the economy, relations with Indians, political confl ict between the Assembly and governors, Bacon’s rebellion, and general conditions of life are reproduced in Warren M. Billings, ed., The Old Dominion in the Seventeenth Century: A Documentary History of Virginia, 1606–1689, published for the Institute of Early American History and Culture at Williamsburg, Virginia (Chapel Hill: University of North Carolina Press, 1975). 50 The contents of these several charters are discussed in chapter 1. 51 Kammen, Deputyes and Libertyes, 90–92, and Billings, Documentary History, 37–38.

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order of the Privy Council and sent them to England for trial. This backfired as the four councillors implored their friends to come to their assistance. The Privy Council recalled Harvey, appointed a new governor in January 1639, and restored the properties of the four councillors. A local elite had successfully bested the Crown’s formal representative in Virginia’s political arena. In the future, governors would have to take local sentiment into consideration. The new governor, Sir Francis Wyatt, brought instructions that called for an annual meeting of the General Assembly and confirmation of lands to the present planters and possessors. Wyatt remained for three years, replaced in 1642 by Sir William Berkeley, who served as governor until 1652 and again from 1660 until his suspension in 1677. Evidence appears to suggest that the burgesses sat separately as a lower house and the Council as an upper house from 1643. In 1648 Parliament renounced allegiance to the king. Two years later it passed an act that forbade trade with Virginia and three Ca ribbean colonies that remained loyal to the king. Meanwhile, Virginia reposed in Berkeley and his Council full emergency powers derived from the king. In 1649 the General Assembly reaffirmed its support of Berkeley and declared that it was treason to defend the regicide. In 1651 Parliament dispatched five commissioners to seek Virginia’s surrender to the Commonwealth. On March 12, 1652, Virginia approved articles of surrender, but one permitted the legislature to continue as before so long as it did not enact any laws contrary to those of the Commonwealth. At the next legislative session in late April 1652, the House of Burgesses chose a speaker, the governor, and members of the Council. The burgesses took control of county court appointments. Apart from securing the colony’s commitment to enforce the Navigation Act of 1651, Parliament left Virginia to its own ministrations during the decade. Berkeley was allowed to retire to his Green Spring plantation. The Stuart Restoration temporarily brought a moment of uncertainty. In 1658 the House of Burgesses had designated itself the supreme power of Virginia, but on occasion it had also acknowledged the supreme power in England. In May 1660 the Convention Parliament proclaimed Charles II as king. On June 17 Charles issued his commission to Berkeley granting him full power as any governor and council had enjoyed during the preceding thirty years. In the 1670s and 1680s, the burgesses lost some of their previously hard-earned rights to hear judicial appeals, elect their own clerk, and control all revenues. The house retained its right to initiate legislation and some control over general taxes. The Glorious Revolution brought the recall of an unpopular governor to England and replaced him with a lieutenant governor who restored good relations with Virginia’s political elite. In 1688, Virginia had a well-defined constitution. [ 139 ]

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Maryland

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he chart er and founding of Maryland in 1632 are described in chapter 2.52 In March 1634 Leonard Calvert, brother of the proprietor, landed with three hundred settlers and became the colony’s fi rst acting governor. He bought some land from the Indians and founded the town of St. Mary’s. Article VIII of the charter vested the right of legislation in the proprietor and the freemen, but the proprietor could issue ordinances with the force of law between sessions of the legislature so long as they did not conflict with enactments previously in force. Most important, the people could not be taxed without their consent. The meeting of the colony’s first legislature, a unicameral body consisting of the governor, Council, and all the freemen, at St. Mary’s City on February 26, 1635, enacted several laws. However, the proprietor, Cecilius Calvert, disallowed them, instead submitting his own draft of laws for approval by a new gathering called for January 25, 1638. That legislative session approved forty-three acts. One act established the House of Assembly and the making of laws, one extended religious freedom to Catholics, one stipulated the calling of elections for and meetings of the legislature, and one secured the liberties of the people.53 As the population grew, the freemen became represented by delegates to the house. A third legislature in early 1639 established the system of selecting eight burgesses by the freemen in electoral districts consisting of clusters of settlement. By 1650, Maryland’s legislature was divided into two distinct houses and the elected representatives had their own speaker. The colonial government had taken on its permanent form. Maryland was the first American colony to recognize religious tolerance. Catholics, Protestants, and Puritans were invited to settle. These rights of religious liberty were later confirmed in the Maryland Toleration Act of April 21, 1649.54 Maryland experienced a great deal of turbulence as the colony was caught up in the English Civil War. The Puritan takeover of Parliament put Catholic Lord Baltimore’s proprietary at risk. To convince Parliament that he was loyal, in 1649, two years after Governor Leonard Calvert died, the Second Lord Baltimore appointed a Protestant named William Stone as governor, and instructed him to have the legislature approve the Act of Toleration. Between 1652 and 1655, commissioners from Parliament fought against Governor Stone and his followers. Victory by supporters of the Commonwealth brought 52

Th is treatment of Maryland from its founding in 1632 to the Glorious Revolution draws from Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 33–90. 53 Lutz, Colonial Origins, 299–301, 302, 305–7, 308. 54 Lutz, Colonial Origins, 309–13.

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about a Puritan assembly that overturned the proprietary regime and its policies, repealing the Toleration Act among others. Lord Baltimore appealed to Cromwell for the return of his proprietary, who commanded the Puritan regime in Baltimore to stand down. Cromwell’s command was initially disregarded and civil war plagued the colony until November 1657 when Lord Baltimore and the Puritans agreed to a treaty that restored Baltimore’s patent to Maryland and granted a general amnesty to all participants. Between 1640 and 1660, the population of Maryland increased from 583 to 8,426, reaching 24,024 in 1690, largely as a result of considerable male immigration. Many came as indentured servants, receiving financial support from the proprietor, who was eager to increase his colony’s population. Cecilius’s son and heir, Charles Calvert, and later the Third Lord Baltimore, administered the proprietorship and served as governor from late 1661 until he returned to England in 1684. He expanded the house to take into account the growing population and restored the two-chamber assembly. The growing ambitions of the population led Charles to impose a property requirement. Freemen whose estate was less than fi fty acres or who possessed a personal estate valued at less than 40 sterling were no longer enfranchised. Only men who possessed one thousand acres of land could be elected as a delegate to the legislature. The proprietary collapsed in 1689. When news of the Glorious Revolution made its way to Maryland, a half-dozen leading Protestants organized an insurrection that brought about the surrender of the proprietor’s councillors and kinsmen in mid-1689. Maryland became a royal colony in 1690, although Baltimore was still permitted to receive revenue in the form of quitrents and excises. Maryland remained under crown rule until it was restored to the proprietor in 1715.

Carolina

T

h e c ar ol i n a charters of 1663 and 1665, the latter enlarging the territory of the grant, and the proposals and concessions of the lords proprietors issued those same years are discussed in chapter 2.55 North and South Carolina were twin-born, although settled by different people at different times. Their histories are somewhat parallel. Virginians made the first settlements in North Carolina in 1653 in a district called Albemarle. Sir William Berkeley, governor of Virginia, had made several grants of land on territory he regarded as his colony’s frontier. 55 Th is treatment of the Carolinas draws from Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 29–55, and Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 47–68.

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By 1663 more than five hundred people occupied land in North Carolina. Berkeley even appointed a commander of what was called the southern plantation. The Crown’s charter of 1665 extended the original Carolina grant to include the settled area of Albemarle, clearly stating it did not belong to Virginia. Men from New England and Barbados also settled on the Cape Fear River, the district called Clarendon, but quickly abandoned the area. The eight Carolina proprietors, which included several of New Jersey’s proprietors and Sir William Berkeley, largely followed the arrangements of New Jersey. They proposed an elected assembly that would make laws with the consent of the governor and Council, subject to the proprietors’ disallowance. Governments would be drawn up for the separate settlements at Albemarle, Cape Fear, and Port Royal. Each would be called a county and given its separate administration with a governor, council, and assembly. A central government was later to be provided by the Fundamental Constitution of 1669.56 That constitution drawn up by John Locke envisaged a unicameral and biennial assembly, which would include a governor, the proprietors or their deputies, and several feudal aristocrats known as landgraves and caciques, and elected freemen. The freemen would not be allowed to initiate legislation and were to function like the Irish Parliament along the lines of Poynings’ Law, only permitted to debate matters approved by the Council. It was revised five times between 1669 and 1698 and never seriously implemented. Officials in Albemarle were instructed to apply only the features of the documents that were suitable under current conditions. The first representative assembly of Albemarle sat in the spring of 1665, followed by meetings in 1667 and 1669, thereafter meeting regularly. Although a unicameral body, the elected delegates met separately from the governor and Council. In 1691, bicameralism was formally established. The Carolina proprietors were more interested in profit than colonization. They were also distracted by London’s Great Plague of 1665 that killed thousands, the Great Fire of 1666 that swept through London destroying more than thirteen thousand houses, and war with France and Holland that lasted until 1667. The settlers resisted the proprietors almost from the start. In 1678 an insurrection led by John Culpeper seized the government at Albemarle and held it for two years. Poor choice of governors left Albemarle in a state of demographic and economic decline when the Glorious Revolution exiled James II. A settlement of the southern part of Carolina on the Ashley River around 1670 was due to a group of experienced planters who brought three shiploads of English emigrants with them from Barbados. Ten years later, they relocated to a point between the Cooper and Ashley rivers, which be-

56 Thorpe, Colonial Charters, 5:2772–86, and http://www.yale.edu/ lawweb/avalon/states/ nc05.htm (February 27, 2003).

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came Charles Town (hereafter Charleston), after King Charles. The governor failed to call an assembly owing to the small population in the settlement. Two of the settlers took matters into their own hands and issued election writs that resulted in an assembly of fifteen delegates plus five appointed councillors. South Carolina’s fi rst assembly convened in July 1670; a year later, Governor Joseph West convened the first legal assembly. That assembly was short-lived, after which twenty freeholders would be elected biennially and meet as required. Until the Glorious Revolution, politics, dominated by the councils, was unsettled both in Albemarle and Charleston. Both Carolinas would remain in a state of turbulence until the proprietors surrendered their claims in the early decades of the eighteenth century and they became royal colonies.

Voting and Elections

E

nt h usiast ic ac t iv i t y at election time was uncommon during the early years of colonization.57 The first elections for the Virginia House of Burgesses in 1619, and those of several decades thereafter, were, as far as can be determined, uncontested. The same can be said for initial voting efforts in Plymouth. Following the death of John Carver in 1621, William Bradford was annually chosen governor for the major part of the next thirty-six years, in many instances without opposition. Deputies to the legislature were also periodically reelected in most cases. New Netherland, founded in the 1620s, had no genuine competition for office in the period of Dutch rule. Representative government was nonexistent beyond the local level. New York was not provided with an elected assembly until 1683. Massachusetts had a small number of contests during its early years as a result of some disagreement with the policies of Governor John Winthrop, after which the chief magistrates were usually returned to their post each year until their retirement or death. Contention at the polls in the Carolinas and Pennsylvania was unknown before 1689. The early quarrels in Rhode Island and Connecticut did not extend to conflicts at the ballot box. The electorate in provincial America was confined to a relatively small part of the population. Women were excluded. Requirements for voting took into account age, residence, citizenship, race, religion, and property holdings. Suffrage laws in early America often followed English precedent, such as the property qualification known as the 40s. freehold or the possession of an estate valued at 40. In general, the Crown allowed the colonies to set their own voter standards. Being a freeman or an inhabitant of a certain area could determine eligibility.58 57 58

Dinkin, Voting in Provincial America, 7. Dinkin, Voting in Provincial America, 28–29.

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c h ap t e r 7
Taxation of the New England Colonies, 1620–1688

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h e f i r st wave of colonists to settle Massachusetts was granted exemption from subsidies and customs in New England for seven years and preferential treatment on goods shipped to and from England and its dominions for twenty-one years. These preferences were also enjoyed by disgruntled migrants who left Massachusetts and founded Connecticut and Rhode Island, as well as the inhabitants of the coastal New Hampshire settlements who came under the jurisdiction of Massachusetts until New Hampshire became a royal colony in 1680. Nonetheless, some taxation was required for these colonial governments to pay public salaries, build some infrastructure, and provide some minimal level of local ser vices such as poor relief. From the beginning, taxation became a central issue in the new settlements.

The Development of the New England Colonies

P

opul at ion g r ow t h in the New England colonies was gradual until the Stuart Restoration in 1660, after which it markedly accelerated. The arrival of 102 settlers in Plymouth in 1620 spread over all the New England colonies to 83,191 in 1688, a small fraction of the near five million of England and Wales.1 The four New England colonies were similar in several respects. Most of the settlers engaged in farming, supplemented with fishing, forestry, shipbuilding, and some trade with other colonies and the West Indies. Boston became a leading commercial center, as did Newport at a later date. A small class of merchants grabbed the opportunity afforded by the economic disruptions during the English Civil War to expand in the transatlantic and Ca ribbean trade. As the seventeenth century drew to a close, English merchants began to regard their New England counterparts as serious rivals. 1

New England population figures appear in the three tables in the appendix to this book. English figures appear in E. A. Wrigley and R. S. Schofield, The Population History of England, 1541–1871: A Reconstruction (London: Edward Arnold, 1981), table A3.3, 531–35.

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Massachusetts h e f i r s t few years of the colony were difficult.2 The Mayflower landed at Cape Cod on November 9, 1620, and half the settlement perished by the next spring. A good harvest in 1621 allowed the Pilgrims to celebrate a thanksgiving feast that fall. Several other attempted settlements in the early 1620s failed to survive. The Massachusetts Bay Company dispatched two small groups of about three hundred settlers in 1628 and 1629, followed in 1630 by the main contingent of another nine hundred or so under the leadership of Governor John Winthrop, who put the colony on a path of sustained expansion. By 1640 Plymouth had added seven new towns to its colony, while Massachusetts added twice as many.3 During the 1630s, an estimated ten thousand Englishmen migrated to Massachusetts, founding the towns of Weymouth, Hingham, Watertown, Dedham, Concord, Sudbury, Newbury, Chelmsford, and Lancaster. Others migrated into Connecticut to found Hartford, Wethersfield, and Windsor and small communities in New Hampshire and Rhode Island. Once the colonists adjusted to local climatic and agricultural conditions, a high birthrate spurred population growth. Expansion brought the settlers into confl ict with Indian tribes. An unfortunate incident in 1636 in which Pequot Indians killed John Oldham, a fur trader, led Massachusetts and Connecticut to declare war on the Pequot. Simmering problems with Indians over the next four decades led to a much larger, costly confl ict known as King Philip’s War in 1675–76. The three resources of fish, fur, and timber dominated the colony’s modest early trade. The colonists built shallops and ketches to fish the rivers and offshore banks.4 When the English Civil War curtailed English fishing

T

2

A brief summary of the founding and early years of the Massachusetts Bay Colony appears in Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 30–46. 3 The expansion of Massachusetts between 1630 and the Glorious Revolution of 1688 is treated in Labaree, Colonial Massachusetts, 84–105. See also Bernard Bailyn, The New England Merchants in the Seventeenth Century (New York: Harper and Row, 1964). First published by Harvard University Press in 1955. 4 The colonists built small vessels called barques, of twelve to twenty tons in size; sloops, vessels of twenty to fifty tons that are rigged with one mast, large mainsail, and large topsail; ketches, which are vessels with two masts with a square-rigged forward and fore-and-aft mainsail; pinks, which are sailing vessels with a narrow overhanging stern; and larger three-masted, square-rigged vessels. The sloop was the most common colonial rig, normally used in the coastal trade. Merchant shipping tonnage was estimated on the basis of a formula that had been used by the Royal Navy and by shipwrights since the seventeenth century. Shipping tonnage referred to the cubic volume of space available in a ship for carry ing cargo. For tax purposes, such as tonnage and port fees, tonnage was defi ned in “tons burden.” A ton of merchandise was defi ned as 252 gallons, equal to 2,240 pounds. The space obtained by paying for a ton of freight was

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off the North American coast, the colonists began to market dried cod to other American colonies, the Caribbean, southern Europe, and England itself. In 1641, Massachusetts exported three hundred thousand dried fish. In 1666, Massachusetts had 1,300 fishing vessels and thousands of men employed in the business of catching, curing, and shipping fish. The growth of fish exports to the Caribbean went hand in hand with the development of the plantation system. Caribbean colonists planted every arable acre in sugar. They required food for themselves and their slaves, who were fed mainly on the poorest grade of cod, termed “refuse fish.” High-grade fish was shipped to the Catholic countries in Europe where it commanded the highest price, with medium-grade cod bought by the Royal Navy to feed its sailors.5 The fur trade prospered for two decades but dissipated in mid-century as the stock of beaver in the near inland regions was exhausted. The Dutch and French controlled the vast interior waterways where beaver were more plentiful. Abundant timber supplies fostered shipbuilding and the production of staves, barrels, shingles, and other wood products that could be exported. Boston merchants sold oak staves and heading for wet storage containers— pipes, hogsheads, casks, and barrels—to wine producers in the Canary and Azores islands.6 American white oak was ideal for the aging and transport of wine. Shipbuilding grew in tandem with the transport of casks and dried codfish to the wine islands. In 1645, a Boston vessel sailed via Madeira to Africa, where it picked up a cargo of Africans to be sold as slaves standardized early as forty cubic feet, which was also known as a “deadweight ton.” Scholars disagree over the exact number of cubic feet embodied in tonnage in practice, but the forty cubic feet measure became a norm. See the discussions in footnotes 1 and 2 in appendix V, “Utilization of Shipping Capacity,” in James F. Shepherd and Gary M. Walton, Shipping, Maritime Trade, and the Economic Development of Colonial North America (Cambridge: Cambridge University Press, 1972), 167. In modern times, a ton has also come to mean a unit of internal capacity of a ship equal to one hundred cubic feet and the displacement of a ship equal to thirty-five cubic feet, supposed to equal the volume taken by a long ton of seawater. 5 Harold A. Innis, The Cod Fisheries: The History of an International Economy, rev. ed. (Toronto: University of Toronto Press, 1954), 75, 117–18, 160–67. 6 Although colonial containers varied in size, the average quantity of different containers is as follows: a pipe is a wine cask having a capacity of 126 imperial gallons (478 liters); a hogshead, used in the tobacco trade, is a cask with a capacity of 63 gallons (239 liters); a barrel can hold 36 gallons (144 liters); and a fi rkin, used to pack butter, can hold 9 gallons (34 liters). Other measures used in colonial trade include a bushel (4 pecks or 36.4 liters), a keg (4.5 gallons), a tierce (42 gallons), a ton (252 gallons or 2,240 pounds), a hundredweight (112 pounds or 50.8 kilograms), a quintal (100 pounds), and a last (80 bushels, 640 gallons, or 2 tons). Barrels, bushels, and casks especially varied in size for rice. An imperial gallon equals 4.546 liters; a gallon in the U.S. Customary System used in liquid measure equals 3.785 liters. An imperial gallon is onefi fth larger than a U.S. gallon. Shepherd and Walton, Shipping, Maritime Trade, 171–72.

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in Barbados. New England timber also provided wood for rolling machinery, mill buildings, slave quarters in the Caribbean, and wharves. Horses were required in the Caribbean to work the sugar mills. In 1650 a market developed for porous red oak casks to carry sugar and molasses from the Caribbean. By mid-century, New England shipwrights were selling ships to the English. By 1666, Massachusetts had a fleet of thirty vessels exceeding one hundred tons and another seven hundred of lesser size. As the century came to a close, a thousand ships had been built in New England. Local white pine found a ready market for the English navy. A first-rate warship of 100 guns required lower masts measuring 36 inches diameter at the heel and 120 feet long. Its bowsprit measured 38 inches at the heel, 75 feet long.7 Mast transports were dispatched by the Admiralty to New England in 1652 and their return the following year marked the beginning of an annual trade in mast timber that endured until the American Revolution. A single mast tree could command the princely sum of 100 sterling. By 1685 the Admiralty became concerned about the diminishing supply of large white pines and sought to protect the remaining mast trees from colonial logging. A policy of marking trees for the exclusive use of the Royal Navy with the king’s “broad arrow,” a three-legged letter A without the horizontal bar, was implemented between 1691 and 1729 to ensure a reliable supply of masts for the Royal Navy.8 It met with only partial success. Attempts at manufacturing were generally unsuccessful. Tools, provisions, furniture, necessities, and even some luxuries were imported, chiefly from England. All kinds of cloth including calico, cambric, challis, fl annel, lawn, linen, serge, plush, silk, satin, and other clothing fabrics were imported, although the colonists raised flax to spin and weave into linen and sheep for wool.9 Social stratification followed the English pattern. The gentry and clergy occupied the top of the scale. Beneath them were merchants, followed by artisans and freehold farmers. All these groups were eligible to vote and hold public office. Below them were journeymen of many crafts and unskilled workers, indentured servants working off their passage, and a few Indian and Negro slaves. By mid-century Massachusetts had furriers, weavers, felt makers, brick and tile makers, leather workers, carpenters, joiners, metal workers, sawyers, fullers, millers, tanners, bankers, blacksmiths, and

7

A bowsprit is a spar (a wooden pole) extending forward from the stem of a ship to which the stays of the foremast are fastened. 8 Samuel F. Manning, New England Masts and the King’s Broad Arrow, Maritime Monographs and Reports No. 42 (Greenwich, London: National Maritime Museum, 1979). 9 A glossary of several hundred colonial trade terms, most of which have fallen out of use, appears in Philip L. White, The Beekmans of New York in Politics and Commerce, 1647–1877 (New York: New York Historical Society, 1956), 645–55.

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shoemakers, but they were only a small fraction of the population. The port of Boston, the largest urban settlement in colonial America, was not much more than an overgrown village numbering about six thousand in 1687, or one-eighth of the colony’s population.10

Connecticut

T

h e n uc l e u s of the Connecticut colony was the towns of Wethersfield, Windsor, and Hartford, founded on the Connecticut River between 1634 and 1635 by emigrants from Massachusetts. The new settlements established their own system of governance, defense, and taxation, adopting their own charter in January 1639, which served as a basis of government until the colony received its royal charter in 1662.11 In October 1644, Connecticut absorbed the settlement of New Haven, which had been founded in 1638 but had never secured a patent or title to the land it occupied. New Haven’s attempt to obtain a separate charter failed under pressure from Connecticut’s leaders and agents in London. As in Massachusetts, the great majority of settlers were subsistence farmers. Scarcity of capital, labor, and transportation made it difficult to produce for a larger market either inside or outside the colony. Artisans, including shipbuilders, tanners, millers, smiths, carpenters, shoemakers, and tailors, practiced their crafts part-time with farming. Only shipbuilding went beyond the local economy. Connecticut’s towns lagged far behind Boston. The colony’s trade was mainly with and through Boston and New York. It sent beaver and other furs to Boston, bartered in exchange for English manufactured goods. The Dutch in New Amsterdam, later New York, bought wheat, biscuits, beef, pork, hides, and furs. Beef and provisions were exchanged in Newfoundland for fish, which was shipped to the West Indies in exchange for sugar, molasses, rum, cotton, and specie.12 A coastwise trade in dry hides and buckskin was established with Virginia. 10 Gary B. Nash, The Urban Crucible: The Northern Seaports and the Origin of the American Revolution, abr. ed. (Cambridge, MA, and London: Harvard University Press, 1986), 1. 11 Th is section draws from Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979), 3–19, 49–53, 90–101; Roland Mather Hooker, The Colonial Trade of Connecticut (New Haven: Yale University Press for the Tercentenary Commission of the State of Connecticut, 1936), 1–16; and Bruce C. Daniels, “Economic Development in Colonial and Revolutionary Connecticut: An Overview,” William and Mary Quarterly, 3rd ser., 37, no. 3 ( July 1980): 429–50. 12 In 1781 Benedict Arnold, in command of British troops, sailed up the Thames River. After landing at New London, he burned the city, destroying the port records of New London, the colony’s only authorized port of entry during most of the colonial period. The destruction of records precludes any rigorous statistical analysis of the colony’s external trade.

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Attempts by the colonial government to encourage industry, particularly ironworks, met with little success until the eighteenth century. The colony’s first shipyard opened in 1660 and several barques were built, later including sloops, ketches, and larger vessels. A report from colonial officials to the Lords of Trade in 1680 on the condition of the colony’s economy enumerated twenty-seven Connecticut vessels of varying size, a minuscule fraction of the number registered in Massachusetts. The report indicated little trade or industry.

Rhode Island

R

e l ig ion i n Rhode Island was distinguished by the absence of a priesthood, or hierarchy, which resulted in the development of a more secular state and free-market economy than that of neighboring Massachusetts.13 Rhode Island’s settlements were situated on, near, or surrounded by water. While Massachusetts and Connecticut had primarily subsistence farmers, Rhode Island’s settlers prospered as commercial farmers. The arrival of Quakers in the mid-1650s brought an intercolonial and international marketing network of trusted family and agents and lines of credit tying Rhode Island into trading networks in other colonial ports, the Caribbean, England, and the European continent. Shortly after settlement, large landowners switched from wheat farming to pastoral husbandry. Grazing, breeding, and fattening of livestock for sale to distant markets, augmented by the production of sufficient grain required for their own use and the feeding of livestock, became the foundation of agriculture. Rapid multiplication of hogs permitted large shipments of pork to Boston, New York, the Chesapeake and Albemarle regions and the West Indies, and supplied ship’s crews and fishermen off Newfoundland. The cattle industry grew equally fast. Large herds of milch cows gave rise to a dairy industry and profitable export of salted butter to other New England colonies and the West Indies. Cattle generated valuable byproducts of hides that were dried and tanned for shoes, clothing, gloves, saddles, harnesses, buckets, and many things used onboard ships. Sheep breeding flourished. A flock of one hundred thousand in 1661 reached two hundred thousand by 1692. Artisans were employed to process the wool clip for wrapping, storage, or spinning by housewives. Weaving and dying became productive activities. Horses were also bred for export, especially to operate the sugar mills in the West Indies. 13 The economic development of colonial Rhode Island from which this section draws is described in Carl Bridenbaugh, Fat Mutton and Liberty of Conscience: Society in Rhode Island, 1636–1690 (Providence: Brown University Press, 1974). See also Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 48–51, 117–18.

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Repairing and refitting visiting vessels developed after the colony received its royal charter in 1663. Prosperous merchants built warehouses to store incoming and outgoing cargo. Rhode Island became a haven for privateers and pirates. As a charter colony free from direct royal control, the colony’s governor and legislators allowed pirates who took Spanish prizes to come ashore and spend their money. Rhode Island merchants sometimes became partners in crime with pirates, helping finance and outfit their expeditions.

New Hampshire

N

e w h a m p s h i r e represented the northern frontier of the Massachusetts Bay Colony.14 Between 1623 and 1641 immigrants from England and Massachusetts established four small settlements along a sixteen-mile strip of the northern New England coastline to engage in fishing. Furs were another attraction. As previously noted, New Hampshire’s settlements came under the jurisdiction of Massachusetts in 1641. Nine hundred residents in the Piscataqua region received exemption from all Massachusetts taxation and protection from the claims of other holders of royal patents to the same area. Within two years, the remaining New Hampshire towns came into the fold of Massachusetts. The forests of New Hampshire provided large stands of white, yellow, and pitch pine; black, red, and yellow oak; spruce; cedar; maple; black and white ash; and others. Lumbering became a major source of employment and income by mid-century and was the foundation of the colony’s prosperity by the 1680s. Numerous sawmills were established. In 1681 fifty-one vessels, of which twenty-six were owned by New Hampshire traders, carried lumber from New Hampshire to Boston. Customs records of 1695, the first year for which comprehensive shipping information is available, list 134 vessels averaging ten tons capacity, carrying 1,679,300 feet of boards and 156,300 staves between New Hampshire and Boston. Twenty-nine larger vessels, eighteen Piscataqua based, exported lumber products to England, the West Indies, Rhode Island, Madeira, Newfoundland, and Pennsylvania.15 However, most of New Hampshire’s settlers were small farmers, raising corn and cattle.

Money

O

nc e a community grows beyond a primitive form of existence, some form of money is required to pay private debts and taxes. Money serves

14 David E. Van Deventer, The Emergence of Provincial New Hampshire, 1623–1741 (Baltimore and London: Johns Hopkins University Press, 1976), 3–95, and Jere R. Daniell, Colonial New Hampshire: A History (Millwood, NY: KTO Press, 1981), 39–79. 15 Van Deventer, Provincial New Hampshire, 95.

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multiple functions—as a medium of exchange that facilitates commerce between people, as a unit of account, and as a store of value. The early New England settlers brought with them some silver coins but quickly used these to purchase imported European goods. The colonies had no local source of precious metals. A series of laws enacted from the reigns of Edward III in 1351 through Charles II in 1663 banned the export of English silver coin, although it became legal after 1663 to export foreign coins and gold and silver bullion. The colonists had to find, acquire, or invent other forms of money with which to conduct their financial transactions. In this regard they were extremely creative, engaging in trade with French and Spanish colonies and other English colonies in the Ca ribbean to earn foreign coins and bills of exchange drawn on European merchants, and designating local resources and products as official money. Let’s review the different functions and forms of money with which the colonists had to contend to earn a living and finance their public spending.

Unit of Account

T

he col onist s generally kept their accounts in the currency units of their mother countries, which were based directly or indirectly on silver or gold coins. English settlers used pounds, shillings, and pence; Dutch settlers used guilders, stivers, and pennies;16 and Swedish settlers used silver and copper dalers.17 Units of account did not necessarily correspond to actual silver or gold coins of these denominations. Rather, they represented bookkeeping units, or moneys of account, which were converted into actual coins or other forms of money at specific rates based on their specie content—whose value fluctuated with changing market conditions—for payment of public and private debts. Apart from New Netherland and New Sweden, the English colonies used English units of account. The English pound can be traced back to the eighth century, when pennies spread throughout the kingdom, paid and accepted by tale or count at the rate of 240 to a pound. The idea was that the pound of account was to equal a pound weight of silver, divided into twenty shillings of twelve pennies, or 240 pennies. In the reign of Alfred, the rating of sterling silver per troy ounce was 20d. (1s. 8d.). During the reign of William the Conqueror, the value of sterling silver per troy ounce fell to 30d., the first of many depreciations. Over the centuries, the rating of sterling 16

One guilder (also a florin) = 20 stivers; one stiver = 16 penning (pennies); and one guilder = 320 penning. The Dutch also kept accounts in Flemish pounds (6 guilders), shillings (6 stivers), and groot (8 penning). The guilder was the predominant unit of account. 17 The numerical relationship between the Swedish daler, a unit of account, and actual Swedish coins appears in chapter 2, footnote 10.

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Precious Metals and Coins in England and the Colonies

T

here is an international standard for weighing precious metals, the Troy scale, first used at the medieval fairs in Troyes, France. The scale is: 1 mite = .05 grain, 20 mites = 1 grain, 24 grains = 1 pennyweight (dwt.), and 20 dwt . = 480 grains = 1 troy oz. Sterling coins were minted of an alloy that was 925 parts pure silver to 75 parts copper, or 92.5 percent silver content, expressed as .925 fine silver. Once the value of silver in coins became stable in the seventeenth century, a troy ounce of .925 sterling silver fineness was used for every 62d. (5s. 2d.) worth of silver coins minted in Britain. This value remained the sterling standard from 1601 to 1816. A standard shilling coin would have 0.1935 troy ounces of .925 fi ne silver. The most frequently used coin in the colonies was the Spanish colonial piece of eight, or eight reales silver dollar. It was authorized to be produced at 422.9 grains of .935 silver. The actual sterling weight of the silver dollar was 17 dwt. 9 gr. 3 mi. (or 417.15 grains sterling). The conversion of silver content in the Spanish piece of eight put its trading value at 54d., or 4s. 6d. In the same manner, other foreign silver coins possessed sterling weight and value based on the number of grains of silver weight in each coin, and the value of gold coins was based on their gold content and the ratio of the market value of gold to silver. The fi rst silver penny that circulated from the eighth through the tenth centuries had a traditional weight of 24 troy grains. It fell gradually over the centuries by two-thirds to 8 grains in 1552, settling at 7.8 grains in 1601. Edward I fi rst minted silver coins as farthings (1 ⁄4d.) and halfpennies (1 ⁄2d.) of proportional weight, which were discontinued with the Stuart debasement. Other small coins issued from the late thirteenth century included groats (4d.) and half groats (2d.), made in proportion to pennies of sterling silver. Silver shilling coins were fi rst issued in 1504, followed by the silver threepence (3d.), sixpence (6d.), half crown (2s. 6d.), and crown (5s.) in 1552, the three-farthing ( 3 ⁄4d.) and three-halfpenny (1 1 ⁄2 d.) pieces issued as an experiment in 1561, and the ten- and twenty-shilling pieces (10s., 20s.) issued during the Civil War. Other issues of silver coin included fourpence-halfpenny (4 1 ⁄2 d.), two-pence-farthing, (2 1 ⁄4d.), and threehalfpence, (1 1 ⁄2 d.) pieces. The brief Civil War issue of twenty-shilling coins was the only time one-pound silver coins were minted in the colonial era. The Middle Ages were marked by cycles of currency debasement and reform. Coins were frequently clipped, fi led, washed, blanched, and sweated, which reduced their silver content. Old coins were periodically called in and reissued with higher silver content. In 1344 a troy ounce of silver was rated at 23.6d. By 1542, it had depreciated to 64.2d., culminating in the great debasement of Henry VII, when an ounce of troy silver was rated at 133.2d. in 1546. Between July 1, 1552, and September 30, 1547, debased gold and silver coins with face value of 1,128,863 8s. were recoined. After the expense of minting, the reissue generated a net profit to the Crown of 227,378 11s. 91 ⁄2d. The Crown routinely took a share of the precious metals used to mint new coins, its seigniorage, during each calling in and reissue. In 1552, a troy ounce of silver was rerated at 60.1d. Restoration and reform came during the reign of Elizabeth in 1562. The decision was made to restore the old sterling standard of .925 fine silver and to mint coins at the rate of 5s. 0d. from an ounce of sterling silver. Fine silver was thus rated at 5s. 43 ⁄4d. an ounce. The silver

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Precious Metals and Coins in England and the Colonies (continued) farthing became so small and inconvenient to handle that it was replaced by a copper farthing under James I. In 1581–82 the three-penny, three-halfpenny, and three-farthing pieces were replaced by coins of 2d., 1d., and 1 ⁄2d. and striking of the shilling was resumed. A further reduction occurred in 1601 when sterling silver was coined at 5s. 2d. an ounce, reducing the shilling from 96 to 92.9 grains. Th is treatment draws from Sir Albert Feavearyear, The Pound Sterling: A History of English Money, 2nd ed. (Oxford: Clarendon Press, 1963), 1–123. Appendixes 1–3, 435–39, list the rating of sterling silver, fine gold, and gold and silver coins from the time of King Alfred through 1887. A penny of fine gold was first issued in 1257. Weighing 45 troy grains, its legal denomination was 1s. 8d. Subsequent gold coins of varying denomination included the florin, half florin, and quarter-florin (1343), the noble, half noble, and quarter-noble (1344–1464), the ryal or royal, half ryal, and quarter-ryal (1465–1544), the angel and half angel (1465–1661), the sovereign or double ryal and half sovereign (1489–1601), the double sovereign (1489), the crown and half crown (1526–46), the treble sovereign (1549–1642), the unite or laurel (1604–61), and the guinea (from 1663). Until the mid-fourteenth century, no English coin valued at one pound was minted. Thereafter, sovereigns, crowns, unites, and ryals were issued in fractions or multiples of a pound. Under Elizabeth, the sovereign or double noble of fine gold was valued at 20s., the pound of 22-carat gold, 20s., the ryal or noble, 15s., the half pound, 10s., the angel, 10s., half angel, 5s., the crown 5s., the half crown, 2s. 6d., and quarter angel, 2s. 6d. Sovereigns were generally rated at 20s., with double, triple, and half sovereigns rated in proportion. The gold coins of James I included the rose-ryal, valued at 30s., the unite, sovereign, and laurel, 20s., the spur-ryal, 15s., the half sovereign, angel, and double crown, 10s., and half angel and half laurel at 5s. Charles II only minted the gold unite, angel, double crown, and crown. After 1663, gold coins valued in fractions or multiples of a pound were no longer issued, replaced by the guinea rated at 21s. and five-guinea, two-guinea, half-guinea, and quarterguinea pieces in proportion. On Christmas Eve 1663, the mint was instructed to stamp all the gold and silver brought to it by the Royal African Company to be coined. A proclamation of 1661 had raised the price of the unit of 140.5 grains of gold to 21s. 4d. During the intervening two years, the price of gold had risen further. A 20s. piece minted in proportion to this unite would have weighed 131.7 grains. The new piece was minted at 44 10s. to the pound or 3 14s. 2d. to the ounce, and therefore weighed 129.4 grains. The newly issued gold coin, termed the “guinea” from the place of origin of the metal, was therefore valued at 21s. The guinea became the standard gold coin in circulation, replacing the sovereign. After 1663, until the issue of paper money by the Bank of England following its establishment in 1694, pounds did not exist as a physical medium of exchange in England except for old coins that remained in circulation. Britain officially went on the gold standard by an act of Parliament in 1816, although it had unofficially been on a gold standard since 1717 when a proclamation proscribed the value of a golden guinea at 21 shillings. Feavearyear, Pound Sterling, 97–98. Spanish American colonial coinage was known in English as “cobs,” made by refining the ore to over 90 percent fineness, rolling it like cooking dough into a rod shape, and then slicing

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Precious Metals and Coins in England and the Colonies (continued) off pieces to form crude flans. They were trimmed with scissors to the prescribed weight and coined by the ancient hammer method. A heavy blow from a sledgehammer impressed the design into both sides of the flan to form the coin. Cobs were usually irregularly shaped. They were a means to account for a specific amount of silver in a coin that could be used for commerce. Starting in 1732, the “Spanish milled dollar” was the English term given to the Spanish eight reales that were minted on a coin press. The term “milled” refers to the fact that the coins were made on a milling machine, which gave them a consistent weight and size, making them superior to cobs in ascertaining that the coin weighed the proper amount and contained the proper amount of silver. In 1732 the Mexico mint began minting coins with the flans held by a collar that impressed a security device on the edge. These coins are round and feature the Pillars of Hercules surrounding the crowned, conjoined globes and ocean waves below, hence the other name for this coin, “Pillar Dollar.” Http://www.coinsite.com/content/Articles/Spanish .asp (August 1, 2005) and http://www.coinsite.com/content/faq/8RealesMilledPillar.asp (August 1, 1005). The terms “piece of eight,” “Spanish reales,” “eight reales,” “dollars,” and “Spanish milled dollars” are used interchangeably throughout the text to indicate a standard value piece of eight.

silver per troy ounce fluctuated with depreciations and reissues, finally stabilizing at 62d. (5s. 2d.) in 1601. Until the eighteenth century, the pound was based on a silver standard, even though foreign and locally minted gold coins circulated alongside silver coins from the middle of the fourteenth century. The gold écu of France, florin of Florence, and English gold-minted coins formed the principal medium of exchange between English merchants and those of the continent. Since English silver coins were scarce in the American colonies, the settlers were forced to rely on foreign coins. The most widely used coin was the eight reales, piece of eight or Spanish dollar (peso), produced in Mexico and Peru, which was the highest unit of Spanish silver coin in the New World. It was similar in size and weight to the thalers of the German states and called the dollar, from the Dutch daalder, a derivative of the German thaler. The Spanish coin was produced at about 420 grams of .935 fi ne silver. Since one troy ounce of silver was valued at 62d. on the English standard of .925 sterling, the value of a Spanish dollar was 54d. (4s. 6d.) To keep silver coins in the colonies to facilitate commerce, on June 14, 1642, the Massachusetts General Court legislated a 3 percent premium by increasing the value of the Spanish dollar to 56d. (4s. 8d.). Th ree months later it [ 154 ]

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raised the value to 60d. (5s.), or 11 percent above the London rate. Th is legislated premium was termed “crying up” of the coinage. The court also stipulated that the dutch ducatour of 3 guilders would pass at 6s. and the rix dollar of 21 ⁄2 guilders at 5s. From 1642, the value of Massachusetts sterling, or Massachusetts currency or money, diverged from that of English sterling.18 Massachusetts enjoyed a high degree of currency autonomy until its charter was revoked in 1684. To facilitate commerce and keep coins in the colony, Massachusetts began minting its own silver shilling coins in 1652 valued at 80d. (6s. 8d.), a 22.2 percent reduction in the English sterling standard from 92.6 grains of silver per shilling to 72 grains. In 1669, Massachusetts officially valued the Spanish dollar at 72d. (6s.), one-third above par (parity with England), at which rate it remained until 1682. To protect and promote the use of Massachusetts coinage and keep it from being exported, the General Court acted on May 24, 1682, reducing the value of the piece of eight from 72d. to 84d. per troy ounce, and setting it at parity with the Massachusetts shilling with a slightly lower silver content. Local minting continued until 1682, one year before the King’s Bench issued a writ of quo warranto against the Governor and Company of Massachusetts Bay. The 1682 law was overturned as revocation of the colony’s charter invalidated all the laws of the Commonwealth including the mint act of 1652 and acts revaluing Spanish silver coinage. The new government of the Dominion of New England reset the value of a piece of eight at 72d. Each colony functioned as an independent government, legislating its own premium for silver coin, which then determined the respective values of their separate currencies and gold coins. The value of each colony’s pounds, shillings, and pence differed from that in England, as well as between the colonies. (The differing values are displayed in the appendix to this chapter, table 7.A.) Apart from the brief episode of the Boston mint during 1652–82, New England did not produce any significant amount of coinage.19 There were no metallic Connecticut, Rhode Island, or New Hampshire shillings. In practice, the settlers used reales, stivers, thalers, and other foreign denominations for their actual coins, which were converted into local colonial currency by calculating the legislated rate of a piece of eight against the relative amount of precious metals in other foreign coins. England set exchange rates between sterling and many foreign coins, which enabled the colonies to set exchange rates between their respective currencies and foreign coins. 18 Roger W. Weiss, “The Colonial Monetary Standard of Massachusetts,” Economic History Review, n.s., 27, no. 4 (November 1974): 577–92. 19 Louis Jordan, John Hull, the Mint and the Economics of Massachusetts Coinage (Hanover, NH, and London: University Press of New England, 2002).

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To summarize, colonial currency units of pounds, shillings, and pence were bookkeeping, or money of account, entries used to keep track of the value of the various foreign denomination coins in circulation and to define the value of commodities that could be used to pay taxes.20 The colonists kept their accounts in sterling, but rarely used English silver and gold coins. They relied largely on foreign coins and other forms of money they valued in terms of English sterling or the separate sterling currencies of each colony.21 Bookkeeping was difficult because of the periodic changes in legislated premiums for silver coins in the several colonies. Colonial traders were good at arithmetic because paper, quills, and ink were expensive. Calculations were performed with great care whenever coins changed hands or other monies were used.

Wampum

W

ampum pl ay ed an important monetary role in the early decades of settlement. 22 Native Indians did not use metallic coins but they collected oblong shells which they polished and sawed into beads, and strung to form necklaces, belts, and lengths of shells called wampum. Also called wampumpeage or peage, Indians exchanged wampum with each other for numerous purposes on special occasions. 23 20 In the eighteenth century, as newspapers began to be published, tables of coins were printed that listed the values of numerous English and foreign coins in terms of English sterling, Philadelphia money, New York money, and other colonial monies, which somewhat simplified commercial transactions and bookkeeping. 21 Basic silver coins were the Amsterdam ducatoon, rijksdaalder, Leeuwendaalder, and guilder; Hamburg reichsthaler, thaler, and mark; Copenhagen rigsdaler and krone; Spanish piece of eight, pistareen of 4 reales, and copper vellon; and Portuguese crusado and tosta~o. These coins ranged in value from a low of 0.09 to a high of 0.27. Basic gold coins were the Amsterdam ryder and ducat, Hamburg ducat, Copenhagen ducat, French Louis d’or, Spanish pistole (doubloon), and Portuguese moeda, cruzado, dobra~o, and escudo. Gold coins ranged from a low of 0.44 to a high of 1.37. The list of coins and their sterling values appears in John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), tables 1.1 and 1.2, 9–13. 22 Lois Scozzari, “The Significance of Wampum to Seventeenth Century Indians in New England,” originally published in the Connecticut Review, http://www.hartford-hwp.com/ archives/41/037.html ( January 21, 2004); “Wampum: Introduction,” http://www.coins.nd.edu/ ColCoinIntros/ Wampum.intro.html (October 22, 2003); and J. Earl Massey, “Early Money Substitutes,” in Eric P. Newman and Richard G. Doty, eds., Studies on Money in Early America (New York: American Numismatic Society, 1976), 20–24. Wampum was widely used by the Dutch in New Netherland and also as far south as the Carolinas, where it was known as “Roanoke.” 23 Wampum, a word in the Algonquian Indian language, was fashioned from the inner whorls of cowries or tiny seashells or pieces of outer shells found on the mud or just below the surface of the water along the coast of southern Massachusetts, Connecticut, Rhode Island, and

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Dutch traders quickly adopted wampum in lieu of coin in their purchase of furs obtained at Fort Orange. In 1627, Peter Minuit sent a Dutchman named Isaac De Razier, secretary and chief trader at Fort Amsterdam, to Plymouth to inquire about the possibility of trade with the Pilgrims. De Razier brought 50 sterling value of wampum beads to purchase corn, after which wampum quickly came into use in place of much less convenient commodity money such as corn (discussed below). The arrival of Puritans in Massachusetts Bay and the increased use of wampum in the fur trade led to its growing regulation. On November 15, 1637, the Massachusetts General Court declared that white beads would pass at six to a penny as lawful payment for amounts under 12d. In 1638 Connecticut began accepting wampum as payment for taxes at the rate of four beads to a penny. 24 Official rates of exchange were formalized in a law of October 18, 1650. Strands of 8, 24, 96, and 480 white beads were valued, respectively, at 1, 3, and 12 pence, and 5s. Strands of 8, 24, 120, and 480 purple beads were valued, respectively, at 2 and 6 pence, and 2.5 and 10s. Wampum was declared legal tender to 40s. in private commerce, but it was not acceptable for taxes. As coins became more plentiful from commerce with the West Indies, the General Court repealed the 1650 wampum law with the opening of the Boston mint in 1661. Connecticut and Rhode Island followed suit a year later. the northern shore of Long Island. Shells came in two colors. White shells were formed from periwinkle (or Meteauhock in Algonquian), and the purple (or deep blue or black) shells were from the dark segments of the hard shell clam (or Quahog, Suckauhock, or Mowhakes). Dark shells were valued at double the white. Members of several tribes gathered shells in the summer and crafted them during the winter, grinding and polishing them into small cylindrical tubes, drilling through the center to string them with fibers of hemp or tendons of wild beasts. Strings of beads were woven into belts, aprons, capes, headpieces, necklaces, and other items. Wampum was used as adornment or ornamentation for Indians of high rank or prestige. Wampum beads and decorative wampum strands are on display in the Smithsonian Museum of American History in Washington, DC. Illustrations of cowrie shells and wampum belts in both color and black and white appear in Jonathan C. Lainey, La “monnaie des sauvages”: Les colliers de wampum d’ hier à aujourd’ hui (Quebec: Septentrion, 2004). 24 In 1640, the Massachusetts General Court specified that purple beads would pass at two to the penny with white beads at four to the penny. The unit of wampum money was the fathom, consisting of 360 beads, initially worth 60d. As noted above, wampum was fi rst receivable for debts of only 12d. but raised in 1641 to 10 for two years, and subsequently lowered to 40s. Official valuations and regulations governing the use of wampum changed as it spread throughout Massachusetts and Connecticut. Any individual could make and pass wampum as currency. English settlers with iron drills were able to markedly increase their output of wampum. Overproduction led to its devaluation as a medium of exchange. To remedy these problems, the General Court increased its regulation and standardization of wampum. In 1647, it voted to accept wampum as legal tender, but not for payment of taxes, in strands of unbroken and unblemished beads.

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Commodity Money

T

he ear ly colonists often resorted to barter to conduct commerce. By its nature, barter is inconvenient as any two people require goods of equal value to trade with each other. Some common commodity against which other goods are valued greatly facilitates exchange. Stipulating commodity values also enables bookkeeping barter to conduct two-way trade in place of precise exchange of equally valued commodities. In 1631 Massachusetts made corn lawful tender for all debts, except in cases where beaver or other money was specified. On March 4, 1635, the General Court enacted that full bore musket balls would pass as farthings (four farthings to a penny), but no one was required to accept more than 12d. (48 farthings) worth of balls. On September 27, 1642, the court established standard prices for specific farm products in addition to corn that could be used to pay taxes. A bushel of wheat was valued at 4s., barley or malt 4s., rye and peas 3s. 4d., and Indian corn 2s. 6d.25 Other colonies established similar lists. A list of commodities authorized as use for money in payment of private and public debts included animal skins, Indian corn, wheat, oats, barley, peas, dried fish, livestock, pork, beef, cheese, sugar, molasses, rum, cotton, wool, tallow, lumber, and other products of the soil. 26 Milk pails were accepted as tax payments in the town of Hingham. Nails, which were extremely scarce and needed for home building, were an important commodity money. In 1657, a shortage of coin prompted a constable in the town of Salisbury to accept boards in payment of taxes from the people in his own town. 27 At various times, when specie was especially scarce, the colonial treasurer would give a 25 percent premium for cash in place of grain to fulfi ll tax payments. Colonial governments paid their creditors in commodity money. Official valuation of commodities meant that individuals could transact business using commodity money with the assurance that it could be used to pay taxes at fi xed rates. Any individual acquiring a specific commodity did not have to consume it for his own use, but could use it to acquire other goods or pay taxes. Commodities designated in payment of taxes at fi xed rates differed in legal standing from other commodities that might be bartered in private, individual agreements. Legislation authorizing payment in-kind for taxes remained a feature of policy for more than a century. 25

Joseph B. Felt, Historical Account of Massachusetts Currency (New York: Burt Franklin, 1968), 11–20. First published in Boston in 1839. 26 Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (New York: A. M. Kelley, 1964), 202–28. A reprint of a 1934 edition. 27 Felt, Massachusetts Currency, 37.

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Legally designated commodities were called “current money” or, in some places, “country pay.” When the same commodities were used for private transactions, they were usually accepted at a discount from the established rates for payments of taxes, and sometimes called “pay as money.” Farmers tended to use or sell their best products and tender their poorest products in payment of taxes. In Massachusetts and Rhode Island, tax collectors complained about lean cattle paid in taxes, which compelled the Massachusetts General Court to enact in 1658 that no man should discharge his liabilities in lean cattle, a warning reissued in 1663, 1664, 1667, 1670, 1673, 1680 (extended to horses), 1681, and 1682. 28 New Haven and Connecticut appointed regulators to judge the value of corn and later extended it to pork. Colonial legislatures learned to value commodities for public payments at legal prices higher than the prevailing market rate for good-quality products. Collectors of commodities could not readily determine the correct value of country pay in receipt of taxes, which resulted in chronic disputes of valuations. Commodities were defective as a standard of value. Another problem with country pay was its use as currency by the colonial government to pay its creditors. Any time commodities were paid out, they added to the supply on the market, thus depressing their price, with corresponding losses to producers, wholesalers, and retailers. The treasurer could not always time public payments to periods of high demand in an effort to sustain market prices. Changing conditions required legislatures to change the designated value of commodities to reflect market prices. Take corn, for example. In April 1633, Massachusetts valued a bushel of Indian corn at 6s. A year later, in 1634, the General Court freed the price of corn to reflect market conditions, but restored it in 1635 at a lower 5s. a bushel. The court alternately raised and lowered the official price of corn, with periods in which it set the price free. In October 1640, the official price was lowered to 4s. Between October 1640 and 1685, the official price of corn ranged from a low of 2s. 4d. in 1656 to a high of 3s. 6d., with the general average of 3s. a bushel over the period. Similar patterns apply to official prices for summer wheat, rye, barley, and peas and oats, added in 1678. Legislated values of each product

28 For 1658, see Charles J. Bullock, Essays on the Monetary History of the United States (New York: Greenwood Press, 1969), 11. A reprint of a 1900 edition published by Macmillan. The figures for the eight enumerated years beginning in 1663 are from Nathaniel B. Shurtleff, Records of the Governor and Company of the Massachusetts Bay in New England: Printed by Order of the Legislature (Boston: William White, Printer to the Commonwealth, 1853–54), vol. 4, part 2, 88, 135, 346, 464, 568, vol. 5, 296, 324, 377. The full records of the company appear in five volumes: vol. 1, 1628–41; vol. 2, 1642–49; vol. 3, 1644–57; vol. 4, part 1, 1650–60; vol. 4, part 2, 1661–74; and vol. 5, 1674–86.

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fluctuated within a narrow range of around 6d., rarely exceeding 1s. in any given year. Commodity values for tax payments were remarkably stable between 1647 and 1685. 29 Corn, wheat, and rye were used to pay tuition to Harvard College at official prices. In 1694 Massachusetts, which developed a prosperous trading center in Boston that drew in coin, enacted that commodity money would no longer be accepted in payment of taxes. Connecticut and New Hampshire, having no trading centers of their own, remained more dependent on country pay. Commodities were defective as a medium of exchange. They were bulky and costly to transport. Five shillings’ worth of wheat weighed as much as sixty pounds. Connecticut, for example, published a schedule of transportation allowances to reimburse taxpayers up to 15 percent of an assessment for the costs of transportation. Commodities deteriorated over time, which made their valuation troublesome when submitted as payment for taxes. Colonial governments had to provide storage facilities for commodities until they were used for public payments. Treasurers and constables had to be reimbursed for the cost of storage, deterioration, and spoilage.

Paper Money

T

h e col oni e s did not have commercial banks that accepted deposits, granted credit, and cleared checks. Until Massachusetts issued the fi rst quasi-official paper money in colonial America in 1690, several years before currency notes were issued by the privately owned Bank of England in 1694, paper money consisted of promissory notes and bills of exchange. A promissory note is a promise by an individual to pay or repay a specified sum of money at a stated time or on demand. Promissory notes issued by wealthy individuals could pass as money among the colonists. Of far greater importance were bills of exchange. Bills of exchange had been in use in Europe since the eleventh century. Revolving around the two large financial centers of Amsterdam and London, and also Hamburg, Copenhagen, Paris, Cadiz, and Lisbon, they were the major instrument used to settle international payments in the seventeenth century. 30 29 The lawful prices of commodities for tax payments for each year enacted by the Massachusetts General Court are found in Shurtleff, Massachusetts Records, 1:110 (1633), 140 (1635), 180 (1636), 191 (March 1637), 192 (April 1637), 209 (1637), 294 (1640); 2:30 (1642), 45 (1643), 112 (1645), 171 (1646), 254 (1648), 286 (1649); 3:118 (1647), 212 (1650), 245 (1651), 284 (1652), 367 (1654); vol. 4, part 1, 245 (1655), 281 (1656), 318 (1657), 348 (1658), 410 (1659), 434 (1660); vol. 4, part 2, 60 (1662), 88 (1663), 135 (1664), 281 (1665), 322 (1666), 346 (1667), 415 (1668), 464 (1670), 568 (1673); and 5:16 (1674), 55 (1675), 120 (1676), 156 (1677), 195 (1678), 219 (May 1679), 249 (October 1679), 296 (1680), 324 (1681), 377 (1682), 417 (1683), 454 (1684), 505 (1685). 30 J. Sperling, “The International Payments Mechanism in the Seventeenth and Eighteenth Centuries,” Economic History Review, n.s., 14, no. 3 (1962): 446–68.

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A bill of exchange is the equivalent of a check drawn on a balance held with a private merchant or correspondent acting in the capacity of a banker. Suppose a shipbuilder in Massachusetts sells a vessel to a merchant in London for 200 sterling. His London merchant credits the shipbuilder’s account for 200 on which he can draw to buy goods from his creditor or any other merchant, as if the 200 was a deposit in a bank. If he buys from his creditor, the shipbuilder’s account is debited for the value of goods he buys, including freight and insurance, as if he withdrew some money from his account. If, however, the shipbuilder chooses to buy goods from another merchant, he can draw on the balance with his creditor and request that money be paid from his account to the other merchant, as if he wrote a check on his account. The document he uses to request payment is called a bill of exchange. In this example, the shipbuilder’s balance would be stated in English sterling. If he purchases goods from another merchant in some other currency, his sterling credits might have to be exchanged into the other currency at the prevailing market rate, as one does in converting dollars to euro, yen, or other currencies to complete a transaction payable in foreign currency. In general terms, the buying and selling of a bill of exchange involves a seller, a correspondent or merchant-banker, a buyer, and the recipient of payment. 31 The buyer of a bill of exchange approaches a seller and asks him to instruct his correspondent or merchant acting as banker to deliver a sum of money from his credit balance to a recipient designated by the buyer. The holder of the credit balance sells the bill in exchange for goods and ser vices he wants to buy. This process transfers money from one person or firm to another. The seller of a bill gives the buyer several copies of the bill of exchange known as a “set” to ensure against loss in delivery; the payment of any one cancels the others. The buyer separately sends each copy in the set to maximize the likelihood of delivery in case one or more copies are lost at sea. The buyer of the bill then presents one copy to the seller’s correspondent for payment. The bill stipulates a period of time, called “usance,” to take into account the time needed to deliver the bill; thirty to forty days might be normal on London bills drawn in Boston. Usance was shorter on intercolonial bills. Bills of exchange could be endorsed from one person to another, thereby acting as money. Sterling bills could be issued against balances in London, or in local money on balances in Boston, New York, Providence, Philadelphia, or Charleston. Sterling bills could be exchanged for colonial 31

Th is characterization relies on McCusker, Money and Exchange, 20–23. Rates of exchange between 1649 and 1775 for Massachusetts currency on London and vice versa are found in tables 3.1 and 3.2, 138–50.

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bills at rates of exchange reflecting the value of sterling against colonial currencies, adjusted by the reputation and reliability of sellers and correspondents with whom credit balances were held. Reputation mattered because not all bills were paid as contracted, the equivalent of bouncing a check. Unpaid bills, returned as a “formal protest,” had to be litigated for collection. Colonial laws granted awards for damages and interest from the date of protest. A bill of exchange is an order to pay a specified sum at some future date, and hence is a loan involving an element of interest. The rate varied with the maturity date of the bill. The longer the period until payment, the lower the cost of the bill, representing implicit interest for the use of the buyer’s money. A buyer of a bill in Boston from a mercantile house with connections in London entailed payment of Massachusetts money to the Boston house for a sterling bill drawn on its London agent. The price of the bill was affected by the exchange rate between Massachusetts currency and sterling, and the usance before payment was stipulated. The price of the bill also depended on demand for and supply of bills between the two currencies and the alternative cost of shipping bullion. The economies of Massachusetts, Rhode Island, Connecticut, and New Hampshire were highly integrated and can be treated as a unit with respect to currency. They shared real money, money of account, and par of exchange, even though each colony had full legal control over its own currency. The early settlers of Massachusetts brought with them sufficient coin and credit to meet their initial requirements, which enabled them to buy sterling bills of exchange with silver coin and sterling credit. The end of immigration in the late 1630s curtailed the inflow of silver coin and sterling credit. The economy fell into depression in 1640 and the Massachusetts legislature twice devalued local currency in 1642. Thereafter, Massachusetts transacted exchange with London in terms of Massachusetts money of account. As previously noted, the par of exchange between Massachusetts and London fell in 1642 from 100 Massachusetts currency to 111.11 per 100 sterling, further declining in 1669 to 133.33. Assume a Massachusetts merchant bought a bill of exchange in 1672 to pay his supplier of English manufactured goods. In that year, the actual rate of exchange of Massachusetts currency on sterling was 125. A Massachusetts importer would have to pay 125 Massachusetts currency for a bill drawn in London for 100 sterling. He could buy the sterling bill from anyone in the colonies who held a credit balance in London of 100 sterling or from anyone in London willing to extend credit and sell him a bill for 100. Negotiations with colonies outside New England were typically based on the bill rate in London for the currency of each of the other colonies.

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Bills of exchange could be purchased in London, in the colonies, in other European markets, and in the French and Spanish colonies in the West Indies. Between 1620 and 1688, bills of exchange played a more important role in financing international trade in New England than did gold and silver coin.

Taxation in Massachusetts, 1620–1688

M

as s ac h u s e t t s s e t t l e r s paid a broad range of taxes, including taxes on goods shipped abroad, internal taxes imposed by the General Court, taxes on goods imported from or exported to other American colonies and countries, taxes levied by counties and towns, church levies, and other miscellaneous charges and fees. 32

Imperial Taxes

T

he cor p orat e colonies of New England were never subject to quitrents that were imposed in the proprietary and royal colonies. Quitrents were originally proposed as a feature of the land system in Sir Ferdinando Gorges’s scheme for the government of Maine and John Mason in New

32 A description, analysis, and data on taxation in colonial Massachusetts between 1620 and 1688 appear in Charles H. J. Douglas, The Financial History of Massachusetts: From the Organization of the Massachusetts Bay Company to the American Revolution, Studies in History, Economics, and Public Law, vol. 1, no. 4 (New York: Columbia College, 1892), 11–55; Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3 (Boston: T. R. Marvin, 1847); and Felt, Massachusetts Currency, 2–48. See also Herbert L. Osgood, “New England Colonial Finance in the Seventeenth Century,” Political Science Quarterly 19 (March 1904): 80–106. The acts of each session pertaining to every tax imposed by the General Court between 1628 and 1688 appear in Shurtleff, Massachusetts Records, vols. 1–5. A compilation of the resolutions of the General Court was published in two volumes by Shurtleff in 1889 and 1890 by order of the City Council of Boston. The Colonial Laws of Massachusetts Reprinted from the Edition of 1660 with the Supplements to 1672 (Boston: Rockwell and Churchill, 1889), and The Colonial Laws of Massachusetts Reprinted from the Edition of 1672 with the Supplements through 1686 (Boston: Rockwell and Churchill, 1890). Exact language authorizing the levying of rates and levels of taxation on property, polls, trade, and other sources of revenue are found in these two volumes as of 1660, which codified previous laws, and of 1672, which repeated the process. Massachusetts was among the earliest colonies to require statements from its colonial treasurer. The fi rst extant statement, held in the Massachusetts Archives, is for 1632. Between 1635 and 1700, a committee of the General Court approved twenty-four statements for twenty-five of the sixty years between 1632 and 1692. From an accounting standpoint, the records are incomplete. It is not possible to compile a comprehensive accounting of the colony’s public fi nances during 1628–88. Imperial English taxes were not combined with provincial and local levies in a comprehensive fi nancial statement.

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Hampshire. Even though the New England Council planned to reserve quitrents in its land grants, it never established a regime of land payments. The incorporation of Maine and New Hampshire into Massachusetts ended any prospect of quitrents in those territories. In lieu of quitrents to the Crown, the only payment required of the New England colonies was a fifth of gold and silver discovered within their borders. Edmund Andros attempted, but failed, to impose quitrents when he was appointed governor of the Dominion of New England in 1686. William and Mary’s charter of 1691 to Massachusetts vested original title in the soil in the body of inhabitants and confirmed all patents that had been issued by the General Court, thereby ending the matter of quitrents.33 The charters authorizing the settlements of Plymouth and Massachusetts Bay, and by implication Connecticut and Rhode Island, exempted the colonists from taxes and impositions on all goods and merchandise shipped to and from any English dominion for twenty-one years, except for the 5 percent royal customs charge in England. New England did not produce any of the enumerated goods in the Navigation Acts that required direct shipment to England, and thus could sell their products in world markets at the highest possible price. In their visible trade with England and other European countries, the colonists incurred a deficit which they covered by shipping goods and remitting specie and bills of exchange earned largely in trade with the West Indies. As the local shipbuilding industry grew, Massachusetts shippers accrued invisible earnings on freight carried on colonial-owned ships between England and the colonies, on freight carried between foreign ports, on port charges of foreign ships in colonial ports, on insurance underwritten by colonial merchants, on interest if goods were sold on credit terms, and from the foreign sale of locally built ships. The full scope and value of New England’s commerce are unknown because comprehensive trade figures on the value of furs, the total value of exports and imports, and tonnage capacity of ships are unavailable until 1697. Language in the Navigation Acts was uncertain. The legitimacy of importing wine from the Spanish Canary Islands depended on whether the Canaries were construed as belonging to Europe, in which case its wine would be taxed, or Africa, in which it would not.34 The Navigation Act of 1663 prohibited the import into the colonies of any of the manufactures of 33

Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies, with an introduction by Charles M. Andrews (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 35–50. 34 Labaree, Colonial Massachusetts, 94. In the parlance of the day, the word “returns” was used to signify payment for imports from England and other countries.

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Taxation of the New England Colonies, 1620–1688

Europe except through English ports, with an exception for salt for the fisheries of New England and wines of Madeira and the Azores.35

Provincial Taxing Power

T

h e m as s ac h u s e t t s Bay Company had no power of assessment upon its stockholders, and thus had no power of taxation it could grant to a colony organized among its members and sent out to colonize land in the New World. A vote of the court of Assistants at its third meeting in America on September 28, 1630, levying a tax on all the freemen was clearly illegitimate unless and until the freemen acquiesced. In 1631, the court levied a tax of 30 to finance the digging of a creek, followed with a tax on the various towns to defray the cost of erecting a palisade around one of them (Cambridge).36 Finally, to resolve the legal issue, the General Court meeting in May 1634 ordered that it alone had the power to levy taxes, grant lands, and make laws. The colonial government thus arrogated unto itself the power to tax, which was finally confirmed in the charter granted by William and Mary in 1691. In general, as the need for revenue arose, the General Court adopted forms of taxation with which the colonists were familiar in England. The various sources of revenue included duties, excises, a general property tax, taxes on specific classes of property, a poll or head tax, a “faculties” or income tax, tax exemptions to encourage certain economic activities, royalties, and other charges. In the fi rst generation after the founding of the New England colonies, gratuitous ser vice without any definite expectation of reward was rendered by the early magistrates of these colonies. Fees compensated those in the judiciary, who provided a ser vice to specific litigants involved in any court action. Magistrates and clergymen were regularly exempted from property or poll taxes. Clergymen were the fi rst to receive regular salaries. In the 1630s, the governor began to receive a salary, and magistrates and deputies attending sessions of the General Court were to receive a daily wage. Allowances were granted in Massachusetts to deputy governors, marshals, and agents sent to England to lobby for the colony. In all, salaries were moderate and amounted to a small sum. The reason is that land grants could be used to compensate leading magistrates and officials, which helped to hold down increases in taxation or public expenditure. Grants of land 35 J. Leander Bishop, A History of American Manufactures from 1608 to 1860 (Philadelphia: Edward Young and Company, and London: Sampson Law, Son and Company, 1864), 1:285. 36 Labaree, Colonial Massachusetts, 41–42, and Shurtleff, Massachusetts Records, 1:89, 93.

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were made for support of the clergy, Harvard College, and grammar schools. 37

Administration and Enforcement

E

ar ly administ rat ion took the form of apportionment among the towns, leaving it to them to collect their portion of the levy approved by the General Court. Initially allocated on the basis of the number of deputies of each town represented in the court, the regime quickly changed to reflect the numbers of residents in each town and their ability to pay, although local town assessors, not the court itself, undertook the assessments. With local towns required to collect taxes from their inhabitants, they restricted residence to those who could be quickly settled and immediately taxed. Those who could not were not admitted. To reside was to pay. In 1637, the General Court confirmed in law that towns were forbidden to allow strangers to settle and become a charge on the taxpayers without permission of two magistrates. 38 Initial taxation of freemen was extended to universal manhood taxation as the number of non-churchmen grew. All male inhabitants above the age of sixteen were brought into the tax net. In 1665, the court required itinerant merchants to pay a tax on their cargoes before entering the community, lest they come and go without paying any tax. The General Court exempted certain classes of individuals from taxation: the poor, elderly, sick, lame, blind, and others who could not earn a living. Military personnel and magistrates were exempt up to 500 and Harvard College professors up to 100 of personal property. Exemptions were often granted to encourage such specific enterprises as fisheries and ironworks. Towns ravaged by Indians received partial or complete exemption for several years at a time. Collection was generally entrusted to constables, who had the power to arrest and to break into homes to keep the peace in their districts. From the beginning, tax collection was difficult and arrears built up to such a degree that they were mentioned in acts of 1643 and thereafter. Constables who failed to meet collection targets were subject to fines of 5 and empowered to impress boats and carts to carry country pay in which taxes were generally paid. The accumulation of arrears led the General Court to diversify taxes away from heavy reliance on property tax to include duties and excises, with periodic adjustments in items subject to taxation and 37

Osgood, “New England Colonial Finance,” 97–102. William B. Weeden, Economic and Social History of New England, 1620–1789 (Boston and New York: Houghton Miffl in, 1894), 1:79. 38

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their rates. The accumulation of intangible personal property brought a shift in the system of assessment, with the tax on property extended to non-farm assets, the property of merchants, shopkeepers, and agents (factors). Beginning in 1645, the auditor general was given a salary of 30, instructed to keep records, and report to the General Court as summoned. As previously noted, colonial treasurers kept and/or left incomplete records, which preclude a systematic statement of Massachusetts’s finances in the seventeenth century. General Court oversight of constables, marshals, auditors, and treasurers was lax. Not until 1653 was the auditor general required to publish receipts and expenditures. A report printed on January 20, 1655, covering a period of four-and-a-half years, reported total receipts of 8,139 1s. 71 ⁄2d. Massachusetts currency, which amounts to an annual average of about 1,809. 39 Of the total collected during this period, about 1,130 was from wine licenses and duties, 256 in fines, with the bulk in rates on property and polls. As the population of the colony during those years ranged between fourteen and seventeen thousand, annual per capita taxes would amount to about 2s. 4d. The resignation of the auditor general was accepted in 1657, after which inefficiency and lack of oversight plagued the colony’s accounts until its charter was revoked in 1684. The treasurer was often forced to expend his own funds and await reimbursement from the General Court to balance the colony’s accounts. In 1683, for example, the administrator of the estate of the late treasurer, John Hull, petitioned for reimbursement and the General Court ordered that his wife, Judith Hull, be paid 545 3s. 101 ⁄2d.40 Even though taxes were light, evasion was widespread. In 1688 the assessment for Boston was estimated to raise 124 18s. 4d., but actual collection amounted to 83 4s. 8 1 ⁄4d. One further note before reviewing each of the separate taxes. Between 1633 and 1650, the General Court levied taxes in the number of pounds Massachusetts currency to be raised. From 1651, levies were changed to the number of rates, fractions or multiples of one rate, to be collected, applied to poll and property taxes (more below). The number of rates ranged from a low of 0.25, 1 ⁄4d. in the pound (1 ⁄4d./1 is a tax rate of 0.1 percent) when few public funds were required as in 1654 and 1655 to, in the five sessions encompassing July 1675 to October 1676 to fight King Philip’s War, thirty-five rates, 35d./1 (an effective rate of 14.6 percent for the two years, or 7.3 percent 39

Douglas, Financial History of Massachusetts, 38. Annual tax receipts of 1,809 Massachusetts money is about a fi fth of Lord Danby’s annual salary of 8,000 sterling. Though votes of the General Court to levy taxes were published in Massachusetts Records, actual audited accounts presented to the court were sporadic until 1692. 40 Douglas, Financial History of Massachusetts, 40–41.

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for each of the two years). Ten rates were levied in a mix of cash and commodities in May 1676, six in October 1676, six in May 1677, three in October 1677, three in 1678, 51 ⁄2 in 1679, eight in 1680, 23 ⁄4 in 1681, 4 1 ⁄2 in 1682, 4 1 ⁄2 in 1683, 21 ⁄2 in 1684, and 11 ⁄2 in 1685.41 Over the period 1651–85, the average number of rates was about 2.1, with a peacetime average of 1.5, a tax rate of 0.6 percent (1.5d./240d.) if fully collected.

Direct Taxes: Wealth or Property Tax

T

h e w e alt h tax was based on what was known as the country “rate,” which amounted to a property tax. Government officers carried out assessments, or sometimes the process involved self-assessment subject to audit, on the value of raw and improved lands (meadow, plowed, and hoed land), animals, goods, stock used in trading, boats and other vessels, mills, and other visible assets.42 Each year, the three units of colonial government, the province, the county, and the town or village, drew up a list of proposed expenditures. To support these outlays, a rate of tax was applied to the assessments to generate the requisite funds, resulting in a provincial rate, a county rate, and a town or village rate. Though the methods of assessment and the rates of tax varied among the New England colonies, the evidence suggests that effective tax rates on land and other real assets were less than 1 percent. Government spending was low, which minimized the need to impose high rates. In addition, the colonists evaded, avoided, and resisted even low taxes by trying to conceal assets and have land classified as least developed. The usual rate of tax was 1d. to every 20s. or pound (1d./1) Massachusetts currency, a rate of 0.42 percent, on the assessed value of estates. Commodity pay was declared acceptable in corn from 1633, extended to other crops in 1642, at fi xed rates per bushel. The General Court judged that the usual 1d. rate was sufficient to meet the general expenses of the colony along with the poll tax (see below). As the deputies discovered that provincial expenses were rising faster than tax receipts, they voted 1.5 rates in 1651. A penny in the pound would be the general “rate,” but multiples, or fractions, of rates would be levied as required, an approach that reflected English precedents of tenths and fi fteenths with which the colonists were 41

Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” 1:275. The law of November 4, 1646, listed the assessed value of cows, oxen, horses and mares, sheep, goats, swine, and asses based on their ages, with older animals rated higher. For example, cows four years and older were rated at 5, cows three to four years 4, cows two to three years 50s., cows one to two years 30s., and so forth. Shurtleff, Massachusetts Records, 2:173. Assessments were increased or decreased in keeping with market prices. For example, in 1653, a horse three to four years old was assessed at 16. Th is figure was reduced to 5 in 1668 and further reduced to 3 in 1677 due to falling prices. Shurtleff, Massachusetts Records, 3:299, 4–2:367, 5:138. 42

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Taxation of the New England Colonies, 1620–1688

familiar. In good times, only a quarter-rate was imposed. No rate was imposed in 1672 as duties and excises from wines, peltry, and other commodities were sufficient to meet public expenses. In five sessions of the court meeting between July 1675 and October 1676, thirty-five rates were levied to fight King Philip’s War. On November 16, 1647, a special tax of 2d. on each beaver, otter, bear, or moose skin was imposed to support the cost of maintaining trading posts.43 In 1682 a tax was laid on mills for the support of Fort Loyal in Maine as a defense against the Indians and French.44

Direct Taxes: Poll or Head Tax

A

no t h e r di r e c t tax was the poll, or head, tax, imposed on every male freeman sixteen years and older, the year of registration for potential military ser vice. It was simultaneously assessed and collected with the property tax. The rate was the same as for property, 1d./1. The Massachusetts law of 1646, which served as a model for the New England colonies, imposed an annual tax of 20d. on each taxpayer, which implies a tax base or taxable value of each taxpayer of 20.45 This amounts to a rate of 0.42 percent on the implied tax base of each poll. A year later the rate was raised to 30d., a rate of 0.63 percent, but it was restored to the original rate in 1653.46 It remained at that rate until 1690, when each rate was lowered to 12d., a rate of 0.25 percent. The actual rate for any given year was determined by the number of rates imposed by the legislature. Whenever the number of rates was increased for the poll tax, the same number applied to the property tax. No attempt was made to equalize total taxes for males whose property varied from small to large holdings; in this regard, the system was not equiproportional. The absence of data on the actual amount of poll tax does not permit the creation of a smooth time series from its beginning through 1680. Shurtleff ’s compilation of Massachusetts records lists the number of rates levied, not the separate sums to be collected from the property and poll taxes.

Direct Taxes: Income or Faculty Tax

A

lt ho ug h t h e modern income tax dates from the ratification of the Sixteenth Amendment in 1913, the income tax, known as a “faculty”

43 Weeden, Economic and Social History of New England, 1:185, states that this tax was imposed by New Haven. Weeden cites as his source Felt, Massachusetts Currency, 28, who cites Massachusetts Colony records as his source. 44 Bishop, American Manufactures, 129. 45 Shurtleff, Massachusetts Records, 2:173. 46 Shurtleff, Massachusetts Records, 2:213, 4–1:155.

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tax, appeared very early in New England. A law of 1634 provided for the assessment of every man’s assets and the product of his abilities. In 1643, assessors were appointed to rate inhabitants on their estates and their faculties, which included personal abilities. Further definition three years later specified the taxation of “laborers, artificers, and handicraftsmen” on their “returns and gains.” It is possible to gain some understanding of the effective rates of poll and faculty taxes. The text of a law of November 4, 1646, stipulates that artificers who were paid 18d. or more per day in the summer should pay 3s. 4d. a year in “income tax” in addition to their 20d. poll tax and that others should be rated proportionally (day laborers, engaged in sporadic work, were exempt).47 Assuming 78 days of work (13 six-day weeks during the summer season), an artificer would earn up to 5 17s. during the summer. If he earned at least that much in other work during the rest of the year, which was not subject to additional income tax, his annual income would be in the neighborhood of 12. A tax of 4s. 4d. (poll tax plus income tax) on an annual income of 12 amounts to a tax rate of 1.8 percent on labor income. Higher annual earnings imply a lower rate, lower earnings a higher rate. Total annual earnings of 20 means a rate of 1.1 percent. At that time, public officials received annual stipends ranging from 20 to 50. In 1647, the specific sum of 3s. 4d. was replaced by a tax on the capitalized value of wages, which was collected by the same officials who administered property and poll taxes. Figures from the faculties tax were commingled with property taxes in the colony’s ledgers, so it is difficult to determine both the rates of tax and the sums collected. Connecticut, New Haven, and Rhode Island incorporated the faculty tax into their codes. Some figures of provincial direct tax levies are available for the period 1620–88. Tax lists of towns in the colony for the thirteen years encompassed from 1633 to 1645 show sums ranging between a low of 200 in 1635 to a high of 1,480 10s. in 1638, with an annual average of 660.48 The next available number is for 1650 at 928 18s. For the next four years, the treasurer received 1,455 17s. 9d. in 1651, 1,020 2s. 3d. (1652), 1,994 17s. 11d. (1653), and 1,174 0s. 21 ⁄2d. (1654). Thereafter the numbers are again sporadic, with missing data for 1665– 69 and 1671–73. Between 1657 and 1675, tax receipts fluctuated within a range of 1,000–1,553, with an average of 1,187 for the eight years reported. Beginning in 1676, the data are complete through 1679, and thereafter miss47

Shurtleff, Massachusetts Records, 2:173. The numbers in this and the succeeding paragraph are from Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” 1:231, 251, 256, 275. All amounts are in Massachusetts currency. 48

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Taxation of the New England Colonies, 1620–1688

ing in part or in whole. Due to the Indian confl ict, direct tax in 1676/77 was especially heavy with ten rates levied in an act of May 3, 1676, to yield revenue of 14,050 11s. 8d., with six rates to yield another 7,039 18s. from a follow-on act of October 11, 1676. Thereafter direct taxes fell to the previous level of several thousand pounds a year.

Direct Taxes: Labor Contribution

I

n addi t ion to local taxes, able-bodied men were required to contribute time to maintain community property. Each man labored for several days a month on roads, or paid the cash equivalent of his labor. Townsmen were also required to perform without compensation such public functions as constable, assessor, clerk, fence viewer, pound keeper, wood reeve, or, for the unfortunate few, hog reeve.49

Indirect Taxes: Duties

I

mp ort and export duties, raised and lowered in keeping with the needs of public spending, were imposed in the New England colonies save Rhode Island. In general, duties were imposed for revenue, not protection, although preference was often given to encourage local shipbuilding. Administration of duties and excises was generally entrusted to the colonial treasurer and one or two other inhabitants as specified in the separate laws. The first duties of Massachusetts were a tax equal to one-sixth part of the price or value of imports of fruit, spices, sugar, wine, strong waters, or tobacco, coupled with an excise or retail tax of one-third of the value or price of these items. The duties were imposed on December 7, 1636, partly repealed on sugar, spices, and fruit in 1637, and the remaining items of wine and strong waters abolished in 1638. The purpose of the tariff was “to prevent the immoderate expense of provisions from beyond the sea.”50 A low 2 percent ad valorem duty was levied on silver plate, bullion, and merchandise in general in 1668.51 Plymouth placed export duties on such products as boards, barrel staves, tar, oysters, and iron. Salt was exempt from most duties as it was an 49 Kenneth A. Lockridge, A New England Town: The First Hundred Years, Dedham, Massachusetts, 1636–1736 (New York: W. W. Norton, 1970), 16. A wood reeve is the steward or overseer of a wood or forest. A hog reeve is an officer charged with the prevention or appraising of damages by stray swine. Formerly a town officer in New England, the office is now merely nominal. The definitions are found in the online edition of the Oxford English Dictionary at http:// dictionary.oed.com/ (June 8, 2004). 50 William Hill, “The First Stages of the Tariff Policy of the United States,” Publications of the American Economic Association 8, no. 6 (November 1893): 13, and Shurtleff, Massachusetts Records, 1:186, 209, 221. 51 Shurtleff, Massachusetts Records, 4-2:410.

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important ingredient in the preservation of codfish, a valuable export. Indirect taxes were modest and focused largely on the sins of drinking and smoking. On November 13, 1641, the General Court ordered every retail vendor of wine to pay 20s. per butt or sack and that all wines wholesaled in the province pay the same rate.52 Several years later, to curb “excessive” importation of wine, the court imposed a duty of 10s. on every butt of Spanish wine and 2s. 6d. for every hogshead of French wine for the general support of government, and building of fortifications and harbor defenses.53 Beginning in 1645 Massachusetts imposed a duty on wines and liquors at rates from 1 to 2 per pipe. The duty was an ad valorem rate of one twenty-fourth, while the excise was an additional one-twentieth. In 1648 specific duties, varying with the place of origin of the product, were substituted for the uniform and ad valorem rates. On May 2, 1649, Massachusetts promulgated a schedule of customs on imports and exports between Boston, Plymouth, New Haven, and Connecticut. Malt for beer was subject to an annual import duty. 54 In 1668 cider, mum, ale, and beer were added to the list of excisable liquors, these being all domestic products. In 1668, the list of imported commodities subject to duty was expanded to include money, plate, bullion, salt, and provisions and merchandise in general.55 Liquor duties were doubled in 1677 over the 1668 rates.56 On June 4, 1669, the legislature systematized the collection of duties under the title “impost.” Exempted goods included fish, wool, cotton, salt, and several other items. All others were charged a rate of 1d./1 of value, the value to be ascertained by adding 20 percent to the value at the place of importation to adjust for the difference between sterling and Massachusetts currency. For goods brought in by land, the rate was fi xed at 1d./1. In May 1673 the court imposed a duty of 6d. a bushel on malt imported from Eu rope, in addition to the rate of one penny previously laid.57 For several years the duty was farmed, fi rst at 120, afterward at 175 per year.58 52

A butt is a unit of volume equal to two hogsheads, 126 U.S. gallons or 477 liters. Shurtleff, Massachusetts Records, 2:82, 3:51. 54 Bishop, American Manufactures, 246, and Shurtleff, Massachusetts Records, 3:149, 152. 55 Osgood, “New England Colonial Finance,” 89, and Shurtleff, Massachusetts Records, 4-2:410. 56 Shurtleff, Massachusetts Records, 5:138. 57 Bishop, American Manufactures, 249. 58 Farming consists of the government granting the right, in exchange for a fi xed payment, to a private party to collect the revenue. In this manner the government receives the money up front and the tax farmer bears the risk of failing to collect sufficient funds to cover the price of his bid or profits from collecting in excess of his bid. 53

[ 172 ]

Taxation of the New England Colonies, 1620–1688

Export duties were occasionally imposed on animals, for example, 1s. per pig and 6d. per sheep in 1680.59 Plymouth levied export duties on boards and plank, barrel and hogshead staves and heading, tars, oysters, and iron from 1662 to its absorption into the Dominion of New England.60

Tax Exemptions

T

h e f o un di ng of Massachusetts towns was often accompanied by a temporary general exemption from taxation. The founders of Dedham in 1635 petitioned the General Court for exemption during the next four years, and received immunity for three years.61 Springfield was exempt from country rates for six years beginning in 1649. Other towns exempted for one or more years included Groton in 1656 for three years, Boston in 1658 for one year for providing meeting rooms for the General Court and a toll-free market underneath the courtroom, Stony River in 1660 for five years if twenty families and a minister settled the town, and Hull for one year in 1674 for providing a beacon.62 Tax exemptions were used to encourage town formation and settlement. In 1645, 1646, and 1647, magistrates were exempt from rates on the first 500 of their estates and also from poll taxes in the latter year. Harvard’s president received similar relief in 1650. Each of the scholars at Harvard was exempt from tolls, customs, and excises. The college was provided with ten servants who were exempt on 1,000 of ratable estate.63 New England resorted to tax exemptions on numerous occasions to encourage the development of specific industries, for example, iron. In 1643 it initially offered the Undertakers of New England Ironworks a twenty-oneyear monopoly on the production of iron and ten years’ freedom from taxation. A revised offer in 1644 granted a twenty-year exemption on all stock and goods employed in the ironworks and exempted all employees from militia ser vice. The charter for the ironworks approved by the General Court on October 1, 1645, included indefinite exemption from taxes and all public charges and full-time workers from military ser vice. The exemptions applied only to provincial taxes, which enabled the town of Lynn in 1648 to impose local taxes of around 20. To meet its promise of exemption for the ironworks, in 1653 the General Court granted Lynn 10 in lieu of ironworks

59

Shurtleff, Massachusetts Records, 5:292. Osgood, “New England Colonial Finance,” 89. 61 Lockridge, Dedham, Massachusetts, 3, and Shurtleff, Massachusetts Records, 1:179. 62 Shurtleff, Massachusetts Records, 2:270, 4-1:263, 327, 424, 5:7. 63 Shurtleff, Massachusetts Records, 2:101, 3:88, 118, 213, 196 (Harvard). 60

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local taxes.64 By 1648, it was producing a ton of iron a day.65 The subsidy was terminated in 1660. Fisheries were deemed especially important. In 1635 the General Court established a commission to manage the fishing industry and granted exemptions on vessels and equipment from all country rates for seven years, and ship carpenters, millers, and fishermen were excused from military training.66 Certain islands were set aside solely as fishing stations, and salt was exempt from most duties.67 Codfish and shipping became engines of growth in New England. In 1639 vessels participating in the New England fisheries were exempt from taxation for seven years.68

Royalties

P

ly mo u t h e stab l i s h e d a government monopoly in the mackerel fishery at Cape Cod and enforced a royalty over drift whales. In 1646, a license fee was imposed on fishing at the Cape. In 1661 the rate for nonresidents was set at 6d. per quintal. In 1670 inhabitants of the colony were required to pay 6d. per barrel for mackerel brought onshore, and strangers were charged 1s. 6d.69

Tonnage Fees

P

ow der d ut ie s, as the impost on shipping was fi rst called, are the earliest of any tonnage fees, first imposed in 1645 by the General Court and widely used in most of the colonies. The average rate was about one hundred pounds of powder and ten iron shot for every hundred tons burden. Powder duties were commuted into cash payments after money became more plentiful.70

64 E. N. Hartley, Ironworks on the Saugus: The Lynn and Braintree Ventures of the Company of Undertakers of the Ironworks in New England (Norman: University of Oklahoma Press, 1957), 90–97, and Shurtleff, Massachusetts Records, 4-1:137–38. 65 Bailyn, The New England Merchants in the Seventeenth Century, 62–71. Although these early companies failed, by the time of the Revolution the colonists produced annually about thirty thousand tons of wrought and cast iron, one-seventh of world output. The number of forges and furnaces in the colonies probably exceeded the number in England and Wales combined. 66 Labaree, Colonial Massachusetts, 91. 67 Terry Lee Anderson, The Economic Growth of Seventeenth Century New England: A Measurement of Regional Income (New York: Arno Press, 1975), 18. 68 Innes, Cod Fisheries, 75. 69 Osgood, “New England Colonial Finance,” 90. 70 Hill, “First Stages of Tariff Policy,” 18–19.

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Taxation of the New England Colonies, 1620–1688

Tonnage duties imposed in 1645 were set at 6d. per ton in merchandise and 10s. for construction and maintenance of a fort. English ships were exempt from customs but paid 6s. 8d. tonnage for ships under two hundred tons, and 10s. above that size, for the fort.71 A fuller set of fees levied in 1646 included firewood at 2d. per ton, stones at 1d., timber at 3d., cask goods at 4d., pipe staves at 6d. per thousand feet, 2d. per load of hay, 1d. per head of cattle, 1 ⁄4d. per head of goats and hogs, 1 ⁄2 farthing (1 ⁄ 8d.) per bushel of corn, and 1 ⁄2d. per quintal of dried fish.72 In May 1667, and again in 1669, the General Court set tonnage at half a pound of gunpowder, or its equivalent in money at the rate of 1s., per ton on all ships and vessels above twenty tons burden not belonging within the jurisdiction or principally owned within it. The duty was levied on every voyage and designated for the support of the fort.73 Every colony exempted its own shipping from tonnage. The northern colonies all had reciprocity agreements. Massachusetts had an agreement that English ships and those of Pennsylvania, the Jerseys, New York, Connecticut, and Rhode Island should pay no duties. English ships were initially subject to tonnage, but after the complaints of English merchants, the colonists were commanded to make no distinction between English ships and their own. Tonnage generated little revenue, only several hundred pounds a year.

Church Taxes

I

n 1638, the General Court required all freemen and non-freemen to support both the province and the church.74 Taxpayers were seated in accordance with their contributions. The largest taxpayers sat in the first row of the churches in Dedham and Newbury, to give but two documented examples.75

Intercolonial Taxes

I

n 1 649 , Connecticut imposed a charge of 2d. per bushel on corn and 1d./1 value on beaver coming from Springfield, Massachusetts, to maintain the fort at Saybrook at the mouth of the Connecticut River. Boston tried but failed to get the duty repealed, which prompted Massachusetts to 71 Weeden, Economic and Social History of New England, 1:148, and Shurtleff, Massachusetts Records, 2:131. 72 Shurtleff, Massachusetts Records, 2:170. 73 Bishop, American Manufactures, 41. 74 Shurtleff, Massachusetts Records, 1:82. 75 Weeden, Economic and Social History of New England, 1:74.

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pass a retaliatory duty on all goods from Connecticut, New Haven, and Plymouth. Connecticut removed the duties the following year.76

Sumptuary Taxes

I

n 165 1 the General Court imposed a tax of 200 on the apparel of town residents, especially the wearing of ribbons or great boots (leather being a scarce commodity), lace, points, silk hoods or scarves, in proportion to that which men could pay to whom such apparel was suitable and allowed, but magistrates, public officers, soldiers, and their wives and children were declared exempt.77

Public Fees and Bounties78

I

n 1630 it was the custom in Plymouth that a surveyor detailing the lines of a lot of land would be compensated by the landowner in the amount of a peck of corn.79 Towns were to pay magistrates 3s. 6d. a day and deputies 2s. 6d. a day for their ser vices.80 In 1641, the gunner of the castle was to receive 250 bushels of corn as his salary. In 1650 the General Court enacted a set of fees, later revised and reissued in 1665, that itemized the cost of preparing, fi ling, copying, or searching for documents. Searching for a record cost 3d., the cost of fi ling a lawsuit seeking damages in excess of 40s. was 76

Hill, “First Stages of Tariff Policy,” 15, and Weeden, Economic and Social History of New England, 1:187. 77 Shurtleff, Colonial Laws of Massachusetts 1660, 123. 78 Fees must be distinguished from taxes. Fees are charges for specifi c ser vices provided by public officials that benefit the fee-paying individual in question, much as one pays a commercial provider for a specific ser vice (e.g., lawyer). Ideally, fees should cover the cost of ser vices rendered. Excessive fees represent charges above and beyond the cost of the ser vice provided. Inadequate fees require the government official providing the ser vice to subsidize the beneficiary of his ser vice at personal cost. To the extent that public ser vices are charged to the general taxpayer, recipients of ser vices are subsidized by those who receive no direct benefit. A good way to think about fees is to consider the cost of the ser vices rendered as if they were provided in a private, competitive marketplace. To the degree that ser vices can be charged directly to the benefi ciaries, the general taxpayer can be relieved of the burden of the cost of providing ser vices. Examples of public fees that directly benefit recipients include birth, death, and marriage certificates, copies of other records, probate of wills, court fees, naval office fees, port fees, and other ser vices. On this argument, fees are not counted as taxes in quantifying colonial taxes or estimating per capita tax burdens throughout this book. Bounties are a form of negative taxation, a subsidy to encourage the production of certain goods (e.g., a premium granted to those who plant hemp) or ser vices (the killing of wolves and other predators). 79 Felt, Massachusetts Currency, 13. 80 Felt, Massachusetts Currency, 22–23.

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Taxation of the New England Colonies, 1620–1688

10s., and recording trial proceedings cost 12d. an hour. These rates were typical of fees for public ser vices.81 On October 7, 1640, the General Court offered a premium of 3d. for each shilling’s worth of linen, woolen, and cotton cloth that was produced for a period of three years. The measure was repealed in 1641.82 In 1630, the General Court ordered a bounty on wolves that would impose a tax of 1d. on every beast, horse, pig, and goat owned by colonists. The measure was repealed two years later. In 1635, the court granted a bounty of 5s. for each wolf and 1s. for each fox killed. The bounties were doubled in 1637, repealed in 1639, and reimposed in 1640 with rates of 40s. if a wolf was killed with the use of hounds and 10s. if killed by other means. The bounties were repealed in 1641. Bounties were reenacted in 1644, repealed in 1645, reimposed in 1648 for five years, extended another five years in 1653, and again offered in 1661 and 1662. The ups and downs of bounties on wolves and foxes reflected their destruction of livestock.83 The most odious of the bounties was a 3 reward in 1675 for an Indian, dead or alive, during King Philip’s War.84

The Maine Counties

A

lt ho ug h taxat ion in Massachusetts was relatively light, certainly by English standards, it was nonetheless heavier than in Maine. In 1652 the Maine counties came under the jurisdiction of Massachusetts when it purchased the claims of the heirs of Sir Ferdinando Gorges. Until then, the Isles of Shoals just off the coast of Maine had profited from its location in the fisheries business. After 1652, its fishermen became subject to higher taxes in Massachusetts, which prompted them to relocate north to Newfoundland and Cape Breton.85

Summary

I

t i s impossible to calculate exact or even roughly accurate figures on total and per capita taxes paid in Massachusetts during 1629–88. Between 81

Shurtleff, Massachusetts Records, 3:210, 4-1:287. Albert Anthony Giesecke, American Commercial Legislation before 1789, University of Pennsylvania Series in Political, Economic, and Public Law (New York: D. Appleton and Company for the University of Pennsylvania, 1910), 64; Rolla Milton Tryon, Household Manufactures in the United States, 1640–1860: A Study in Industrial History (Chicago: University of Chicago Press, 1917), 29; and Shurtleff , Massachusetts Records, 1:303 (1640), 320 (1641). 83 Bishop, American Manufactures, 311. Shurtleff, Massachusetts Records, 1:81 (1630), 102 (1632), 156 (1635), 218 (1637), 252 (1638), 304 (1649), 319 (1641); 2:84 (1644), 103 (1645), 252 (1648); 3:319 (1653); 4-2:2 (1661), 42 (1662). 84 Shurtleff, Massachusetts Records, 4-2:72. 85 Van Deventer, Provincial New Hampshire, 247n45. 82

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October 1633 and May 1640, the General Court met in seventeen sessions encompassing eight years. It appropriated a total of 10,000 for an annual average of 1,250. The three years encompassing May 1636 to March 1638 consumed 5,300 due to the Pequot War. With a population just under 9,000 in 1640, per capita taxation during most of the 1630s would have averaged about 33d. After 1652, taxes were levied in rates, not amounts. Apart from the heavy war time times of 1676–77, direct taxes were modest. Hard figures on indirect taxes are not available. Gaps in the records preclude an accurate estimation of specific or overall taxes.

Taxation in Connecticut, 1634–1688

C

on n e c t ic u t ’s s e t t l e r s paid both provincial and local town taxes.86 The colony’s direct and indirect provincial taxes generally conformed with those of Massachusetts, which were transferred to Connecticut and formed its fiscal foundation. Direct taxes supplied the bulk of revenues, consisting of levies on land, property, polls, faculties, and income. In 1651, following passage of the Code of 1650, assessors compiled a Grand List, which included all the land, houses, animals, and other property subject to assessment. Each male was required to submit his own list of real estate and personal property. Every year the General Court set a tax rate, which ranged from a low 1 ⁄2d./1 (0.2 percent) assessed valuation in 1652 to a wartime high of 18d./1 (7.5 percent) in 1676. The country, or standard, rate was 1d., and levies were set in fractions of multiples of the rate. The Grand List system continued until the adoption of the state constitution in 1818. Indirect taxes, licenses for retailers, and duties on imports and exports began to

86 A comprehensive treatment of taxation in colonial Connecticut appears in Frederick Robertson Jones, History of Taxation in Connecticut, 1636–1776, Johns Hopkins University Studies in Historical and Political Science, ser. 14, no. 8 (Baltimore: Johns Hopkins Press, 1896). Details on the town of Stamford appear in Robert D. Towne, “Stamford Grand Lists: Taxation in Stamford, CT from 1641 to the Code of 1821,” Stamford Historical Society, July 1994, reproduced in http://www.cslib.org/stamford/gr_intro.htm (August 16, 2001). Comprehensive valuation lists and annual tax levies for Connecticut are recorded in Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut (Hartford: Case, Lockwood and Brainard, 1850–90). Vol. 1 (published in 1850) covers the Union with the New Haven Colony to May 1665. Vol. 2 (1852) covers 1665–78. Vol. 3 (1859) covers May 1678–June 1689 (hereafter Public Records of Connecticut). In addition to the printed records, the University of Connecticut maintains an indexed copy of the records on-line at http://www.colonialct.uconn.edu (March 9, 2004). The list of persons and valuation of estates in each town of the colony were sent to the General Court in October and reported in the legislative proceedings. These lists permit a rough estimate of the rising value of real and personal property in the colony and the burden of direct taxes, annual assessment divided by total valuation. Treasurer’s statements are extant in the Connecticut State Library from 1743. There are no comprehensive records of actual receipts of revenue during 1634–88.

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be imposed in mid-century to relieve the burden of direct taxation. Local taxation was predominantly direct in nature to support churches, schools, and towns. Other minor sources of public revenue included fines and inkind labor. As in Massachusetts, despite the provision of fines and penalties for failure to comply with the law, full preparation and submission of town lists to the colonial treasurer were difficult to achieve. The first public tax in Connecticut was a general levy of 620 Connecticut currency apportioned among the towns to defray the expenses of the Pequot War.87 Payment could be made in money, in wampum at four to a penny, or in beaver at 9s. per pound. On May 1, 1637, the General Court ordered that fi xed quantities of beer, liquor, corn, butter, peas, salt, pork, rice, and cheese be provided to finance an offensive war against the Pequot.88 Examples of subsequent taxes ordered by the General Court were 1s. per beaver skin on April 5, 1638, 100 on the towns for general revenue on August 8, 1939, again on December 1, 1662, and 150 on October 25, 1644.89 The first tax in New Haven, November 25, 1639, was a levy of 25s. on every 100 on the investments of the Joint-Stock Association of Adventurers. Thereafter taxes were laid on real estate not pound sterling capital. The first charge in the town of Stamford was laid in 1641 to finance a gristmill and dam to be built on the Rippowam River; the rate was 5s. an acre of land for the mill, and 12s. a home lot plus 5s. an acre for the dam. In May 1650 the Connecticut Code of Laws established a system of taxation, replacing the ad hoc system that had previously prevailed.

Direct Taxes: Poll and Property Taxes

P

ol l or head taxes on every male over sixteen years of age was combined with a general tax based on land and property owned as recorded each year in a Grand List. Rates for provincial, village, and church taxes and levies for major projects and schools were all based on property. The poll tax was written into the 1650 code as a flat tax levied on males sixteen years and over at a rate of 2s. 6d. It was reduced to 1s. 6d. in October 1651, where it remained until 1686 when Governor Edmund Andros took office and raised it to 1s. 8d.90 The capitalized value of the tax base of adult males was 18 and youths under twenty at 9, with the rate set at 1d./1, 0.42 percent. The 18 figure was equivalent to twenty-four acres of 87

Public Records of Connecticut, 1:12, February 9, 1737. Public Records of Connecticut, 1:9. 89 Public Records of Connecticut, 1:20, 30, 79, 113. 90 In the session of November 9, 1659, the General Court imposed a fi ne of 20s. on David the Jew for his misdemeanor in trading provisions with children in a house where the parents were absent. Public Records of Connecticut, 1:343. 88

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good plowed or mowed meadowland in Hartford County, or thirty-six acres of ordinary plow land anywhere else, or six cows three years or older.91 Ministers, the president of Yale College, disabled men, individuals with special circumstances, such as loss by fi re, and assistants, but not deputies, were exempt. On October 23, 1640, an annual tax was placed on land based on its quality. Land of the first division was taxed at 4d. an acre on upland within two miles of the town and meadows. Land of the second division, 2d. an acre, lay outside the two-mile limit. The code of 1640 exempted certain classes of land: common land for free feed of cattle, estates of land in England, lands used for ecclesiastical, educational, or charitable purposes, and land cleared for enclosure for four years, extended to the latter in October 1676. A revision of valuation was promulgated in 1676 that rated land in accordance with its use, quality, locality, and position. Developed lands and house or home lots varied from a low rating of 8s. per acre for tilled lowlands to a high of 55s. an acre for the best meadow lands in towns. Undeveloped lands were taxed at 1s. an acre.92 The system remained intact through the Glorious Revolution. Taxes on property were levied concurrently with those on land following the system of Massachusetts. Items subject to taxation included houses, mills, ships, smaller vessels, merchantable goods, cranes, wharves, all other “visible” estate, and animals of all kinds (rated by age as in Massachusetts). Strangers, individuals not freemen of any town, were taxed on the value of goods they imported at the same rate imposed on inhabitants of similar estate. Exemptions included household goods and stock used in trade in New Haven, later discontinued, cattle under one year of age, hay and corn, dwelling houses and barns, locally owned vessels used in whale or cod fishing four months of each year, a trooping horse, and property used for religious, educational, or charitable purposes. Table 7.1 summarizes direct taxation in Connecticut from 1651 through 1687. Column 2 presents the total assessed value of the Grand List each October, which is calculated by adding the assessments submitted by each town to the General Court reported in the Public Records of Connecticut. Column 3 is the tax rate set each year in pence, converted to percentage in column 4. Multiplying the rate times the Grand List yields an estimate of taxes in Connecticut currency that should be collected, assuming full compliance, which was rarely achieved. Column 7 derives per capita direct taxes assuming full compliance. Apart from wartime years, the rate was on the order of one shilling and a few pence.

91 92

Taylor, Colonial Connecticut, 42. Public Records of Connecticut, 2:294–96.

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Taxation of the New England Colonies, 1620–1688 tabl e . Direct Taxation in Connecticut, 1651–1688 (Connecticut Currency) c ol u m n 1

col u mn 2

c olum n 3

c olum n 4

c olu mn 5

column 6

column 7

Year

Grand List ()

Tax Rate (d./)

Tax Rate ()

Estimated Taxes ()

Population

Per Capita Taxes (d.)

75,493 70,012 79,577 79,074 73,170 83,666 76,762 85,486 80,768 74,114 84,138

1 0.5 1.5 1 1 0.75 1 1 1.5 1 1

0.4167 0.2083 0.625 0.4167 0.4167 0.3125 0.4167 0.4167 0.625 0.4167 0.4167

100,706 106,256 153,621 147,786 144,398 145,238 141,992 145,778 141,195 147,368 152,169 153,472 147,940 139,525 144,738 143,690 149,614 156,298 150,792 156,817 159,385 147,354 168,707 167,640 172,111

1 2.25 1 1.5 1.5 1 1 1.25 1.25 1.25 2.5 2 6 18 8 3 3 2 2 1.5 1.5 2 1.5 1.75 1

0.4167 0.9375 0.4167 0.625 0.625 0.4167 0.4167 0.5208 0.5208 0.5208 1.042 0.833 2.5 7.5 3.33 1.25 1.25 0.833 0.833 0.625 0.625 0.833 0.625 0.729 0.4167

314.6 145.8 497.4 329.5 304.9 261.5 319.9 356.2 504.8 308.8 350.6 0.0 419.6 996.2 640.1 923.7 902.5 605.2 591.7 759.2 735.3 767.5 1,585.6 1,278.4 3,698.5 10,464.4 4,819.8 1,796.1 1,870.2 1,302.0 1,256.1 980.1 996.2 1,227.5 1,054.4 1,222.1 717.2

4,523 4,907 5,291 5,675 6,069 6,444 6,828 7,212 7,596 7,980 8,442 8,905 9,367 9,829 10,291 10,754 11,216 11,678 12,141 12,603 13,967 13,532 13,996 14,460 14,924 15,389 15,853 16,317 16,782 17,246 17,686 18,126 18,566 19,006 19,446 19,885 20,325

16.7 7.1 22.6 13.9 12.1 9.7 11.2 11.9 15.9 9.3 10.0 0.0 10.8 24.3 14.9 20.6 19.3 12.4 11.7 14.5 12.6 13.6 27.2 21.2 59.5 163.2 73.0 26.4 26.7 18.1 17.0 13.0 12.9 15.5 13.0 14.7 8.5

1651 1652 1653 1654 1655 1656 1657 1658 1659 1660 1661 1662 1663 1664 1665 1666 1667 1668 1669 1670 1671 1672 1673 1674 1675 1676 1677 1678 1679 1680 1681 1682 1683 1684 1685 1686 1687

Notes: Population figures are from appendix A.1. No list was compiled in 1662. Source: Charles J. Hoadly, The Public Records of the Colony of Connecticut (Hartford: Case, Lockwood and Brainard, 1850–90), 1:229, 236, 246, 249, 265–66, 279, 285, 307–8, 324, 342–43, 357, 373, 410–12, 432, 435; 2:25, 28, 49, 52, 71–72, 78, 93–94, 117, 121, 137, 143, 160, 163, 185–86, 209–10, 212, 236–37, 265–66, 269, 290, 292, 320, 322; 3:17, 19, 36, 44, 66–67, 71, 86–87, 92, 106–7, 111, 126, 129, 156–57, 160.

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The contribution of the towns to the provincial treasury was modest. Between 1654 and 1662, the town of Stamford sent an average of 21 to New Haven, under whose jurisdiction it was assessed. Taxes could be paid in specie, beaver, wheat, peas, rye, pork, or beef. Stamford’s share of New Haven’s tax collections was on the order of 10–13 percent, which implies that New Haven’s provincial receipts amounted to less than 200. After its incorporation into Connecticut, Stamford’s provincial taxes remained very small. Church, town, and school expenses were also based on the Grand List, only adding modest sums to the burdens of taxpayers. On March 3, 1686, and again on February 15, 1687, Governor Andros and his council promulgated a full set of laws that encompassed all colonial revenues, specifying the country rate at 20d./1 (8.3 percent) for land and animals of farmers, and proportional assessments for artisans and merchants. The acts also regularized duties on wines from the Azores, Canary Islands, Madeira, Spain, and France, and a general ad valorem import duty of 1d./1. The acts specified the means of collection and fines for noncompliance.93

Direct Taxes: Faculty and Income Taxes

T

o r e d uc e the burden on landholders, New Haven added skilled laborers to the property tax and required that merchants be rated according to their “trade and stocks.” Even though the faculty tax was imposed as a provision of the property tax, in effect it amounted to an income tax. This provision was emulated in the Connecticut Code of Laws of 1650 to distinguish skilled from unskilled artisans. The faculty tax remained unchanged through Andros’s regime. Exemptions included those whose infi rmities kept them from being self-supporting, ministers and elders of the church, the rectors, tutors, and students of Yale College, all executive and legislative officials of the colonial government, those employed in the ironworks and fisheries, and physicians. Licensed tavern keepers were rated on their gains.

Indirect Taxes: Excises, Duties, and Tonnage Fees

A

s e ar ly as 1636, the colony imposed a tax on beaver at the rate of 1s. a skin, followed by a tax on wine in January 1646. Further taxes of 10s. on every cask of liquor, 40s. on every butt of wine, 20s. a hogshead, and 10s. a quarter cask were imposed on February 16, 1653, but repealed on March 12, 1659. In Connecticut and New Haven the import duty and the excise on liquors were combined in much the same way as in Massachusetts, but not extended to include imported commodities in general. With the exception 93

Public Records of Connecticut, 3:402–11, 433–35.

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of an import duty of 25s. a hogshead imposed on tobacco on May 15, 1662, wines and liquors were the only imported goods on which duties were levied.94 Duties were raised and lowered following the need for more or less revenue. On May 14, 1668, duties were cut by a third.95 Along with New Hampshire, Connecticut levied export duties on timber. Its first act of 1673 imposed heavy export duties on lumber. The rates were as follows: 10s. per 1,000 hogshead staves, 15s. per 1,000 pipe or butt staves, 15s. per 1,000 hogshead headings, 8s. per 1,000 barrel headings, 10s. per ton of ship’s timber, 3s. per 100 feet of two-inch plank, 1s. 6d. per 100 feet of boards, and 10s. per cord of bark. The measure appears to have been adopted more to encourage the home timber industry than to generate revenue.96 Tonnage followed Massachusetts, intermittently applied, but usually in war time for the building of lighthouses and the construction and maintenance of forts.

Tax Exemptions

F

ol l ow ing t he Pequot War, on May 17, 1649, the General Court exempted the inhabitants of Pequot from all public charges, save those selfimposed, for three years.97 John Winthrop the younger and Stephen Goodyear set up a bloomery and forge at New Haven in 1665. The colonial government exempted it from taxes for seven years from 1669.98 It did not succeed. On May 10, 1666, the court exempted sheep from the property tax rating, all vessels of every size not in use, followed on October 11, 1666, on all vessels exceeding thirty tons.99 To support the establishment of the town of Derby “in a church state,” on May 9, 1678, the court granted its inhabitants a three-year exemption of country rates beginning October 1678, followed on May 11, 1682, by a further two years to support the building of a mill and meeting house.100

Sumptuary Taxes

I

n 167 6, Connecticut enacted that any person who wore gold or silver lace, gold or silver buttons, silk ribbons or other superfluous trimmings, 94

Public Records of Connecticut, 1:146 (1646), 255 (1653), 380 (1662), and Herbert L. Osgood, The American Colonies in the Seventeenth Century (Gloucester, MA: Peter Smith, 1957), 479. 95 Public Records of Connecticut, 2:91. 96 Giesecke, American Commercial Legislation before 1789, 51. 97 Public Records of Connecticut, 1:185. 98 Weeden, Economic and Social History of New England, 1:307, and Public Records of Connecticut, 2:108. 99 Public Records of Connecticut, 2:34, 38, 47. 100 Public Records of Connecticut, 3:2, 89.

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any bone lace above 3s. per yard, or silk scarves would be assessed at a 150 estate. The purpose of this law was to restrain spiritual excess in wanton apparel.101

Taxes In-Kind: Labor Contribution

A

s i n Massachusetts, each man was required to contribute time to build roads, fences and gates, clear and maintain common lands and waterways, view fences, and help build a fort to protect the settlement and a landing on the river. The code of 1650 required each man to supply a team of horses and labor for two days a year, although wealthy persons could hire substitute labor. Men were required to train in militia and man the palisade around the meeting house, the local town’s fort. Such ser vices as firefighting were volunteer.

Fees and Bounties

F

e e s w er e assessed, as in Massachusetts, for a wide variety of ser vices, most of a private nature. Examples include 12d. for the copy of the orders of each session of the General Court paid to the court secretary by the towns, 6d. for recording purchases or mortgages of lands paid to the secretary, 2s. 6d. for a retail liquor license, and 20s. for an appeal to the colonial courts, rising to 3 for an appeal to the court of Assistants.102 Examples of bounties include payment of 5s. for each wolf, 3d. for each gray squirrel, and 1d. for blackbirds in Stamford in 1684. On May 11, 1687, Governor Andros and his council granted 20s. for each wolf killed, and half that for a whelp, a young offspring.103

Local Taxes

N

o dist inct ion was made between the parish and township until 1667. Ecclesiastical salaries were initially dependent on voluntary contributions, but in 1644 towns were authorized to levy taxes to support ministers, in addition to civil grants of land and a house. Town residents might be compelled to provide ministers with fi rewood and several days’ labor to bring their land into cultivation, which was later replaced by money payments. By 1680, the salaries of ministers ranged from 50 to 100, which was considered a large sum in the day. Church lands were exempt from property taxation.104 Whenever a town decided to build or repair a public 101

Weeden, Economic and Social History of New England, 1:288. Public Records of Connecticut, 1:39, 37, 333, 2:29. 103 Public Records of Connecticut, 3:422. 104 The legislature terminated compulsory taxation for religion in 1818. 102

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facility, a special rate was voted and collected as part of general town taxes. The 1650 code required towns of fifty householders and up, later reduced to thirty, to employ a teacher; those exceeding one hundred were required to build and maintain a school. School rates were collected in conjunction with regular town rates. Outlays on schools consumed between a fifth to a third of public funds available to the towns. To support charitable donations for education, the legislature made legacies for schools tax free in 1684. The legislature also granted lands to counties for schools, fining counties 10 a year for failure to support schools. When necessary, a special rate of provincial taxation could be imposed to make up for deficiencies in town revenue, or the legislature could allocate a portion of excise and duties. Towns were also required to construct and repair bridges and levy a poor rate to provide support for the indigent.105 The legislature was keen to foster the establishment of new towns. Unimproved land paid no taxes. The location of an individual’s land, belonging to one town or another, could result in higher or lower taxes, which required the provincial government to resolve disputes over town boundaries. Counties were established in May 1666 to cover areas not encompassed in the towns or subject to provincial responsibility. The primary purpose of county expenditure was for jails and courthouses.

Control of Revenue and Expenditure

T

he g eneral Court (renamed General Assembly after Connecticut received a royal charter in 1662) became bicameral in 1645. From that moment, deputies in the lower house controlled the origination of money bills, a privilege never questioned by the governor or his council, whereas this right was the subject of contention in neighboring Massachusetts.

Summary

A

part f r om war time, settlers paid low taxes. The growth of the tax base can be seen in the assessments in the grand lists. Assessed

105 Public Records of Connecticut, 3:300. In a reply by colonial officials dated July 15, 1680, to a request for information about the condition of the colony from William Blathwayt of the Lords of Trade, Governor William Leete wrote that although each town was responsible for providing poor relief inside its borders, “There is seldom any want relief; because labor is dear, viz., 2s. and sometimes 2s. 6d. a day, for a day laborer, and provisions cheap.” In the same reply he also noted that ministers enjoy an income of not less than 50 and, in some places, as high as 100. Blathwayt also asked for information on the volume of annual trade, which Leete put at 8,000–9,000 a year. With a population of 17,246 in 1680, per capita annual consumption of imports amounted to about 10s. Duties on trade, about 1 percent ad valorem on items other than alcoholic beverages, amounted to no more than a few pence per person.

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valuation of all property subject to taxation of 75,492 10s. 16d. in 1651 reached 172,820 in fiscal year 1687–88 (1687 in table 7.1). Scholars agree that total valuation was below actual wealth because assessment was based on the probable income arising from, rather than the true value of, real and personal property. Actual rates of tax were thus lower than the percentage in column 4 and actual per capita taxes lower than in column 7 in table 7.1. The annual tax burden in peacetime was a fraction of 1 percent of valuation. The population of Connecticut in 1688 was 20,765. Per capita assessed valuation on the Grand List was about 8, with actual market value higher by some unknown amount. A rate of 1d./1 on official assessment is a tax rate of 0.42 percent, which would be lower still due to undervaluation. The combined poll and property tax, along with town and county taxes, and indirect taxes, is likely to have pushed the total peacetime rate to 1–2 percent, sufficient to provide for the total cost of provincial, town, church, and county expenditures. The 90 percent of the population engaging in selfsufficient farming was taxed at the low end, with traders and urban residents, especially skilled artisans, at the higher end of this range. The annual cost of provincial government was estimated at about 800 Connecticut money, or 571 English sterling, in 1700.106 Governors, members of the legislature, and soldiers were compensated with grants of empty land in addition to, or in lieu of, regular salaries. The brief interlude of the dominion, which repealed all colonial tax laws, terminated tax support for churches and schools, which was a severe blow to the Puritan leadership. The Glorious Revolution of 1688 ended the dominion and led to the reestablishment of most prior legislation.

Taxation in Rhode Island, 1636–1688

R

hode i s l and began as a collection of autonomous towns in 1636, which was unified in 1647 by a majority of the freemen in the colony under a patent secured by Roger Williams from Parliament in 1644.107 An 106

Taylor, Colonial Connecticut, 41. A comprehensive history of taxation in Rhode Island, similar to those of Massachusetts, Connecticut, and New Hampshire published in the late nineteenth or early twentieth centuries, does not exist. Perhaps one reason is the much smaller scope of taxation in Rhode Island. Several aspects of Rhode Island’s taxation are cited in Samuel Greene Arnold, History of the State of Rhode Island and Providence Plantations, vol. 1, 1636–1700 (New York and London: D. Appleton and Company, 1859). Resolutions of the colonial legislature appear in Records of the Colony of Rhode Island and Providence Plantations, in New England, transcribed and edited by John R. Bartlett, secretary of state (Providence: A. C. Greene, state printer, 1856–65). Volumes 1–3 cover the period 1636–1706 (volumes 4–7 encompass 1707–76). Separate, but incomplete, records exist for Providence during 1636–47, for Portsmouth, 1637–47, for Newport, 1639–47, and 107

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effective colonial government embracing the four towns, able to make laws and enforce its edicts on the separate towns, did not emerge until 1658. Prior to the unification of the four towns of Providence, Portsmouth, Newport, and Warwick into the Colony of Rhode Island and Providence Plantations in 1647, the separate towns imposed few taxes. Portsmouth charged residents of the Island of Aquidneck 2s. an acre after which they would be admitted as inhabitants of the town.108 Other limited records show concern with predators. On March 16, 1641, the town of Newport approved a bounty of 6s. 8d. for each fox killed. In March 1642, it granted 30s. for every wolf killed, raising the reward to 5 the following September.109 Extermination of wolves, which posed a special menace to cattle and later the flocks of sheep that contributed so much to the colony’s prosperity, remained high on the colony’s agenda throughout the seventeenth century. In 1652, the towns paid 30s. a head for every one killed, later raised to 5 paid by a special tax levied on farmers in proportion to the number of cattle they had. In April 1688 a provincial tax of 53 was imposed for that purpose.110 In 1658, the colonial government began to levy regular taxes, allocated to the towns on a lump sum basis. On March 13, 1658, its unicameral legislature levied 5 5s. on each town, followed on November 2, 1658, by an additional tax of 6 on each town. On August 23, 1659, the General Court raised the annual levy to 6 10s. in addition to a special colony-wide tax of 50 to finance the mission of John Clarke in England to secure a charter for the colony.111 On five occasions during 1661–63, the legislature requested voluntary contributions of hundreds of pounds sterling to supports its agents in England, but met with difficulty securing compliance.112 In 1661, it recommended 200 as payment to John Clarke for his assistance with securing the colony’s new charter, which was granted the following year. An audit of his accounts revealed expenses of 343, well in excess of money that had been contributed. Requests for contributions gave way to legislation in 1664 in which 600 was levied to pay Clarke and his assistants. Tax resistance was a prominent feature of life in the colony. The attempt to collect 600 for Clarke failed. Because deputies from Warwick were absent during the vote, the town refused to contribute its share, objecting to for Warwick only for 1642. Under the colony’s fi rst charter, records for the Colony of Rhode Island and Providence Plantations begin in 1647. 108 Bartlett, Rhode Island Records, 1:56. 109 Wolves were more destructive of flocks than foxes. Bartlett, Rhode Island Records, 1:113, 122, 125. 110 Arnold, History of Rhode Island, 154, 508. 111 Bartlett, Rhode Island Records, 1:384 (March 1658), 395 (November 1658), 422 (1659), 426 (1659). 112 Bartlett, Rhode Island Records, 1:443–44, 448, 480, 496, 506.

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the level and purpose of the tax. In 1666, the legislature instructed the towns to distrain the property of those who failed to pay their taxes. Again, little happened. In 1667, the legislature established a committee to further investigate the difficulty encountered in collecting the 600. In May 1669, it made local constables and sergeants liable for the sums that were not collected. Later that October, it restated the need to collect the 600 that had been appropriated five years earlier. On June 29, 1670, the General Court approved another 300 sterling to support its agents in England and demanded expeditious collection of that sum and the remainder of the 1664 levy that had not been remitted. In 1671 it voted another 200 payable in New England silver for its English agent even as legislators continued to express their concern over the delinquency of the towns in remitting the levies of 1664 and 1670. By 1672 only Providence and Warwick had complied, with the other towns remaining delinquent.113 In the hope of gathering revenue, in 1670 and 1671 the legislature authorized payment of taxes in country pay at specified rates for pork, peas, wheat, corn, oats, wool, and butter, but offered a 50 percent discount for specie.114 The towns were unable or unwilling to comply with the colonial government’s tax laws. Tax resistance in Providence even stirred up opposition to the charter itself. By the early 1670s the provincial government was beginning to impose its mandates on the towns, but still only with partial success.115 The English government wanted to revoke all the New England charters, not just that of Massachusetts. Rhode Island’s General Assembly appropriated funds to support its agents in England to block revocation, voting 300 sterling in 1678, 60 sterling in 1679, and 400 Rhode Island currency in 1682.116 In defense against royal commissioners sent from England to consider possible revocation of its charter, in 1683 the General Court levied a tax of 400 local currency to draft letters and send an agent to England.117 Although the charter of Massachusetts was revoked in 1684, Rhode Island was spared a similar fate. In 1685, Edward Randolph, surveyor-general in America, persuaded the English government to issue a writ of quo warranto to revoke Rhode Island’s charter of 1663, charging the colony with failure to enforce the Navigation Acts and other misconduct. On June 3, 1686, King James II

113

Bartlett, History of Rhode Island, 2:77–81 (1664), 131 (1665), 183 (1666), 197 (1667), 254 (May 1669), 288 (October 1669), 338 (June 1670), 358 (October 1670), 379 (May 1671), 412 (September 1671), 436 (1672). 114 Bartlett, Rhode Island Records, 2:359 (1670), 412–13 (1671). 115 James, Colonial Rhode Island, 91–92. 116 Bartlett, Rhode Island Records, 3:21 (1678), 47 (1679), 134 (1682). 117 Arnold, History of Rhode Island, 473.

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commissioned Sir Edmund Andros as governor of all the New England colonies. He arrived in Boston on December 20, and on January 17, 1687, his commission was published in Rhode Island. Sir Edmund dissolved Rhode Island’s government, broke the seal of its charter, reduced the colony to a single county, and admitted seven of its inhabitants into his council.118 No meetings of the General Assembly took place under his government, which was replaced by Courts of Quarter Sessions. The accession of William and Mary to the English throne ended the dominion. Andros and his council were seized by the people of Boston on April 18, 1689 (the same date as Paul Revere’s famous ride in 1775), and imprisoned. The General Assembly reconvened in May and sought to recover the colony’s former charter privileges. During his brief administration, Andros and his council levied a tax of 160 sterling on December 14, 1687, followed in March 1688 with a tax of 53 6s. 8d. for killing wolves, and a levy of 120 for general expenditure in December 1688. Taxes could be remitted in country pay in wool, butter, corn, rye, or pork at specified rates or in coin at one-sixth discount.119 Andros also sought to add quitrents to the colony’s taxes. Rhode Islanders refused to pay taxes levied by the county courts, and the constables refused to call town meetings to apportion taxes or collect levies imposed by the courts. Before the tax revolt could be quelled, the dominion was overthrown.120 Until 1695, country rates in Rhode Island were levied as lump sums, allocated to the towns in fi xed amounts for collections. The rate ranged between a 1 ⁄4 d.–1d./1 of assessed farmland and goods.121 Each individual was required to report his own assessment of ratable estate to his town. When individuals were lax or failed to comply, the towns appointed men to guess and rate estates. As the previous paragraphs leave little doubt, Rhode Island was not very successful in enforcing tax collection.

Miscellaneous Sources of Revenue and Events

A

s e s s ion of the General Court during May 19–21, 1647, established reciprocal duties on all imported goods, except beaver, with foreign nations. It also levied 100 apportioned among Newport, Portsmouth, and

118 A second commission of April 16, 1688, extended Andros’s government over New York, Connecticut, and other English colonies in America. 119 Bartlett, Rhode Island Records, 3:235–36 (1687), 239 (March 1688), 247 (December 1688). 120 James, Colonial Rhode Island, 109. In December 1693 the Crown’s attorney general ruled that no suit had been carried out against the colony’s charter and thus its privileges remained intact. Th is opinion was presented in a message from Queen Mary in August 1694 addressed to the General Assembly of Rhode Island. James, Colonial Rhode Island, 112–13. 121 Osgood, “New England Colonial Finance,” 85.

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Providence as a “free gift” for Roger Williams for his work in securing the colony’s charter.122 A subsequent session in the summer of 1659 included a tax of 50 to purchase ammunition to cope with Indian problems and meet the expenses of an agent in London to protect the colony’s charter. A further tax of 50 was levied to purchase Hog Island from the Indians.123 A session of the court held on October 29, 1684, is noteworthy in that it was the first time that Jews appeared by petition, seeking the same protection under law accorded other foreigners.124 In 1655 the General Court imposed an excise of 5s. an anchor on liquor and a quarter cask of wine.125 Tonnage duties seem to have been the only duties. No reference to general customs duties appears in the colonial records until 1700, when a rate of 5 percent was imposed on goods imported for sale by nonresidents.126 When the charter of Massachusetts was revoked in 1684, royal officials brought charges against Rhode Island (and Connecticut) for their failure to enforce the Navigation Acts. To prevent English officials from taking charge, the colony established its own naval office to keep enforcement in local hands. The legislature also transferred some provincial powers back to the towns in order to retain the maximum degree of autonomy should its charter be revoked. When it became clear that the Dominion of New England would place the colony’s charter in abeyance, the General Assembly repealed the liquor excise, its only tax.127 There are no extant lists of total provincial valuation or estimates of total revenue collection by all levels of government in the colony. Sporadic written accounts indicate that per capita taxes in the colony were lower than in Massachusetts and Connecticut.

Taxation in New Hampshire, 1639–1688

U

n t il 1 6 8 0 , when the Crown established royal government over New Hampshire, the towns in the territory had no legal authority to estab-

122

Arnold, History of Rhode Island, 204–5. Arnold, History of Rhode Island, 271–72. Concern about Indians prompted occasional levies of tax directed to that end, as in 1665, when the General Court required each town to maintain a magazine of arms at public expense. Total tax of 110 was imposed on the towns in 1665 to that end (320); a special defense tax of 150 was levied in Newport in 1667 (331); and another of 250 in silver in 1671 (352). The fi rst tax imposed after King Philip’s War was 300, most of which was paid in wool at a rate of 5d. a pound (450–51). 124 Arnold, History of Rhode Island, 479. 125 Bartlett, Rhode Island Records, 1:309. 126 Hill, “First Stages of Tariff Policy,” 18, and Osgood, “New England Colonial Finance,” 91. 127 James, Colonial Rhode Island, 107. 123

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Taxation of the New England Colonies, 1620–1688

lish and maintain a government.128 The Council of Plymouth, which granted to its patentees the lands of New Hampshire, had no authority to delegate its power of government. The four New Hampshire towns, from their founding until 1680, governed and taxed on the voluntary consent of the people. The leading men of the companies owning the patents exercised power with the tacit consent of the settlers. On July 4, 1639, a majority of freemen in the banished church congregation in Exeter imposed the first known taxes in New Hampshire, combined with the first election of town officials. In Portsmouth, a grant of fifty acres of land to the parish for its perpetual use on May 25, 1640, established the power of taxation. The town of Hampton, situated within the boundaries of Massachusetts, followed the pattern of towns in the Bay colony that established corporate life. In 1641, union with Massachusetts brought the towns on the Piscataqua River, Portsmouth, and Dover under the jurisdiction of the Bay colony. New Hampshire’s residents were to follow the policies of Massachusetts in supporting church and town, save that local taxes were reserved for their exclusive use, not to be shared with Massachusetts. The Massachusetts system of taxation operated within the New Hampshire towns until it became a royal colony. The Cutt Commission of 1680, which established the provincial government in royal New Hampshire, with John Cutt serving as president of the Council, granted the right of the people to impose taxes through its elected representatives. An assembly of March 1680 dealt with the issue of financing the new royal government. All laws enacted by elected deputies first required approval of the president and Council, after which they were subject to royal disallowance. Cutt’s government imposed direct poll and property taxes (see below). His replacement on May 9, 1682, by Edward Cranfield as lieutenant governor brought a new legislature into session on November 14, 1682, which approved a higher rate. Conflict between Cranfield and the lower house, which he frequently dissolved, shifted dependence on revenue to fines, land rents, excises, customs, and tonnage. With the royal government short of funds, Cranfield called a new session of the legislature but quickly dissolved it for failing to 128

The only comprehensive account of taxation in colonial New Hampshire appears in Maurice H. Robinson, “A History of Taxation in New Hampshire,” Publications of the American Economic Association, 3rd ser., 3, no. 3 (New York: Macmillan and London: Swan Sonnenschein and Company, 1902). Details on taxation are recorded in Nathaniel Bouton, ed., Provincial and State Papers, vols. 1- 7, Provincial Papers: Documents and Records Relating to the Province of New-Hampshire from the Earliest Period of Its Settlement: 1623–1686 (Concord, NH: George E. Jenks, state printer, 1867), and during New Hampshire’s royal period between 1679 and 1688 in Albert S. Batchellor et al., eds., Provincial Papers of New Hampshire, Including the Records of the President and Council (Manchester, NH: J. B. Clarke, public printer, 1891).

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vote the necessary rates. To resolve the impasse, the Lords of Trade instructed Cranfield to use the legislature to raise funds. It refused to vote supplies, the courts refused to enforce collection, and one of the colony’s leading citizens, Nathaniel Weare, brought a case against Cranfield before the Lords of Trade. On March 27, 1685, the lords ruled against Cranfield and he was forced to demit office. The interlude of the Dominion of New England, established by Governor Andros on June 3, 1686, did not recognize any role of the House of Representatives in imposing taxes. His commission restricted all government powers to himself and the Council, nominated by the Crown. Andros increased excises and customs, and imposed a single rate of 1d./1 according to customary usage. Andros reported to England that revenues were short by 875 New Hampshire currency, and he was authorized to increase some of the duties.129 The fall of Andros on April 18, 1689, ended the brief interlude of executive government. Town meeting participants resisted tax measures that were not broadly supported.130 Since officials received no compensation, and community projects were financed by compulsory labor contributions, actual town cash outlays were small. Taxes were extremely low.

Direct Taxation: Poll and Property Taxes

T

h e t h irt y - ni ne years of union with Massachusetts provided the general basis of taxation in New Hampshire. The General Court exercised the prerogative of levying taxes on polls, estates, and faculties. Indirect taxes were levied on those who imported goods and tonnage on shipping to finance harbor fortifications. The tax on faculties was on artisans and craftsmen who earned income from non-agricultural activity. Cutt’s commission provided that the president and Council should maintain extant taxes until the legislature could be summoned within three months after the new government was inaugurated. When it met in March 1680, it imported wholesale a complete body of laws of Massachusetts from which New Hampshire was now separated. All male persons sixteen years and older were subject to poll and property taxes. The capitalized value of the poll tax was set at 16 New Hampshire currency. All fenced lands and those within meadow or marsh were assessed at 5s. an acre. Assessments of animals ranged from a low of 10s. for yearling cattle and swine over one year of age to a high of 3 for oxen four years and

129

William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (New York: Columbia University, 1908), 329. 130 Daniell, Colonial New Hampshire, 44.

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older. The laws stressed the importance of equitable assessments between towns. Assessments also encompassed ships, ketches, barques, boats, and all other vessels; dwelling houses, warehouses, wharfs, and mills; the output of carpenters, masons, joiners, shoemakers, tailors, tanners, curriers, butchers, bakers, and any other artificers; and victuallers, merchants, and innkeepers. Property that produced no income was exempt, along with livestock under one year old, farming implements, farm products, household furniture, books, silver plate and jewelry, and personal clothing. Exempt individuals included the president of the Council, council members, and ministers and elders of the church. A rate of 11 ⁄2d. in the pound, 0.625 percent, was levied on the assessed list. The legislature imposed rates to meet immediate expenses, which were invariably underestimated, leaving deficits in the Treasury. A rate of 11 ⁄2d. in March 1681 was increased to 2d. the following May. In March 1682, the rate was reduced to 1d.131 Cranfield’s commission was largely similar to that of Cutt. The tax law carried over into Cranfield’s administration, but the rate was increased threefold in November 1682 to 4d./1, 1.67 percent.132 The brief period of rule by Andros retained the 1680 system.133 Between 1680 and 1688, assessment was based on individuals, not towns. Full assessment and collection was difficult to achieve. The 11 ⁄2d. rate enacted in 1680 gave a one-third discount to those who paid in specie. Taxes in 1682 could be remitted in marble pine boards at 26s. per 1,000 feet, white oak pipe staves at 50s. per 1,000 feet, red oak pipe staves at 35s. per 1,000 feet, beef at 2d. per pound, pork at 3d. per pound, corn at 3s. a bushel, wheat at 5s. a bushel, peas at 4s. a bushel, barley malt at 3s. a bushel, and fish at current prices, again with a one-third discount for silver.134 In 1682, a piece of eight was rated in New Hampshire money at 6s. 8d., but lowered the next year to 6s.135 Resistance to taxes was widespread in the towns, which meant that constables rarely met their targets.

Indirect Taxes: Excises and Duties

O

n j un e 10, 1680, the Council granted retail licenses to ten persons with payments ranging from nothing to 8 per year, yielding revenue

131

Fry, New Hampshire as a Royal Province, 324. Bouton, New Hampshire Records, 448. 133 Bouton, New Hampshire Records, 488–89. 134 Bouton, New Hampshire Records, 448. The rates for country pay remained relatively constant between 1679 and 1684, with slight changes reflecting market prices. 135 Bouton, New Hampshire Records, 448, 480–81. 132

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of 38 10s. 1d. The system continued until 1687, after which Andros imposed a uniform system of duties and excises. Tonnage previously in force, that of Massachusetts, was carried over by legislation on April 1, 1680.

Intercolonial Duties

W

it h t he establishment of New Hampshire as a royal province, traders who had previously done business in Massachusetts were now subject to its powder duties and customs of 1s. per ton of merchandise. New Hampshire traders were also subject to their own powder duties and thus asked Massachusetts for an agreement to avoid double taxation. Massachusetts refused the request, prompting New Hampshire to place duties on imports, lumber exports, and a powder duty on ship tonnage, exempting locally owned vessels. Cranfield required a license fee for residents of Massachusetts engaging in New Hampshire’s timber trade. These intercolonial duties expired with the creation of the dominion in 1686.136

Local Taxes

L

o c al taxe s encompassed the parish tax, school tax, highway tax, inventory tax, and special taxes and fines. Initial voluntary support of churches gave way in 1650 in Exeter to compulsory taxation. Every resident was ordered to pay 2s. for every thousand pipe staves he made for maintenance of the ministry, with proportional rates on other sizes of staves. Given New Hampshire’s economic dependence on timber, a specific tax on sawmills was levied to support the ministry. Exeter’s system was copied in Dover four years later. Dover millmen were charged a town tax of 10s. on each mast exceeding twenty-four inches in diameter on their property. As millmen began harvesting smaller trees, a tax of 6s. was placed on masts fourteen to eighteen inches in diameter and 8s. on masts eighteen to twenty-four inches in diameter.137 Each felled tree generated private and public income. Lumbering, as the main source of income for town residents, was an obvious source of revenue, and dozens of sawmills were established. With mill taxes exclusively allocated to the ministry, sawmills were often exempted from general town rates. Compulsory labor was required for the erection of churches. If the churches remained short of money, a tax on inventory was authorized, 136 137

Van Deventer, Provincial New Hampshire, 157. Van Deventer, Provincial New Hampshire, 35–36.

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although resort to inventory tax was rare prior to the eighteenth century. The towns offered an attractive incentive to support the ministry. The grant of common lands or new areas to town inhabitants was based on the proportion of tax each individual paid to support his minister, which was itself based on his ratable estate.138 Important town leaders received special grants, which attracted residents to public ser vice despite the lack of formal salaries. Those seeking additional lands cheerfully paid the ecclesiastical tax. The fi rst schools established in New Hampshire were supported by parents of the children who attended them, not by tax levies. Shortly after passage of the 1647 Massachusetts school tax, New Hampshire’s settlers became subject to compulsory school taxation. The sums collected were modest, as reflected in the appropriation of 20 in 1658 to support the teacher in the town of Dover. A highway tax was adopted as early as 1644, requiring individuals and those owning teams of horses to provide several days of work a year. Exeter required four days. Failure to comply carried a fine of 5s. per day for individuals and 20s. for those with teams. In subsequent years, individuals were required to maintain the portions of the roads that they built. Failure to comply carried a fine of 10s. per rod, a linear measure of 16.5 feet, that could be used by the constable to repair the share in question. Counties were not established in New Hampshire until 1769.

Taxation of the New England Colonies, 1620–1688: A Summary

P

ly mo ut h and Massachusetts Bay were founded with specific exemptions from duties on trade, and preferential treatment on trade with England for twenty-one years. The colonies, along with those of Connecticut, Rhode Island, and New Hampshire, levied low taxes on property, income, and trade, save during the Pequot and King William’s wars. A reasonable estimate is that New Englanders paid on the order of one-fourth to one-third the taxes of their English cousins. 138 Van Deventer, Provincial New Hampshire, 25. To attract population, Portsmouth granted new settlers one or two acres of commonage or town lots. In 1651, town leaders acquired five thousand acres for themselves after resolving a dispute with a group of patentees over the area of Squamscot. Th irty-three of the original planters and several “in need” were allocated 550 acres by town selectmen, after which 4,139 acres were parceled out to ninety-one inhabitants as of 1657, including married sons over twenty-one years of age, and married and unmarried daughters over eighteen. Van Deventer writes that “Th is land dowry must have helped many an ugly maiden capture a husband in later years” (31).

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chap t er 7 tabl e .a Ratios of Legal Rating of Sterling and Colonial Currencies Expressed in Pence Based on Full-Weight Spanish Dollar (One Unit of Each Currency Rated in Spanish Silver Coin Buys How Many Pounds of Any Other Currency Similarly Rated)

Currency

Sterling (54d.) = New England 1652 (80d.) = New England 1669 (72d.) = New England 1682 (84d.) = New England 1688 (72d.) = New York 1660 (64.8d.) = New York 1672 (72d.) = Pennsylvania 1683 (72d.) = Maryland Sterling (54d.) = Maryland 1671–76, 1686–89 (72d.) = Virginia 1645 (72d.) = Virginia 1665 (60d.) = Carolina 1664 (60d.) = Carolina 1683 (72d.) =

Sterling

N.E. 1652

N.E. 1669

N.E. 1682

N.E. 1688

N.Y. 1660

1.00 0.68 0.75 0.64 0.75 0.83 0.75 0.75 1.00 0.75 0.75 0.90 0.90 0.75

1.48 1.00 n.a. n.a. n.a. 1.23 n.a. n.a. 1.48 n.a. 1.11 n.a. n.a. n.a.

1.33 n.a. 1.00 n.a. n.a. 1.30 1.00 n.a. 1.33 1.33 n.a. 1.20 1.20 n.a.

1.56 n.a. n.a. 1.00 n.a. n.a. 1.17 1.17 0.75 1.56 n.a. 1.40 1.40 n.a.

1.33 n.a. n.a. n.a. 1.00 n.a. 1.00 1.00 1.00 1.00 n.a. 1.20 n.a. 1.00

1.20 n.a. 0.90 n.a. n.a. 1.00 n.a. n.a. 1.20 n.a. 0.90 n.a. n.a. n.a.

Notes: New Jersey had the same rating as New York. Delaware had the same rating as Pennsylvania. North and South Carolina had the same rating until their separation in 1712. Sources: Colonial legislation in various colonial records and chapters 7–9.

Appendix: Colonial Currencies and Foreign Coins

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h e cur r e nc y situation in the colonies in 1688 was complicated. The English government rated a full-weight Spanish reale (also called the dollar or piece of eight) weighing 418 grains, or 17.42 pennyweight of silver, at 54d. In an effort to retain silver coins in the colonies, the colonial legislatures of New England, New York (mimicked by East and West Jersey), Pennsylvania (including Delaware), East and West New Jersey, Maryland, Virginia, and the Carolinas raised the legal values, known as “crying up,” of the Spanish coin. Values ranged from parity with sterling in Maryland, except for the two periods 1671–76 and 1686–89, to a high of 1.56 times against sterling in New York during 1682–88, with others rated in between. The value of the same coin varied among the colonies as well as against its legal value in England, along with the value of foreign coins of Holland, Flanders, France, Germany, and Portugal, and bills of exchange written in sterling and colonial currencies. In the early years, traders might have to include wampum in their accounts, until the wampum laws were repealed. To complicate matters further, the value of country pay—a bushel of wheat, corn, rye, barley, peas, and numerous animals deemed legal tender in public and often private debts—varied among the colonies since each colony set values in its respective currency. [ 196 ]

Taxation of the New England Colonies, 1620–1688

N.Y. 1672

PENN 1683

Maryland Sterling

Maryland 1671–76 1686–89

Virginia 1645

Virginia 1665

Carolina 1664

Carolina 1683

1.33 n.a. 1.00 0.86 1.00 n.a. 1.00 1.00 1.20 1.00 1.20 1.20 1.20 1.20

1.33 n.a. n.a. 0.86 1.00 n.a. 1.00 1.00 0.75 1.33 1.20 1.20 n.a. 1.00

1.00 0.68 0.75 n.a. n.a. 0.83 0.75 n.a. 1.00 n.a. 0.75 0.90 0.90 0.75

1.33 n.a. 1.00 0.86 0.75 n.a. 1.00 1.00 n.a. 1.00 n.a. 1.20 n.a. n.a.

1.33 0.90 n.a. n.a. n.a. 1.11 n.a. n.a. 0.75 n.a. 1.00 n.a. n.a. n.a.

1.11 0.75 0.83 0.71 0.83 0.93 0.83 0.83 1.11 1.33 n.a. 1.00 1.00 0.83

1.11 0.75 0.83 n.a. n.a. 0.93 n.a. n.a. 1.11 1.11 1.00 0.83 1.00 n.a.

1.33 n.a. n.a. 0.86 1.00 n.a. 1.00 1.00 1.33 1.33 1.20 1.20 n.a. 1.00

Consider the plight of an English trader residing in Boston. His activities might include importing goods from England and elsewhere in Europe to sell in Boston, other New England colonies, and some or all of the middle and southern plantation colonies. He might supply wholesalers or sell retail from his own stores in the countryside. He might purchase colonial goods for shipment to England, English colonies in the West Indies, or other markets. He would write contracts to cover his sales and purchases. He was fortunate, and his accounting made easier, if he could write all or most of his contracts in sterling, or only traded and dealt in the currencies of one or two colonies. Depending on the complexity of his business, his accounts would show entries in pounds, shillings, and pence of England and in some or all of the different colonies. He might keep multiple records of transactions in different currencies of purchases and sales, along with records that converted those currencies into equivalent sterling values to better enable him to reckon his gains or losses. He used a set of formulas that converted New England pounds, shillings, and pence and those of other colonies into their sterling equivalent. He probably had a table for converting foreign coins into their Spanish equivalent.139 Many of the coins he handled were fractional, clipped, 139

The John D. Rockefel ler, Jr. Library in Williamsburg, Virginia, has an exhibition of coins that circulated in colonial America. Joseph R. Lasser et al., Th e Coins of Colonial America: World Trade Coins of the Seventeenth and Eighteenth Centuries (Williamsburg, VA: Colonial

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broken, blanched, sweated, or otherwise reduced from their full silver content, and he had to adjust their values accordingly. He also had to reckon in legally rated country pay, sometimes bartering one lot of goods for another, facing a risk of spoilage and rapid changes in market conditions. In Virginia and Maryland (chapter 9), he probably accepted payment in tobacco, the legal rating of which was changed from time to time in accord with market prices. Table 7.A presents the ratios of the legal rating of sterling and the colonial currencies against each other at each point in time, expressed in pence based on the silver content of a full-weight Spanish reale or dollar. The values of other foreign coins were determined by the amount of silver in each coin relative to the reale.140 The formulas would change when colonial legislatures enacted new ratings of their currencies. The table is read from left to right. For example, a sterling coin valued at 54d. was equivalent to 1.48 units of New England’s 1652 currency rating, which remained in force until 1668. In other words, a debt of 1.48 New England currency rated at 80d. was equal to a debt of 54d. sterling, reflecting the two ratings of a full-weight silver dollar. The trader’s ledger might show an account payable of 1s. sterling to his English supplier, balanced with an account receivable of 1.48 New York currency from his colonial customer. A conversion mistake from faulty bookkeeping could reduce or eliminate his profit, or cause a loss. Continuing across the table, the same sterling coin was equal to 1.33 New England currency from 1669 to 1682, and so forth each time New England reset the legal value of the Spanish dollar. The same method of equating currency values applies for each of the other colonial currencies. In the table, “n.a.” means not applicable. For example, the rating of New England currency in 1652 would not apply to New York, which did not set a legal value of its own currency until 1660. New England currency 1669 applies to New York 1660, but not Pennsylvania 1683 or Carolina 1683. In the case of Maryland, which had a separate rating for the two periods 1671–76 and 1688–89, the ratio in the table reflects the exact year in which other currencies were legally rated, although the periods overlap multiple currencies of other colonies.

Williamsburg Foundation, 1997). Coins used in colonial America at various times included the English guinea (21s.); French guinea (Louis d’or); Spanish 2 and 8 escudos (gold); 1, 2, 4, and 8 reales of Bolivia, Mexico, Peru, and Spain; 1 ⁄4, 1 ⁄2 (light and heavy), and 3 gulden Netherlands; 1 ⁄10, 1 ⁄5, 1 ⁄2, and 1 French écu; En glish farthings, 1 ⁄2d., 6d., 1s., half crown, and crown; Dutch Lyon dollars; Egyptian gold sultani; Brazilian moidore, half joe and joe; and various German coins. 140 Table 13.A presents the ratios for sterling, the colonial ratings of pieces of eight, and numerous other foreign coins included in the assay of Sir Isaac Newton in 1702. Paper money is not included in this appendix as it was fi rst issued in Massachusetts in 1690.

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c h ap t e r 8
Taxation of the Middle Colonies, 1624–1688

T

he middl e colonies of New Netherland, which became New York, New Sweden, later Delaware, New Jersey, and Pennsylvania all struggled to fi nance the cost of colonial administration, not to mention generating profits for their founding investors. Apart from Pennsylvania, each was partially hamstrung by tax exemptions contained in its founding charter, exemptions granted by the Dutch and Swedish companies to lure settlers to New Netherland and New Sweden, and the New Jersey proprietors’ waiving of quitrents for six years. The result was to be expected. The directors and governors of the middle colonies struggled to make ends meet.

The Development of the Middle Colonies

T

h e m iddl e colonies developed at a later and slower pace than did New England. By 1688 their combined population reached 30,856, somewhat more than a third of that of New England. Many of the early settlers earned their livelihood in the fur trade, especially in New Netherland and New Sweden. As it declined, general agriculture became increasingly important. In the political arena, New Netherland and New Sweden were initially governed in accordance with Dutch and Swedish directives, but gradually came under English law and governance after 1664. New York’s governors tried to manage a hybrid colony of English and Dutch practices and institutions with varying degrees of success. New Jersey and Pennsylvania, indirectly royal colonies through the vice-regal instrument of proprietary rule, were governed with a high degree of autonomy but were plagued with internal political confl icts. New Jersey’s development was extremely chaotic as it was divided into the separate colonies of East and West New Jersey in 1676, later incorporated into the Dominion of New England in 1688.

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New Netherland, New York e w ne t her l and’s development proceeded in fits and starts.1 In 1624 the Dutch West India Company dispatched its first wave of settlers that took up residence at Fort Orange, on Burlington Island in the Delaware, and on Governor’s Island at the mouth of the Hudson. A second wave of settlers in 1625 located in New Amsterdam (lower Manhattan). In September 1626, Director-General Willem Verhulst purchased Manhattan Island from the Indians for sixty guilders’ worth of merchandise.2 As fewer than three hundred residents had settled New Netherland by 1628, the company altered its policies to lure more settlers. Its directors concluded that the fur trade, while doubling in value from 27,125 to 61,075 guilders during the five years encompassing 1624–28, left little or no profit after subtracting the cost of colonial administration and goods shipped to keep the colony afloat.

N

1

Th is brief treatment of the development of New Netherland between 1624 and 1664, and New York after 1664, draws from Oliver A. Rink, Holland on the Hudson: An Economic and Social History of Dutch New York (Ithaca, NY, and London: Cornell University Press, 1986); Michael Kammen, Colonial New York: A History (New York and Oxford: Oxford University Press, 1996), 1–118 (fi rst published in 1975 by KTO Press, Millwood, NY); Cathy D. Matson, Merchants and Empire: Trading in Colonial New York (Baltimore and London: Johns Hopkins University Press, 1998), 13–117; Russell Shorto, The Island at the Center of the World: The Epic Story of Dutch Manhattan and the Forgotten Colony That Shaped America (New York: Doubleday, 2004); Robert C. Ritchie, The Duke’s Province: A Study of New York Politics and Society, 1664–1691 (Chapel Hill: University of North Carolina Press, 1977); and Thomas J. Archdeacon, New York City, 1664–1710: Conquest and Change (Ithaca, NY, and London: Cornell University Press, 1976). 2 The guilder was valued at three per piece of eight, the latter valued at 54d. in England. Sixty guilders, the purchase price of Manhattan, equals twenty Spanish dollars at the English standard. However, Spanish dollars were valued at a higher rate in most of the American colonies. The rate of exchange of New York currency on London in 1680 was 125 per 100 sterling, which translates into a purchase price of twenty-five dollars New York money (actually Spanish dollars) for Manhattan. In 1626, when Verhulst purchased Manhattan, Dutch money of account took two forms. The merchant community of Amsterdam was served by the Wisselbank van Amsterdam. Founded in 1609, it cleared bills of exchange, accepted deposits of money, and minted coins. In the course of performing these tasks, a difference in value arose between bank money (banco) and current money. All the bank’s transactions were entered into its books in bank money, even as everyday business was transacted in current money. Bank money was valued at a 4 percent premium over current money in that it took 104 guilders of current money to equal 100 guilders banco. The difference was called the agio or the opgelt. Most commodities trading in Amsterdam were bought and sold at current money. It is possible that Verhulst’s payment was reckoned in current money. If the 4 percent adjustment is made for the agio, twentyfive Spanish dollars’ worth of guilders of current money converts into twenty-four dollars’ worth of banco, or bank money, which is the oft-quoted (Spanish) dollar purchase price of Manhattan. Information on Amsterdam’s money and the rate of exchange of New York money in London is found in John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 42–45, 162.

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Taxation of the Middle Colonies, 1624–1688

To promote settlement, in June 1629 the company’s directors issued a charter of “Freedom and Exemptions for the Patroons, Masters or Private Persons who will Plant any Colonies in, and Send Cattle to New Netherland.” This charter granted the status of patroon and a large block of land to any qualified entrepreneur who brought fifty persons to New Netherland. A patroon would enjoy de facto political authority within his territory and could trade furs where the company had no agent, subject to an export duty of one guilder for every beaver or otter skin. A few wealthy Dutchmen took advantage of the opportunity, the most successful being Kiliaen Van Rensselaer, who founded Rensselaerswyck. The creation of patroonships did little to improve the company’s profit. The 1629 charter also provided smaller land grants for private individuals who would settle at their own expense. The Dutch middle classes failed to show much interest until 1638, when the States-General of the United Provinces pressured the company to make more land available and the company voluntarily terminated its trading monopoly seven years early. The company promulgated a new charter in 1640 that granted two hundred acres free of charge to anyone who brought five adults with him, and also promised a degree of local self-government. The 1640 charter induced a modest rise in immigration, attracting some Puritans from New England to Long Island, who brought with them English notions of self-government distinct from those of the autocratic Dutch West India Company. Political instability plagued the colony’s early years. The first two director-generals, Carnelis Jacobsen May and Willem Verhulst, each served less than a year (1624–26). Their successor, Peter Minuit, was dismissed after a five-year stint (1626–31). The next director lasted about a year, replaced in 1633 by a clerk in the company’s ser vice named Wouter van Twiller. Van Twiller failed to keep accurate accounts and report with regularity to Amsterdam, and was replaced in 1638 by Willem Kieft. 3 Kieft undertook to tax the local Indians, which provoked a four-year war that set back the colony’s development. An official audit in 1644 disclosed that the Dutch West India Company had spent five hundred and fifty thousand guilders on the colony, but had only earned some fifty to seventy thousand guilders annually from it. The company recalled Kieft at the end of 1644 and replaced him with Peter Stuyvesant, who arrived in 1647 and directed the colony for seventeen years until its takeover by the English in 1664.4 From the moment of his arrival, Stuyvesant fought with the settlers over taxes. 3

Kammen, Colonial New York, 29–41. The period of Stuyvesant’s rule is described in Kammen, Colonial New York, 48–72, and Shorto, Island at the Center of the World, 146–254. Kammen remarks that prior to Stuyvesant’s arrival the condition of New Amsterdam in 1645 was that of a “straggling village” with an 4

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Peg-legged Stuyvesant struggled to bring order and good government to the colony. He tried to govern a colony affl icted with religious disputes, labor shortages, rampant alcoholism, sexual promiscuity, tavern brawls, devastating fires, Indian troubles, and the economic fallout from the First Anglo-Dutch Naval War of 1652–54. The company failed to provide meaningful resources to assist him, and his efforts to tax the colonists met serious opposition. He resisted calling elected assemblies, which cost him political support. When the Duke of York’s military expedition sailed into New Netherland, Stuyvesant’s effort to rally the colony’s residents to the defense of Dutch rule met with indifference and opposition. He peacefully surrendered the colony to England. During the early years of English rule, New York’s economy was damaged by the Second Anglo-Dutch War, which curtailed the colony’s trade between 1664 and 1668. Bad weather in 1671 reduced agricultural output and normal trade. The Third Anglo-Dutch War kept the colony in turmoil until 1674, when it was returned to the Duke of York after a final one-year interlude of Dutch rule. By 1688, after twenty-four years of English rule, the foundations of growth had been laid. Exports of grain fueled the growth of commerce and rise of Manhattan. Importantly, New York grain, meat, dairy products, timber, horses, and other agricultural products were not subject to the Navigation Acts, which gave the colony a free hand in pursuing profitable trading opportunities. Less than 10 percent of New York’s output was subject to the Navigation Acts before 1699.5

New Sweden, Delaware

T

h e s e t t l e m e n t s in Delaware were originally part of New Netherland (1631–33), then New Sweden (1638–55), again New Netherland (1655–64), New York (1664–82), and finally Pennsylvania (1682–88). Known as the three lower counties, Delaware gradually took shape as a separate political entity with its own legislature under a common governor with Pennsylvania. It developed as a post trading in furs and tobacco, some grown in Delaware but the greater portion purchased in Virginia. 6 As the Dutch period came to a close, some 110 farms tilled by Swedes, Finns, and Dutch had been established in the Delaware Valley. A report prepared in 1663 by Alexander D’Hinoyossa, a representative of the Amsterdam comunfinished church and a weak fort, and “that muddy streets stank with excrement from pigsties and privies. Only the thirty-five taverns seem to have been flourishing” (46). 5 Matson, Merchants and Empire, 74. 6 The economic development of Delaware is treated in John A. Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978), 6–98.

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missioners, counted two thousand cows and oxen, twenty horses, eight sheep, and several thousand swine. The hundred-plus plantations produced a variety of grains and fruit, and several local breweries supplied beer to Maryland. Delaware’s output was sufficient to purchase one thousand tubs of tobacco from Maryland and about ten thousand furs from the Indians.7 Royal rule over the Delaware settlements ended in 1682 when they came into the hands of William Penn. Penn distributed land, reserving quitrents of 1d. an acre, but these taxes were rarely paid to an absent proprietor. The town of New Castle, the port where ships customarily cleared coming into Philadelphia, shared in the growth of Pennsylvania. Tobacco flourished and remained Delaware’s chief export to England, with corn assuming an increasingly important role as a staple and source of earnings.

New Jersey

A

g r icult ur e and animal husbandry were the chief occupations of colonial New Jersey. As early as 1625 Dutch settlers in what would later become the proprietary of New Jersey were cultivating wheat, oats, hemp, and flax, and tended milch cows, sheep, and hogs. Plentiful deposits of bog iron supported the establishment of ironworks in the late seventeenth century. Whalers and fishermen established bases along the coast.

Pennsylvania

P

enn r eceiv ed his charter from King Charles II in 1682. The year before he began publishing promotional tracts to encourage immigration. His generous offer of land for purchase or lease attracted eight thousand migrants from England, Wales, and Ireland by 1685. He also sought immigrants from continental Eu rope with Dutch and German pamphlets. Penn managed relations with Indians in his province much better than did governors and proprietors of other American colonies. He insisted that they receive a fair price for their land and that they understood the implications of their sales. Within a few years of its founding, Philadelphia shipped beef, pork, lumber, wheat, flour, and skins and furs to markets in the West Indies, Lisbon, the Canary Islands, the Azores, Madeira, and England, importing manufactured goods, primarily hardware and dry goods, for the colony’s residents. The economy of Pennsylvania achieved visible results within six years of its formal birth. 7

Munroe, Colonial Delaware, 56.

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Money

T

h e mi ddl e colonies suffered similar monetary problems as did New England. There was no local source of gold or silver with which to mint coins. The funds the proprietors advanced or which the settlers brought with them quickly drained abroad to pay for imported goods. The chief sources of money with which to conduct commerce and pay taxes were wampum, commodities, furs and skins, bills of exchange, and foreign coins earned in foreign and intercolonial trade.

Unit of Account

T

he d utc h West India Company and its settlers kept their accounts in guilders (or florins), stivers, and pennies, and less frequently in Flemish pounds, shillings, and groot.8 The money used in the business transactions of the New Sweden Company and in Sweden in general at the time were the riksdaler, the daler, and the Dutch guilder. The English colonies of New York after 1664, Delaware under the successive administration of New York and Pennsylvania, and Pennsylvania kept their accounts in pounds, shillings, and pence, although guilders were concurrently used in New York for some time. New York and Pennsylvania (with Delaware under both) legislated different denominations of provincial money, “crying up” the value of Spanish coins and hence the value of their currencies against the sterling standard. In April 1686 the East New Jersey Assembly raised the value of all circulating coins by a third, thus establishing its rate of exchange against sterling.9

Commodity Money

T

he l aw s and ordinances of New Netherland recognized wampum (sewant in Dutch) and beaver skins as official currency, but their value was expressed in guilders and stivers. In the early years, coins were less frequently used for payment. To facilitate the use of silver coin, Peter Stuyvesant fi xed the value of pieces of eight at three guilders. “Light” pieces of eight were drawn into the colony, which depreciated at about 50 percent compared with the official rate for full pieces, although light reales were forbidden in Holland. After the English takeover in 1664, currency arrangements 8 See chapter 2, footnote 10, and chapter 7, footnote 16. See also “The Lion Dollar: Introduction,” http://www.coins.nd.edu/ColCoin/ColIntros/ Lion-Dollar.intro.html (October 22, 2003), and “The Rix Dollar and Silver Rider: Introduction,” http://www.coins.nd.edu/ColCoin/ ColCoinIntros/ Rix-Dollar.intro.html (October 22, 2003). 9 John E. Pomfret, The Province of East New Jersey, 1609–1702: The Rebellious Proprietary (Princeton: Princeton University Press, 1962), 223–24.

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Coins in Europe and the Middle Colonies

T

he Dutch guilder in its various denominations was the main coin in use in Holland, and thus the unit of account and circulating Dutch coins were the same. Dutch coins were struck in various guilder denominations of 1 ⁄4 , 1 ⁄ 2 , 1, 11 ⁄ 2 , 2 (the Dutch Leeuwendaalder or Lyon dollar of 40 stivers), 21 ⁄ 2 (the Dutch rijksdaalder or rix dollar of 50 stivers), 3 (of 60 stivers), and the Dutch ducaton “silver rider” (of 63 stivers). The ducaton (also spelled ducatoon or ducator), rix dollar, and Lyon dollar were widely used in New Amsterdam and appeared in other colonies as trade expanded. As early as 1642 the Massachusetts General Court rated the ducaton and rix dollar in terms of English shillings and Spanish pieces of eight. The coins of France, Spain, Portugal, England, and other nations that circulated in New Netherland and Delaware, when it was under Dutch control, were convertible into guilders on the basis of the rate of exchange established in Amsterdam and other exchanges in London, Glasgow, Dublin, Hamburg, Copenhagen, Paris, Cadiz, and Lisbon. Whenever the guilder was used, it was converted to Swedish rixdalers or dalers for accounting purposes. The company kept its accounts and paid its officials in notional silver dalers, which were converted into rixdalers, copper dalers, or Dutch guilders for actual use. The Dutch guilder was in general use throughout Sweden as a result of foreign trade with Holland and was widely used as a standard of value in New Sweden and in hiring sailors in Sweden or Holland for overseas expeditions. Dalers were either silver or copper money, with a notional silver daler worth 21 ⁄2 copper dalers, the primary circulating Swedish coin. The rixdaler was divided into forty-eight skillings (shillings) and a skilling into 4 stivers (Dutch stivers). The rixdaler was worth 21 ⁄2 guilders, and a silver daler was valued at 2 ⁄3 riksdaler. Settlers in New Sweden largely used copper dalers and guilders, but other coins also circulated. Under the Dutch regime, sometime in the 1640s or early 1650s, the directorgeneral raised the legal value of the piece of eight to three guilders, an increase of 20 percent over its value in Holland. When England seized New Netherland from the Dutch, its governors retained the same rate of exchange up to 1672, which meant that 120 New York currency equaled 100 sterling. In October 1672, the Court of Assizes, the effective quasi-legislative body of the governor meeting with the Council, revalued the piece of eight to 72d., raising the par rate to 133.33 New York currency to 100 sterling. The actual rate of exchange on London in 1680 was 125 per 100 sterling, depreciating slightly to 130 in 1688. In 1683, Pennsylvania (including Delaware) legalized the English shilling at 25 percent above its par value, rating the Spanish piece of eight at 72d. and other coins accordingly in proportion to their silver content. It set Pennsylvania currency equal to New England currency. Pennsylvania currency traded against sterling at similar rates to that of New York in 1683 and 1689. See McCusker, Money and Exchange, 156–57, 162, 183.

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remained intact, but were changed to English equivalents. In February 1665, Governor Nicolls issued an order which declared that payment for imported goods shall be as before in beaver pay at eight guilders, or 13s. 4d. a beaver. Tobacco was to pay 2d. a pound English weight in wampum, which is equivalent to 11 ⁄2d. sterling, or was to pay in beaver at 8s. a pound.10

Taxation in New Netherland and New York, 1624–1688

T

axe s imp osed on residents of New Netherland included those due the company to pay dividends to its investors or help underwrite the cost of colonial administration, and those imposed by the company’s directorgeneral and executive council in the colony to finance local government.11 Collecting taxes in New Netherland was difficult. Settlers reluctantly paid taxes, and rarely in full. On occasion, the Amsterdam department of the Dutch West India Company, which managed the colony after 1645, disallowed revenue measures. An example is an internal duty of four stivers, in addition to the 8 percent export duty, on each merchantable beaver on the ground that the extra tax threatened to impede commerce and discourage immigration.12

Company-Imposed Taxes

I

t was only logical for the company and its local administrators to look to the home country for guidance on taxation. The Netherlands relied chiefly on indirect taxes to finance its war of independence from Spain, taxing beer, wine, liquor, and articles of consumption by either an import duty or an excise. Direct taxes were relatively unimportant in Holland when the company founded New Netherland. The taxes levied in New Netherland followed the Dutch model with slight modification. Duties provided the main source of revenue. The chief economic activity of the colony was the fur trade. Records show that 42,987 beaver skins 10

Kammen, Colonial New York, 32. Good sources of information on taxes in New Netherland and New York include Kammen, Colonial New York; Matson, Merchants and Empire; Shorto, Island at the Center of the World; Ritchie, The Duke’s Province; Archdeacon, New York City; Edward Dana Durand, Th e Finances of New York City (New York and London: Macmillan, 1898); John Christopher Schwab, History of the New York Property Tax: An Introduction to the History of State and Local Finance in New York, a publication of the American Economic Association, vol. 5, no. 1 (Baltimore: American Economic Association, 1890); Herbert Alan Johnson, The Law Merchant and Negotiable Instruments in Colonial New York, 1664 to 1730 (Chicago: Loyola University Press, 1963); and Philip L. White, The Beekmans of New York in Politics and Commerce, 1647–1877 (New York: New York Historical Society, 1956). A list of sources of tax laws is found in Schwab, New York Property Tax, 11–12. 12 Harold C. Syrett, “Private Enterprise in New Amsterdam,” William and Mary Quarterly, 3rd ser., 11, no. 4 (October 1954): 544. 11

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and 4,890 other skins valued at 355,692 guilders were exported from New Netherland during 1624–30.13 In 1626, The Arms of Amsterdam transported 17,246 beaver, 853 otter, 36 wildcat, and 24 muskrat skins out of New Amsterdam. Between 1630 and 1635, according to legal registrations, up to 15,000 furs were exported annually. In 1645, some 10,000 furs may have been collected at Albany and shipped to New Amsterdam.14 The first taxes the company imposed consisted of import and export duties, with specific rates levied on furs and codfish. The company also imposed transit duties. Given the company’s monopoly on shipping, the transit tax was relatively easy to enforce, although it was often evaded by fi rst transporting goods to Virginia or New England from which they were shipped to England.15 New Amsterdam became a trading center for goods imported from Holland for distribution along the Hudson River and into the interior, and for tobacco and furs shipped to Europe.16 The settlement was conveniently situated along the main coastal shipping route connecting New England with Virginia, which facilitated the collection of taxes on trade in and out of its harbor. The next largest source of revenue was excises on beer, wine, and liquor, again following the Dutch model. The penchant for drink, reflected in the large number of distilleries, breweries, and taverns, made this tax productive of revenue and relatively easy to collect. Exemptions and inducements were offered prospective immigrants, which limited the growth of revenue. On June 17, 1629, when the company authorized the patroonship system known as “Freedoms and Exemptions for the Patroons and Masters,” those who qualified were granted a ten-year exemption from paying the convoy, toll, and excise fees that the Netherlands’ admiralty levied on all Dutch vessels. Patroons were permitted limited access to the fur trade where the company had no agent, but had to pay an export duty of one guilder for every beaver or otter skin. Patroons were 13

Schwab, New York Property Tax, 20. Matson, Merchants and Empire, 15–16. Matson notes that New Netherland traders also marketed their fur exports in Connecticut River Valley towns, Long Island, and Boston because export duties were lower or nonex istent. In turn, importers in New Amsterdam ordered cargoes of manufactured goods and handicrafts from Amsterdam to be delivered in Boston for sale, reloading for shipment to New Amsterdam only those products that failed to sell in Boston. The use of lower-tax ports deprived the colony of New Netherland of revenue. 15 Matson, Merchants and Empire, 23, reproduces portions of the text of a petition of New Amsterdam merchants sent to company directors in 1657. It states that since New England merchants paid no duties, the incentive for New Netherland merchants to smuggle via New England was greatly enhanced to avoid duties that raised export and transport costs 28.5 percent if shipped from New Amsterdam. Traders also complained that goods imported into New Netherland cost 70 to 80 percent higher than abroad due to heavy export and import duties paid in both Amsterdam and New Amsterdam. 16 Attesting to its importance, the beaver appears in the city seal of Amsterdam and in the municipal coat of arms of New York City. Moreover, terms of capitulation of New Netherland of March 12, 1664, stipulated the yearly payment of forty beaver skins to the Duke of York. 14

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also required to pay a 5 percent staple tax at New Amsterdam on all goods obtained outside the colony, but this tax was largely uncollectible due to inadequate customs control.17 The 1629 charter imposed a basic duty of 5 percent ad valorem on all goods entering Amsterdam, with wine, brandy, and vinegar taxed at 18 guilders a cask.18 In 1640 the company issued another charter to encourage immigration. The charter created the rank of “master or colonist” for any person who settled five adults in New Netherland. It offered free land to those who would farm it, promised low freight rates for goods shipped to Holland, subsidized transport costs, and stipulated that the 10 percent tax on the produce of all farms starting in their fifth year of production would not be used to pay company dividends, but rather the salaries of preachers and schoolmasters. The company reserved a 10 percent export charge on peltry.19 It also retained a duty on foreign imports into the colony of 15 percent ad valorem and a duty of 15 percent on all colonial goods received in Amsterdam. 20

Locally Imposed Taxes

A

n e ar ly example of a locally imposed tax consisted of an order of the director and Council of New Netherland of August 19, 1638, which required all tobacco exported to be brought to an approved warehouse for inspection and collection of a tax of five of every hundred pounds.21 In 1640, Director Kieft imposed a 10 percent duty on all colonial imports that had not already paid duties to the company in Amsterdam and announced that he would enforce the 1629 law that imposed a 10 percent export duty on peltry, provisions, cattle, and tobacco, which had largely been evaded.22 On April 3, 1642, a 10 percent duty in commodities or in money was levied on certain imports and exports including slaves. On April 4, 1652, Stuyvesant and the Council approved an import duty of fifteen guilders on slaves, followed on August 6, 1655, by a 10 percent export duty on Negro slaves. Many of the slaves arriving in New Netherland were quickly reexported to Maryland and Virginia.23

17

Rink, Holland on the Hudson, 99, 100, 106. To finance the quasi-governmental administration of their estates, patroons were authorized to tax their tenant-colonists at a maximum rate of 10 percent of their annual income from farming, fishing, and mining. 18 Matson, Merchants and Empire, 15, 337n3. 19 Rink, Holland on the Hudson, 136. 20 Matson, Merchants and Empire, 16. 21 John Dean Goss, The History of Tariff Administration in the United States: From Colonial Times to the McKinley Administrative Bill, Studies in History, Economics, and Public Law, vol. 1, no. 2 (New York: Columbia University, 1891), 17–18. 22 Matson, Merchants and Empire, 20. 23 W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1969), 201–2. First published in 1896 by Russell and Russell, Inc.

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In 1650 Secretary Van Tienhoven reported that the colony’s revenue derived from an 8 percent export duty on beaver skins, an excise of three guilders a ton on beer (first imposed in 1644), and an excise of one stiver per can of wine (first imposed in 1647). Naturally the settlers complained about “heavy” alcoholic taxes. The most traumatic event in the colony’s early history was a bloody war fought with all its Indian neighbors between 1641 and 1645.24 New Netherland, founded by the Dutch West India Company, did not receive any formal Dutch government land patent. Land was to be purchased or acquired from Indians by treaty, which often left Indians in de facto occupation of their former lands for several years. By 1640, Kieft had acquired large blocks of land in what is modern Queens and Brooklyn, and sought to bring them under cultivation. The roots of the confl ict can be traced to 1639. Desperately seeking revenue, Kieft sent a yacht to collect taxes from the Algonkian tribes on Staten Island to be paid in pelts, which were to be brought back to New Amsterdam for counting and shipment to Holland. When crew members observed stacks of pelts from the ship, the skipper of the yacht, Cornelis Pietersen, assumed that they were for payment of the tax and ordered his men to load them aboard. When he went ashore with his men to collect the furs, village warriors attacked the crew and tried to storm the ship. Pietersen and his crew barely escaped. On the yacht’s return to New Amsterdam and after learning of the incident and receiving a report that Indians had killed some hogs on Staten Island, Kieft ordered a punitive expedition against the Indians. He also placed a bounty on Indians of ten belts of wampum for every head of a Raritan Indian delivered to the fort at New Amsterdam. After a year of relative calm, conflict reemerged. Roaming Indian dogs were killing European livestock and poultry while wandering European livestock were destroying unfenced Indian cornfields. Indian tribes raided outlying Dutch settlements, which were followed by Dutch reprisals. Punctuated by intermittent truces, the conflict steadily escalated. After the Dutch killed about a thousand Indians, peace treaties were successfully negotiated between April and August 1645. As a result of the conflict, Indians remained a threat to outlying colonists for many years. Kieft was recalled and replaced.25

Property Taxes

P

r ope rt y taxe s arose in New Netherland on the basis of two developments. One was the application of New England property taxes, the other the need for New Amsterdam to find revenue to develop fortifications and improve infrastructure. 24

Kammen, Colonial New York, 44–46. Th is unsavory episode in New Netherland’s history is told in Shorto, Island at the Center of the World, 118–28, and in Rink, Holland on the Hudson, 216–19. 25

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To remedy the colony’s deplorable financial situation, the New England tax system appeared to offer a solution. On Long Island, where most of the communities had been settled by migrants from New England, a property tax seems to have been in existence as early as 1654. A levy of six guilders was imposed on each lot in Midwout, and in 1657 a lump sum property tax of three hundred guilders was imposed on the town of Breuckelen (Brooklyn). Records show that twelve inhabitants of Walebocht were taxed eightyeight guilders and seven of Gouwanus sixty guilders. 26 Other towns also imposed property taxes before the English invasion in 1664. In 1654 Stuyvesant and his administrative council, with the support of the home government, resolved to impose a tax on land, houses, milch cows, and oxen in the form of a special war tax.

New Amsterdam

N

e w a m st e r da m received its charter from the Dutch West India Company in 1652, which gave it a certain degree of autonomy from Stuyvesant and the Council. With autonomy came the desire of city officials to develop their own sources of revenue. In 1653 the First Anglo-Dutch War led the city’s burgomasters (co-mayors) and schepens (magistrates) to impose a charge of five thousand guilders for the defense of the city, to be apportioned on forty-four of its leading citizens with amounts ranging from fifty to two hundred guilders, with a hundred being the most common charge. City officials undertook the construction of a wall and palisade around the city, but stopped short of completion. Complaining that they were inordinately burdened with the cost of defense, they implored Stuyvesant, whose consent was required to impose municipal taxes, to transfer the excises on wine and beer to the exclusive use of the city.27 Stuyvesant agreed with the city to a joint loan with the province to complete the fortifications. However, city magistrates refused to raise the funds to redeem their share of the loan until they were permitted to retain the revenue from the excise on tavern keepers. This gave New Amsterdam its first separate source of income. A year later Stuyvesant reclaimed this source when the town failed to discharge its debt. In 1655–56, the city levied another tax to repair its fortifications, assigning each burgher a charge of four to one hundred fifty guilders based on each man’s “fair share.” The tax was unpopular and difficult to collect. 26 Schwab, New York Property Tax, 26, citing as his source Laws and Ordinances New Netherland, September 2, 1654, and February 13, 1657, published in New York Colonial Manuscripts, vols. 5 and 8. 27 To illustrate the competition between city magistrates and Stuyvesant’s need for provincial revenues, in 1654 he denied the city the right to levy tonnage or export duties on vessels “because these duties concern the country in general and not a par ticu lar city or place.” Matson, Merchants and Empire, 341n42.

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City excises on liquor, typically farmed out to the highest bidder at public auction, brought in several thousand guilders annually. Other municipal charges included licenses for innkeepers, and a city slaughterhouse with a charge of 5 percent of the value of all slaughtered cattle and other livestock, which brought in just over a thousand guilders in 1659. Other revenues included ferry charges to Long Island; wharfage charges of eight stivers per last (about two tons) for loading and unloading vessels; special taxes for fire protection and night watch; fines; and the sale of several varieties of “freedoms,” the status of greater citizenship of burgher that conferred the right to hold city office or that of smaller citizenship, which conferred the right of itinerant merchants to trade in the colony. Residents were required to contribute labor for projects of direct benefit to them, as in the construction of piling to protect waterfront lots and the paving of streets; failure to comply resulted in city construction with the cost collected from lot and homeowners.28 The city also levied property taxes. In 1655 the burgomasters and schepens of New Amsterdam announced a yearly property tax of ten stivers on each morgen (three-quarters of an acre) of land, twenty stivers per head of cattle, and 5 percent rent on all houses. In 1658 vacant lots in New Amsterdam were taxed at 6.5 percent. In 1661 the community of Esopus was authorized to impose a tax of one rix dollar on every morgen of land. 29 In the letter addressed to the Duke of York two months after the surrender of New Netherland, the former colonial administrators made a plea for light taxation, complaining that the colony had been impoverished for many years by heavy taxes.

New York

W

i t h t h e exception of a brief interlude in 1673–74, when New York came under Dutch rule for the last time, English law and governance gradually transformed New Amsterdam’s Dutch heritage into an English colony. When James became king of England in 1685, New York was transformed from his proprietary to a royal colony. Governor Richard Nicolls (1664–68) brought with him a frame of government and a civil and criminal code known as the Duke’s Laws, which declared the governor and his council as the supreme governing body, with the power to promulgate laws and impose taxes. 30 At a meeting 28

Schwab, New York Property Tax, 31–35, and Durand, New York City, 8–12. Schwab, New York Property Tax, 23–24. 30 The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), 1:6–110. 29

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at Hempstead in 1665, Nicolls extracted a tax of 200 from the townsmen who assembled with him, despite their opposition. 31 The Duke’s Laws initially applied only to Long Island. The Hudson Valley, especially the cities of New York, Albany, Esopus, and Schenectady, did not fall under their jurisdiction for another decade. The property tax on land, houses, and cattle on Long Island was consistent with English practices of the New England settlers. The infirm and sick were exempt and country pay was deemed acceptable for taxes.32 On February 26, 1666, Nicolls issued warrants to assess a rate of 1d./1 assessed valuation in the county of Yorkshire, instructing the local overseers to collect the tax on all estates of men over sixteen years of age. 33 The duke authorized each town to impose a tax to support a minister acceptable to a majority of its population, but only Protestant ministers would be recognized. All religious sects were free to exercise their own religion so long as the public peace was not disturbed. Governor Andros faithfully carried out the duke’s instructions. 34 Governors invariably used the office to improve their financial circumstances. Nicolls’s successor, Francis Lovelace (1668–73), and his brother who came with him to New York acquired a large spread of land stretching from Esopus to Delaware, with an especially large estate on Staten Island. He also joined with local merchants to engage in a wide variety of entrepreneurial activities. 35 Directly participating in the growth of the colony meant that Governor Lovelace, and others to follow, often favored colonial over English or imperial interests. The final Dutch occupation lasted from July 30, 1673, until August 2, 1674. During that period, Governor Anthony Colve imposed a tax on individuals with estates exceeding a thousand guilders in value, and raised a forced loan of 1 percent on assessed property in the form of “a tax advanced in the form of a loan.”36 The duke appointed Edmund Andros (1674–77 and 1678–81) as the new governor, with a mandate to secure sufficient revenue to administer his colony. 37 James sought to make his proprietary profitable by transferring the 31 Ritchie, The Duke’s Province, 37. All values cited in the text are New York currency unless specifically stated in sterling. 32 Schwab, New York Property Tax, 36–37. 33 Ritchie, The Duke’s Province, 50. 34 Kammen, Colonial New York, 86, and Ritchie, The Duke’s Province, 38. The duke granted religious liberty to all Christians, but did not allow Jews the right of public worship, only private. The minority in any town was required to pay tax to support the religion of the majority. 35 Ritchie, The Duke’s Province, 60. 36 Schwab, New York Property Tax, 39. Dutch governance during 1673–74 was based on Colve’s Charter, which is reproduced in Colonial Laws of New York, 1:102–4. 37 The efforts of Andros to collect taxes during his fi rst term as governor are recounted in Ritchie, The Duke’s Province, 100–107, 132, 135.

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cost of the garrison to local taxpayers. It had cost him 2,000 sterling to regain New York in 1674. James sent William Dyre as receiver-general to collect royal customs, but smuggling and outright confiscation remained widespread, estimated to cost the colonial administration several thousand pounds during 1682–86. 38 Local taxes were collected as before for local salaries and other expenses. Andros allowed Albany’s magistrates to levy special taxes to support diplomacy with the French and Indians and sustain a militia. New York City was permitted to tax property, place a fee on licensed taverns, and enact special taxes for infrastructure projects. Customs revenue for 1675–77 are based on a custom inspector’s estimate that revenues for the three years should total 14,000, an average of 4,666 a year. Local merchants who supplied the inspector with information estimated a slightly higher figure of about 5,000 a year. Actual collection is put at about 4,000 a year. An estimate for 1685 was put at 6,000, but 3,000 of this was not received by the colony’s government. 39 Provincial taxes consisted of a 2 percent ad valorem duty on all imports from England and English colonies and 10 percent on foreign goods. Goods shipped up the Delaware or Hudson rivers were subject to a further 3 percent. To promote Dutch commerce, Governor Lovelace, shortly after his appointment in 1668, reduced import duties on foreign goods from 10 to 7 percent and other specific duties on wine, dry goods, cocoa, and goods shipped up the Hudson River for the fur trade with the Indians.40 The higher rates were reimposed by Andros in 1674 for a period of three years. Salt and tobacco were declared exempt due to their importance in consumption and New York’s trade. On August 5, 1675, Andros imposed a property tax on polls, animals, and land in the three ridings (administrative divisions) of Yorkshire specified in the Duke’s Laws. They were periodically renewed during the next eight years. Most of these funds supported local salaries and ser vices. Andros sought high assessments, while local towns and farmers sought low assessments, arguing that market prices of animals and land sometimes fell. To reduce assessments, towns often permitted common meadowland to be used for grazing, which reduced the number of privately owned acres subject to assessment. The same reasoning applied to commodities used in tax payments. Farmers complained that their products were unfairly valued at low rates when paid in taxes. The attempt by Nicolls and Andros to collect quitrents achieved little success. The Duke’s Laws required reserving a quitrent in future patents, 38

Matson, Merchants and Empire, 85. These figures are reported in appendix B in Johnson, The Law Merchant, 49–50. 40 Matson, Merchants and Empire, 51–52. Matson notes that Lovelace was also prompted to reduce taxes on Dutch trade out of personal self-interest given his ownership of shares in several vessels and his trade with Dutch agents resident in New York. 39

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but when he confirmed all Dutch land grants under their original terms, feudal dues on lands already settled were permanently waived. New grants were liable to quitrents, but the disparity of treatment between the two sets of titles created hostility on the part of post-Dutch recipients. The initial laws of 1665 did not stipulate a fi xed and uniform quitrent. Even after the reconquest of New York in 1674, governors failed to take effective enforcement measures. Some public lands were leased in 1678 at rates of 30d. to 5s. per hundred acres, but no serious attempt was made to collect these rents. In 1686, quitrents generated a mere 291 5s. New York currency, less than a tenth of provincial revenue. The sums raised in 1686 and subsequent years were only a few percent of those raised from duties and excises.41 Remaining sources of revenue included the weigh house in New York City, the monopoly over liquor licensing, and liquor excises. Average annual receipts during 1675–80 from tax farmers who bid for the weigh house was 6,700 guilders. The successful bidder who won the right to grant liquor licenses paid 180 in 1677, the one year for which accurate information survived.42 As in New England, local magistrates took advantage of their position to reduce or eliminate their own taxes. The members of New York’s city council and high-level provincial officers exempted themselves from assessment and taxes. Andros failed to transform New York into a profitable proprietary, though he reduced the duke’s losses. James sent Andros 1,100 sterling to make up the deficit from June 1674 to November 1677. Before Andros left for England, he failed to renew the customs act of 1677, which expired on November 1, 1680. Th is left the collection of customs in legal limbo, providing an excuse for merchants to withhold payment, which crippled provincial revenue for the next few years. Th is precarious fiscal situation prompted the duke to call an assembly in 1682. It promptly issued a “Charter of Liberties and Privileges” in 1683, which reflected similar efforts in New Jersey and Pennsylvania.43 In return for the right to an assembly, the elected delegates reenacted the expired law of 1677, putting duties on a wide range of goods, including liquor and Indian goods.44

41

Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 110–13, and Schwab, New York Property Tax, 48–49. 42 New York currency (colonial pounds) and Dutch guilders were used interchangeably as units of account in the fi rst few decades of English administration. In 1677 180 New York money was officially equal to 135 sterling. 43 Colonial Laws of New York, 1:111–16. 44 Colonial Laws of New York, 1:116–21; Ritchie, The Duke’s Province, 174–75; and Kammen, Colonial New York, 98–99.

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Shortly after his arrival, Governor Thomas Dongan (1683–88) sought to increase local revenues. In 1683 he increased export taxes on beaver to 9d. A year later, he extended the 10 percent ad valorem tax to cover all imported goods. He reimposed the 3 percent ad valorem tax on reexports up the Hudson River.45 An audit ordered by Dongan revealed a provincial debt of 3,533 15s. 8d., which prompted him to extend the list of goods on which duties was levied. A report compiled in 1688 by Stephen Cortlandt, deputy surveyor and auditor general, indicated revenue of 5,288 for the fiscal year March 1687 to March 1688, of which 3,172 was derived from duties on imports into New York City. Another 1,707 was collected from excises. In 1688 direct taxes raised 2,556.46 On retirement in 1688, Dongan settled at his Long Island estate, having used his position as governor to acquire a substantial tract of land and, in the process, to become a colonial.

New York City

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ov e r nor n ic ol l s granted the city the excise on taverns. In 1677 New York City’s governing body, the Common Council, imposed duties on importation of general merchandise, rum, and wine and exportation of furs, which were in addition to provincial duties. City rum duties contributed 46 percent of total duties of 1,459 6s. 1d. Export duties generated 441 19s. 6d.47 Dongan gave the city council the right to manage the Brooklyn ferry, which became a major source of municipal revenue. Dongan’s charter of 1686 gave the city ownership of all the market houses, extended its rights to cover all docks and wharves, and all unappropriated lands on the island to the low-water mark. A New York law copied from London, enacted in the aftermath of the Great Fire of 1677, authorized the city to pave, grade,

45 Colonial Laws of New York, 1:170–71, and Matson, Merchants and Empire, 352n48. On page 59, Matson writes that Andros reported to the Privy Council in 1681 that English rule had increased New York City’s trade to tenfold that under Dutch governance, generating customs duties of over 14,000 a year. Th is seems a gross exaggeration given much lower fi gures in the various years for which records exist. For example, footnote 48 states that import revenues ranged from 1,560 to 3,055 11s. 3d. over the three years from 1684 to 1686. 46 Ritchie, The Duke’s Province, 189. New York’s residents deemed their taxes high compared with those in neighboring colonies. Connecticut’s war time provincial taxes of 4,824 in 1677 during the last year of King Philip’s War were substantially reduced to the prewar levy of 1d. in the pound. In a normal year, such as 1683, this tax produced 941. In 1687 the provincial tax in Rhode Island was 160. New Jersey was virtually tax-free, with no customs duties, poorly collected quitrents, and trivial provincial property taxes. New York’s merchants complained that New Jersey’s free port of Perth Amboy gave its merchants an unfair advantage. 47 Archdeacon, New York City, 65–66.

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sewer, and improve streets, and to impose any reasonable tax on households in proportion to the benefit received from the improvements.48 During the 1680s, city officials sold highly desirable waterfront lots to raise money for the construction of new streets and neighborhoods. New Dock Street was created in this way to raise money to pay for the more extended and formal city charter of 1686, which declared New York a “free city” and to compensate Governor Dongan with 300 for his assistance.49 City residents were required to supply labor for such purposes as sweeping streets; those failing to cooperate were subject to a 3s. fine.50 The charter stipulated that city taxes could not be levied except with the special authority of the provincial assembly. During the brief spell when New York had a colonial assembly, a general tax and assessment law was passed on November 1, 1683, which required that funds be used to pay all necessary city, town, and county charges throughout the province, including poor relief and preventing vagabonds.51 Total assessment of New York City’s seven wards in 1688 came to 78,231. The amount raised was 370 11s., which amounts to a tax rate of 0.47 percent of (under)assessed valuation.

Taxation in New Sweden (Delaware), 1638–1688

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he col ony of New Sweden was planted in 1638 with the arrival of the Swedes.52 A previous settlement undertaken by the Dutch in 1631 lasted less than a year. Dutch settlers erected a small building and palisades at Swaanendael (Valley of the Swans). A misunderstanding with local Indians led to the massacre of all the Dutch inhabitants, an unfortunate episode that opened the way for Swedes to colonize this region on the Delaware. The first Swedish expedition arrived off the Delaware coast in March 1638. Peter Minuit, the expedition’s leader, purchased land from several Indian chiefs (sachems) and declared his territory New Sweden. As an inducement to immigration, the New Sweden Company exempted settlers from taxation for ten years.53 All peltry and tobacco shipped from New Sweden, 48

Durand, New York City, 14–15, 18–19, 23–24. The text of the Dongan Charter of the City of New York, 1686, is reproduced in Colonial Laws of New York, 1:181–95. The Dongan Charter of the City of Albany, 1686, is on 195–216. 50 Archdeacon, New York City, 80. 51 Schwab, New York Property Tax, 52–54. 52 A brief treatment of taxation in New Sweden appears in M. M. Daugherty, Early Colonial Taxation in Delaware (Wilmington: Delaware Tercentenary Commission, 1938), 7–10. Daugherty also covers the Dutch period of 1655–64 (10–12), the English period under the Duke of York of 1664–82 (12–20), and under Pennsylvania during 1682–88 (21–25). 53 Daugherty, Early Colonial Taxation in Delaware, 9–10. 49

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and all merchandise reshipped from Holland apart from tobacco, were to enter Sweden free of duty. The colony progressed slowly under its first governor, Dutchman Peter Hollander Ridder. Following a reorganization of the company in 1642, it appointed a Swedish military man, Johan Printz, as governor in 1643, who served until 1653. After a successful year of trade in 1643, the company suffered a loss of over 20,000 guilders in 1644 when Swedish ships failed to arrive as anticipated, which enabled Dutch and English traders to capture the local beaver trade.54 Moreover, the colony’s residents had to pay high prices to purchase necessities from the Dutch and English. Printz complained about the lack of wampum, which reduced the volume of trade with the Indians and the company’s potential profit. In a subsequent report sent from New Sweden on February 10, 1647, Printz advised of further lost profitable trading opportunities from the lack of merchandise that the company failed to deliver after 1644.55 An accidental fire set off by a guard burned Fort New Gothenberg to the ground on November 25, 1645, costing the colony and company some 4,000 rixdalers.56 In 1642, the budget of New Sweden was set at 3,020 rixdalers. The budget for payrolls for officers, servants, and military personnel for 1643–44 was 4,530 rixdalers. The principal cost of New Sweden’s colonial government was the governor’s salary of 1,200 rixdalers. The cost of the thirty-one-man military garrison came to 2,754 rixdalers. Civic expenses for a preacher, barber-surgeon, and bookkeeper were 404 rixdalers.57 The increase in the budget over the prior year was due to new persons hired by Printz. The annual expense of maintaining the colony and its military garrison was

54

The full text of Governor Johan Printz’s June 20, 1644, report to Sweden appears in Albert Cook Myers, ed., Narratives of Early Pennsylvania, West New Jersey, and Delaware (New York, 1912), 95–116. Volume 12 in a series of Original Narratives of Early American History, Reproduced Under the Auspices of the American Historical Association, edited by J. Franklin Jameson. 55 Myers, Narratives, 120–29. 56 Myers, Narratives, 123. In his report of 1647, Printz set forth a coherent plan for the economic development of New Sweden, citing investment in churches, infrastructure, and agriculture, and plans for sawmills, local manufacture of wampum, the dispatch of a trustworthy man to buy wampum in New England, prompt payment of the freemen to encourage their retention in the colony, and erection of a trading house. Printz also stressed the importance of removing the Dutch from the Delaware River who were impeding Swedish trade, selling munitions to the Indians, encouraging Indian attacks on the Swedes, buying land from the Indians, and claiming the territory of New Sweden as New Netherland. 57 Amandus Johnson, Th e Swedish Settlements on the Delaware: Th eir History and Relation to the Indians, Dutch, and English, 1638–1664; with an Account of the South, the New Sweden, and the American Companies, and the Eff orts of Sweden to Regain the Colony (New York: D. Appleton and Company for the University of Pennsylvania, 1911), 1:451 and photostat of 1642 bud get opposite 452.

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drawn from an excise tax on tobacco imported from Holland into Sweden, the Swedish Crown’s one-third share of all confiscated tobacco seized in attempts to avoid the tax, and the fines imposed on smugglers. Further losses incurred in the management of the colony were to be covered by the department of the excise in Sweden.58 From time to time, Printz advanced his own funds to pay administrative costs. According to the journals of the colony, between 1643 and 1648 company employees in New Sweden were paid 10,902 dalers in goods and cash. Printz also paid the servants, soldiers, officers, and freemen of the colony 11,288 dalers from his own funds.59 To retard New Sweden’s progress, the Dutch obstructed Swedish trade on the Delaware. Dissatisfied with their circumstances, numerous officers, soldiers, and servants of the company returned to Sweden. Governor Printz sought additional subsidies of 20,000 rixdalers from the company. Frustrated by the colony’s failure to prosper, he returned to Sweden in 1653, and was replaced by Johan Classon Rising the following year. Rising was instructed to generate local revenue to reduce the company’s burden of supporting the colony. He proposed a 100 percent ad valorem duty on liquor imports, 2 to 4 percent on goods transported in Swedish boats, and 4 to 6 percent on goods carried in foreign vessels, except that necessary provisions for a time might be brought in free. Any goods brought in but not sold would be free of duty.60 He terminated the company’s monopoly on the fur trade and levied a 2 percent tax on fur exports. During the last year of Swedish rule in 1655, the reported cost of administering the colony amounted to 4,404 rixdalers.61 58 Israel Acrelius, History of New Sweden; or, The Settlements on the River Delaware, translated from the Swedish with an introduction and notes by William M. Reynolds (Philadelphia: Historical Society of Pennsylvania, 1874), 60. The original Swedish edition was published in 1759 by Harberg and Hasselberg in Stockholm. 59 Johnson, Swedish Settlements on the Delaware, 1:336, 336n126. It is likely that these actual payments were in copper, not silver, dalers, given annual budget figures in rixdalers cited in Daugherty’s work. 60 “Report of Governor Johan Rising, 1654,” in Myers, Narratives, 146. 61 Daugherty, Early Colonial Taxation in Delaware, 10. One rixdaler was worth 21 ⁄2 guilders. Th ree guilders (1.2 rixdalers) were equivalent to a Spanish piece of eight, valued at 54d. in England. With one guilder equal to 18d., one rixdaler was worth 45d. Thus, 4,404 rixdalers amounted to 825 15s. sterling. The estimated population of New Sweden in 1650 was 185, rising to 540 in 1660. When the Dutch seized the Swedish colony in 1655, its population was probably in the neighborhood of about 400. The cost of colonial administration probably amounted to about 2 sterling a head, partly subsidized with Swedish funds, some of which was borne by European consumers of furs. To the best of my knowledge, there are no published figures showing the different sources of the colony’s budgeted outlays or its income that would enable the tax burden of its inhabitants to be calculated.

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Dutch Rule, 1655–1664

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h e n e w Dutch administration continued heavy duties on imported liquor. Vice-director Jean Paul Jacquette imposed liquor taxes of 20 guilders per hogshead of French or German wine, 4 guilders per anker (10 gallons) of French or Spanish wine, 7 guilders per anker of brandy, Spanish wine, or distilled spirits, and 4 guilders per ton of New Netherland beer. He also levied a property tax of twelve stivers on each morgen of land.62 The Dutch West India Company was eager to expand its new territory. It encouraged all existing Swedish and Finnish inhabitants to remain. To attract new migrants, in 1656 the City of Amsterdam, having taken over management of the company, offered a ten-year exemption from direct and indirect taxation to any new settlers on the Delaware River, after which they would be liable to no higher taxes than the lowest in New Netherland. Settlers were exempted from tithes for twenty years, after which half would be used to pay for public works and local salaries.63 The city of New Amstel, the center of the Delaware colony, petitioned its masters in Amsterdam for assistance in settling Mennonite immigrants. New Amstel agreed to lend one hundred guilders to each family and provide free transportation, free land, and exemption from colonial taxes for twenty years.64 The Delaware territories enjoyed partial autonomy from New Netherland. New Amstel’s city council consisted of seven elected councilmen and three executive officials chosen from the seven. They assisted the vice-director, Jacob Alrichs, who was selected by the company to administer the Delaware territories. The town of New Amstel, regarded as a fief of the West India Company, became known as the “city colony.” Legal issues taken to the court in New Amstel could be appealed to Stuyvesant and his council in New Amsterdam. Duties were to be paid to the company on imports and exports to New Amstel, but these were widely evaded.65 The city colony’s inhabitants pushed for ever-greater autonomy. One of its officials traveled to Amsterdam and secured greater autonomy over judicial 62 63

Daugherty, Early Colonial Taxation in Delaware, 10–11. Daugherty, Early Colonial Taxation in Delaware, 11, and Munroe, Colonial Delaware,

43–44. 64

Munroe, Colonial Delaware, 56. By its nature, the inability to count the volume of smuggled goods, it is difficult to estimate lost revenue from evasion of customs. In general, governors and other officials were prone to overestimate the numbers to explain away their failure in meeting revenue targets or to emphasize the need for more stringent revenue measures and enforcement to curry favor with home government officials. The words that appear in colonial correspondence cannot always be taken at face value. Officials, then as now, are wont to write what will cast them in the best possible light, or what they believe their superiors should be told or want to know. Few offi cials are inclined to admit their own faults or, perhaps, complicity in smuggling through bribery. 65

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and administrative matters from New Amsterdam and the right to appoint its own customs collector. On December 22, 1663, a deed was executed in New Amsterdam formally conveying specified lands on both shores of the Delaware River to the city colony, thus creating a separate geographical identity. Economic conditions gradually improved during the early 1660s, but Dutch prospects for its future were terminated with English conquest.66

English Rule, 1664–1682

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ap tai n r obe rt c ar r was sent to administer Delaware on behalf of the duke, with instructions to continue current taxes. In addition to the Dutch system, he added a 10 percent ad valorem tax on all imports and exports. As previously noted, the Dutch penchant for drink made taxation of alcoholic beverages lucrative. The establishment of a local brewery was accompanied by the levy of one guilder per can on its output, which was used to construct fortifications.67 In 1669 the fi rst land grant with a stipulated ground rent was made under Governor Lovelace. It provided a rent of one bushel of wheat if requested. Fees were charged for the confirmation of land patents, but these were very small.68 Lovelace visited Delaware in March 1672, incorporating New Castle (New Amstel) as a bailiwick to be governed by a bailiff and six assistants appointed by the governor. The schout became the high sheriff, and English laws and practices were gradually introduced. The brief return to Dutch rule changed little in the colony, apart from the use of Dutch titles for its officials. The Treaty of Westminster of 1674 that returned New Netherland and Delaware to English rule placed the colony’s administration in the hands of Governor Andros of New York, who also held the position as governor of Delaware. Andros appointed a deputy governor and several justices of the peace, empowering them to collect taxes and administer the colony. He reserved for himself the right to approve all taxes, save in an emergency. Accounts of receipts and expenditures were to be kept and sent to him. The establishment of local courts, which resulted in the collection of fines, proved to be an important source of revenue for the colony. Andros authorized New Castle’s officials to collect a property levy of 1d./1, but this proved difficult to collect given the wide population dispersion. The local assembly petitioned the governor to collect a poll tax instead, which Andros approved. A typical annual budget came to about 3,125 guilders. Every tithable person was assessed 12 guilders and 10 stivers, to be paid in wheat at 5 guilders a schippel (bushel), rye and barley at 4 guilders, corn 66

Munroe, Colonial Delaware, 46–57. Daugherty, Early Colonial Taxation in Delaware, 13. 68 Monroe, Colonial Delaware, 66. 67

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at 3 guilders, tobacco at 8 stivers per pound, pork at 8 stivers and bacon at 16 stivers per pound, or in skins at current prices. The high sheriff entrusted with collection was to receive 5d./1, 2.1 percent of the proceeds.69 Labor was conscripted to build roads and dikes; failure to comply resulted in a fine of one hogshead of tobacco. Andros further extended English institutions throughout the Delaware colony, although most accounts were still kept in guilders. Custom duties were set at the same rate as on the Hudson River and collected at New Castle. Attempts were made, but met with little success, to collect quitrents at one bushel of wheat per hundred acres. It is noteworthy at this early stage that Andros complained of the duties each colony imposed on the products of the others, as though they were foreign lands, which retarded the prosperity of his planters and traders.70 He was making an early case for intercolonial free trade.

William Penn, 1682–1688

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enn’s chart er required that he seek the advice and consent of the freemen of his colony to impose any tax. His frame of government also stipulated that all fees would be moderate and posted in a public place. His original grant from Charles II embraced only the province of Pennsylvania, but on August 24, 1682, the Duke of York deeded to him the “three lower counties” or the territories on the Delaware. These counties quickly petitioned Penn to be united in government with his upper colony of Pennsylvania. The union stipulated that the three Delaware counties, along with the three Pennsylvania counties of Bucks, Philadelphia, and Chester, would each elect six representatives to an assembly and three to a council. All revenue measures required the approval of the Assembly. In 1683 the Assembly approved an export tax on skins sent to any country except England, tonnage of 1d. per ton on all vessels over twelve tons, and a special tax to provide buoys in the river and bay. Other revenue measures included import duties of 2d. a gallon on strong liquor, 1d. a gallon on cider, and 1 percent ad valorem on other goods. The Assembly also authorized counties to levy direct taxes, half on property and half on polls, to support the poor, build prisons, pay salaries of assembly delegates and judicial officers, grant bounties for wolves, and other necessary charges. The law stipulated that some of these funds should be spent on roads and ferries. Colonists were required to educate their children in the scriptures and writing, but taxation was not allocated for the support of public schools. All fees and taxes 69 Daugherty, Early Colonial Taxation in Delaware, 16–17. Th is segment illustrates the joint use of English and Dutch currencies in levying and collecting taxes, with country pay serving as the means of payment and fi nes. 70 Munroe, Colonial Delaware, 74–75.

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could be paid in country produce. The enactments of subsequent assemblies continued the revenue measures of 1683.71 Attempts by Penn to collect quitrents of a 1d. an acre were rarely realized because no quitrent roll had ever been compiled.72

Taxation in New Jersey, 1665–1688

N

e w je r s e y began its separate political existence with a six-year exemption from quitrents of 1 ⁄2d. an acre, with the fi rst payment due on March 25, 1670. The colony was divided into East and West New Jersey in 1676, and later incorporated into the Dominion of New England from spring 1688 to April 1689. A single assembly for the entire territory met in East New Jersey through November 1681, after which a separate assembly began to meet in West New Jersey. In response to the proprietors’ concessions of 1664, over the next few years, six towns—Elizabethtown, Woodbridge, Piscataway, Middletown, Shrewsbury, and Newark—were established in what became East New Jersey. The sixth and newest town, Newark, was founded by dissident Puritan clergy from New Haven who were dissatisfied with the colony’s annexation to Connecticut in 1665 and the increasingly liberal bent of local religious practices. The town was named in honor of Revered Abraham Pierson of Newark-on-Trent, Lincoln County, England.73 Each town was authorized to send two representatives to a provincial assembly. Town matters were to be decided by a majority of the local freemen. Towns were to pay quitrents on their public holdings, but these were abated until 1672.74 The first New Jersey assembly met under Deputy Governor Philip Carteret in May 1668, passing a revenue bill of 30 for the support of the colony. 71

Daugherty, Early Colonial Taxation in Delaware, 23–25. William Robert Shepherd, History of Proprietary Government in Pennsylvania, Studies in History, Economics and Public Law, edited by the Faculty of Political Science of Columbia University, vol. 6 (New York: Columbia University, 1896), 40. In 1691 the Delaware counties broke away from Pennsylvania, and appointed a separate deputy governor. All values are in Pennsylvania currency unless stated in sterling. 73 John E. Pomfret, Colonial New Jersey: A History (New York: Charles Scribner’s Sons, 1973), 24–28. Reverend Abraham Pierson established a flourishing Puritan church in Newark, with freemanship reserved for the elect. In 1669, his son Abraham, a Harvard graduate, was elected assistant pastor and, on his father’s death in 1678, his successor. Young Abraham received a salary of 80, free fi rewood, and exemption from local taxes, a quite comfortable living. In 1687 town residents were no longer compelled to pay taxes to support the church. Pierson, no longer supported by Newark taxpayers, returned to Connecticut where he founded Congregational College at New Haven, later Yale University, and was chosen its fi rst rector with a lower salary of 50. Yale University was thus established as a result of the termination of a compulsory tax in Newark. Pomfret, Colonial New Jersey, 99–100. 74 Quitrents were rarely paid in New Jersey or after its partition into East and West New Jersey in 1676. Bond, The Quit-Rent System in the American Colonies, 84–91. 72

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Each of the towns, except Bergen, was instructed to collect 5 and forward the funds to the revenue collector. Payment was stipulated in commodities, with winter wheat at 5s. per bushel, summer wheat at 4s. 6d., peas at 3s. 6d., corn at 3s., rye at 4s., and barley at 4s., with beef at 21 ⁄2d. and pork at 31 ⁄2d. per pound. The burden of this tax was very light as land yielded as much as forty bushels of wheat an acre. Two of the towns, arguing that they had received patents from Governor Nicolls that gave them separate standing from the authority of the proprietors, especially the obligation to pay quitrents, initially refused to pay their provincial taxes.75 At a second session in November 1668, provincial tax revenue was set at 72, apportioned at 12 for each town. Assemblies were held in 1671 and 1672 though no minutes of meetings between 1668 and 1675 exist. As in New York, the Dutch came and went quickly during 1673–74. Following the Dutch surrender, the list of payments in-kind was revised and enlarged to peas at 3s. a bushel, beef at 2d. per pound, pork at 3d., tallow at 6d., green hides at 3d., dried hides at 6d., bacon at 6d., hogs at 6d., and tobacco at 4d., with beef at 2 10s. and pork at 3 10s. per barrel.76 To pay off the provincial debt, a tax was authorized on lands of non-residents, on those prospering from timber, on tradesmen, and on the town commons. In 1675 tobacco was reduced to 3d. per pound for tax payments and fatty hogs were excluded. Berkeley’s sale of his portion of New Jersey resulted in the colony’s partition into East and West New Jersey in 1676.77 West New Jersey was largely uninhabited. Philip Carteret continued to serve as deputy governor of East New Jersey until 1682. During the next several years before the establishment of separate assemblies, the reconvened assembly sitting in East New Jersey largely adopted the provincial New Jersey tax and other laws that had been promulgated in 1668, set court and several regulatory fees, and licensed inns and taverns, among other acts.78 Annual taxes for 1676 were set at 50, but local constables and marshals failed to collect the full amount. In 1677 taxes were again fi xed at 50 and marshals were instructed to seize goods and chattels from noncompliant taxpayers; in the same session, an additional levy of 80 was approved to pay off the provincial debt. In 1678 the land tax was renewed and raised to 100 12s. 6d. In 1679, the tax levy was increased to 196 18s.79 To encourage the development of Lewis

75 John Franklin Crowell, Taxation in the American Colonies: The Colony of New Jersey (Durham, NC: Trinity College Press, 1893), 6–7. 76 Pomfret, East New Jersey, 85–86. 77 John E. Pomfret has written comprehensive histories of both East and West New Jersey: The Province of West New Jersey, 1609–1702: A History of the Origins of an American Colony (Princeton: Princeton University Press, 1956), and East New Jersey. 78 Pomfret, Colonial New Jersey, 28–33, and East New Jersey, 97. 79 Pomfret, East New Jersey, 86–87.

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Morris’s ironworks, the 1676 assembly exempted his lands and works from taxation for a period of seven years.80 The arrival of Governor Andros in New York in July 1674 brought intercolonial confl ict when he attempted to collect customs on cargoes entering the Delaware River. Governor Carteret refused to comply, declaring in 1679 that the free ports of East New Jersey were not liable for the payment of customs. Andros had Carteret arrested, brought to trial in New York, and dissolved the assembly at Elizabethtown. For a period of ten months, Andros exercised authority over East New Jersey. In July 1680, the Duke of York ruled against Andros, recalled him in January 1681, and restored Carteret to his post as governor from late 1680 until 1682, when East New Jersey was sold by the Carteret estate to a group of twenty-four proprietors. Thomas Rudyard was appointed deputy governor in September 1682 and took up residence at Elizabethtown two months later.81 He tried to enforce payment of quitrents and collect all arrears, but met with little success. Only one assembly, that of 1683, met during his term. The laws of the province had been most recently renewed for the usual period in 1679. Political disagreements thereafter impeded the business of government. At the close of 1683, the assembly approved taxation of 50, with assessments assigned to counties in place of the six townships. Payment was restricted to winter and summer wheat, corn, and pork. Constables were allowed 3d./1 for collection and the provincial treasurer double that for rendering receipts and disbursements to the assembly.82 Each county was required to maintain a jail for felons and other criminals. In December 1683 county justices were ordered to lay a tax for erecting a jail and pound; failure to do so would have the governor and Council assess the tax and erect the structures.83 Gawen Lawrie was appointed deputy governor of East New Jersey in July 1683, presenting his commission to the Council on February 28, 1684. Forty-three of the forty-four laws passed in 1683 under Rudyard were approved by Lawrie on March 1, 1684. Lawrie concentrated his efforts on negotiations with the towns to settle land disputes and collect quitrent arrears, calling his fi rst assembly in April 1686. No provision had been made for a revenue measure since 1683. A dispute arose over the issue of whether the Assembly thought fit to pay the expenses of the secretary and the Council since it did not enjoy the power of appointment over them. It adjourned before the matter was resolved since it was planting time and the matter was 80

Pomfret, East New Jersey, 99. In September 1682 the proprietors appointed Robert Barclay governor, but he was an absentee governor throughout his term, which lasted until October 1690. During these eight years, a succession of resident deputy governors administered the colony. 82 Pomfret, East New Jersey, 178–79. 83 Pomfret, East New Jersey, 176. 81

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postponed.84 Lawrie was replaced by Lord Neil Campbell (October 1686– March 1687), who sought but failed to obtain a revenue measure. Andrew Hamilton (March 1687–August 1688) was the last deputy governor in the final eighteen months before the establishment of the dominion, which incorporated East New Jersey on August 11, 1688, at Elizabethtown, and then West New Jersey on August 18, 1688, at Burlington. Unaware that Andros had been given a commission to annex the Jerseys to the dominion, Hamilton called an assembly that met from May 14 to May 24, 1688. The purpose of the assembly was to raise a tax to assist New York in its fight against the Indians. The delegates agreed to an act, “A Tax to Withstand Invasion,” of 500. It consisted of a poll tax of 10d. on all males above sixteen years of age, and 1d./1 assessed valuation of land and personal property. Unsettled lands of proprietors were exempted. The act valued land at 10 per hundred acres. Grown oxen were valued at 4, cows and horses at 3, hogs at 10s., wheat at 4s. per bushel, corn at 2s., butter at 6d. per pound, pork at 21 ⁄2d., beef at 2d., and tobacco at 21 ⁄2d.85 The legislature adjourned on May 24, 1688, and did not meet again until September 1692. Turning to West New Jersey, its trustees issued their concessions of March 1677 to encourage settlement of a largely empty territory. Each settler transporting himself to the colony in 1677 would receive seventy acres of land, an additional seventy for each able servant, and fi fty for weaker male or female servants, with quitrents fi xed at 1d. per acre for town land and 1 ⁄2d. elsewhere. For those arriving in 1678 and 1679, land grants were reduced to fifty and forty acres, respectively, with slightly increased quitrents. Few quitrents were ever imposed or collected in West New Jersey.86 Major John Fenwick, one of the leading shareholders and trustees, founded his own Salem Tenth or county in November 1675. Burlington, the first of several Quaker settlements, was founded in August 1677. Between 1677 and 1783, four of the projected tenths, or districts, were settled, mainly by Quakers from England and Ireland, with Fenwick’s tenth remaining separate. Edward Byllynge, chief proprietor of West New Jersey, served as absentee governor from September 1680 to January 1687. The colony’s first assembly met in November 1681, adopting thirty-six laws based on the experience of four years of settlement that implemented various provisions of the 1677 concessions. It approved a revenue act of 200 in coin, skins, or money for discharging public debt and other public charges. Each tenth in the colony was assigned to raise 20 in real and personal property with every man assessed on the value of his estate. A fine of 40s. would be imposed on individuals

84

Pomfret, East New Jersey, 224–25. Pomfret, East New Jersey, 264–65. 86 Pomfret, East New Jersey, 100–101. 85

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who evaded taxes. The full 200 could not be collected in that only four of the tenths had yet been settled.87 The Assembly reconvened in May 1682. Three of the tenths, Yorkshire, London, and Salem, were each instructed to raise 9 6s. 8d. and the other tenth 40s. for a reduced total of 30, down sharply from the 80 voted the previous November and only a small fraction of the 200 authorized tax, payable in skins, corn, or money. The remainder of the 200, some 170, would be recorded in the colony’s accounts as a debt against the unpopulated tenths, to be collected after they were settled.88 A tax of 5s. per hundred acres was imposed, and one of 2s. 6d. on undivided lands, increased to 3s. the following year, but little was collected and none from absentee English proprietors.89 An assembly of November 1685 approved a tax of 5s. per 100 acres on all surveyed lands and 3s. per 100 acres on all undivided lands in the four settled tenths to pay quitrents to the king, build a prison, and pay debts contracted by the province. The Salem Tenth of Fenwick was exempted from the general order, but instructed to collect 80 from its freeholders and inhabitants as its share. All men, including freemen, artificers, workmen, those following any trade or retail business, innkeepers, and others earning a profit were held liable for the tax.90 The proprietary of West New Jersey disintegrated in 1687 with the death of Edward Byllynge and the sale of his family’s interests in New Jersey to Dr. Daniel Coxe of London in February. In 1687 the indebtedness of the colony reached 1,250, which was assumed by Thomas Budd in exchange for a grant of 15,000 acres of land contributed by the resident proprietors.91 West New Jersey’s public debt was extinguished in a swap of debt for equity in the form of land. The population of both Jerseys reached just over 7,000 in 1688. Combined taxes of the two from the time of their division in 1676 through 1688 amounted to no more than a mere several hundred pounds in any given year. In some years, the sums collected were less than 100, and during several years no taxes were authorized or collected. There are no comprehensive records that permit the calculation of a settler’s annual tax burden between 1665 and 1688. The population of 3,400 in 1680 paying an annual tax of 100 (24,000d.) amounts to a per capita tax burden of 7d. Assuming 87

Pomfret, West New Jersey, 129. Pomfret, West New Jersey, 133. The debt of 170 entered on the colony’s books is, in accounting terms, a liability of future settlers, to be redeemed by future taxes or some other source of funds. The important point is that the money was not available for current spending. 89 Pomfret, West New Jersey, 156. 90 Pomfret, West New Jersey, 148. Pomfret and other historians of New Jersey’s public finances do not report actual sums collected and disbursed. There are no extant comprehensive treasurer’s records in New Jersey prior to 1776. 91 Pomfret, West New Jersey, 156. 88

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taxes of several hundred pounds in 1688 paid by the two Jerseys’ 7,000 inhabitants yields a similar result. The free port of Perth Amboy relieved New Jersey’s settlers from trade duties. From the time of New Jersey’s founding until 1688, its settlers did not willingly pay even extremely low taxes. By 1688 the principle that the elected assemblies, not the proprietors, would determine the level and composition of provincial taxation was well established. At the time of the Glorious Revolution, New Jersey was a tax haven.

Taxation in Pennsylvania, 1682–1688

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ennsy lvania’s assembly approved the colony’s first tax measures in 1683, half to be raised from property and half from polls, with nonresidents assessed a 50 percent surcharge. County courts were permitted to impose taxes to defray local expenses.92 An issue arose that plagued Penn and his heirs throughout the history of the proprietary, namely the taxation of the proprietary estates themselves. The Penns were not only hereditary governors of the colony but also great landholders in their own right. The charter given to the proprietor and his frame of government imposed no legal prohibition on the objects of taxation, including Penn’s lands. Settlers resented that Penn, who held title to a tenth of the colony’s estates, was not required to pay quitrents on his holdings, giving him an advantage in land speculation. No tax was imposed on Penn’s lands during the period 1683–88.

Taxation in the Middle Colonies, 1624–1688: A Summary

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he pat t er n of taxation in the middle colonies varied considerably. New Netherland and New York depended heavily on trade duties, especially liquor. New Amsterdam’s and later New York City’s merchants complained of the high cost of doing business owing to substantial duties affecting their port. It’s no accident that smuggling was widespread. During its brief existence, New Sweden lived mainly off company subsidies. Its governors were never able to generate much in the way of local revenue. Its residents became successively subject to the taxes and fees of New Netherland, New York, and then Pennsylvania, which substantially raised their tax burden. A year after its founding, Pennsylvania largely adopted the New England system of taxation on property and polls. New Jersey, although basing its provincial levies on polls and property, was very lightly taxed and its settlers were hostile to the idea of paying even low levels of tax. 92

Shepherd, Proprietary Government in Pennsylvania, 436.

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Taxation of the Southern Plantation Colonies, 1607–1688

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he sy st ems of taxation of Virginia, Maryland, and the Carolinas differed substantially from those of the New England and middle colonies. The southern colonies were overwhelmingly rural, settled on widely dispersed plantations, and, save North Carolina, dependent on a single crop. Unlike the freemen in the other colonies, they relied on indentured labor during the seventeenth century, gradually switching to slave labor. The only towns of any magnitude were Baltimore and Charleston, which were scarcely more than villages. Nor were Virginia and Maryland starved for revenue thanks to taxes on tobacco, which also supplied the English government with considerable customs revenue. Until the eighteenth century, the Carolinas remained relative backwaters.

The Development of the Southern Plantation Colonies

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h e so u t h e r n plantation colonies grew quickly from the settlement in Jamestown to reach 84,482 in 1688, rapidly becoming slaveholding communities. Negroes in the plantation colonies numbered 11,650, making up almost four-fifths of all slaves in colonial America. The southern colonies originated as proprietary ventures. The failure of the Virginia Company led the Crown to annul its charter in 1624 and establish direct control. Apart from internal chaos engendered by the English Civil War, Maryland remained under the control of its proprietor until 1690, when it became a royal colony. Insurrections and political turmoil retarded the growth of the Carolinas during their brief pre-1688 history.

Virginia and Maryland

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obac c o i s the story of Virginia and Maryland.1 In 1612 John Rolfe discovered that tobacco would flourish in Virginia and sell profitably

1

Detailed treatments of the importance of tobacco in Virginia and Maryland appear in Philip A. Bruce, Economic History of Virginia in the Seventeenth Century: An Inquiry into the Material Condition of the People, Based upon Original and Contemporaneous Records, 2 vols. (New

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in England. Virtually overnight it was planted in every available clearing, including in Jamestown itself. In 1616 Virginia shipped 2,500 pounds of tobacco to England. 2 Exports increased from 18,800 pounds in 1617 to 119,000 in 1620. The cultivation of all other crops virtually ceased. After two years of modest contraction, tobacco exports to England resumed their upward course, rising to 203,000 pounds in 1624. Between 1625 and 1631, annual English imports of American tobacco averaged 362,000 pounds. 3 On Maryland’s settling in 1634, its planters quickly made tobacco their principal crop. With the two colonies under separate governments, neither the quantity planted nor the quality packaged for export could be controlled by the actions of a single legislature. Any reduction in planting in Virginia to reduce supply and boost prices could be offset by an increase in Maryland, and vice versa. As a result, output steadily rose and prices fell. Output per farm worker increased from 712 pounds of tobacco in the 1620s to 1,296 in the 1650s, reaching 1,710 pounds in the 1680s and 1690s. Prices fluctuated in a narrowing lower range. In the 1620s, prices ranged between 6.50 and 27.00d. per pound. The range fell from 3.00–5.30d. in the 1630s to 1.65–2.55d. York and London: Macmillan, 1896), and Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore and London: Johns Hopkins University Press and the Maryland State Archives, 1984). Originally published in 1953 by the Mariners’ Museum in Newport News, VA. The taxation of tobacco and its use as money are discussed later in this chapter. The importance of tobacco taxes to the English Crown is discussed in Alfred Rive, “A Brief History of Regulation and Taxation of Tobacco in England,” William and Mary Quarterly Historical Magazine, 2nd ser., 9, no. 2 (April 1929): 73–87. A public choice treatment of tobacco appears in Gary M. Pecquet, “British Mercantilism and Crop Control in the Tobacco Colonies: A Study of Rent-Seeking Costs,” The Cato Journal 22, no. 3 (Winter 2003): 467–84. 2 Tobacco leaves were bound together in small bundles and tightly stuffed for shipment in wooden casks called hogsheads. Hogsheads varied in size in Virginia and Maryland at different times, but were usually four feet tall and two and a half feet in diameter at the head. A hogshead was fashioned absolutely cylindrical, without any bulge in the middle, so that it could be tightly packed by a press, and could be rolled through the woods to the nearest waterway. Mea sured by volume, a hogshead held 63 gallons. During the seventeenth century, hogsheads weighed between four and eight hundred pounds, depending on their contents as either sweetscented or oronoco tobacco. Colonial legislatures in Virginia and Maryland periodically regulated the weight of hogsheads, which led to changes in their size. Sweetscented tobacco was rounded with finer fibers, mild, and preferred in England. Oronoco was bulkier, coarser, had a stronger flavor, and consumed largely on the Eu ropean continent. Sweetscented generally sold at 50 percent over oronoco. More of the less bulky sweetscented could be packed in a cask. Taking the eight-hundred-pound figure for a hogshead of sweetscented tobacco as a reasonable figure in the seventeenth century, a gallon of sweetscented tobacco was equivalent to 12–13 pounds by weight. See Middleton, Tobacco Coast, 109–13. 3 Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” includes a chapter on colonial statistics, edited and with an introduction by John J. McCusker, table Eg1054–56: “English Colonial Tobacco Imported into England: 1615–1701,” S-756.

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in the 1650s to a low of 0.80–1.00d. during 1680–99.4 The ups and downs of tobacco prices corresponded with booms and busts in Virginia and Maryland. There are no complete records on total output of colonial tobacco or the separate production of Virginia and Maryland. Nor are there satisfactory data for English imports of American tobacco between 1632 and 1668, 1670– 71, 1673–81, and 1683–85.5 Recorded imports into London amounted to 3,134,000 pounds in 1638, more than doubling to 7,371,000 in 1663. In 1672, for which total shipments into London and the outports (English ports other than London) are available, imports totaled 17,559,000 pounds. During the three years 1686–88, an annual average of 27,996,300 pounds of American tobacco was delivered to England.6 Holland also imported considerable quantities of American tobacco. Estimates of lost revenue to the English Treasury in the mid-1650s from illegal shipments to Holland were put at 10,000 sterling a year. Although this figure was likely exaggerated to stir up sentiment against Dutch traders, concern over the Dutch trade prompted three Anglo-Dutch wars, a succession of stricter Navigation Acts, and greater efforts at their enforcement. The explosive growth of tobacco took place over the objections of the Virginia Company and the admonitions of several English kings. The proprietors of the Virginia Company called tobacco “deceivable” and King Charles called it a “contemptible weed.” The company urged production of foodstuffs, the establishment of a fishery, and iron, glass, lumber, and shipbuilding industries. None succeeded. Charles urged the colonists to cultivate staple commodities, expressing concern that consumption of tobacco impaired the health and depraved the manners of his subjects. In 1627 he wrote to the governor and Council in Virginia that it was to the dishonor and shame of its people that their plantation was built upon smoke. He 4

Pecquet, “Tobacco Colonies,” table 1, 472. The Central Customs Office perished in the Great Fire of London in 1666, and similar catastrophes occurred in 1715 and 1814. The registers and letter-books kept at the outport customshouses have in most instances been ravished by moth and mildew, with few surviving. Henry Atton and Henry Hurst Holland, The King’s Customs, vol. 1, An Account of Maritime Revenue and Contraband Traffic in England, Scotland, and Ireland: From the Earliest Times to the Year 1800 (London: Frank Cass and Company, 1967). First edition published in 1908 by John Murray in London. 6 Annual figures of tobacco imported by England lump together Virginia and Maryland, all of New England, and all other sources, reserving only separate totals for Carolina, Pennsylvania, and New York. Between 1697 and 1775, tobacco from Virginia and Maryland invariably accounted for over 95 percent of England’s tobacco imports and in most years more than 98 percent. Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1038–45: “Tobacco Imported into England, by Origin: 1697 to 1775,” S-752. Beginning in 1658, and especially after 1662, Virginia kept separate records of its tobacco exports in order to enforce collection of an export duty of 2s. a hogshead for local use. 5

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urged them to produce tar, pitch, soap, potash, salt, iron, timber, and vines. Even though duties on tobacco imported in just one ship in 1636 contributed 3,334 to the royal coffers, Charles urged the planters to diversify their crops, citing the success of several West Indies islands after tobacco planting was replaced with the production of cotton, sugar, indigo, ginger, and oranges.7 Taking their cue from royal pronouncements, the governors of Virginia and Maryland recommended the production of hemp, flax, the tanning of hides (by banning the export of untanned skins), pitch and potash, and linen and woolen cloth. Bounties were offered for the production of silk. Within a few years of settlement, Maryland’s government decreed that everyone who planted tobacco should also grow two acres of corn, an act renewed several times until 1654 when it was allowed to lapse.8 Apart from a modest level of production on the larger plantations to supply some domestic needs, few of these efforts at diversification succeeded. The inhabitants of Virginia and Maryland single-mindedly devoted themselves to tobacco, relying on imported goods for clothing, furniture, and other household needs. From the beginning, the production, purchase, shipment, and distribution of tobacco was highly regulated and taxed on both sides of the Atlantic. As for England, Kings James and Charles established monopolies under which royal commissioners purchased the colonial crop at fi xed prices. Charles favored the production of American tobacco by banning domestic English production; the ban was widely evaded until Parliament took stern action against domestic producers later in the century. Charles imposed discriminatory duties of 2s. a pound on Spanish tobacco and 12d. on that of Barbados and other English possessions in the West Indies, compared with 9d., later reduced to 4d., for American leaf.9 He regulated the retail trade at home with licenses and fees that yielded more than 10,000 a year in revenue in the late 1630s (in 1640 Parliament abolished all retail patents). He restricted shipment to London in English ships, requiring that bond be given to ensure that all cargoes originating in the American colonies proceeded directly to London. Parliament passed a succession of Navigation Acts that 7

Middleton, Tobacco Coast, 105–6, and Bruce, Economic History of Virginia, 1:290, 320. Margaret Shove Morriss, Colonial Trade of Maryland, 1689–1715, Johns Hopkins University Studies in Historical and Political Science, ser. 32, no. 3 (Baltimore: Johns Hopkins Press, 1914), 15. 9 Between 1674 and 1702 the price of Virginia and Maryland tobacco ranged between 2s.6d. and 1s.6d. a pound compared with Spanish tobacco at 6s. to 8s. a pound. Spanish tobacco was generally regarded as of fi ner quality, but the price difference substantially favored the consumption of American tobacco. See Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (New York: A. M. Kelley, 1964), 62. A reprint of the 1934 original edition in the series of Reprints of Economic Classics. 8

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regulated and taxed the shipment of goods within the English Empire. Especially important was the plantation duty of 1673 that taxed intercolonial shipments of tobacco.10

Carolina

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he de v el opment of North and South Carolina proceeded on separate tracks, settled by different groups of immigrants represented by two assemblies, but administered by one governor under a common charter of 1663. North Carolina was slow to develop, and the act of 1673 that imposed a duty on goods shipped from one colony to another disrupted a growing trade between North Carolina and New England. Hard times followed in 1678 in the wake of a tax revolt led by John Culpeper, whose forces seized and held the colonial government at Albemarle for two years. The restoration of proprietary government did little to improve matters, with the population of Albemarle settlement falling by half between 1678 and 1693. The Clarendon County planted on Cape Fear had been wholly abandoned. North Carolina had little to show for itself in 1688. In the south, the colonists who settled at the mouth of the Ashley and Cooper rivers in 1680, where Charles Town (Charleston) was founded, numbered only a few thousand in 1688. Although tobacco was a successful crop from the beginning, its future was limited given the monopolization of the tobacco market by Virginia and Maryland. Slaves played an important part in the economy of South Carolina from the very beginning. Prosperity did not come to South Carolina until the 1720s, fueled by the cultivation of rice and the production of naval stores.

Money

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h e s o u t h e r n colonies, much like their northern neighbors, depended on commodities and bills of exchange with which to conduct trade and pay internal bills and taxes. Very little business was conducted with gold or silver coin. Most of the trade of Virginia, Maryland, and the Carolinas was with England, not other colonies or the West Indies. English merchants collected tobacco at colonial warehouses, sometimes at the landings of individual plantations, crediting the planters in English sterling in the form of book credit at fi xed rates or based on subsequent selling prices in Europe. Planters could draw down their credit in off setting manufactured and other goods or in bills of exchange for other purchases and payments. 10

Rive, “Regulation and Taxation of Tobacco in England,” 73–81.

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The exchange of tobacco for goods and bills of exchange suited external trade, but not internal trade or payment of provincial taxes, which required some local circulating medium of exchange. English bills of exchange could serve as large-denomination paper currency, sent to New England or the West Indies to pay for imported goods. Local payment in Virginia and Maryland used the colonies’ principal crop, tobacco, while Carolina used several commodities at legally specified rates as its means of payment. The unit of account in the south was pounds, shillings, and pence, although each colony set its own par, or rate of exchange, with sterling. In March 1632 the Virginia House of Burgesses petitioned the Privy Council for a 25 percent “debasement” in the value of its coinage, but no action was taken on this request. With England enmeshed in a civil war, the burgesses acted on their own in 1645, legislating a piece of eight at 6s. Virginia currency, which established a par of 133.33 Virginia currency to 100 sterling. In 1655, a second act revalued the piece of eight to 5s., reducing the par to 111.11. This official rate of 111.11 came to be applied to “light coins” of less than full silver content, which made the effective rate against full silver coins 121.55 to 100 sterling. The law of 1655 remained in effect through 1688.11 Maryland attempted to “cry up” the value of coin in terms of its currency through legislation in 1671 and 1686. Neither of these laws was allowed to stand and both were repealed within a few years. Until 1708, the piece of eight circulated in Maryland at its sterling value of 54d., except for the periods April 1671 through June 1676, and November 1686 through November 1689, when it passed at 6s. Maryland currency, a par rate of 133.33 to 100 sterling. For most of the period from the founding of Maryland to the Glorious Revolution, its currency was equivalent to sterling.12 Until their formal division in 1712, the two Carolinas can be treated as a single monetary unit. In the absence of a single staple crop, official rates were set for several commodities. Carolina “cried up” the piece of eight from 54d. to 5s., a par rate of 111.11 to 100 sterling, further depreciating the rate in 1683 to 133.33.13 Despite “crying up” the local currency in an effort to retain coins in their colonies, commodities were the main media of exchange.

Commodity Money

V

i r g i n i a l e g i s l at e d tobacco as the official currency of the colony in 1619, fi xing the price at 3s. per pound for the best grade and 18d., half

11 John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 205. 12 McCusker, Money and Exchange, 189–90. 13 McCusker, Money and Exchange, 215.

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that, for the second or lower grade. Tobacco became the chief money of Maryland from 1640 even though it was never legally declared as in Virginia. Levies, fines, court charges, and all ecclesiastical and official fees in Maryland were regularly assessed in tobacco, not in hard money. Though money did not grow on trees, it can be said that Virginia and Maryland grew their own money. Given the centrality of tobacco in Virginia, public inspection was deemed essential to ensure quality. Warehouses were erected beginning in 1632, permitting debts to be settled by a transfer of book credits on stored tobacco. This system remained in place throughout the seventeenth century. The use of tobacco as money was not without problems. First was its dual role as staple and means of payment. Planters wanted high prices for their tobacco, as well as the ability to use highly valued tobacco to pay their debts and taxes. To that end, colonial governments tried, often without success, to regulate the output and quality of tobacco to prevent gluts and “trash” tobacco from depressing prices, and also prevent the payment of taxes in trash tobacco. If the governments succeeded in keeping up prices, this had the undesirable effect of increasing the real value of debts and payments, which were denominated in units of tobacco as currency at an established rate. As the price of tobacco fluctuated, the Virginia legislature had to readjust the official price of tobacco as currency for private and public payments. Initially set at 3s. and 18d. a pound according to quality in 1619, it was reset at 3d. in 1645, 2d. in 1661, 1.5d. in 1676, 1.2d. in 1682, and 1d. in 1697, remaining at 1d. throughout the eighteenth century.14 In 1633 the legislature required that all contracts and judgments be made in coin, but the lack of specie rendered this law ineffective. Another problem was that the use of tobacco as currency discouraged production of other commodities. Testimony before the Maryland Assembly recounted how non-tobacco growing settlers had to buy tobacco from outside the province to meet their need for currency. Abandoning cultivation of tobacco required purchasing it from other sources to make payments. The ability to use the principle staple as money contributed to its overproduction and declining price. Tobacco also suffered from global competition. No single planter or colony could act alone to reduce output and raise prices. Any attempt to grow less in one plantation, county, or colony could be offset by increased production in another or a foreign country. If total output and prices remained the same, the planter or region curtailing production would receive a smaller income. Virginia farmers would lose out to those in Maryland and

14 William Z. Ripley, The Financial History of Virginia, 1609–1776, Studies in History, Economics, and Public Law (New York: Columbia College, 1893), 50n3.

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North Carolina, and vice versa, and total colonial cooperation would fail if other countries increased their output. Tobacco had defects as a medium of exchange. It was bulky and heavy. Any substantial payment required movement of barrels of leaf from one place to another. Virginia granted its sheriffs 10 percent of the quitrent tobacco they collected to cover the cost of shipping it from the plantations to the seat of government; planters received an 8 percent deduction if they delivered it themselves. Tobacco was costly to store and was prone to deteriorate, which created problems in the payment of debts and taxes. Some creditors refused to take tobacco when they had no immediate use for it, thus leaving the problem and cost of storage to the debtor. To remedy this problem, legislation was passed requiring creditors to accept delivery of “good and merchantable” tobacco when tendered in payment; failure to do so could result in cancellation of the debt. For their part, debtors often masked the quality of poor tobacco by placing good leaf at the top and around the edges of bundles stuffed into barrels, a practice especially prevalent in payment of taxes, akin to delivery of lean cattle in New England. Problems of quality were not resolved until the eighteenth century. In North Carolina, many commodities were rated as legal tender. At various times these included tobacco, corn, wheat, tallow, tanned and uncured leather, beaver skins, wildcat skins, butter, cheese, raw and dressed deerskins, feathers, pitch, whale oil, pork, beef, rice, tar, and turpentine. Beef, pork, naval stores, staves, and later rice served as money in South Carolina. Despite the shortcomings of commodities as money, the planters, merchants, and governments of the southern colonies had few alternatives to growing, trapping, shooting, or catching their own money. They had no source of precious metals. They could sell their staples for foreign goods, bills of exchange, indentured servants, and even wives, especially Irish orphan girls who could be purchased at dockside for two hogsheads of tobacco. One brief exception to commodity money was tried in Maryland. To ease the shortage of money, the proprietor of the colony, Cecil Calvert, Lord Baltimore, decided to privately mint coins for Maryland. He minted coins at the Tower of London mint in silver denominations of 4d., 6d., and 1s. In April 1661 the colonial legislature acted to put the coins in circulation. Every household was required to exchange sixty pounds of tobacco for 10s. worth of coin. However, the small number of coins minted did not supplant tobacco, which remained the mainstay of Maryland’s currency.15 15 The English government generally opposed the minting of colonial coins. When it learned of Baltimore’s project, the Privy Council summoned him to answer why he had coined pieces of silver for shipment to Maryland. He was charged with coining money 30 percent lighter than its English equivalents of the Tower of London standard, which he believed would

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Taxation in Virginia, 1607–1688 t is no accident that Virginia was among the favorites of the Crown.16 In 1689 duties and imposts on tobacco supplied 130,000 sterling in net annual income to the English Treasury, about 7.2 percent of total tax revenue, in addition to employment generated in English shipping and commerce. All other sources of royal income from the colonies paled in comparison. Royal quitrents in Virginia provided a steady stream of revenue to underwrite colonial administration, helping reduce the political confl icts that plagued other English colonies in America with elected assemblies resisting taxation. The poll tax and an export duty on tobacco were the two main sources of provincial revenue.

I

encourage their retention in Maryland, and also charged that he was exporting silver coins against English law, which only permitted export of copper coins. The Committee of the Council on Plantations to which his case was referred evidently ruled in his favor, but required that he secure the approval of his colonists to put the coins in circulation. Lord Baltimore’s experiment with colonial coinage appears in “Lord Baltimore Coinage, 1658–1659: Introduction,” http://www.coins.nd.edu/ColCoin/ColCoinIntros/ Baltimore.intro.html (October 22, 2003). 16 Scholars have published several comprehensive studies on taxation in Virginia. These include Ripley, Financial History of Virginia, 1–170; Percy Scott Flippin, The Financial Administration of the Colony of Virginia, Johns Hopkins University Studies in Historical and Political Science, ser. 33, no. 2 (Baltimore: Johns Hopkins Press, 1915); and Flippin, The Royal Government in Virginia, 1624–1775, Studies in History, Economics, and Public Law, vol. 84, no. 1 (New York: Columbia University, and London: P. S. King and Son, 1919), chapter 6, “The Financial System and Administration,” 230–306. Taxation is treated throughout both volumes of Bruce, Economic History of Virginia. The taxation of slaves and free Negroes appears in Tipton R. Snavely, Th e Taxation of Negroes in Virginia (Charlottesville, VA: Michie Company, 1916), and W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638– 1870 (Baton Rouge: Louisiana State University Press, 1969). First published in 1896, reissued in 1965 by Russell and Russell, Inc. The original source of legislation on taxes is William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619, 13 vols. (Richmond, VA: Samuel Pleasants, 1809–23). Vol. 1 covers 1619–60, vol. 2, 1660–82, and vol. 3, 1682–1710. Unlike Massachusetts, where the General Court enacted specific amounts of taxes in every session, the several taxes in Virginia were enacted in general form and remained on the books unless revised or repealed. Quitrents, poll taxes, export duties on tobacco, tonnage, castle duties, and other levies were collected on a regular basis unless they had been imposed for specific time periods, therefore requiring renewal. From time to time the rates were changed. The Virginia Statutes do not record actual taxes collected. Comprehensive records of tax receipts of the provincial and county treasurers do not exist for the period 1607–88. English customs rec ords are sporadic and incomplete before 1697. Most numbers or ranges of numbers of the various taxes cited in scholarly studies were prepared by various officials in Virginia or England. These were rarely audited reports. Rather, they were rough estimates based on what should have or appears to have been collected. There are wide gaps in the Virginia Statutes. No recorded proceedings of the General Assembly exist from the close of the August 1633 session until the January 1640 session. One can only presume that the tax laws in place as of 1633 remained largely in force until 1640.

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Imperial Taxes

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r om t h e beginning, crown duties on colonial tobacco imports were part of its regular subsidy or revenue. Despite the king’s dislike of English consumption of tobacco and his royal colony’s heavy dependence on a single crop, a steady source of revenue from tobacco was invaluable given his constant struggle with Parliament for funds. In January 1631 King Charles imposed duties of 2s. a pound on Spanish tobacco, 12d. on that of Barbados and his West Indies colonies, and a smaller charge of 9d. on Virginia leaf. Three of the 9d. was levied as customs, and 6d. as imposts. Later that year he reduced the total duty to 4d., 2d. for subsidy and 2d. for impost.17 These duties favored colonial tobacco, benefiting Crown and colony alike. The desire to achieve full collection of royal duties prompted the Privy Council to instruct Governor John Harvey and his successors that vessels laden with tobacco proceed directly to London. Upon the Stuart Restoration in 1660, Parliament granted Charles II a tonnage and poundage subsidy for life. Tonnage was a specific duty placed on wine, while poundage was a 5 percent ad valorem duty placed on all imports and exports. The tariff of 1660 granted preferential treatment to colonial tobacco, sugar, and cotton. Foreign tobacco was valued at 10s. per pound, which made the 5 percent old subsidy duty worth 6d. Colonial tobacco, valued at 20d. a pound, amounted to a duty of 1d. Another 1d. was added to this duty, raising the total on American tobacco to 2d. per pound, which was a third that of foreign leaf. The rate remained at 2d. until 1685, when it was raised to 5d.18 To maintain a large difference between colonial and Spanish tobacco, duty on the latter was increased to 1s. In 1681, the Commissioners of the Customs estimated that royal duties on Virginia tobacco had averaged 100,000 a year over the previous three years. The impact of duties on the demand for colonial tobacco in England, by raising its price, was substantially relieved with drawbacks on reexportation. From 1660 to 1723, all but a 1 ⁄2d. per pound of tobacco was refunded. About two-thirds of American tobacco imported into England was reexported, 17

The origin and meaning of old customs, subsidies, imposts, new imposts, new new imposts, and other tax terminology are discussed in chapters 1 and 4. 18 The increase from 2d. to 5d. per pound on English customs in 1685 meant that crown revenues from tobacco were about four to five times as much as planters received for their crops. English merchants paid five to six times more to import tobacco than to buy it from the planters after 1685. Fiscal circumstances had changed dramatically between the 1620s and 1630s, when the Crown tried to discourage smoking in England and tobacco cultivation in Virginia, and the 1680s, when tobacco duties supplied in excess of 100,000 sterling annually, a valuable source of royal revenue free from sessions of Parliament. Paul G. E. Clemens, The Atlantic Economy and Colonial Maryland’s Eastern Shore: From Tobacco to Grain (Ithaca, NY, and London: Cornell University Press, 1980), 38.

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which eliminated most of the English duty paid by importers. Rebates of 10 percent of the duty were offered for “ready money” and a deduction was permitted of 3–4 percent for losses due to damage in curing and shipping.19 It is necessary to distinguish the incidence of taxation, who pays the tax, from the burden of taxation, on whom it falls. The duty was paid by English importers of tobacco. It was borne in small measure by colonial producers to the extent that higher prices depressed sales and income. It was borne by smokers in the form of higher prices paid for tobacco, but only on the portion consumed in England. Another portion was borne by continental European smokers as a result of import duty in their countries. It is generally acknowledged that smokers, not planters, bore the brunt of the burden. Philip Bruce reproduces an account of June 29, 1659, of the various charges associated with a shipment of 10,938 pounds of tobacco from Mr. Richard Jones to his English merchant.20 At the purchase price of 6d. per pound, the shipment is valued at 273 9s.21 Of this, customs amounted to 45 11s. 6d, excise another 45 11s. 6d., another excise of 4 11s. 9d. (a surtax of 2s. per each 20s.), adding to total tax of 95 14s. 1d., about 35 percent of the value of the shipment. Other deductions from the merchant’s purchase included carriage, petty charges, Virginia duty (discussed later in this segment), porterage, cooperage, freight, warehousing, transportation charges for the purchasing agent’s travel to Virginia, and the cost of processing a bill of exchange, together constituting another 30 percent of its value. The remaining items in the account show the cost of goods consigned to Mr. Jones and the debt for goods previously shipped. After all deductions, net receipts to Richard Jones came to 92 7s. 11d., about 34 percent of the purchase price of the tobacco. Duties and excises were extremely high as a percentage of price and profit. These percentages rose as the purchase price of tobacco fell.

Internal Imperial Taxes

S

eparat e f r om internal taxes levied by the General Assembly (the House of Burgesses and the Council), Virginia had a system of royal revenues. These taxes were collected by officials holding royal commissions, generally paid from the revenues supplemented by disbursements from the 19

Middleton, Tobacco Coast, 123–24. Official figures on the volume of reexported tobacco are available from 1697. 20 Bruce, Economic History of Virginia, 2:339. 21 The price of 6d. was unusually high compared with lower average prices throughout the 1650s and 1660s. Farmer Jones was exceptionally fortunate to receive such a high price for his tobacco in 1659. More typical prices for these years ranged between 1.2d. and 2.8d. Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg275–84: “Wholesale Tobacco Prices in Virginia and Maryland, by Region: 1647–1820 [Virginia currency],” S-681–85.

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English Treasury. Before passage of the Navigation Acts, the principal source was quitrents. 22 In 1618, the London Company imposed a charge of 2s. per hundred acres, but postponed the date of first payment until 1625, the year after the Crown took control. The Crown retained the company’s rate, but paid little attention to collection of quitrents between 1624 and 1684; the little that was collected was generally controlled by the colonial government. In 1645 and 1646 the General Assembly stipulated that quitrents, payable in tobacco at 3d. per pound, were to be placed under its direction for spending. Local control continued throughout most of the century despite instructions to Governor Sir William Berkeley in 1662 to have the royal treasurer collect quitrents. From time to time, the assembly sought to enforce collection to ease the burden on other sources of taxation, especially the poll tax. Virginia laws of 1640, 1643, and 1647 required annual payments at convenient places and authorized distraint of property in the event of nonpayment, but these measures yielded little revenue. Grants of land carried exemption from quitrents for seven years, which encouraged individuals to acquire more land than they could cultivate. In January 1640 the General Assembly approved quitrents of 2s. per hundred acres, payable seven years after the patent was received.23 To halt speculation, the English government revoked this exemption in 1662 in instructions to Berkeley and also to later governors. In 1631 the House of Burgesses estimated that quitrents, if fully collected, would yield 2,000 a year. This vision never materialized. In 1665 the tax rolls listed 941,667 acres subject to quitrents. If fully paid, quitrents should have yielded 113,000 pounds of tobacco worth 950 at the current price of 2d. By 1680, despite an eightfold increase in population over the previous fifty years, quitrents amounted to a mere 1,500. The revenue fluctuated considerably, from 574 17s. 6d. in 1684, to 1,029 5s. 3d. in 1685, and 750 in 1690. 24 In some years, quitrents were not worth the trouble of collection. Planters resisted quitrents in the early years because they were to be paid in hard money. Later tobacco became acceptable. A previous rate of 3d. per pound of tobacco enacted in 1646 was set at 2d. in 1662, 25 but the king repealed this rate by proclamation, and planters accepted payment at 1d. The 22 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University, and London: Humphrey Milford and Oxford University Press, 1919), 219–39, and Ripley, Financial History of Virginia, 46–55. 23 Hening, Virginia Statutes, 1:228. 24 Bond, Quit-Rent System in the American Colonies, 235. 25 Hening, Virginia Statutes, 1:316, 2:99.

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burgesses disliked the fact that quitrents were beyond their control, giving royal officials in the colony a measure of financial independence. In 1686, King James II invalidated the payment of quitrents in tobacco on the ground that trash tobacco rendered in payment was nearly worthless. In response, the burgesses denied the right of the king to issue the royal order. After 1688, quitrents were generally paid in tobacco at the rate of 1d. a pound.

Financial Administration: The London Company

V

i r g i n i a’s i ni t i al attempt at a communistic system was quickly replaced with an economic system based on private property. 26 In exchange for grants of land, each colonist was to provide up to thirty-one days of ser vice for defense, if needed, and pay two-and-a-half barrels of wheat for himself and every manservant for community support. Later migrants were to receive grants in socage tenure at rents of 6d. for every twenty-five acres. Large proprietary grantees were to pay fi xed amounts of labor ser vice of a month each year and several bushels of corn. All payments fell short of the company’s expenses. To help make the company a viable concern, the shareholders permitted the calling of an assembly, the House of Burgesses. It voted the fi rst real tax levied in Virginia on August 4, 1619, of one pound of tobacco per poll to support the speaker, clerk, and sergeant for their ser vices during the session. The governor and secretary were compensated with grants of land, three thousand and five hundred acres, respectively, to be worked by tenants transported by the company. Other poll taxes of five pounds of tobacco a head were levied to defend the colony against Indians, ten pounds to defray the public debt, and four pounds to send a commissioner to England. Another levy was approved to provide a public granary in every parish. The company retained the right to overrule the local assembly and advised the governor in 1622 that its approval of the fort tax did not convey a local right to assess and levy taxation. The assembly replied in 1623 with a law declaring that the governor had no power to lay any taxes or impositions on the colony, the settlers’ lands, or goods other than by the authority of the assembly.

Financial Administration: Royal Government

T

h e l aw s of 1623 remained in force following royal takeover of the colony. Initially, the contribution of labor provided the bulk of the gov-

26 The company’s administration of Virginia is described in Ripley, Financial History of Virginia, 11–22.

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ernment’s needs along with poll tax revenue. Prior to 1629, the General Assembly exempted newcomers from military ser vice and taxes for one year to encourage immigration, but this incentive was terminated after 1629. In 1629 the appropriation of eight thousand pounds of tobacco was used to purchase ordnance, powder, shot, and military supplies to defend the colony against Indians. In 1632, an appropriation of twenty thousand pounds was used for the same purpose. 27 After 1639 the governor received a regular salary from an export tax on tobacco in place of previous land grants worked by company tenants, as the land reverted to the Crown on dissolution of the London Company. The Protectorate terminated the governor’s salary. In response, the General Assembly levied a poll tax of 2s. in March 1643, to be paid in commodities at specified rates for the governor’s support. 28 He was also granted a house and a lot. Royal officials did not find it easy to collect revenue. 29 Colonial governors did not always faithfully enforce the requirement of direct shipment of colonial produce to England. Nor was it possible to eliminate smuggling. The conduct of locally created officials to assist the governor in his responsibilities, keep a register of all exports, forward copies to the Lord Treasurer in England, and collect fees did not always satisfy English officials. The fi rst appointment of a colonial customs official was established by the General Assembly in obedience to an order of the king, not on its own volition. During the Protectorate, the burgesses appointed and supervised the collection of customs duty, especially the 2s. per hogshead duty levied in 1658 (see below). Repealed a year later, the levy was reenacted in March 1662 and customs officials appointed by the legislature undertook its enforcement. In 1669, the Commissioners of the Customs in England appointed its own man, Edward Diggs, as collector of Virginia to the post, assigned to oversee revenue collection and correct the abuses in the system. He was paid a salary of 250 a year by the receiver-general of customs in England. Resident collectors previously commissioned by the legislature became royal officials. 27

Ripley, Financial History of Virginia, 101. Indian troubles and other problems resulted in a small crop in 1643, and turmoil in England put the governor’s compensation at risk given delays and other difficulties involved in shipping his tobacco to England. Providing support in commodities took care of his needs for the year. Approved commodities included corn, wheat, malt, beef, pork, hens, capons, calves, butter, pigs, cheese, geese, turkey, and goats at fi xed prices. Hening, Virginia Statutes, 1:281. 29 The duties of the several royal and colonial officials entrusted with the collection of royal and provincial revenues and the colony’s fi nancial administration are described in Flippin, Financial Administration of Virginia, 21–55, and Flippin, Royal Government in Virginia, 245–83. The administration of the Navigation Acts is discussed in chapter 5. 28

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The governor administered the oath of office to collectors and was required to compel their obedience to instructions from the English commissioners. Collectors received certain import and export duties, including the 1d. per pound on tobacco shipped from Virginia to any other American colony required by the plantation duty of 1673. From 1680 collectors received a fee of 15d. per ton on ships and 6d. per poll on persons brought into the colony. Other posts were created in the Navigation Acts. The first was that of naval office in 1663. Before 1698 naval officers were appointed and removed by the governor. Duties coincided with those of collectors and the two officers served as a check on each other. Naval officers issued certificates for clearing ships and received bonds given by shipmasters. They were empowered to seize vessels trading illegally and required to send comprehensive accounts to England of all ships trading in the colony. The office of auditor, whose duties were fi rst performed by the colonial treasurer, was established in 1664 by the General Assembly, but royal approval was required for all appointments. Auditors held their appointments under the great seal and, after 1680, were deputies of the auditor-general of the colonies. Only councillors and longtime residents of the colony were appointed to the office. The office of receiver-general, a royal appointment, was combined with that of auditor, but the two were separated in 1705 over concerns of fraud, a chronic problem in Virginia and the other American colonies. The receiver-general accepted quitrents, the local export duty on hogsheads, the plantation duty, the port duty of 15d. per ton on arriving vessels, and other funds not received by the colonial treasurer. From his receipts he paid the salaries of colonial officials, the auditor-general of the colonies, and other public expenses. He was required to remit quitrents to England in sterling bills of exchange, but most of these funds remained in the colony. The office of colonial treasurer was appointed by the king from 1624 to 1691, and thereafter by the House of Burgesses. He was usually a member of the Council, but became an agent of the burgesses after they acquired the power of appointment. The treasurer was independent of the auditor and receiver-general, which meant that his interests were more closely tied to those of the colonists. Until 1664, he enjoyed the duties and powers later given the receiver-general, especially the collection of quitrents. The treasurer was responsible for collecting duties on liquors, servants, and imported slaves, for any special levy enacted by the legislature, and borrowing money on its behalf. In 1645, the legislature directed that quitrents were to pay his salary of 500 a year. Other officials included inspectors of tobacco, who were paid about 60 a year, and pilots established in 1661 by the assembly to guide ships on the

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Taxation of the Southern Plantation Colonies, 1607–1688

rivers with fees specified for every stretch of the rivers where guides were required.30

Direct Taxes: Poll Tax

T

h e p ol l tax was in place from the colony’s early years. In March 1624, a tax of five pounds of tobacco was levied on masters of servants to support the construction of a fort. 31 Within a few years of royal rule, in 1629 the General Assembly approved a poll tax of five pounds per tithable, the term for an individual subject to the tax. The rate was set at sixty-four pounds in 1632, sixty-four pounds on newcomers after their fi rst crop in 1633, seventeen pounds in 1640, nine pounds in 1643, eighteen pounds in 1644 to support Governor Berkeley’s voyage to England, and thirty pounds in 1656.32 Poll tax was imposed on all males of any color over sixteen and all Negro, mulatto, and Indian women over sixteen. All young persons imported into the colony after 1649 were liable for payment, except native Virginians under sixteen and children under sixteen who arrived with their parents.33 In 1680, the law applicable to tithables lowered the legal age of all Christian servants brought into the colony to fourteen. Women employed in the fields were tithable. Servants imported for sale were not considered tithable until sold.34 After the Stuart Restoration, poll tax averaged about fifteen to twenty pounds for each tithable, but extra levies were exacted for war time emergencies and special occasions.35 For example, the General Assembly authorized an extraordinary poll tax of eighteen pounds of tobacco, two hundred thousand pounds total, to send Governor Berkeley to England to negotiate terms of peace with the Commonwealth government.36 They rewarded the governor with 300 on his return with a charter, granted him an extra gift of 200 sterling for life in addition to his 1,000 annual salary, and confirmed 30

Hening, Virginia Statutes, 2:35. Pi lot fees were set by order of the assembly, not legislation, at 5 sterling for vessels exceeding eighty tons. 31 Hening, Virginia Statutes, 1:127. 32 Hening, Virginia Statutes, 1:143 (1629), 196 (1632), 222 (1633), 229 (1640), 279 (1643), 286 (1644), 404 (1656). 33 Hening, Virginia Statutes, 2:84. 34 Bruce, Economic History of Virginia, 2:40. 35 In 1661 the poll tax was levied for three years at 20 pounds of tobacco. No further entries appear in Hening until 1674, when the rate was set at 12 pounds per poll. In 1682, the rate was set at 89 pounds; in 1684 at 47 pounds; and in 1686 at 104 pounds, to cover the colony’s debts between 1684 and 1685. Hening, Virginia Statutes, 2:24 (1661), 325 (1674), 507–8 (1682), 3:25 (1684), 38–39 (1686). 36 Hening, Virginia Statutes, 2:17.

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land grants of 1,090 acres at Green Spring and another seventy adjoining acres for life. 37 Poll tax was also levied by justices of the peace in the counties for payment of county debts, building and repairing courthouses, bridges, and ferryboats. The vestry of each parish also levied poll tax for erection of churches, the minister’s salary, the clerk’s salary, care of the poor, and other parish expenses. All were compelled to support the Anglican Church regardless of religious belief. County and parish taxes were modest. In 1682 the public levy was set at eighty-nine pounds of tobacco per tithable. It generated 1,349,418 pounds of tobacco worth 6,747 1s. 6d., tobacco then worth 10s. per hundred pounds. 38 The number of tithables in 1682 was 15,162, resulting in a per tithable tax burden of 0.44 (about 9s.), and a per capita burden of 0.15 (3s.). 39 Total combined poll levies paid to the colony, county, and parish treasurers came to about two million pounds a year at the end of the seventeenth century. At a market price of 1d. sterling a pound, their value would amount to 8,333 sterling, or 10,417 Virginia currency.40 Tobacco paid in Virginia taxes amounted to about 7.4 percent of that exported. However, local tobacco tax circulated as currency when paid by the colonial government for salaries, infrastructure, and supplies. Apart from a brief resort to property taxes in mid-century, poll tax was the only direct tax levied on the colonists, with quitrents contributing only a small sum due the Crown but which were generally allowed for local use. Poll tax remained the main direct tax, and often the main support of government, especially for such extraordinary occasions as a fifty pounds levy to build James City in 1662, or sending commissioners to England.

Direct Taxes: Property Tax

I

n 1 64 5 , the General Assembly abolished the poll tax and replaced it with a property tax. The rate was assessed at four pounds of tobacco for each hundred acres of land, four pounds for each cow over three years old, thirty-two pounds on horses, mares, and geldings, four pounds per breeding sheep, two pounds per breeding goat, and twenty pounds on each tith-

37

Hening, Virginia Statutes, 2:314–15, 319–21. The source for this statement is Flippin, Royal Government in Virginia, 244. Tobacco worth 10s. a hundred pounds converts to 1s. for ten pounds, which makes one pound of tobacco worth 0.833d. a pound, below its value assessed for quitrents and poll taxes. Ripley, Financial History of Virginia, states that the value of tobacco assessed for quitrents was 1.2d. a pound (104) 39 Flippin, Royal Government in Virginia, 244. 40 Flippin, Royal Government in Virginia, 50. 38

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Taxation of the Southern Plantation Colonies, 1607–1688

able subject to the poll tax. The property tax was repealed in 1648, with a return to the poll tax.41

Indirect Taxes: Duties

S

e v e ral mi nor indirect taxes were levied in the seventeenth century. Prior to the Commonwealth Protectorate, the General Assembly imposed a tax of 6d. on every passenger arriving at Point Comfort, with a high sum of 15s. for indentured servants of alien birth. Those importing servants were subsequently free to sell their contracts to anyone at the highest available price.42 The 6d. duty was reenacted in 1662 and 1680.43 In 1662 the General Assembly imposed import duties of 6d. a gallon on rum and 1d. per pound on sugar if imported in vessels not owned by Virginia citizens. Another motive, apart from revenue, was to discourage drunkenness. It took effect in 1663, but was repealed in 1664 on the ground that it obstructed trade.44 Governor Berkeley’s report of 1671 to England stated that no import duties were imposed. None was enacted until 1684, when duty of 3d. per gallon on wine, brandy, rum, and spirits was levied. In its session of 1686, the General Assembly approved for three years a duty of 3d. per gallon on wine, brandy, rum, and other spirits to commence from September 29, 1687,45 the proceeds directed for the building of a new courthouse for the sitting of the General Assembly. Liquor duty averaged about 600 a year, with an exemption for beverages imported in Virginia-built vessels. The overwhelming bulk of indirect taxes derived from an export duty on tobacco. In 1655 the General Assembly passed legislation which stated that there would be no tax on tobacco exports.46 The need for revenue required prompt retraction. In 1657, the assembly levied an export duty of 1s. a hogshead on tobacco exports, to be devoted to payment of the governor’s salary of 600. It was reenacted in 1658 at 2s., with a penalty rate of 10s. a hogshead on tobacco not exported to England, in effect a prohibitive tariff directed against the Dutch. Repealed in 1659, it was reenacted in 1662 along with the 2s. export duty.47 In 1663 the assembly specified that it was to be paid in money or good tobacco, not “refuse contemptible goods.” Acts passed 41

Henning, Virginia Statutes, 1:305–6, 356. Bruce, Economic History of Virginia, 1:631. 43 Hening, Virginia Statutes, 2:134–35, 468. 44 Hening, Virginia Statutes, 2:125, 212. 45 Hening, Virginia Statutes, 3:23, 38. 46 Hening, Virginia Statutes, 1:410. 47 Hening, Virginia Statutes, 1:491 (1657), 523 (1658), 2:130–31 (1659), 133–34 (1662). When the king confi rmed the March 1662 2s. hogshead export duty, the General Assembly reenacted it with thanks to the king in December 1662 (2:177). 42

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by the legislature in 1680, which replaced the former acts of 1662, made the duty permanent. Instead of being accounted to the burgesses as before, it was considered royal revenue, appropriated for governmental expenses to pay the salary of the governor and other colonial officials and the usual charges of the government. It became the principal fund on which the governor relied. In 1671, some 15,000–20,000 hogsheads of tobacco were exported, which yielded about 1,550, of which 1,200 was paid to the governor and 350 to members of the Council. Thereafter, the duty yielded some 2,000– 3,000 annually, varying with the volume of exports. For example, the amount collected in 1676 was 2,546, rising to about 3,000 in 1680. In 1689, receipts came to 3,631 sterling.48 The cost of collection was about 27 percent of the total.49 The 2s. hogshead duty was intended to ease the burden of the regressive poll tax and encourage diversification of agriculture. Duty was to be paid in coin, bills of exchange, or goods valued at 30 percent above their original cost. After 1670 it was judged inconvenient to receive merchandise in settlement of the duty, so payment was restricted to coin and bills of exchange. During the 1670s, large amounts of tobacco were being shipped in bulk in addition to hogsheads. On October 10, 1677, the General Assembly imposed a duty on tobacco exported in bulk at 2s. for every five hundred pounds, with a sliding scale for smaller quantities.50 Large penalties were imposed on those who failed to pay. In the event that foreign enemies seized cargoes of tobacco on which export duty had been paid, owners were permitted to export a similar quantity free from the tax. In 1680, payment of the 2s. duty was restricted solely to the current coin of England (valued at the sterling rate, not the depreciated Virginia rate), but the whole amount was allocated by the Crown to the support of the colonial government. In response to the Navigation Act of 1651, in 1658 Virginia placed a duty of 10s. on every hogshead of tobacco purchased in the colony with Dutch goods and afterward dispatched in a Dutch or English vessel bound for a foreign or American port. Tobacco transported in English ships was not subject to this charge, which was in addition to the 2s. duty. Concerned that the measure reduced trade between Virginia and the northern Dutch colonies, the legislature repealed the extra charge the following year.51 In 48 After 1680, the 2s. duty was payable only in coin at the English sterling standard. Previously sums were reckoned in Virginia currency. 49 The high cost of collection reveals the disadvantages associated with tobacco as currency. 50 Hening, Virginia Statutes, 2:413, and reenacted in 1680, 466. 51 Henning, Virginia Statutes, 1:468, 523.

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Taxation of the Southern Plantation Colonies, 1607–1688

1660 it relieved Dutch traders of duty if they purchased goods with the sale of imported Negroes. The Dutch, eager to encourage trade with Virginia, in 1657 imposed only a small 1 percent ad valorem export duty on all commodities shipped from New Netherland to Virginia.52 The volume of this trade was reported as very great in 1660. The seizure of New Netherland by the English in 1664 eliminated this irritant to the enforcement of the Navigation Acts. When Berkeley was reinstated as governor, he was ordered to strictly enforce the Navigation Acts to ensure that the Crown received its full complement of revenues from duty and other charges. The 1d. plantation duty of 1673 was enacted to strengthen enforcement of English customs. After payment of this duty, bond had to be given to ensure that the shipmaster would convey his cargo to England. If shipment was bound to another English colony, the duty was to be paid a second time. Th is adversely affected intercolonial trade, but helped enforcement of crown duty. Apart from tobacco, other indirect duty entailed a tax of 5s. per barrel on exported meat in 1660, which was repealed in July 1662.53 A law of 1682 prohibited the export of hides and skins and other articles to encourage employment among idle men and also supply the colony with some processed goods. The penalty for violating the ban was one hundred fifty pounds of tobacco. Shipowners and seamen violating the ban were subject to similar fines. The law was repealed in 1691 and replaced with a schedule of export duties on furs, hides, and skins, raw and tanned.54 The plantation duty of 1d. per pound on tobacco exported from Virginia (and Maryland) to any other American colony was granted by the king to William and Mary College in 1692, worth about 200 sterling a year.

Tonnage

A

c ast l e d u t y of five pounds of tobacco per poll for each servant was levied in March 1624. A castle duty imposed in February 1632 set the rate at one pound of powder and one pound of shot on every ton of cargo imported. It was lowered in 1633 to one-fourth of a pound of each, later fi xed in 1645 at one-half for each. By 1635, castle duty had financed the construction of five forts.55 In 1662, it was again made payable in powder and shot at the rate of half a pound of powder and three pounds of leaden shot for every 52

Bruce, Economic History of Virginia, 2:315. Hening, Virginia Statutes, 2:21. 54 Bruce, Economic History of Virginia, 2:482–83. 55 Hening, Virginia Statutes, 1:127 (1624), 176 (October 1632), 192 (March 1632), 218 (1633), 247 (1643). 53

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ton of goods carried in each arriving vessel, or in bills of exchange or coin at 12d. a ton imported merchandise.56 In 1680, shipowners could pay at the rate of 15d. on every ton of cargo instead of powder and shot.57 It also became customary that a gift of liquor or provisions be given to the governor, amounting to 20s. on vessels above one hundred tons and 30s. if of lower displacement. The gift of merchandise was subsequently transformed into a payment of coin or tobacco.58

Fines, Forfeitures, and Fees

R

e v e n ue s w e r e also derived from fines and forfeitures imposed by Parliament or the colonial legislature for breach of penal law, contempt of court, and conviction for felony or trespass, and from fees for the right of taking up land at 5s. for every fifty acres. From time to time, as in 1662, the General Assembly enacted long lists of fees for various ser vices, ranging from 8s. to as high as 300s. for a copy of the full set of the colony’s laws.59

Exemptions Foreign

T

o e nc o urag e the production of hemp, pitch, and tar in Virginia (and Maryland) to assist planters who found tobacco cultivation unprofitable, especially following the period of low tobacco prices between 1655 and 1662, the Privy Council declared that these commodities would be admitted into England free from ordinary duty for a period of five years. For England’s part, importing these commodities from its colonies would reduce the outflow of precious metal to the Baltic countries on which England depended for naval stores.60

Domestic

T

he chart er of 1639 brought by Governor Berkeley initially exempted councillors from taxation. An act of March 1643 exempted councillors from all but church fees. This exemption was of little importance since councillors were liable for poll tax on their servants and slaves.61 56

Hening, Virginia Statutes, 2:134–35. Hening, Virginia Statutes, 2:467–68. 58 Bruce, Economic History of Virginia, 2:349–51. 59 Hening, Virginia Statutes, 1:490, 1:143–46. 60 Bruce, Economic History of Virginia, 1:392–93. 61 Hening, Virginia Statutes, 1:279, and Ripley, Financial History of Virginia, 95–96. The exemption that year only relieved councillors of the meager payment of nine pounds of tobacco. 57

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Taxation of the Southern Plantation Colonies, 1607–1688

In 1656, all ships exclusively owned by Virginia residents were exempted from payment of tonnage. Earlier acts of 1631–55 did not exempt ships of its inhabitants. In 1662 owners of Virginia ships were exempt from payment of tonnage.62 Again, in 1668, shipowners were declared exempt.63 To further promote shipbuilding, an act of 1677 relieved owners of vessels built in the colony and owned by Virginians from all duties, except those imposed on making entry, in clearing, or giving bond to sail directly to England.64 As concern mounted in England at this exemption, its government instructed Governor Thomas Culpeper to annul these laws in 1680. Virginia sought to attract and develop skilled craftsmen, exempting tradesmen and handicraftsmen in 1662 from payment of levies, excluding church taxes, for three years if they worked full-time on their trades in the colony. The law was suspended for five years owing to hard times, but was revived in 1667. In 1672, the assembly applied the exemption only to apprentices below the age of sixteen.65 The 1680 Act of Cohabitation restored the five-year exemption to all tradesmen, and added freedom from arrest and personal seizure of their goods in payment of debts incurred elsewhere so long as they remained within the boundaries of their towns.66 As early as 1643, poor persons were exempted from levies save church dues. In 1668 the General Assembly required each county to establish a work house. Those who had become impoverished were exempt from payment of county levies. Eligibles included the elderly, the infirm, the blind, and families with many children.67 Virginia and Maryland depended on tobacco for their livelihood. Both colonies recognized the problem of double taxation if tobacco was first shipped from one colony to the other for shipment to England. In 1667, Virginia approved duty-free import of tobacco from Maryland for shipment to England, but warned that attempts to evade Virginia tax by shipping from Maryland would result in heavy fines.68

County Tax

B

r id g e s a n d public highways were financed with poll taxes paid in tobacco levied by the justices of the peace. Legislation established free 62

Hening, Virginia Statutes, 2:135–36. Hening, Virginia Statutes, 2:272. 64 Bruce, Economic History of Virginia, 2:433–36. 65 Hening, Virginia Statutes, 2:85. In December, due to difficult fiscal conditions, the relief was suspended for five years, taking effect in 1667. In 1673, the assembly excluded artificers over sixteen years of age from the exemption (307). 66 Bruce, Economic History of Virginia, 2:411–13. 67 Hening, Virginia Statutes, 1:242, and Bruce, Economic History of Virginia, 2:256. 68 Hening, Virginia Statutes, 2:259. 63

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ferries in 1641, to be financed by a county levy to remunerate the ferryman. In 1676, it was set at forty pounds of tobacco per tithable.69

Church Tax

T

he c h ur c h tithe was a special charge on all those who lived within a particular parish, from which there was no exemption. The tax was regulated by law, with the proceeds to be spent in the parish. In 1631 the tithe was equal to the average value of a bushel of corn, ten pounds of tobacco, and every twentieth calf, kid, or pig. In 1681, it was commuted into sixteen pounds of tobacco. In good times, the allowance for a minister came to as high as 100, generally an average of 80. The total parish tax was fi xed in 1696 at sixteen thousands pounds of tobacco, in addition to the use of a house and land of two hundred acres.70

Bounties

B

o unt ie s or pr emi ums, a negative tax, were often paid out of the colonial treasury to encourage the production of silk, flax, hops, woolen and cotton clothing, and ships.71 69

Ripley, Financial History of Virginia, 85. (The average fell to four pounds during the eighteenth century.) 70 Ripley, Financial History of Virginia, 87–89. 71 In 1658, the General Assembly approved premiums, or bounties, for the production of silk, flax, and hops, paying five thousand pounds of tobacco for every hundred pounds of silk, increasing the premium in 1659 to ten thousand pounds for every fi fty pounds of silk (Hening, Virginia Statutes, 1:469–70, 487, 521). In 1662 the post-Restoration assembly reauthorized the payment of bounties from general revenue for the production of wool and fl ax. Flax seed was ordered from England and distributed to each county. Bounties were offered for raising fl ax and hemp seed. Two pounds of tobacco were granted for every pound of fl ax or hemp prepared for the spindle, three pounds for every yard of linen cloth a yard wide, and five pounds for every yard of woolen cloth made of domestic yarn. Other premiums included ten pounds of tobacco for every hat made of wool or fur and for every dozen pair of woolen or worsted stockings. Fifty pounds were granted for every pound of wound silk, coupled with the requirement that each farmer plant twelve mulberry trees for every hundred acres of land he owned. It was reported that a member of the General Assembly, Major Walker, had planted seventy thousand mulberry trees and was collecting the bounty. Th is law was repealed in 1666 on the belief that Virginians had learned the benefits of making their own linen and woolen cloth (Hening, Virginia Statues, 2:120–21, 241–42). So many mulberry trees had been planted that a premium on silk was no longer deemed necessary. In 1682 the previous law of 1662 was reenacted with premiums offered for dressed flax and hemp, linen and woolen cloth, linsey-woolsey (a coarse woven fabric of wool and cotton or of wool and linen), hats, and woolen or worsted hose (Hening, Virginia Statutes, 2:503–6). The law, to continue for three years, was disallowed by the English Commissioners of Customs on the ground that it diminished trade between the mother country and its colony, weakened the

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Tax Evasion

T

he col onist s routinely evaded or avoided taxes, which explains why Parliament enacted the 1673 plantation duty requirement of payment of export duty on goods shipped from one colony to another regardless of their final destination. One source of tax evasion was bundling tobacco, which required one-sixth less space than leaf packed into hogsheads. Th is meant a one-sixth reduction in port fees to the colonial government, and less royal revenue from a smaller landed volume of tobacco.72 Duty on West Indies liquor imported into Virginia was widely evaded.

Slaves

T

axat ion of sl av e s is important as they increasingly became the source of labor for the plantation economy.73 The first duty imposed on slaves was the small fee required of all immigrants. The poll tax, which dates from 1623, levied a charge of ten pounds of tobacco on every male head above sixteen years of age to meet the public debt resulting from the previous year’s Indian massacre.74 In 1633 a duty of sixty-four pounds of tobacco was levied on all newcomers who planted tobacco within a year of their arrival. This measure lasted only a year as restrictions on the supply of labor retarded the expansion of tobacco cultivation. Free Negroes were subject to the poll tax and free Negro women were declared tithable in 1668. Prior to 1650, Dutch vessels transported most of the Negroes to the colony. Th is trade was interrupted by the Anglo-Dutch War of 1652–54, but

dependence of the colonists on England, reduced the volume of freight at the expense of English shipping, contracted the market for English cloth, and decreased the volume of English customs. In obedience to the disallowance, the General Assembly repealed the law in 1684, but reenacted it in 1686 for four years, at which time it was renewed for three more years. Rolla Milton Tryon, Household Manufactures in the United States, 1640–1860: A Study in Industrial History (Chicago: University of Chicago Press, 1917), 37–41, and J. Leander Bishop, A History of American Manufactures from 1608 to 1860 (Philadelphia: Edward Young and Company, and London: Sampson Low, Son and Company, 1864), 1:320–21. In 1662 bounties were offered to those who constructed vessels large enough to make a sea voyage. Later legislation granted larger bounties for ships exceeding one and two hundred tons. To receive the bounty, shipowners were required not to sell their vessels for three years unless to another Virginian. Hening, Virginia Statutes, 2:122, 17. 72 Bruce, Economic History of Virginia, 1:453. In 1696, a law was passed that the size of a hogshead might be increased by one-fi fth, which diminished the revenue from the fi xed export duty on each barrel. Ten percent of the revenue was given to shipmasters to induce them to report accurately their cargoes, 10 percent was allowed to the collectors for their costs, and 7.5 percent to the colony’s auditors (456). 73 Bruce, Economic History of Virginia, 2:57–109. 74 Snavely, Taxation of Negroes in Virginia, 9.

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resumed after peace was restored. English merchants resented Dutch involvement in the slave trade. To promote English shipping, the English government granted a charter to the Royal African Company in 1662, giving it the exclusive right to import Negroes into English possessions of no fewer than three thousand a year. The Duke of York was placed at the head of the company, with the Crown among the large shareholders. The company was authorized to grant any English subject the right to export slaves from Africa to the English colonies on payment of 3 sterling a ton on vessels used to transport them. Contraband trade, misconduct, and war reduced the fortunes of the company, which led it to surrender its charter to another company for 34,000 sterling in 1672. The new corporation chartered by Charles II as the Royal African Company carried on a growing trade for a quarter of a century. Parliamentary interference with the slave trade did not begin until 1698.75 The bulk of the slaves were transported to Antigua, Jamaica, and Barbados. Slaves were few in number in Virginia in 1665, about fifteen hundred, rising to about two thousand in 1670. In 1671 there were three times as many white servants as Negroes in the colony, a proportion that changed dramatically in the eighteenth century. Indeed, in the 1690s, New York City had as many slaves per capita as did any part of Virginia, a condition that also prevailed in several New England port towns.76 Although Governor Berkeley claimed that slave duties generated 600 in 1671, based on his estimate that slaves constituted 5 percent of the colony’s population, there is no recorded statute of a duty on slave imports until 1699, which was levied to help rebuild the capitol that was destroyed by fire.77 In 1658 all imported slaves above sixteen were declared tithable for taxation. The age was reduced to twelve in 1680, but later restored to sixteen. A list was compiled every year at the onset of each planting season. All Negresses born in Virginia above sixteen were rated tithable whether they worked in the house or in the fields; white female servants whose work was wholly domestic were not listed. This differential was designed to encourage the importation of white women, whose numbers were significantly below those of white imported male servants. In addition, it is likely that the legislature wished to remove white female servants from working in the fields alongside Negroes. Tax on slave and indentured tithables was paid by their owners and masters. While the poll tax was regressive in that it was levied 75

A brief history of the rise of the slave trade in the seventeenth century appears in Du Bois, African Slave-Trade, 2–6. 76 Clarence L. Ver Steeg, The Formative Years, 1607–1763 (New York: Hill and Wang, 1964), 190. 77 Ripley, Financial History of Virginia, 73.

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on each tithable regardless of income, it nonetheless served as a proxy for a tax on property in that owners of large plantations, with numerous slaves and indentured servants working their fields, paid polls in proportion to their numbers.

Summary: Tax Revenue and Tax Burdens

T

h e c al c ul at ion of taxes paid by Virginians and who ultimately bore their burden is subject to several caveats. The proceedings of the General Assembly report approved levies, but systematic, audited receipts of revenue do not exist. Records of English import duties on tobacco lump together Virginia and Maryland. The burden of this tax was borne by planters, importers, and smokers in unknown proportions, but does not appear to have depressed demand for colonial leaf to any significant extent. Property taxes, import duties, and other miscellaneous measures were temporary, imposed for short periods of time. Shipments of tobacco to England, whose value can be estimated, exclude shipments to Scotland, Ireland, other colonies, and Europe, and smuggling. The value of other internal output has not been estimated, nor the value of goods produced on the plantations. Estimating tax burdens as a percentage of income is almost impossible as there are no comprehensive scholarly accounts of the income of Virginians in the seventeenth century. In 1661 regular revenue (export duty on hogsheads, import duties, and tonnage, excluding quitrents and poll tax) totaled 4,200 Virginia currency. In 1700, regular revenue generated about 4,500. These figures seem typical for the post-Restoration era.78 Quitrents and poll tax added another several thousand pounds to annual revenue. The following is a list of taxes imposed on the products and activities of Virginians. 1. Imperial Taxes A. Customs duty. In January 1631, English duty on Virginia tobacco was set at 9d. per pound, reduced later in the year to 4d. From the time of Charles II in 1660, duty was set at 2d. per pound (a third the duty on foreign tobacco), remaining at that level until 1685 when it was raised to 5d. As previously noted, figures of American tobacco imported in England between 1616 and 1688 are incomplete. Revenue derived from duty on Virginia tobacco is based on reports from the 78 Even with the import of slaves in the eighteenth century, regular revenue only rose to about 6,500 in 1754. Salaries and fi xed charges of government came to 4,345, with the surplus used for other expenses. In addition, poll tax supplied another 3,000. Ripley, Financial History of Virginia, 103–4.

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Commissioners of the Customs after 1669 and other estimates. In the early 1680s, annual receipts were placed at 100,000 sterling. Nominal receipts were in the range of 500,000, but most was refunded as drawbacks when reexported. B. Quitrents. Annual receipt of quitrents rarely exceeded 1,000. In 1665, fully collected quitrents would have amounted to 950. In 1680, they totaled 1,500, fluctuating between 575 and 1,030 in the 1680s. Revenue from quitrents was largely used to support the colonial administration, and thus was part of the local tax burden. At an annual average of 1,000, the per capita charge came to about 5d. a person. C. Plantation duty. The plantation duty of 1d. a pound of tobacco, imposed by Parliament in 1673 on shipments from Virginia to other American colonies, generated about 200 sterling in 1692. This was insignificant as a source of revenue to the Crown. 2. Domestic Taxes A. Poll tax. Poll tax supplied about half the revenue during the second half of the seventeenth century. In 1632 the number of tithables was 2,000. It increased to 5,000 in 1644, 7,000 in 1652, 7,209 in 1654, 13,000 in 1671, and 20,000 in 1697. The average tobacco levy was sixty-four pounds in 1632, thirty in 1654, fi fty-two (of which forty was an extra levy) in 1671, and sixteen in 1697. Receipts amounted to 1,802 in 1654, 3,250 in 1671 (due to the extra levy), and 1,333 in 1697. For 1682, Flippin writes that poll tax on 15,162 tithables generated 1,349,418 pounds of tobacco worth 6,747 1s. 6d., with tobacco then selling at 10s. per one hundred pounds. A rough guess would place annual average receipts at about 1,500– 2,000. Assuming 15,000 tithables in the 1680s, the average annual poll tax would amount to 24d. per tithable, or 8d. per capita.79 External circumstances, the worldwide demand for and price of tobacco, made this a highly variable source of revenue. The value per pound of tobacco fi xed for quitrents, which was the basis for the poll tax, was 12d. in 1640, 3d. in 1645, 2d. in 1661, 1.5d. in 1676, and 1.2d. in 1682, falling to 1d. from 1697 to 1772. Even though the number of tithables increased, the value of tobacco receipts failed to keep pace. Considerably less money was collected in 1697 than in 1654, despite a near tripling in the number of tithables. As tobacco output increased, more trash tobacco was rendered in payment, which was worth less than its official tax value.80

79 80

Flippin, Royal Government in Virginia, 244. Ripley, Financial History of Virginia, 103–5.

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County taxes amounted to forty pounds per poll in 1676. Church taxes amounted to sixteen pounds in 1681. There are no records that permit accurate tabulation of combined county and church taxes each year, or for any period of years. If each tithable paid 50 pounds of tobacco a year in combined county and church poll tax, the total would be about eight hundred thousand pounds, some 40 percent of provincial levies. Moreover, it seems most unlikely that a provincial levy of twelve pounds per tithable, as in 1674, would be much less than county and church levies. Evasion and payment of trash tobacco are likely to have reduced the real value of these two taxes to no more than 2–3d. per capita. B. Property tax. Property tax on land and animals was levied in 1645 as a supplement to the poll tax, but repealed in 1648. It was reimposed from 1649 to 1653, to replace revenue lost from suspension of the poll tax during these years. For all intents and purposes, property tax can be disregarded in estimating tax revenues and burdens between 1607 and 1688. C. Export duty. The 10s. duty imposed on tobacco shipped to New Netherland and Holland in 1658 was only briefly in place, and never an important source of revenue Export duty on tobacco, enacted in 1657 and 1658, and reenacted in 1662 after the Stuart Restoration, became a mainstay of colonial finance. Governor Berkeley estimated revenue from the 2s. hogshead duty at 1,500 Virginia currency in 1671. The 2s. duty did not rise in proportion with the total quantity of exported tobacco. Bulk shipments after 1671 reduced the number of hogsheads that were shipped. As the size of hogsheads increased, the duty per hogshead remained the same. The 2s. duty on every five hundred pounds of bulk tobacco often underestimated the weight of bulk bundles. Reported collections were 2,546 Virginia currency in 1676, about 3,000 sterling in 1680 (in 1680 payment of duty was restricted to the coin of England at the sterling standard), 3,632 sterling in 1689, generally varying between 2,000 and 3,000 sterling annually. The cost of collection at 27 percent of the total was income to those entrusted with its responsibility. At an annual average of 3,000, per capita taxes from this duty would amount to about 1s. 2d. sterling. Export duty imposed on meat in 1660 yielded an insignificant sum. D. Import duties. Liquor duty was in place between 1663 and 1664 and again between 1682 and 1688. During the latter period, it yielded about 600 a year, with exemption for owners of Virginia-built vessels. This charge comes to about 3d. per person for the few years it was in force. E. Miscellaneous charges. Tonnage generated a few hundred pounds a year, about 1d. a person. [ 255 ]

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Summing up, annual tax paid by Virginians to finance their colonial government in the 1680s in peacetime was about 6,800. Of this quitrents contributed 1,000, poll tax 1,500–2,000, export duty on tobacco 2,000– 3,000, import duty on liquor 600 (1682–88), county and parish poll tax probably 200–500, and tonnage 200. Total per capita tax works out to about 3s. There are no reliable estimates of per capita income. A full accounting would include the value of goods and ser vices produced on the relatively self-sufficient larger plantations, the output of handicraftsmen and shopkeepers, the value of shipping in Virginia-owned vessels, and locally produced services of non-planters. If per capita income in the 1680s was in the neighborhood of 8–10, the per capita tax burden would be about 3–4 percent. This percentage exceeds that of the New England and middle colonies. In 1700 the external commerce of Virginia and Maryland was estimated at about 600,000 sterling. About two-thirds, somewhat more than 400,000, can be attributed to Virginia, an annual average per capita trade of 8.81 From this trade must be subtracted the costs of production, freight, insurance, and other items. Still, the number is very large relative to the other colonies, which was in the range of 1 per capita. By way of comparison, the Lord Treasurer, the chief minister to Charles II, received a salary of 8,000 sterling, which exceeded the annual peacetime cost of the financial administration for Virginia.

Taxation in Maryland, 1634–1688

A

s in virginia, tobacco served both as currency and the basis of taxation for quitrents, polls, property tax, export duty, and other miscellaneous fees and charges.82 The two systems of taxation bore similarities, but that of Maryland was simpler with fewer taxes, which were assessed and imposed at lower levels. Until 1671, when an export duty on tobacco became an important source of local revenue, the principal tax was on polls, with a direct property tax briefly imposed during the rule of the Puritan Commission in the late 1650s. As previously explained, Maryland tobacco was lumped together with Virginia tobacco in English customs records, contributing some 30–35 percent of colonial tobacco duty collected in England, but this tax was largely paid by final consumers.

81

Emory R. Johnson et al., History of Domestic and Foreign Commerce of the United States (Washington, DC: Carnegie Institute of Washington, 1915), 1:80. 82 Apart from records of the Assembly and Council, there are two relatively comprehensive scholarly sources on taxation in colonial Maryland. They are John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University 1955; Ann Arbor, MI: University Microfi lms), and Newton D. Mereness, Maryland as a Proprietary Province (New York and London: Macmillan, 1901).

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Proprietary Taxes: Quitrents and Other Charges

M

ary l an d was a proprietary province, which meant that the proprietor was entitled to all revenue derived from quitrents, sale of land, fines for alienation of land, port dues, and ferry licenses. On grants of land made before 1635, Lord Baltimore reserved ten pounds of wheat per fi fty acres; after that date he established a quitrent of 1s. per fifty acres to be paid in commodities of the country. The fi rst quitrent in 1636 was set at the equivalent of twenty pounds of tobacco. These conditions were repeated in 1641, with rents of 1s. per hundred acres for seven years followed by 3s. for the next fourteen. Lands taken up on Kent Island were charged 2s. per hundred acres. An attempt to reserve a higher rate in 1648 was abandoned to encourage settlement. After the overthrow of the Protectorate and the brief period of rule by Puritan commissioners in Maryland, and reflecting higher land prices, Baltimore issued orders to raise quitrents to 4s. per hundred acres, but unsettled local conditions prevented the charge from taking effect until 1669, when it was fi xed at 4s., remaining at this level until 1775. In 1683, the proprietor ceased granting lands on condition of settlement and payment of quitrents, demanding payment of two hundred pounds of tobacco as a condition of a grant, which he raised in 1684 to two hundred forty pounds.83 Maryland’s charter granted its proprietor the power to erect ports and to enjoy taxes and subsidies payable for their construction and operation. Legislators fi rst approved port duty in 1650 for strengthening a fort that had been constructed at St. Inigoes. Duty was set at one half-pound of powder and two pounds of shot, or the equivalent in money, on every ton of each vessel trading with the province that was not owned by a Maryland resident. The act of 1650 was superseded in 1651, with the charge raised to one half-pound of powder and three pounds of shot. The fi rst act stated that the port duty was to be used for defensive purposes; the second directed that it was to be paid to the proprietor and his heirs, with no mention of its use. Since there was no need to fortify the ports of Maryland, the proprietor received the duty for his own private use, which remained unchanged through 1688. As to ferry money, the proprietor received virtually none of it.84 Payment of quitrents could be made in tobacco, a variety of grains, and specie, but tobacco served almost exclusively as the means of payment. In 1662 the legislature sought to fi x the legal rate of payment at 2d. per pound

83

Lewis Mayer, Ground Rents in Maryland (Baltimore: Cushings and Bailey, 1883), 18–19. See also Mereness, Maryland as a Proprietary Province, 76–78. 84 Mereness, Maryland as a Proprietary Province, 89–92.

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of tobacco. In 1669, it declared all legal debts payable at 31 ⁄2d. per pound, well above the market price of about 1d. a pound, making quitrents paid in tobacco worth a fraction of their real value. A compromise was reached in 1671, which led to the imposition of Maryland’s 2s. hogshead export duty on tobacco. Half was to compensate the proprietor in lieu of quitrents, with the other half to be used for colonial administration. An act of 1676 continued the same arrangement for the new proprietor, Charles Calvert, Third Lord Baltimore. The market price of tobacco after 1670 rarely exceeded 1d. per pound, which meant that Baltimore’s 12d. per hogshead reflected a financial sacrifice on his part compared with the quitrents to which he was legally entitled. As additional recompense, in 1682 the legislature granted an extra gift of one hundred thousand pounds of tobacco to the proprietor, approved again the following year. Legislators recognized that Baltimore had spent up to 40,000 sterling (9,600,000d.) to found the colony, and deserved reimbursement. At the market price of 1d. a pound, he needed to collect almost ten million pounds of tobacco to recover his investment. Between 1671 and 1688, although quitrents were never formally abolished, they were effectively commuted in exchange for half the 2s. export duty.85 In addition to the proprietor’s personal income, legislators approved other measures to support the colonial administration. An act of 1643 authorized a duty of five pounds of tobacco per hundred, which continued until the next session of the legislature. In April 1649 a 10s. hogshead duty on tobacco shipped to any port other than one in England was imposed. In 1650 Governor William Stone was granted one half bushel of corn per poll.86 Other measures included an act of 1661, which granted the proprietor the fee from the issuance of a license to those doing business with Indians, tonnage, and anchorage charges, with the funds intended for local use.87

85 Bond, Quit-Rent System in the American Colonies, 174–79. Between 1671 and 1685, Baltimore paid his councillors from the duty given him, 12d. per hogshead, for the support of the government. Th is became a hot political issue when the lower house of the legislature was later asked to vote additional funds for the support of the Council. Mereness, Maryland as a Proprietary Province, 365. 86 As a reward for faithful ser vice, Baltimore granted Stone a manor of five thousand acres. Subsequent governors Josias Fendall (1657–60) and Philip Calvert (1660–61) also received grants of land. In addition to export duty on tobacco granted the proprietor, the Assembly approved twenty-five pounds of tobacco per poll to Governor Calvert from 1662 to 1669, replaced in 1669 with an export duty of 6d. per poll. Mereness, Maryland as a Proprietary Province, 171–72. 87 Kinnaman, “Internal Revenues of Colonial Maryland,” 170. See also Thomas Sewall Adams, “Taxation in Maryland,” in Jacob H. Hollander, ed., Studies in State Taxation with Particular Reference to the Southern States, Johns Hopkins University Studies in Historical and Political Science, ser. 18, nos. 1–4 (Baltimore: Johns Hopkins Press, 1900), 26.

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Direct Taxes: Poll Tax

T

he p ol l tax was used to pay the clerks of both houses of the legislature, justices of the county and provincial courts, and Anglican clergy (after its establishment), and, for a short time, members of the Council. Before 1650 it was assessed somewhat in relation to an individual’s wealth. After 1654, it became purely a head tax without regard for the wealth of each taxable. An act of 1654 specified taxables as freemen, servants, Negresses and Indian women, with a higher charge for men than women. Non-Negro and non-Indian women servants were exempt. Males over sixteen years of age and male servants imported before the age of ten were declared taxable. Male and female slaves were considered taxable at age ten. Only priests and ministers were exempt.88 The first tax was a proclamation in 1641 issued by the governor, Leonard Calvert, to levy the tax assessed by the General Assembly, but there is no mention of the amount. In 1642, a tax of 1,210 pounds of tobacco was approved to pay the costs of an expedition against Indians in autumn of that year. Provision was made for an additional levy to pay for provisions needed along the march, which came to 6,033 pounds. Altogether, the total levy came to 7,610 pounds. Another act of 1642 provided for the expenses of the assembly members. The collection of this tax counted 272 taxable individuals.89 The next preserved record of a public levy appears in 1650, but the sum is not recorded. In 1654, the Puritan commissioners governing Maryland approved a tax on property in addition to polls. It was assessed in proportion to the size of each colonist’s land holdings which, however, reflected the number of servants and slaves a planter controlled. In 1657, the specific rate of 32 pounds of tobacco per poll, estimated at about 1,030, was levied to meet budgeted outlays of 32,974 pounds.90 The property tax was terminated, and only temporarily reimposed for a short period in the eighteenth century. It was of little consequence in Maryland’s public finances in the seventeenth century. Subsequent levies amounted to 18 pounds per poll in 1660, 25 pounds on 1,873 taxables in 1663, with a supplementary 17,500 pounds for expenses associated with the General Assembly, yielding a total of 99,249 pounds. In 1664, the total levy came to 124,940 pounds.91 Poll taxes of 292,554 pounds of tobacco were levied in 1669, reflecting the colony’s rising output. In 1671, the levy was considerably reduced to 129,742 pounds, imposed on 5,641 polls. 88

Kinnaman, “Internal Revenues of Colonial Maryland,” 59–63, and Mereness, Maryland as a Proprietary Province, 340–41. 89 Kinnaman, “Internal Revenues of Colonial Maryland,” 89–90. 90 Kinnaman, “Internal Revenues of Colonial Maryland,” 93–94. 91 Kinnaman, “Internal Revenues of Colonial Maryland,” 95.

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Tax burdens per poll were declining with the rise in population. In 1674, an act for 240,258 pounds was levied. In 1675, 6,610 taxables were assessed a much larger sum of 1,070,640 pounds of tobacco, about 165 pounds per poll, owing to the cost of the confl ict with the Susquehannough Indians. Combined levies for the fall and spring terms of the Assembly in 1676 came to 1,963,170 pounds, followed by a levy of 825,979 in the fall of 1678, both to pay for Indian wars. The levy for 1681 was set at 300,000 pounds, but it was postponed by the proprietor. As reported in acts of the legislature, claims submitted for reimbursement by the colony’s creditors and the sheriffs, who were allowed 10 percent for collection, came to 174,967 pounds in 1682, and 226,502 pounds in 1684. In 1686, a general levy of 446,248 pounds was approved. The final levy preserved in the records before 1689, passed in autumn 1688, amounted to 436,837 pounds.92 In aggregate terms, at 1d. per pound, each 100,000 pounds of tobacco was worth 416 13s. For each levy enacted in the 1680s, the poll tax raised 700–1,800. Since records do not indicate that levies were enacted each year, it is difficult to estimate the annual average of the decade. With a population just under twenty-three thousand in 1688, per capita poll tax during the 1680s ranged between seven and nineteen pounds. At a market price of 1d. per pound, poll tax ranged from a low of 7d. in 1682 to a high of 19d. in 1686. There is no evidence to indicate whether full levies were collected. With tobacco exports to England in 1688 exceeding twenty-eight million pounds, of which about eight to nine million pounds represented Maryland tobacco, provincial poll tax constituted a maximum of 2–4 percent of exports to England, a percentage that falls when exports to Ireland, Scotland, Holland, and other markets are included.

Fines, Forfeitures, Fees

T

h e c ol ony ’s governor was the only local official who received a salary from public revenues, which permitted a low peacetime level of direct taxation. All other official ser vices were compensated by fees, listed in pounds of tobacco for specific documents and ser vices. From the founding of the colony until 1650, the governor and Council fi xed fees. In that year, the Assembly limited the fees of the secretary, the second most important official, and the sheriffs, and later those of other officials. However, fees were often in arrears by as much as two-thirds, prompting the legislature periodically to urge prompt payment of all charges.93 92

Kinnaman, “Internal Revenues of Colonial Maryland,” 106–10. Kinnaman, “Internal Revenues of Colonial Maryland,” 112–20, and Mereness, Maryland as a Proprietary Province, 374. 93

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County and Church Taxes

T

h r e e c o unt i e s as units of government were first established in 1650. In 1654, they became the unit of representation in provincial government and for the apportionment and collection of taxes, and held county courts in four annual sessions. Counties in turn were divided into hundreds. The erection of towns by town acts commenced in 1683. In addition to these local organs was the parish. Justices of county courts could instruct the sheriff to exempt paupers and superannuated slaves from the poll tax, sell insolvent debtors into servitude, sell immoral women and their children into slavery, bind out orphans as apprentices, pay bounties for killing bears, squirrels, and crows, and grant bounties for linen. They let contracts for the keeping of ferries and building and maintaining public buildings. For the support of religion, they were authorized to levy a poll tax not exceeding ten pounds of tobacco on taxpaying residents of the parish.94

Summary

J

ohn kinnaman concludes from his data and analysis that Maryland was efficiently administered, that its taxes were light, and that expenditures were generally directed at the welfare of the people.95

Taxation in the Carolinas, 1663–1688

T

h e c ar ol i n as were lightly populated and poorly developed between 1663 and 1688.96 There were no highways and few roads, one port city of Charleston in South Carolina populated by a mere 1,100 resi94

Mereness, Maryland as a Proprietary Province, 403–4. Kinnaman, “Internal Revenues of Colonial Maryland,” 185–86. 96 A comprehensive treatment of taxation in colonial North Carolina appears in Coralie Parker, The History of Taxation in North Carolina during the Colonial Period, 1663–1776 (New York: Columbia University Press, 1928). Apart from taxation imposed by the colonial assembly in 1680 to reimburse the value of money and goods seized by the people in the course of an uprising against the proprietors during 1678–80, which was prompted by efforts to enforce the English plantation duty of 1673, Parker provides no information on any specific local tax levied during 1663–88. She presents substantial information for the eighteenth century. No comparable publication exists for colonial South Carolina. Sporadic information on taxes in South Carolina is found in Converse D. Clowse, Economic Beginnings in Colonial South Carolina, 1670–1730 (Columbia: University of South Carolina Press, 1971); Robert K. Ackerman, South Carolina Colonial Land Policies (Columbia: University of South Carolina Press, 1977); David Ramsay, Ramsay’s History of South Carolina from Its First Settlement in 1670 to the Year 1808, vol. 2 (Newberry, SC: W. J. Duffie, 1858); and M. E. Sirmans, Colonial South Carolina: A Political History, 1663–1763 (Chapel Hill: University of North Carolina Press, 1966). 95

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dents in 1690, with most of the colonists living in crude conditions dispersed over relatively large areas.97 Coralie Parker describes the territory of North Carolina as “truly a forest primeval.”98 The proprietors bore the early costs of founding, settlement, and colonial administration. Only later did they direct their governors and deputy governors to try to raise local revenue from the colonists which, given their difficult economic circumstances, yielded little fruit.

North Carolina

I

n t h e great deed of grant sent by the lords proprietors of Carolina dated May 1, 1668, the settlers of Albemarle were given permission to hold their land under the same conditions as in Virginia, at 2s. per hundred acres payable at 1d. per pound in tobacco. Article 113 of the Fundamental Constitution of 1669 stipulated that those in possession of any freehold should begin to pay quitrents beginning no later than 1689. Quitrents were not a source of revenue to the proprietors or for local use before 1689.99 For the first seven years, no duties were collected in North Carolina as specified in the first charter granted to the proprietors. After 1670 exports of Albermarle settlers were subject to English duty and, after 1673, the 1d. plantation duty on tobacco shipped from one American colony to another. The absence of duty had stimulated the development of trade between North Carolina and England. The output of tobacco in the 1670s in North Carolina was estimated at two thousand hogsheads, or about one million pounds, most of which was shipped to New England. The plantation duty revenue was solely English, estimated at about 4,000 sterling if fully collected, but it was largely evaded. Stricter instructions to enforce collection resulted in an uprising known as Culpeper’s Rebellion, named after its leader, John Culpeper, in which the colonists seized control of the colonial administration for two years. It subsided in 1680 and there is evidence that the local assembly imposed a tax to repay the money and goods appropriated

Quitrents were not collected in the Carolinas until 1694. Negro slave duty laws in South Carolina date from 1703. The fi rst direct tax, the poll tax, was levied in North Carolina in 1715. General histories of the two colonies are found in Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973); Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997); and Sirmans, Colonial South Carolina. 97 Stuart Weems Bruchey, ed., The Roots of American Economic Growth, 1607–1861: An Essay in Social Causation (New York and Evanston, IL: Harper and Row, 1968), table 2, “Estimated Population of Five Leading Port Cities, 1630–1775,” 20. 98 Parker, Taxation in North Carolina, 36. 99 Parker, Taxation in North Carolina, 48–49.

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Taxation of the Southern Plantation Colonies, 1607–1688

by it during the two-year revolution.100 In contrast with Virginia and Maryland, export duty on tobacco was not a source of local revenue for colonial administration. Colonial records appear to indicate that no import duties were levied in Albemarle until North Carolina became a distinct political unit in 1712.101 Import duties on vessels and liquors and an export duty on hides became the three indirect taxes levied in North Carolina, but none generated any revenue before 1688. Based on extant records, the first direct poll tax and land tax were levied in 1715.102 Until 1688, North Carolina’s colonial government functioned with virtually no locally raised revenue.

South Carolina

T

he pr opr ie tors did not put their plans for settlement, and eventual profit, of South Carolina into motion until 1669.103 In April of that year, each proprietor put up 500 sterling along with a commitment of another 200 annually into the hands of an agent for the next four years, some 10,400 in all. Land grants, headrights of hundreds of acres, to encourage settlement would hopefully supply quitrents forever, providing a large return to the proprietors when their lands became occupied and developed. To encourage immigration, quitrents were waived until 1689, precluding any revenue from this source for local administration. The proprietors extended financial backing to both the province as a whole and individuals. They largely underwrote the transportation and early maintenance of the colonists. These debts were to be repaid with 10 percent interest, but most were written off. During the 1670s, the Council of the local government continually requested additional aid. In 1674 each of the proprietors agreed to a further investment of 100 per year or risk seeing the colony abandoned, with the loss of all prior investment and future profits. Although self-sufficiency in food was achieved in 1675, no staple product was developed that made South Carolina profitable. By 1679, the proprietors claimed to have invested 17,000–18,000, much loaned to individuals, but new advances to individuals ceased in the early 1680s. The proprietors urged the governor and Council to extract money from the settlers, but they had little to pay. Finally, in the 1680s the representatives of the settlers began to approve some taxes for the salary of the governor and other essential ser vices.104 100

Parker, Taxation in North Carolina, 83. Parker, Taxation in North Carolina, 87. 102 Parker, Taxation in North Carolina, 86–96, 99. 103 Th is section draws from Clowse, Colonial South Carolina, 17, 45–46, 54–64, 68–72. 104 Clowse relies on Thomas Cooper and D. J. McCord, eds., The Statutes at Large of South Carolina, 1682–1838 (Columbia, SC: A. S. Johnston, 1838–41), 1:3–50, for this statement. He 101

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chap t er 9

The political situation in South Carolina was relatively stable during the administration of Governor Joseph West during 1674–82, but the proprietors had little success in recovering their debts. In 1682, the proprietors proposed that the settlers assume the responsibility of the governor’s salary of 100 a year. The Council offered to pay Governor West in land, but he refused. Later he agreed to be paid in commodities, but West and the debtors could never agree on the market value of commodities, which left the matter unresolved.105 The earliest tax on record in South Carolina is for 1682, an act of the colony’s legislature for raising a tax of 400 South Carolina currency to defray the public charges of the province, most likely from a tax on property. Between 1670 and 1702, the largest sum raised in any one year was 800, with the total raised over all those years amounting to 2,320. The means of raising some of the funds included a poll tax on freemen and white servants above the age of sixteen. A small tonnage was levied for the fi rst time in 1686, payable at first at a rate of a half pound of powder for each ton of ship measurement; in 1690 the tax could be paid in money, with 15d. set equivalent to the half pound of powder. The first tariff act was passed in 1691, consisting of an export duty on fur and skins. The bulk of the total cited above was raised after the Glorious Revolution. In general, tax acts were few and intermittent until 1713. Prior to 1688, tax acts were passed in 1682, 1683, 1685, and 1686, but all of the legislative records are lost except that of 1686, which is the earliest tax act extant.106 In 1682, the proprietors replaced Governor West with Joseph Morton, a leader among the English dissenters migrating to the colony. The proprietors stipulated that quitrents were to be paid in specie only instead of in commodities, as had been done previously. They also sought to alter the legal form of land grants by substituting an indenture for the simple deed previously used, which required the grantee’s signature and promise to pay quitrents within six months of the due date or forfeit his claims. The provincial secretary was ordered not to issue a survey warrant until the claimant had agreed to terms. The proprietors also offered the option of land for sale at 1s. an acre, with only a token quitrent of one peppercorn annually. These reforms and the attempt to forbid trade with pirates notes that these pages cover most of the surviving laws passed from 1682 through 1690, but that only titles remain for some laws, which makes it impossible to determine the taxes and outlays of the colonial administration for this period. 105 Sirmans, Colonial South Carolina, 30. 106 The information on the absence of records appears in Edson L. Whitney, Government of the Colony of South Carolina, Johns Hopkins University Studies in Historical and Political Science, vol. 13, nos. 1–2 (Baltimore: Johns Hopkins Press, 1895), 97. The figure of 400 raised from taxation in 1682 and the several early sources of tax revenue appear on 99–100, 102. The totals for the period 1670–1702 are found in Ramsay, History of South Carolina, 2:90.

[ 264 ]

Taxation of the Southern Plantation Colonies, 1607–1688

under the pressure of the Crown produced bitter factionalism between the pro- and anti-proprietary factions in the colony. The latter, who wished to preserve the status quo, consisted largely of the immigrant group from Barbados who had settled on Goose Creek, a tributary of the Cooper River. The anti-proprietary faction remained in control of the South Carolina legislature under Governor Morton’s brief tenure. To achieve their objectives in the colony, the proprietors brought in a governor from outside, Sir Richard Kyrle of Ireland, but he died shortly after arriving in the colony in 1684. His successor, Robert Quary, who succeeded to the governorship from the Council, was dismissed for trading with pirates. West was reappointed governor, but abandoned the post after a year and left the colony. In 1685 Morton returned to the governorship, but was unable to wrest political power from the Barbadians. He ceased trying to suppress the Indian slave trade and openly condoned trade with pirates. In 1686 Morton sought to restore his dwindling prestige by leading a major military expedition against the Spaniards in Florida, but this reach for glory ended with the arrival of a new governor, James Colleton of Barbados, the younger brother of one of the proprietors, in November 1686. Colleton’s appointment provided a fresh opportunity to raise local funds for the support of the colonial government. In 1686 the lower house of the legislature offered to levy an excise on all liquors and sugar to raise his salary. He accepted its proposal, but the Council opposed the tax. He insisted that the Council support the mea sure, which offended several proprietary men. At this point, the Barbadians charged Colleton with extreme avarice, arguing that he planned to rape the colony’s taxpayers for his own profit. The measure failed, with Colleton lacking support from either the elected or appointed members of the colonial legislature. For the next two years the colony remained in an unsettled state as Colleton refused to call another meeting of the legislature. A new governor, Sir Nathaniel Johnson, former governor of the Leeward Islands, replaced Colleton in 1689.107 In 1682 the proprietors affi rmed the primacy of the Church of England but no longer required dissenters to pay taxes for its support. Each congregation, regardless of sect, would be empowered to tax its own members. There are no records of church tax collection during 1682–88.108 With a population of 3,360 in 1688, the annual local per capita tax burden was no more than a few pence that could be counted on the fingers of one or at most two hands. 107

Sirmans, Colonial South Carolina, 38–46. Sirmans, Colonial South Carolina, 37. The result of this policy was the establishment of large numbers of different churches in Charleston, as each could be self-supporting. 108

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chap t er 9

Taxation in the Southern Plantation Colonies, 1607–1688: A Summary

T

he f o undat ion of economic life in Virginia and Maryland was tobacco. It was the source of income, currency, and taxation. Poll taxes, quitrents, and export duties were assessed and collected largely in tobacco, legally set at fi xed rates in units of local or sterling currency. Property taxes, import duties, and other revenue measures were temporary and insignificant. During peacetime, the level of taxation was low, with the total burden on the seventy-four thousand residents of the two colonies roughly equal to the salary of the king’s chief minister. Internal taxation in the Carolinas was negligible.

[ 266 ]

appendix
Taxation in the American Colonies, 1688

T

axat ion rang ed from heavy during years of war to light in peacetime in the American colonies from the founding of Virginia to the Glorious Revolution. At first the colonists looked to Europe for constructing systems of provincial revenue, but quickly chose to emphasize such measures as the poll tax and extending direct tax to faculties or income in New England, a tax that was rarely levied in England. New England and New York spread taxes over a broad array of sources, while others taxed very narrowly. Table A presents a snapshot of taxes in the English colonies on the mainland of North America in 1688. The entry “minimal” means that the inhabitants of those colonies exported few enumerated or other products to England that were subject to English import duty and, in the case of quitrents, that little revenue was collected. In table B, the entry “n.r.” means no records were found. Estimates of tax levies in the colonies range from reasonably accurate to extremely vague. Some kept good records that survived; others did not. Although the figures for each colony are rough, they reflect fair estimates of taxes levied in 1688. A few hundred pounds more or less added to the totals would not change the overall picture very much. Column 2 in table B lists estimated internal taxes enacted in each colony in 1688, based on the discussion and compilations in chapters 7, 8, and 9. Column 4 presents the exchange rate of the colonial currencies of New England, New York, Pennsylvania with Delaware, and Virginia on London from John J. McCusker, Money and Exchange in Europe and America, 1600– 1775: A Handbook, on which colonial taxes are converted into sterling equivalents.1 Other currency values are based on legal ratings enacted in the legislatures of the other colonies. Columns 6 and 7 present per capita taxes in pence colonial currency and their equivalent in pence sterling. Column 8 compares the ratio of per capita taxes in England with that of each colony. 2 1

John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 138, 162, 183, 209. 2 The estimates of internal taxes in each colony are approximate rather than precise.

[ 267 ]

i i .a Composition of Taxes in Colonial America, 1688

Colony

Massachusetts Connecticut Rhode Island New Hampshire New York New Jersey Pennsylvania Delaware Virginia Maryland North Carolina South Carolina

English Duties

minimal minimal minimal minimal minimal minimal minimal minimal yes yes yes yes

Quitrents

English Bounties

no no no no minimal minimal no no yes yes no minimal

no no no yes no no no no no no no no

Poll Tax

Property Tax

Faculty Income Tax

Retail Licenses Excises

Import Duties

Export Duties

Tonnage Fees

Church Taxes

School Taxes

Local Taxes

Provincial Bounties

yes yes no yes yes yes yes yes yes yes no yes

yes yes yes yes yes yes yes yes no no no no

yes yes no yes no yes no no no no no no

yes yes yes yes yes no no no no yes no no

yes yes no yes yes no no yes yes no no no

yes yes no yes yes no no yes yes yes no no

yes yes yes yes no no no yes yes yes no yes

yes yes no yes no no no no yes yes no yes

no yes no yes no no no no no no no no

no yes no yes yes no yes no yes yes no no

yes yes yes no no yes no yes yes no no no

ii.b Per Capita Taxes in the American Colonies, 1688 colum n 1

Colony

[ 269 ]

Massachusetts Connecticut Rhode Island New Hampshire New York Pennsylvania Delaware New Jersey Virginia Maryland North Carolina South Carolina Georgia

Notes: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

c olumn 3

column 4

Colonial Taxes in Colonial Currency ()

c olum n 2

Colonial Taxes Sterling ()

100 Sterling Exchange Rate

2,000 1,000 168 200 6,000 385 300 200 6,800 5,000 minimal 72.5 n.a. 22,126

1,428.6 714.3 120.0 142.9 4,615.4 296.2 230.8 153.8 5,594.4 5,000.0 minimal 54.4 n.a. 18,350.8

140 140 140 140 130 130 130 130 121.55 100 133.33 133.33 n.a.

column 5

column 6

column 7

col u m n 8

Population 1688

Per Capita Taxes (d. Colonial Currency)

Per Capita Colonial Taxes (d. Sterling)

Ratio of Per Capita Taxes in England to the Colonies

8.8 11.6 10.1 12.8 110.0 51.6 51.9 6.8 31.9 52.6 n.a. 5.2 n.a.

6.3 8.3 7.2 9.2 84.6 39.7 39.9 5.2 26.2 52.6 n.a. 3.9 n.a. 23.0

22.3 17 19.4 15.3 1.7 3.5 3.5 26.8 5.3 2.7 n.a. 35.9 n.a. 6.1

54,702 20,765 3,983 3,741 13,093 9,296 1,387 7,080 51,156 22,800 7,166 3,360 n.a. 198,529

The values at the bottom of columns 2, 3, and 5 are totals; those for columns 7 and 8 are averages. Massachusetts taxes are a rough estimate based on information presented in chapter 7. Connecticut taxes are a rough estimate. Rhode Island taxes are based on Andros’s tax for 1688 cited in sterling. New Hampshire taxes are an estimate based on peacetime costs versus a war time appropriation in 1693. Per capita taxes in England and Wales in 1688 were 140d. sterling. New York taxes are based on 5,288 New York currency provincial taxes and 1,700 New York City taxes. Pennsylvania taxes are based on 90 percent of reported tax of 427 collected in 1693. Delaware taxes are based on 90 percent of reported tax of 332 collected in 1693. New Jersey taxes are based on the annual average for East and West New Jersey during 1680–88. Virginia taxes are based on information presented in chapter 9. Maryland taxes include about 1,800 paid abroad in quitrents to Lord Baltimore. North Carolina taxes were negligible and barely collected. South Carolina taxes averaged 72.5 per year between 1670 and 1702.

appendix to part t wo

The sterling value of all internal colonial taxes appears at the bottom of column 3, summing to 18,350 7s. Royal quitrents collected in Virginia largely remained in the colony for local use, although about 1,125 sterling drained out of Maryland to Lord Baltimore. Internal colonial taxes, including Baltimore’s quitrents, were a small fraction of England’s taxes of about 2,870,000 in 1688. Per capita taxes in the colonies came to 21.7d. sterling in 1688. The 4,900,000 inhabitants of England and Wales paid six to seven times as much as their cousins across the Atlantic. Tax burdens varied within the colonies. The heaviest was in New York, Maryland, Delaware, and Virginia. Residents in New England, Pennsylvania, the Jerseys, and the Carolinas paid negligible taxes. No wonder New Yorkers complained about their relatively high taxes, especially as traders in New York City faced competition from those using the free port of Perth Amboy in neighboring Jersey.

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pa r t t h r e e
War in Europe—Opportunity in the Colonies, 1688–1714

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P

art iii traces the history of taxation of the American colonies from the beginning of the Glorious Revolution of 1688 to the end of the Stuart Dynasty. The revolution brought William and Mary of the Netherlands’ House of Orange to England. Their installation as king and queen of England entailed a bargain with Parliament that made it preeminent in matters of law, finance, and, when it chose, colonial regulation. Between 1688 and 1714, when Queen Anne died without a surviving heir, England fought King William’s War during 1689–97 (the war in Ireland and with France, known in Europe as the War of the League of Augsburg) at a cost of 32 million and, between 1702 and 1713, Queen Anne’s War (the War of the Spanish Succession) at 50 million. Scotland was joined with England and Wales to form Great Britain in the Act of Union in 1707. When a Germanspeaking Hanover elector was installed as King George I of Great Britain in 1714, the national debt of Great Britain had increased from 6,734,000 in 1694 to 37 million in 1715. Debt charges on net public expenditure had risen from 189,000 for 1688–91 to 3,021,000 in 1714, a huge increase from 1.6 percent of total net expenditure during 1688–91 to 48.9 percent in 1714.1 On Anne’s death, debt ser vice almost equaled the combined cost of civil government, the army, the navy, and ordnance. England had been transformed from virtually debt free to debt ridden in twenty-five years. The tax burdens on the British people were high and rising, prompting tens of thousands of Irish, Scots, Scots-Irish, Welsh, and English to seek refuge and opportunity in the low-tax American colonies. They were joined by an ever-growing number of continental Europeans seeking to escape European turmoil. Having overcome disease, hunger, and Indian wars, conflicts between the settlers and their corporate and proprietary masters, and external disputes between the colonies and England, the twelve English settlements had formed a firm beachhead in North America. Over the next quarter century, their population doubled. A hodge-podge of corporate and proprietary colonial governments were replaced with more uniform colonial administration under royal rule or direction in Massachusetts, New York, New Jersey, Maryland, and later the Carolinas. In trade, shipping, and other areas of economic life, the colonies became rivals to Britain, prompting Parliament to strengthen the Navigation Acts and impose some restrictions on colonial manufacturing. The continuing problems with making returns for European imports brought a remarkable innovation in 1690 when Massachusetts became the

1 Data on England’s national debt are from Stephen Dowell, A History of Taxation and Taxes in England from the Earliest Times to the Year 1885, vol. 2, Taxation from the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company 1888), table: “The National Debt, 1694–1885,” 453. Data on debt charges are from B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance I: Net Receipts of the Public Income—Great Britain 1688–1801,” 575.

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i n t r od uc t ion t o part t hr ee

first Western government to issue paper currency, a practice that spread to most of the other colonies during the early decades of the eighteenth century. Indeed, the invention of paper money enabled the colonies to avoid the tax increases that were affl icting Britain. Part III consists of six chapters. Chapter 10 describes the changing English constitution and major political developments in England as they bore upon the colonies. Chapter 11 examines the application of England’s commercial policy to its empire, guided by additional Navigation Acts and strengthened royal administration, and new limitations on colonial economic activities. Chapter 12 describes the legal and administrative changes of the colonial governments, especially greater power for elected assemblies on matters of taxation. Chapters 13, 14, and 15 analyze the taxation of New England, the middle colonies, and the southern plantation colonies.

[ 274 ]

c h ap t e r 1 0
Constitutional Government and Politics in England, 1688–1714

W

i t h t he Glorious Revolution, Parliament became supreme in matters of law, finance, and control over the military. The Crown, Privy Council, and other officers of state still managed or directed the daily affairs of English and colonial administration, but they were strictly subject to the laws and appropriations of Parliament. The Crown still chose its ministers, but Parliament could pressure it to remove and replace them with more favorable persons. Political parties, more properly factions, of Whigs and Tories began to supplant families and court favorites as leaders in Parliament. Parliamentary supremacy was important in colonial America for two main reasons. First, it provided a model for locally elected assemblies in their struggle to seize power from governors and councillors appointed by the Crown or proprietors. Second, when the interests of English merchants were paramount, Parliament adopted laws to favor English constituents over the colonists, who had no representation in the House of Commons. The clash of legislatures would become an issue in the eighteenth century. When William of Orange and his wife, Mary, became King William III (1689–1702) and Queen Mary II (1689–94) of England in 1689, the country was free of public debt.1 The national debt, insofar as one could be said to exist, consisted of a floating debt of around 1.6–1.7 million, which took the forms of personal loans to and other instruments of credit used by James II to raise money. When Queen Anne died in 1714, an official public debt, which replaced the sovereign’s personal debt, stood at 37 million, the result of fighting two lengthy continental wars and the government’s greatly enhanced ability to borrow. Costly wars ensnared English taxpayers in a web of debt and taxes that would rise relentlessly up to the American Revolution. At some point it became inevitable that Parliament would seek to tax the colonists to relieve the burden on Britons.

1 William of Orange was the son of William, Prince of Orange and Mary Stuart, daughter of Charles I, and Mary was the daughter of James II and Anne Hyde.

[ 275 ]

chap t er 10

William and Mary, 1688–1702

T

he e v ent s leading to the coronation of William and Mary in 1689 have their roots in concerns about the pro-Catholic views and actions of Kings Charles II and James II. 2 Prospects of a Catholic restoration always concerned members of Parliament and Protestant leaders. In the midto late seventeenth century, England and France were united against Holland and Spain. In 1670 Charles concluded the Treaty of Dover with King Louis XIV of France, in which he inserted a secret clause undertaking to declare himself a Catholic at the appropriate time. In return, Louis pledged to reward Charles with cash and provide funds to support his war with Holland. Louis supplied later subsidies for Charles to keep Parliament out of session. Total recorded subsidies received by Charles from France from the Restoration until his death came to about 1,165,000. 3 Information on these subsidies fueled concerns about a possible Catholic restoration.

2

A summary of the main constitutional and political developments during the reign of William and Mary from which this section draws appears in R. W. Harris, England in the Eighteenth Century, 1689–1793: A Balanced Constitution and New Horizons (London: Blandford Press, 1963), 2–44. The events leading up to the invitation to William of Orange can be found in Factsheet G4, “The Glorious Revolution,” ISSN 014404689, revised July 2003, published by the House of Commons Information Office, http://www.parliament.uk/factsheets. In 1988, on the celebration of the tercentenary of the Glorious Revolution, a committee of members of both houses of Parliament authorized the publication of a brief booklet titled Parliament and the Glorious Revolution, 1688–1988 (London: Her Majesty’s Stationery Office, 1988), which summarizes the events leading up to and through the revolution and its impact in the international arena, in America and the British Commonwealth, thereafter. As is the case for every period of English (British after 1707) history, there is an enormous scholarly literature encompassing hundreds of books and thousands of articles. Many examine specific events that occurred in any reign, presenting varying explanations of the causes of the events and different interpretations of their consequences. Th is treatment of the development of constitutional government and politics in England during the two reigns of William and Mary and Anne does not attempt to synthesize or summarize this vast literature or choose among rival interpretations of different themes, for example, whether a Whig or Tory interpretation of English history better fits the facts, or which party contributed the most to England’s democracy and economic growth. Rather, the objective in this chapter is to highlight how the changing English constitution affected colonial policy and administration, which will be elaborated in chapters 11 and 12. 3 In February 1662, France gave Charles II 36,363 (the sterling equivalent of 500,000 French livres tournois) in support of English aid to Portugal against Spain. In the second decade of his reign, Charles received subsidies from Louis under three agreements. The fi rst was in the text-mentioned Treaty of Dover in 1670. It provided two million livres for his promised conversion to Catholicism and three million a year for the duration of a projected Anglo-French war against Holland. He received the two million in a lump sum and three million for each of the two years in the Th ird Anglo-Dutch War, a total of eight million. Under the second and third agreements, intended to diminish anti-French feeling in Parliament, Louis promised to pay 3,600,000 livres for keeping Parliament in abeyance in 1676 and from May 1677 through

[ 276 ]

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Charles made several attempts, the last in 1672, to issue declarations of indulgence or tolerance to reduce the authority of the Church of England, increase the freedom of the new Protestant sects that had emerged during the Civil War, and perhaps restore some rights to Catholics. Fearing a return to Catholicism, Parliament passed the Test Act in 1673 that excluded from public office anyone who refused to take the sacrament according to the rites of the Anglican Church. The king’s brother, James, Duke of York, who had secretly converted to the Catholic religion in 1668, resigned all his offices, including that of Lord High Admiral. He then married a devout Francophile Catholic, the Italian duchess Mary of Modena, his first Protestant wife having died in 1661. Charles was keen to preserve the succession in his family, which was complicated by his brother’s conversion to Catholicism. He successfully fought back the Exclusion Crisis of 1678–81, in which an emerging Whig party sought to exclude James from the throne. The Whigs were supported by urban residents, dissenters, and men lacking any prospect of royal favor. An opposing group, the Tories, were seen as the party of the court, strong supporters of the Crown and the official Church of England. After 1681, Charles refused to call any more parliaments. Whigs were dismissed from offices in local government and some were prosecuted for treason. A series of quo warranto proceedings were instituted against the charters of some boroughs. Their replacement with new charters allowed Charles to appoint men of his choice to borough offices. Charles II died on February 6, 1685, a deathbed convert to Catholicism, succeeded by his Catholic brother, James II. The succession went smoothly, with Parliament voting him the same life revenue as it had granted his brother. An uprising led by James, Duke of Monmouth, Charles II’s illegitimate but Protestant son who had been involved in the Exclusion Crisis, was crushed, which strengthened the new monarch. April 1678. Only 1,950,000 livres appear to have been paid. Total subsidies of 9,950,000 livres in the 1670s came to 746,000 (the livre was worth 18d.). During the 1680s, Charles received 4,300,000 livres (322,500), the reward for keeping Parliament out of session. James II sought, but failed, to obtain a renewal of the French subsidy. C. D. Chandaman, The English Public Revenue, 1660–1688 (Oxford: Clarendon Press, 1975), 133–35. French subsidies to Charles II were substantial in absolute terms, but only averaged about 47,000 per year during his reign. Excluding the 1660s, the annual average during 1670–85 amounted to a larger 75,000 and were most important between 1681 and 1685, when Parliament supplied almost no temporary additions to the king’s permanent revenue. Between 1670 and 1685, annual net government income was 1.3–2.3 million. The permanent ordinary income of the Crown, which did not require votes of Parliament, supplied 70–80 percent of it. Parliamentary additions, apart from French subsidies, provided the bulk of the difference, except in the last four years of Charles’s reign. The annual figures are in Chandaman, English Public Revenue, appendix 2, table 7: “Net Governmental Income, 1660–1688,” 332–33. Details of the various sources of revenue are found throughout his book.

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chap t er 10

Harmony soon gave way to discontent. In 1685 Louis XIV revoked the Edict of Nantes, which guaranteed political and religious rights to the Protestant Huguenots, and his army began forcibly converting them to Catholicism. In November James asked Parliament to repeal the Test Acts, which required officeholders to prove they were not Catholics by making a declaration against transubstantiation. James prorogued Parliament when it refused. In April 1686, in a collusive law case, Godden v. Hales, the judges ruled that James could dispense with the Test Acts without the consent of Parliament in individual cases. He placed Catholics into the army, the universities, and even some posts in the Anglican Church. On July 16, 1686, he established the Ecclesiastical Commission, which could deprive the clergy of some of their functions. He suspended the Bishop of London, received a papal envoy in Whitehall, and installed a Catholic administration in Scotland. On April 5, 1687, James published the Declaration of Indulgence, which suspended all the religious penal laws against dissenters and Catholics. In July he dissolved Parliament and began a campaign to pack a new House of Commons with dissenters and Catholics. He used quo warranto proceedings to substitute new borough charters for old to bring parliamentary electors under royal control. James reissued the declaration on April 27, 1688, ordering the Anglican clergy to read it from the pulpit to their congregations on two successive Sundays. On May 18 the Archbishop of Canterbury and six other bishops refused and petitioned against the order. On June 8 he arrested the seven and incarcerated them in the Tower of London to await trial. Two days later, James’s second wife gave birth to a son, James Francis Edward, who was baptized Catholic. A Catholic heir presaged the restoration of a new Catholic dynasty instead of the Crown passing to the Protestant children of James’s fi rst marriage. On June 30, 1688, the seven bishops were acquitted with huge crowds celebrating in the streets and attacking Catholic establishments. On the same day, seven prominent politicians, four Whigs and three Tories, wrote a letter of invitation to William of Orange to come to England to replace James. Mary had earlier let it be known that she, too, was opposed to repeal of the Test Acts. On October 1, 1688, William issued a declaration from The Hague, that James had overturned the religion, laws, and liberties of England, threatened to supplant the Anglican by the Roman Catholic Church, confiscated town charters, and gathered a large standing army under Catholic officers to subjugate the people. As the new king, he would preserve a free and lawful Parliament. William, above all, sought to secure the independence of Holland. An alliance between England and Holland could better fend off French threats to his own country. William landed at Torbay in Devon with an army of about 15,000 mostly Dutch troops on November 5, 1688. He received a warm welcome from English Protestants and English landholders. He entered [ 278 ]

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London on December 18. James was captured while fleeing from London, but William gave him safe passage to France and he departed for exile on December 22. An ingrate, he sought to regain his Crown, an effort that failed with his defeat at the Battle of Boyne in July 1690. Th is time he remained in France, where he lived out the rest of his life in exile.4 It took from William’s arrival in November 1688 until December 1689 to complete the transformation of government. Parliament originally wanted to install Mary as queen, but William refused to serve as prince consort to a throne in the sole possession of Mary, and Mary, in agreement with her husband, refused the offer. William and Mary were thus offered the throne as joint monarchs. On Christmas Day in 1688, sixty members of the House of Lords asked William to assume the administration of England and issue circular letters for a parliamentary election. Immediately after Christmas, some three hundred men who served as members of Parliament under Charles II met with London city officials to ratify the actions of the lords. As the year came to a close, William wrote letters to the leading Protestant lords and bishops, as well as the several counties, cities, universities, boroughs, and five ports, to select qualified representatives to sit in a convention parliament at Westminster beginning January 22, 1689, to determine how England was to be governed. It was termed a convention parliament, having been summoned not by a king, but by William of Orange. He instructed them to prepare a document that would prevent the future subversion of their Protestant religion, laws, and historic liberties.

4 The lord deputy of Ireland, the Earl of Tyrconnell, was a Catholic loyal to James, and his Irish army controlled most of the island. When James landed in Ireland in 1690, he called an Irish parliament to repeal legislation under which Protestant settlers had acquired land. An exodus of Protestants to England quickly followed. The new king, William, could not afford to ignore the threat posed by a Catholic Ireland, which, aided and abetted by the French king Louis XIV, might serve as a staging ground for an assault on Scotland and England. In March 1690 Louis sent seven thousand French troops to reinforce James’s army. James also recruited some English, Germans, and Dutch. William assembled a fleet of three hundred vessels and sailed into Belfast Lough on June 14, 1690. He brought with him forty pieces of artillery, a thousand horses, and 200,000 in cash to pay his men. His army consisted of thirty-six thousand men made up of English, Danes, Dutch, French Huguenots, Germans, Scots, Irish, Swiss, Italians, Norwegians, and Poles, with an elite unit of Catholics known as the Dutch Blue Guards. The battle began early on July 1. By mid-afternoon, the Irish army was in retreat, paced by James who rode to Dublin to warn the city of William’s approach. William entered Dublin on July 6 proclaiming victory. The Irish fought on for another year but formally surrendered after the siege of Limerick in 1691. The Battle of the Boyne eliminated an immediate threat to the Protestant rule of William and Mary. The Battle of the Boyne is recalled each July 12 in the celebrations of the Protestant Orange Order in Northern Ireland because eleven days were lost with the change from the Julian to the Gregorian calendar in 1752.

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The delegates drafted the 1689 Bill of Rights, which they presented to William and Mary at Westminster on February 13, 1689.5 It was read to them at their coronation on April 11, 1689. William and Mary, as part of their coronation oaths, were required to swear that they would obey the laws of Parliament.6 After the coronation, the Bill of Rights was formally passed through Parliament and received royal assent on December 16, 1689, thereby ending the concept of the divine right of kings in England. The royal family’s concession to be subject to the laws of Parliament is known as the “bloodless” or “Glorious Revolution.” The Bill of Rights became the second most important constitutional document after the Magna Carta. The Bill of Rights enumerated the misdeeds of King James II. First and foremost was his effort to subvert and extirpate the Protestant religion. Other measures that were deemed to have eroded the laws and liberties of Englishmen included his exercising the power to dispense with and suspend laws, executing laws without the consent of Parliament, prosecuting worthy Protestant bishops, establishing an ecclesiastical court, levying money by prerogative, keeping a peacetime standing army, replacing Protestant officers with Catholic ones, violating the freedom of election of members to serve in Parliament, exercising arbitrary and illegal powers, placing unqualified persons on juries, requiring excessive bail, imposing excessive fines, and threatening individuals with fines and forfeitures before conviction or judgment. The Bill of Rights declared illegal the suspension of laws without consent of Parliament, executing laws by royal authority, erecting ecclesiastical courts, levying money without grant of Parliament, raising or keeping a standing army in peacetime without consent of Parliament, and threatening individuals with fines and forfeitures before conviction. Further declarations included the right to petition the Crown, the right of Protestants to bear arms for their defense, free election of members of Parliament, freedom of speech for members of Parliament without fear of impeachment or court action, no imposition of excessive bail, excessive fines, or cruel and unusual punishment, and that jurors be duly impaneled. Finally, to ensure the redress 5

The Bill of Rights is reproduced in David C. Douglas, ed., English Historical Documents (London: Eyre and Spottswoode, 1953), 8:122–24. It is on-line at http://www.historicaldocuments .com/ EnglishBillofRights.htm (June 15, 2004); http: www.jacobite.ca/documents/16890213.htm (June 15, 2004); and numerous other sites. 6 An Act Establishing the Coronation Oath 1689 stipulated the precise words of the oath to be administered to every king and queen of England at their respective coronations by one of the bishops or archbishops of England. Specific words included the promise to “maintain the laws of God, the true profession of the gospel and the Protestant reformed religion established by law” and “preserve unto the bishops and clergy of this Realm, and to the churches committed to their charge, all such rights and privileges as by law do or shall appertain unto them, or any of them.” See http://www.worldfreeinternet.net/parliament/oath.htm ( June 15, 2004).

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of grievances, and to amend, strengthen, and preserve the laws, Parliament was to meet frequently—Parliament had often gone for long stretches of time without being called into session under the four previous monarchs. This provision was strengthened in the 1694 Triennial Act (see below).7 To ensure Protestant succession, the Bill of Rights stipulated that the exercise of royal power would apply to William and Mary during their joint lives, to Mary’s children after their deaths, to Princess Anne of Denmark and her heirs if Mary was childless, and to the heirs of the Prince of Orange if Anne had no surviving children. All were Protestants. The Bill of Rights included oaths of allegiance and supremacy that rejected “that damnable doctrine and position” of the pope: “Whereas it hath been found by experience, that it is inconsistent with the safety and welfare of this protestant kingdom, to be governed by a popish prince, or by any King or Queen marrying a papist.” No person holding communion with the church of Rome, professing Catholicism, or marrying a Catholic would be eligible to inherit or possess the Crown and government of England or to exercise authority in the realm. Every monarch, on the first day of the meeting of the first Parliament following his or her accession to the Crown on the date of coronation, in the presence of all members of Parliament, was required to repeat the declaration in the statute enacted under Charles II that precluded Catholics from either house of Parliament. England’s monarchs, legislators, and voters were to be Protestant. A corollary act, the Mutiny Act of 1689, authorized a standing army in peacetime for one year only. Parliamentary control of military forces ensured that it would have to meet at least once a year, thereby precluding a historical reprise of lengthy periods without sessions. Another complementary measure was the Toleration Act of 1689.8 It accorded greater freedom to dissenters from Anglican orthodoxy. The preamble stated this clearly: “Forasmuch as some ease to scrupulous consciences in the exercise of religion [strict adherence to the Anglican Church] may be an effectual means to unite their Majesties Protestant subjects in interest and affection.” The act relaxed the stricter measures in previous legislation dating from Elizabeth, recognizing that the emergence of dissenting Protestant sects—Presbyterians, Baptists, Quakers, and others—was a reality of English religious life. Upon taking the oath specified in article 13 of the act,

7

Many of the provisions in the Bill of Rights became standard fare in the colonies. Colonial assemblies issued their own bills of rights, which were sometimes opposed by colonial governors. Recall that the fi rst session of an elected assembly in New York before James II became king issued a charter of liberties, which was subsequently disallowed. Nonetheless, over time the provisions of the Bill of Rights were incorporated into colonial resolutions and many of its features were included in the fi rst ten amendments to the U.S. Constitution. 8 http://www.etsu.edu/cas/ history/docs/1689toleration.htm ( June 15, 2004).

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pledging allegiance to King William and Queen Mary and rejecting papism, paying a maximum of 6d. for a certificate of declaration, all further fines, seizures, and penalties previously incurred were to be discharged. The act granted dissenters freedom of worship, so long as they did not assemble behind locked, barred, or bolted doors. Quakers could refuse to swear oaths and were permitted to declare their denial of papal authority and their belief in Jesus Christ. All persons were still required to pay tithes or other parochial duties. Dissenters were permitted to hold, or appoint deputies on their behalf, the offices of high- or petit-constable, church warden, overseer of the poor, or any other parochial or ward office. Article 19 required any congregation or assembly for religious worship to be certified, for a fee not to exceed 6d., with the bishop of the diocese, or archdeacon of that archdeaconry, or justices of the peace at the general or quarter sessions of the peace for the county, city, or place in which such meeting shall be held, and registered in the pertinent court. The only people excluded from the benefits of the act were Catholics, Jews, and those who denied the divinity of Christ.9 Parliament also sought to preclude further violations of the Triennial Act of 1664. Charles II had refused to call Parliament into session at least once every three years as stipulated in law. Parliament also wanted to prevent unduly lengthy sessions of a single parliament, as that which lasted during 1661–79. A new Triennial Act was passed in 1694 requiring Parliament to meet at least once in every three years but remain in being no longer than three years.10 The most important element in the Glorious Revolution was the absolute control of public finance by Parliament.11 Life grants of revenue to the Crown were abolished; the lifetime grant to James II had enabled him to maintain a standing army, which Parliament saw as a threat to itself and the liberty of the English people. Parliament established a new system of public finance as part of the settlement that placed William and Mary on the throne. It created the Civil List, which encompassed the royal household’s expenses and the salaries of judges and ambassadors, other civil servants, and pensioners of the Crown. Granted to the king for life, with revenue earmarked from the excise, Parliament fi xed the Civil List at 600,000 a year. Parliament established a separate category of National Expenditure, removed 9 Recall that the requirement of church membership as a condition of holding office or voting in Massachusetts was repealed in the royal charter granted in 1691 after the collapse of the Dominion of New England. The English Toleration Act of 1689 lagged behind that of Maryland by forty years, which went beyond the easing of strict Anglicanism to include rights of religious liberty for Catholics and Puritans as well as Protestants. In this, as in other instances, the colonies preceded the mother country. 10 The Septennial Act of 1716 changed the maximum duration of a parliament from three to seven years. Modern practice limits a lifetime to fi ve years. 11 As colonial assemblies sought to acquire similar powers during the eighteenth century, American politics became increasingly fractious.

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from the Crown’s control, to finance the navy, army, ordnance, interest charges on the public debt, and other costs of government. It approved the appropriations of customs duties for four years at a time, with funds normally allocated for the army and navy. These appropriations were insufficient to sustain any large-scale military operations, thus compelling the Crown to seek additional revenues from Parliament to support an aggressive or wartime foreign policy. Between 1691 and 1697 the House of Commons appointed a series of Accounts Commissioners to audit the annual income and expenditure accounts, establishing parliamentary control over government finances. The public finance revolution transformed the Crown from master of England to a paid servant of the state, supported by the elected and hereditary members of Parliament. A king or queen could still initiate foreign policy but could not long carry it out without Parliament’s concurrence. William’s willingness to work with Parliament, in marked contrast to that of his predecessors, paid off handsomely. Between 1688 and 1702, Parliament levied 59 million in taxes. Passage in 1694 of an act that established the Bank of England facilitated borrowing of another 13 million and helped accelerate a growing commercial economy. Expenditure of 72 million over fourteen years, an average of slightly more than 5 million a year, was fivefold that of annual revenue approved for James II.12 Parliament was willing to fund a monarch it trusted and controlled. The king, for his part, needed parliamentary consent to conduct war, select and maintain key officers and advisers, and administer the nation. The constitutional transformation of English public finance went beyond the mere separation of earmarked revenue for the Civil List and the National Expenditure. The creation of the Bank of England by an act of Parliament in 1694 enabled the government to borrow money at reasonable rates of interest, with payment guaranteed to lenders. This credit or financial revolution dramatically altered the previous system under which monarchs secured, and often defaulted on, personal loans and other limited forms of crown borrowing that partially underwrote royal expenditures.

The Bank of England

T

h e e stab l i s h m e nt of the Bank of England in 1694 revolutionized English public finance.13 By greatly enhancing the ability of the state

12

Harris, England in the Eighteenth Century, 29. A history of the Bank of England appears in Sir John Clapham, The Bank of England: A History (Cambridge: Cambridge University Press, and New York: Macmillan, 1945). Volume 1 covers 1694–1797. The period encompassing the reign of William and Mary appears on 1–57. A very brief treatment can be found in Sir Albert Feavearyear, The Pound Sterling: A History of English Money, 2nd ed., rev. E. Victor Morgan (Oxford: Clarendon Press, 1963), 125–29. 13

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to borrow, it helped fuel a fivefold increase in public spending without full recourse to taxation. It facilitated private transactions in addition to those provided by the quasi-banking activities of goldsmiths, promissory notes of wealthy individuals, gold and silver coins that were constantly being debased, and other forms of currency. Until 1694, banking and lending ser vices were provided through a variety of private and government means. Private banks existed in the form of individuals and partnerships, but their owners faced unlimited liability, not the limited liability accorded royally chartered, joint-stock corporations. Private banks were small operations. Inland bills of exchange enabled merchants to remit payment inside the country, but their volume was limited by the modest resources of a small number of traders. Promissory notes of wealthy individuals served a limited role as circulating currency. More important were the banking ser vices provided by London’s goldsmiths in the early years of the restoration. They accepted deposits at 6 percent interest, issuing receipts on which repayment was made at presentation. Their promise to pay the depositor or bearer of their bills or notes (receipts) created a modest amount of circulating paper currency. Goldsmiths also bought and sold bullion, conducted foreign exchange transactions with correspondents, and with funds at their disposal discounted commercial bills and various Exchequer orders. Several goldsmiths served as bankers to the others. This was an unregulated system of private quasi-banking. Charles II relied on goldsmiths to raise money, but there were limits to this source.14 His government developed several mechanisms to create credit that the government could spend in advance and in excess of treasury cash receipts from customs, the excise, the hearth tax, and the small branches and casual receipts (crown land revenue, first year’s profit of ecclesiastical appointments, wine licenses, post office revenue, the law duty, revenues remaining from the royal prerogative, and French subsidies). At the beginning of his reign, the collection of customs duties was farmed out for an annual rent or cash payment, of which up to 45 percent was to be paid in advance. The farmer of the excise was able to issue credit at interest, that is, act as a small banker on the basis of running cash, or the flow of tax receipts. Farming was abandoned in 1683, replaced by direct treasury collection. The excise ser vice increased the yield compared with the previous annual rent and transferred its credit feature to the government. 14 Chandaman explains the four main methods of raising credit during the Restoration period. These were loans, advances, tallies, and orders. Briefly, loans were normally paid in cash into the Exchequer and repaid from it with interest, when funds permitted. Advances were payments by taxpayers at a discount, but more important were advance payments by tax farmers, which they recouped from tax collections with interest. Tallies and orders are explained in the paragraphs that follow. See English Public Revenue, appendix 1, 285–300.

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Charles’s government issued what was known as “tallies of loan.” Tallies had been an integral part of the Exchequer system for centuries. The tally was a hazelwood stick notched to represent a given sum of money, originally a receipt for cash paid into the Exchequer as taxes. From the early fourteenth century, it began to be used for purposes of payment, and remained so in the seventeenth. A creditor of the Crown received a tally in lieu of cash. It was a receipt of a given sum at the Exchequer from a par ticular receiver of the revenue, which was exchangeable for cash on presentation and surrender to the receiver in question. Payment tallies were struck on the basis of future receipts, which enabled the government to spend money before revenues materialized, a revenue anticipation note. Excess issue of interest-bearing tallies led to their acceptance only at a heavy discount. Charles’s need for additional French subsidies during 1681–85 stemmed from the collapse of two leading goldsmiths in 1681. The Second Anglo-Dutch War of 1665–67, along with the plague of 1665 and great fi re of 1666, posed severe strains on the royal fi nances. Bankers had already loaned the government about 1 million and, given the critical state of the public finances, refused to loan more. The prospects of raising more money from existing sources of taxation were dim. These events prompted the treasury commissioners to create a modified system of raising credit upon Orders. The technique of raising credit upon Orders had been introduced with parliamentary backing in 1665 as a means of extraordinary war finance.15 The essence of the Order system was an attempt to secure government loans beyond professional financiers and monied interests by reaching a much larger group of small investors. The scheme was to offer them a simple, orderly, scheduled, and guaranteed means of payment at the Exchequer from the yield of strictly reserved tax revenues. This was to be a marked improvement over the previous approach of repayment of a tally of generally anticipated revenue, which might or might not materialize in the expected amounts. Orders could be used as security for loans, but also in payment for goods and ser vices. They could be assigned by endorsement to others and used by government departments as a form of paper money. The big change from the old to the new system was their application to specific, earmarked parliamentary taxes.16 Since much of the existing revenues was promised in repayment for previous outstanding tallies or loans, it was necessary to establish a system of registration to set aside future uncommitted revenues that could be assigned to the Exchequer as the basis of the Order system. The system of registered Orders was gradually applied to about half the revenue of the three 15

The word “extraordinary” was applied to appropriations granted the Crown for expenses outside the normal peacetime costs of government, such as war time expenditures. 16 The new Order system is explained in Chandaman, English Public Revenue, 215–22.

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great branches of the customs, the excise, and the hearth tax in late 1667. Parliament gave statutory confirmation to the assignability of the registered Orders in December 1667, and departmental treasurers were able to raise funds on them early in 1668. Linking specific tax receipts to orderly, sequential repayment of Orders established a new credit structure of the government. The new regime provided a vital ser vice in the midst of a financial crisis in 1667–68, but would quickly come under stress from overloading the revenue with Orders. Although efforts were made to curtail expenditure during 1668–70, and a recovering economy increased the yield from ordinary revenue, the burden of debt approaching 3 million was jeopardizing the Order system. Repayment of pre-Order tallies and new Orders was becoming increasingly difficult. Orders were applied to the remaining sources of the small and casual revenue and interest was raised to 10 percent, but servicing the debt was strangling ordinary government expenditures. These conditions prompted Charles to press for extraparliamentary supplies and enter into the Treaty of Dover with Louis XIV. Neither sufficed. In January 1672 the Crown faced bankruptcy, which prompted a stop of the Exchequer, the freezing of all repayment for a year from January 1, 1672, on Orders issued before December 18, 1671. Orders amounting to 1,100,000 rested on the ordinary revenue. Repayment of Orders would have reduced the Crown’s disposable income in 1672 to 400,000, an intolerably low level. The stop temporarily relieved repayment of 1,200,000. The memory of the stop, which ruined several goldsmiths and other small lenders, was not quickly forgotten. Its damage constrained government credit operations during the remainder of Charles’s reign and the brief rule of his brother, James. William’s expenditures in Ireland and far greater military outlays in Europe as he involved England in what became more than a century-long struggle against France on the continent and in America required funds above and beyond grants of Parliament. This circumstance provided an opportunity for a group of men who proposed the creation of a private, jointstock bank that would have some of the powers of a national bank, especially the issue of bank notes. After discussions between the founders of the proposed bank, the Privy Council in the presence of Queen Mary, and a committee of Parliament, an agreement was eventually reached in the Ways and Means Act of 1694 that authorized the creation of the Bank of England. The previous system of granting credit directly to the monarch was replaced with loans made to the state, with debt ser vice guaranteed by specific taxes on acts of Parliament. Parliament, not the king’s tax collectors, guaranteed public debt. It passed the Tonnage Act of 1694 to guarantee annual interest of 100,000 on a loan of 1,200,000 to the government made by the new Bank of England. Parliament’s approval of earmarked taxes to guarantee payment of interest on loans to the state created a bond market in which [ 286 ]

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individuals could securely invest in government stock, the English term for long-term government bonds. The Bank of England in conjunction with the Tonnage Act marked the beginning of an official national debt, which would grow by leaps and bounds in the eighteenth century. Crown acquiescence in the supremacy of Parliament with Parliament’s statutory guarantee of interest and capital redemption transformed the previous insecurity of lending to the government through personal loans, tallies, and Orders with the generally safe investment of purchasing government bonds. The credit revolution of 1694 allowed the government of England to live beyond its means—to spend more than it collected in taxes each year. The creation of credit at low rates of interest enabled the government to engage in lengthy wars costing millions of pounds without having to subject English taxpayers at once to their full cost. As debt and debt ser vice piled up, the consequences of steadily rising taxes would lead England into war with its American colonies later in the eighteenth century.17

War with France

F

r om t h e reign of Queen Elizabeth, England’s principal rivals were Spain and Holland.18 The defeat of the Spanish Armada, the successful naval assault on the Spanish fleet at Cadiz, and victory in the final war with Holland secured England’s colonial empire in the New World. William’s accession to the throne changed partners. Holland and England became allies for the next hundred and twenty-five years in a series of wars undertaken to contain France. These costly wars had their counterparts in the American colonies as France and England fought for control of North America. In 1686 the League of Augsburg was formed to contain the growing menace of French king Louis XIV. Its members included Holland, the German emperor, Sweden, Spain, the Palatinate, Saxony, and Bavaria. In 1688 Louis invaded the Palatinate and occupied Cologne, which brought England into the war in 1689. Parliament enthusiastically supported William’s foreign policy, the desire to preserve the independence of his native Holland, on the view that it would defend both the Protestant succession and English liberties against an autocratic Catholic monarch. French conquest of continental Europe was seen as a precursor to a potential Catholic restoration in England against which Parliament had struggled and legislated. As a commercial island, England required control of the seas. By 1688 France had built Europe’s third largest fleet, which threatened English 17 The appendix to this chapter describes the credit revolution established through the Bank of England. 18 A brief discussion of the War of the League of Augsburg appears in Harris, England in the Eighteenth Century, 45–50.

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commerce. Louis’s assault on Holland and invasion of Flanders, then part of the Spanish Empire, menaced England. The independence of the Netherlands and survival of an independent Spain were deemed essential to England’s commercial development. William’s first major victory was the defeat of James’s forces at the Battle of the Boyne, which eliminated any French threat from Ireland. On the continent, England supplied ninety thousand men to assist Holland and Germany. But the war stoked political divisions between Tories and Whigs that would plague England throughout the eighteenth century. Tories complained that England was investing too heavily on land to fight Dutch battles and too little at sea to protect England’s growing commercial empire. Early sea battles went poorly for England, but French commanders failed to exploit their openings. Similarly conservative English commanders failed to take advantage of later English naval victories. Despite an inconclusive victory at sea, the allied fleet was dominant at war’s end. France sued for peace, conceded most of Louis’s previous conquests, and officially recognized William as king of England. The war ended with the Treaty of Ryswick in 1697. Peace was short-lived. The illness of the Spanish king raised concerns that France would try to seize the Spanish throne. When Charles the Sufferer died on November 1, 1700, he willed the Spanish Empire to the French prince Philip Anjou. Louis XIV decided to accept the will instead of honoring treaties of partition that had been carefully worked out with England and other European powers. French troops moved into Spain in the name of King Philip V. William went to Holland in July 1701 to negotiate the Grand Alliance among England, Holland, and the German emperor. Prussia, Sweden, Denmark, and several lesser German states later joined the alliance. Thus began the War of the Spanish Succession, which lasted until the Treaty of Utrecht was signed in April 1713. William did not survive long into the war. Never of good health, he died of complications from a fall while riding his horse at Hampton Court in 1702. Mary had died earlier of smallpox in 1694.

The Act of Settlement 1701

J

u s t b e f or e William’s mishap, Parliament further strengthened the provisions of the Glorious Revolution with the Act of Settlement 1701.19 It was prompted by the failure of William and Mary to produce any Protestant heirs and the death in 1700 of Prince William, Duke of Gloucester, the only surviving heir of Princess Anne of Denmark, next in line of succession. 19

The Act of Settlement 1701 is posted at http://www.worldfreeinternet.net/parliament/ settlement.htm ( June 16, 2004) and http://www.guardian.co.uk/monarchy/story/9,2763,407239 .00.html ( June 16, 2004).

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Her prospective succession to the English throne without any heirs led William and Parliament to reinforce the Protestant succession in the 1689 Bill of Rights. The purpose of the 1701 act was to place in law a further provision for the succession of the Crown in the Protestant line, thereby eliminating all future doubts and contentions. The act also provided an opportunity for Tory leaders to insert their constitutional interests into law given that Germans from Hanover would one day inherit the English Crown. Their provisions resembled the commentary in the Bill of Rights that brought William to England. The act declared Princess Sophia, Electress and Dutchess Dowager of Hanover, daughter of King James I (niece of Charles I and cousin of James II) and her heirs next in the Protestant line after Princess Anne assuming she had no surviving children. It stipulated that anyone who acquires or inherits the English Crown must take the coronation oath enacted by Parliament in 1689 as administered to William and Mary, declaring oneself a faithful Protestant. Other provisions required the new monarch to join in communion with the Church of England, to obtain the consent of Parliament to engage in any war for the defense of territories or dominions not belonging to the Crown of England, and Parliament’s permission to leave the territories of England, Scotland, or Ireland. The Privy Council was to continue as before. Only English citizens could serve on the Privy Council, in either house of Parliament, hold any office or place of trust in civil or military institutions, or receive royal grants of lands. Catholics, by definition, were deemed loyal to a foreign prince and the pope, and thus were excluded from Parliament and the franchise.20 Any individual holding an office or receiving a salary or pension from the Crown was disqualified from the House of Commons. Judges were to serve for life with established salaries unless removed by a decision of both houses of Parliament. Finally, the Crown could not pardon any individual impeached by the Commons. Each of these measures further strengthened Parliament, especially the Commons, against the Crown. Most of its articles were subsequently repealed or amended, and holders of office under the Crown were permitted to sit in Parliament. The three provisions that survived precluded royal pardon of impeached officials, lifetime terms for judicial appointments, and the requirement of Protestant succession. Before his untimely death, William brought a united England into what became an even lengthier continental confl ict, the War of the Spanish Succession, which lasted from 1702 to 1713. One motivating factor was Louis XIV’s recognition of the Catholic son of James II, known as the Old

20 Catholics were excluded from the franchise until they were granted the right to vote in 1793, well after the American Revolution.

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Pretender, as James III of England following the death of James II on September 16, 1701. Waging this war fell to Queen Anne and England’s great military leader, John Churchill, the fi rst Duke of Marlborough.21

English Taxation in 1702

T

h e c r e at ion of a Civil List to pay the expenses of the royal household, judges, ambassadors, other civil servants, and pensioners of the Crown was fi xed at 600,000 in 1689, chargeable to the excise and other hereditary revenues; it was raised to 700,000 in 1698 after the war with France, with the extra amount funded by a new lifetime subsidy of tonnage and poundage. 22 All other expenditures were treated as extraordinary, to meet expenses for war and others authorized by Parliament. In 1689 Parliament repealed the hated hearth tax, replacing this loss of some 200,000 with a poll tax that yielded 288,000. Seven subsequent poll taxes through 1698, the last passed in England up through the American Revolution, yielded 2,268,000. The property tax was the other important source of revenue. Parliament eventually settled on an annual rate of at 4s./ on personal property in 1692, which produced 1,922,000 that year. The same rate in subsequent years produced diminishing revenue as a result of lax assessment and fraudulent returns. To remedy this problem, in 1697 Parliament fi xed a specific sum that the rate should produce and then set the rate based on the value of total assessments. The sums were charged on the counties and towns specified in the revenue act and parceled out to them for collection. The revenue target for the property tax was 1,484,015. Since 1s. was estimated to raise 494,671, Parliament set the rate of 3s. 23 Between 1689 and 1700, the property tax raised a total of 19,174,059. Th is system of setting specific rates per pound of assessed valuation remained in force up to 1798. Parliament considered, but rejected, raising 100,000 by a tax on Jews for fear it would drive them out of England with a concomitant loss of business. A tax on the stock of the East India, Royal African, and Hudson’s Bay companies remained in force only for 1692. To recover some revenue lost from 21 In honor of his military victory at Blenheim in 1704, Queen Anne built the stately country home of Blenheim for Marlborough near Oxford, where Winston Churchill was born. 22 Stephen Dowell, A History of Taxation and Taxes in England From the Earliest Times to the Year 1885, vol. 2, Taxation from the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 37–63, and Michael J. Braddick, The Nerves of State: Taxation and the Financing of the English State, 1558–1714 (Manchester and New York: Manchester University Press, 1996). 23 The colonies fi xed the country rate at 1d., and then set the revenue target in terms of fractions or numbers of rates. Note that England’s Parliament set the rates in terms of the number of shillings rather than pence, a twelvefold higher basic rate.

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repeal of the hearth tax, a 2s. fi xed house tax was imposed in 1696, with higher rates for houses with more than a stated number of windows. A trade license fee was placed on itinerant hawkers and pedlars, along with a tax on the hackney coach business. A steeply graduated tax on burials, births, marriages, and bachelors, based on title and social standing, was imposed in 1695 and remained in force until 1706. A bachelor, for example, was charged 1s. if he had an annual income below 50, while a duke paid 12 11s. New and higher inland excises were levied on beer, brandy, salt, coal, glass (repealed in 1699), tobacco pipes (repealed after an existence of three years, 1696–99), malt, and leather. Duties imposed on imported articles applied to East India and China goods, a large variety of manufactured wares, French goods, tea, coffee, cocoa nuts, spices, whale fins, and Scotch linens. Stamp duties were first imposed in 1694 on the Dutch model. Stamps had to be used on legal documents. Values ranged from 1d. to 5s. depending on the class of document. The duties produced about 50,000 a year. These were subsequently extended to deeds of conveyance, settlement, mortgages and leases, and probates of wills.24 In 1702, the population of England and Wales stood at about 5.8 million. Total net receipts of the public income that year were 4,869,000. Per capita taxation at the end of William’s reign in 1702 amounted to 0.84 or 17s. National income was somewhere in the neighborhood of 60 million, which meant that taxes consumed about 8.3 percent of the national income of England and Wales.25 This was many times that in the American colonies.

Queen Anne: 1702–1714

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h e r e ig n of Queen Anne was occupied with the War of the Spanish Succession, known as Queen Anne’s War in America, unification of England and Scotland in 1707, and the growing importance of party politics. Anne was the second daughter of James II. She married George, Prince of Denmark. She died at forty-nine years of age, having poor vision, a serious case of smallpox at the age of twelve, and possibly the blood disease porphyria, which may have contributed to her twelve miscarriages. None of her 24 The Stamp Act of 1765, which extended stamp duties to the colonies, has been reckoned by many scholars as the start of the rebellion that led to the American Revolution. Stamp duties are widely used in former and current British colonies and dependent territories. 25 The estimate of national income is based on interpolating the figures for 1688 and 1759 that appear in B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “National Accounts 1: National Income and Its Constituents—England and Wales, 1688–1801/3,” 821. National income was 54,550,000 in 1688 and 66,840,000 in 1759. I assume that national income fluctuated within this range between the two years.

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other five children reached adulthood, the last dying in 1700. She was the first married queen to rule England alone and died on July 31, 1714. Anne was active in government, attending most cabinet meetings to ward off the influence of her half brother, James, the Catholic son of her father’s second marriage. She was the last sovereign to veto an act of Parliament, a Scottish militia bill she feared might raise troops that could be used against her. It aroused no opposition or controversy and was the last use of this royal prerogative in English history.26 Her close confidant was Sarah Churchill, whose husband, the Duke of Marlborough, was England’s great military leader in the War of the Spanish Succession with victories at Blenheim, Ramillies, Oudenarde, and Malplaquet. Anne had to govern with an emerging two-party system of Whigs and Tories, each striving to control Parliament and dominate the administration of government in what was evolving into a cabinet system. Anne governed with mixed administrations until Whigs became dominant in 1707. The Tories won an electoral victory in 1710, which lasted only three years. Despite common interests between Tories and the Crown, Anne concurred with the Whigs in concentrating war efforts on the continent to suppress French Catholic influence. Naval dominance better suited Tory commercial interests. Whig-Tory rivalry in Parliament and administration increasingly dictated the policies of the English government and spilled over into the management of colonial affairs.

Act of Union with Scotland 1707

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h e o t h e r important event in Anne’s reign was the union of England and Scotland, which created Great Britain.27 The union resolved several issues that threatened the peace between England and Scotland, although one last uprising was put down at the Battle of Culloden in 1745. 28

26 Colonial governors retained the right of veto, and the English government maintained the right to disallow colonial laws, right up to the American Revolution. The difference between the actions of the Crown regarding Parliament and that of its vice-regal representatives in the colonies did not go unnoticed in the colonial assemblies. 27 The text of the Act of Union, 1707, is posted at http://www.forscotland.com/aou.html (June 16, 2004). The addition of Ireland on January 1, 1801, formed the United Kingdom of Great Britain and Ireland, which shrank in 1922 to the United Kingdom of Great Britain and Northern Ireland when most of Ireland formed the Irish Free State. 28 Prince Charles Edward, in one more Jacobite attempt at seizing the English Crown, landed in Scotland in 1745, formed an army of 5,500 men, and pushed as far south as Derby. His forces were defeated on the field of Culloden in April 1745. Charles Edward left in September and remained in perpetual exile in Italy. The temporary success of the revolt was due only to England’s involvement in another continental war, the War with Spain and of the Austrian Succession. As a consequence of Scottish participation, Highland dress was forbidden and the old clan jurisdictions were abolished.

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Previous attempts to unify England and Scotland had failed. Scotland feared becoming the junior partner in an enlarged kingdom and England saw few benefits from a union with the troublesome Scots. The 1701 Act of Settlement renewed the pressure for union. The act, which passed the English throne to the House of Hanover, angered the Scots, who threatened to install Anne’s Catholic half brother, James, on the Scottish throne. The Scottish Parliament passed the Act of Security, which gave it the power to nominate a successor to Anne, which did not have to be from the House of Hanover, within twenty days of her death. This act raised the possibility of a separate Scottish monarchy after a century of joint monarchs when James VI of Scotland became James I of England in 1603. England was concerned about a possible alliance of Scotland and France, the Auld Alliance. Moreover, Scottish soldiers were important in the army as England was fighting the War of the Spanish Succession. The Scottish Parliament withheld Scottish soldiers from her army until she signed the Act of Security. In 1704, the Scots were considering independence. To forestall this effort and bring the two countries closer together, the English Parliament passed the Alien Act of 1705. If Scotland refused to accept the Hanoverian succession by Christmas Day that year or appoint commissioners to negotiate a union, Scots would be treated as aliens in England, possibly losing their property there, and be excluded from its profitable trade with the colonies. Members of the Scottish Parliament decided to appoint commissioners, began deliberations with their English counterparts in April 1706, and completed work in July. The act was passed in both the English and Scottish parliaments by large majorities. On April 27, 1707, the last Scottish Parliament was dissolved. On May 1, 1707, Anne became Queen of the kingdom of Great Britain, with the Crown of Great Britain to descend to Princess Sophia and her heirs. Scotland received forty-five and sixteen seats in a combined Commons and Lords, and compensation of 398,085 10s. for taking on part of England’s debt. The Scottish Privy Council was abolished, and the same treason laws were introduced in both countries. Several clauses of the Act of Union merit further review, as the union improved trading relations between the American colonies and Great Britain. Scottish merchant fleets, blockaded since 1704, were granted free trade within Great Britain and between its dominions and plantations. All Scottish-owned ships were now defined as ships built in Great Britain, thus conforming with the Navigation Acts. Scotland and England were treated equally with respect to allowances, encouragements, and drawbacks, but governed by similar prohibitions, restrictions, and regulations of trade, liable to the same customs and duties. Taxes on alcohol were standardized. Scotland received a seven-year exemption on the duty or excise on locally made salt. The land tax of England was imposed in Scotland at the level of one-fortieth that in England, which was generous as the percentage of [ 293 ]

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Scottish members of the new Parliament exceeded this ratio. Scotland was exempted from duties on stamped paper, vellum (a fine parchment made from calfskin, lambskin, or kidskin used for the pages and binding of books), and parchment imposed in England and, beginning August 1, 1710, from duties payable in England on windows and lights. English duties on malt were not to be charged in Scotland, a boon to the makers of Scotch whisky. A uniform coinage of the same standard and value as in England was created, along with uniform English weights and measures. In general, trade, tax, and other laws were to follow English patterns.

The War of the Spanish Succession, 1702–1713

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n m ay 4, 1702, England declared war against France. The War of the Spanish Succession was interwoven with the growing rivalry between the Whig and Tory factions for dominance in Parliament and in cabinet offices, particularly the secretary of state, secretary of war, Lord Chancellor, Lord Treasurer, and Lord President of the Privy Council. For the first five years of her reign, Anne managed to form joint ministries, but unity governments could not withstand the rivalry and disagreements between the two groups. Each was led by strong, ambitious personalities, fi rm in their respective beliefs and visions of England’s future. Tory and Whig leaders relentlessly pushed their separate agendas. Tories wanted to preserve as much as possible of the old order of Crown authority, religious conformity with the Church of England to reduce the political power of dissenters, a bastion of Whig strength, and conduct a mainly naval war to assure mastery of the seas in the interests of Tory merchants. They periodically threatened to withhold supplies for the war effort and pull English troops back from the continent. Whigs sought to reinforce the principles of 1688, toleration for religious dissenters, the Protestant succession, and deal a fi rm blow to French Catholic ambitions through vigorous prosecution of the war on European soil. Whigs gained dominance between 1707 and 1710, providing support for Marlborough’s campaigns. They rejected an early opportunity to make peace, keeping a war-weary England embroiled on the continent at great expense. The war became synonymous with Marlborough’s personal ambitions. Tories routed the Whigs in the election of 1710, reducing their representation to less than a third of the Commons. The newly ascendant Tories sought an early peace. To achieve this objective, Queen Anne acceded to a special creation of peers in 1712, packing the House of Lords to reverse Whig opposition in the upper body. Marlborough was dismissed. The Treaty of Utrecht, signed in April 1713, served Britain’s current and future interests. The balance of power was preserved in Eu rope, with neither France nor Austria acquiring the throne of Spain. Britain acquired [ 294 ]

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Newfoundland, Hudson’s Bay, Nova Scotia, and St. Kitts, in addition to Gibraltar seized in 1704 and Minorca in 1708. Tories strove to diminish the power of dissenters. When in power, they passed the Occasional Conformity Bill, which required dissenters to obtain a permit from the diocesan bishop. This measure caused a great deal of enmity in the broader Protestant community, instilled a residual fear that Tories craved a Jacobite restoration, and infuriated George of Hanover, who had previously opposed the peace talks. Anne’s death and George’s coronation resulted in the virtual death of the Tory party for the next half century. For the next forty-five years, Whigs held the key posts in the governments of George I and George II, which proved beneficial to the American colonies.

Taxes in England in 1714

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h e war of the Spanish Succession, which coincided with Queen Anne’s reign, was a costly affair.29 A national debt of 12,750,000 with annual debt ser vice of 1,200,000 in 1702 tripled to 37,000,000 and 3,100,000, respectively, in 1715. The total cost of the war in Ireland in 1690 and the War of the League of Augsburg came to 32,643,764, with the cost of the War of the Spanish Succession estimated at 50,684,956. These figures were derived by subtracting the peacetime costs of the military establishment from its total expenditure during war time years.30 A civil list of 700,000 was granted to Queen Anne charged to the ordinary excise on liquors, the previous subsidy enacted in 1698, and the land revenue of the Crown. The latter entailed the reversion of some previous crown land by descent, escheat, or otherwise back to the royal household and prohibited its future alienation. The old subsidy on port duties of 1660, the two imposts of 1690 and 1692, the special taxes on wine, tobacco, whale fins, and Scotch linen, the stamp duties, and house tax were granted until 1710, and duty on seaborne coal continued until 1708. These taxes were subsequently continued and made permanent. To finance the costs of Anne’s war with France, Parliament raised the rate of land tax from 2s. to 4s., at which it remained throughout the war, and granted further subsidies of port duties. The Treaty of Methuen negotiated with Portugal in 1703 taxed its wine one-third less than the duty on French wine, which changed the drinking habits of Englishmen for many years. New duties were granted in 1704 on tea, coffee, spices, and chemicals. (Union with Scotland in 1707 brought the Scots into the British tax net with 29

Dowell, Taxation and Taxes in England, 2:64–81, and Braddick, Nerves of State. Dowell, Taxation and Taxes in England, vol. 2, table: “National Debt, 1694–1885,” 453, appendix 5, “Cost of Each War from 1688 to 1869,” 534. 30

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several concessions previously identified.) New taxes were imposed on the domestic manufacture of candles, leather, soap, paper, printed goods (silks, calicoes, linen), starch, gilt and silverware, newspapers, the growers of malt, cards, dice, almanacs, and licenses to sell wine and beer. After the war the land tax reverted to its peacetime rate of 2s. In 1714 Britain’s tax system consisted of direct taxes on land, houses, trades (income), and hackney coaches, indirect taxes on food, beverages, tobacco, imported and exported articles, and domestic manufactures, and stamp duties. Net public expenditure in 1714 amounted to 6,185,000, of which debt charges were 3,021,000, or 48.8 percent. Annual debt charges had risen from 1,174,000, 23.4 percent of 5,010,000 of net public expenditure in 1702 when Anne was installed as queen. 31 The cost of two lengthy European military wars burdened English taxpayers with relatively heavy taxes, far in excess of those at the coronation of William and Mary.

Summary

T

he end of t he stuart s and the beginning of the House of Hanover in 1714 completed the transformation of the English constitution that began with the Glorious Revolution. The Protestant succession was secure, but the prerogative of the Crown was no more. In matters of its interest, Parliament was supreme. Party leaders became the chief executives in the royal cabinet. The cost of government was subject to regular votes of Parliament. The Crown still had the right to summon and prorogue Parliament, but it could not govern without its cooperation and consent. Statute law increasingly circumscribed executive discretion and royal orders. The representatives of the still narrow electorate—no more than one in twelve male adults enjoyed the franchise and many seats were controlled by families—increasingly dictated public policy. 32 The supremacy of Parliament was not lost on the colonists, who often chafed under crown- or proprietor-appointed governors and councils. In addition, Parliament began to play an increasingly active legislative role in restricting colonial economic rights and privileges. Trade was to conform to increasing regulation and enforcement. Money had to meet parliamentary standards. Competition in manufacturing would be suppressed. But Parliament would also offer bounties, drawbacks, subsidies, and concessions. For the most part, the routine management of colonial policy and direction rested 31

Mitchell, British Historical Statistics, table: “Public Finance 2: Net Public Expenditure— Great Britain, 1688–1801,” 578–79. 32 Colonial settlers generally had a larger franchise than the mother country, especially in the eighteenth century. The size of the franchise and the extent of voter turnout during 1689– 1714 are discussed in chapter 12.

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in the hands of royal ministers. However, the important ministers of state were invariably leaders of the ruling party in Parliament and tended to reflect their party’s attitude toward the colonies. The relative defeat of the French in the two wars of the League of Augsburg and the Spanish Succession resulted in English supremacy on the seas and a much strengthened overseas empire, which fostered the growth of English colonies in America over the geographically larger settlements of France and Spain. But the price of victory was high. Great Britain was affl icted with a large public debt and steep annual debt charges. Compared with their American cousins, Britons paid a heavy price for a quarter century of European warfare. Highly taxed Britons would gradually come to resent their lightly taxed American cousins.

Appendix: The Bank of England and the Credit Revolution in England

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h e me ch ani s m of credit established through the Bank of England merits explanation. 33 In May 1694, the Ways and Means Act granted a charter to the Bank of England. The bank was to lend the government 1,200,000 at 8 percent interest, a moderate rate given the government’s dire financial straits. In return, the bank was to be given the privilege of registering as a joint-stock company. This was an enormous concession because all other banks were required to operate as individuals or partnerships on the basis of unlimited liability to their individual proprietors. The proprietors of the Bank of England, in contrast, did not face personal liability on their private funds. Their risk was limited to the capital invested in the bank. The bank enjoyed this advantage for more than a century. The newly chartered bank was empowered to do ordinary banking business of receiving deposits and creating a credit currency. The bank was both a bank of issue and a bank of deposit. The original plan put before a parliamentary committee in 1693 contained an explicit reference to the right of note issue, but this was a point of contention. As a result, the act of 1694 contains no reference to bank notes and only one to bank bills. It envisaged that the bank would accept deposits and borrow on bills, but that borrowing should never exceed the sum of 1,200,000 at any one time, the amount the bank would raise and lend to the government, unless it be by an act of Parliament upon funds agreed in Parliament. In this restriction, the act appears to limit the bill liabilities of the bank to 1,200,000. It was not clear if the bank could legally owe more than 33 Sir John Clapham, The Bank of England: A History, vol. 1, 1694–1787 (Cambridge: Cambridge University Press, and New York: Macmillan, 1945), 19–58.

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1,200,000 upon its notes. Other provisions forbade the purchase of crown lands or lending to the Crown without parliamentary consent. A perpetual fund of interest, 8 percent on the 1,200,000, payable to the subscribers from the ships’ tonnage and liquor duties levied under the act, was set at 100,000, tax free. No individual was permitted to subscribe more than 20,000, and a quarter of all subscriptions was to be paid in prompt cash. Individuals were to be personally liable for any debts of the bank exceeding its capital of 1,200,000. The bank’s capital of 1,200,000 was subscribed within twelve days. The subscribers became a corporation called the Governor and Company of the Bank of England. Only 60 percent of the subscription, 720,000, was called up immediately by the governors of the bank. The bank made its loan to the government in installments. On August 1, 1694, it gave the government 720,000 in cash, in a combination of drafts on other banks and 480,000 in notes under the seal of the bank, which became known as “sealed bank bills.” In return, the bank took the government’s promise to repay in the form of interest-bearing tallies (bonds, or government stock). From August 22, treasury orders for the spending of the money began. By year’s end, the full sum had been advanced to the government. However, as of January 1, 1695, the remaining 480,000 of shareholders’ subscriptions had not been called in and remained available for future banking activities. Moreover, even some of the 720,000 existed in the form of subscribers bonds that the bank reckoned, optimistically, as cash. On receipt of the loan, the government used the bank’s notes to purchase supplies for the army. They were quickly accepted everywhere at par for all payments and replaced inland bills of exchange as the preferred means of remitting money around the country. Where the king’s pay was deemed bad, with the Orders and tallies of Charles II payable in eighteen months if at all, the bank’s bills, sealed with the common seal of the corporation, were good as gold in the eyes of the public. Bank of England sealed bank bills assured the king of purchasing power. The bank, in turn, was guaranteed interest by a specific act of Parliament. For 100,000 in earmarked tax revenue, the government of England could spend 1,200,000. For their part, the bank’s shareholders received a dividend of 6 percent in the first half year, a double-digit return on an annualized basis. The bank raised additional capital from its acceptance of deposits and the circulation of sealed bills in addition to those it gave the government as part of the original 1,200,000. More important to the profitability of the bank and its ability to create additional credit for the government and private commerce was if its total borrowing was limited to 1,200,000 as stated in the act of 1694. The governor of the bank tried but failed in 1695 to negotiate a clause in the act that would permit an issue of sealed bills in excess of 1,200,000. A court ruling declared that new bills could be issued only as [ 298 ]

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old bills were retired. However, the court ruled that the limit applied only to sealed bills, not to the less formal “running cash notes” of the bank, which lacked the corporate seal and were merely signed by the cashier. Excluding running cash notes from the limit amounted to a license to print money, literally cash, subject to the prudential judgment of the bank’s managers. Forms were printed with blanks for names, amounts, and the cashier’s signature. These cash notes, nicknamed “Speed’s notes” from the name of the cashier, were issued, circulated freely, and were accepted at full face value. They were deemed as secure as the sealed bills backed by the bank’s share capital and government tallies or loans. The combined issue of sealed bills and cash notes quickly exceeded the authorized subscribed capital and borrowing on bills. Credit could be created to the extent that the public accepted bank paper as good currency. The first issue of sealed bank bills bore interest of 2d. per 100 per day, an annual rate just over 3 percent. Interest bearing bills of 2–3d. remained in circulation for twenty-two years. Their acceptability prompted the bank to issue non-interest-bearing bills from 1698. Large-denomination bills were accepted by the government as cash and paid out to its creditors. Recipients typically cashed them at the bank, or placed them as deposits against which they took running cash notes. The clients of the bank took the sealed bills as a convenient medium for payments to the Treasury and for cross-country remittances in place of inland bills of exchange. Apart from gold and silver coins, used as petty cash, the public preferred the bank’s non-interestbearing running cash notes, which were smaller than the sealed bills but larger than the interest-bearing 5 and 10 denomination Exchequer Bills issued by the government. The public’s preference for non-interest-bearing Bank of England currency made it the supplement to gold and silver coins in the eighteenth century instead of government paper money. The people of England had more trust in private money than government paper. During late 1694 and early 1695, the bank purchased more and more tallies, which had the effect of replacing depreciated wooden securities with bank-sealed bills and cash notes. Money that had been locked up in depreciated securities of the Crown, amounting to as much as an estimated 5 million in 1694, began to circulate freely in the form of the bank’s bills and cash notes. The growing supply of currency and credit enabled the government to issue more public debt, or government stock, which enabled it to pay for the fleet in the Mediterranean, allow the Ordnance Board to make large-scale purchases it previously could not afford, and clear dockyard arrears. The bank assisted the government with the transfer of money to its overseas military forces. The general financial condition in England improved as merchants were far more willing to accept bank bills and notes in place of crown tallies and treasury orders. Government bonds slowly became a prime investment, gilt-edged as it is called in England. [ 299 ]

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The balance sheet of the Bank of England on November 10, 1696, showed liabilities of 2,101,187 13s. 5d. Sealed bills amounted to 893,800, running cash notes 764,196 10s. 6d., money borrowed in Holland 300,000, 17,876 of interest due on outstanding bills, and a cash balance of 125,315 2s. 11d. The total of sealed bill and cash note liabilities clearly exceeded 1.2 million. The right to print cash notes, so long as they were accepted by the public, created a circulating medium in excess of the bank’s subscription of capital. The assets of the bank consisted largely of government tallies from the original loan and subsequent loans and discounts chargeable to parliamentary funds, which secured the original capital. Only 266,610 17s. of its 2.1 million in assets was mortgages, pawns, other private securities, and cash. The accounting practice of the bank differs from modern accounting. The paid-up portion of the capital, 720,000, was not shown separately as a liability to shareholders. Rather, it was treated as a deposit and included in the liability side for running cash notes. Similarly, the original loan to the government was included as tallies or claims on parliamentary funds. The bank’s assets were largely government paper and its domestic liabilities were nearly all sealed bills and cash notes, both of which were negotiable and added to the preexisting paper currency (e.g., goldsmith’s notes, inland bills of exchange). In its early years, the bank served primarily as a means for financing the government by inflating credit, with only modest commercial business. Despite the ups and downs of the government’s chronic need for additional funds, the temporary deflationary effects of a nationwide recoinage in 1696 to eliminate substandard silver coins from circulation, and repeal of tonnage that originally served as security for blocks of tallies held by the bank, a brief peace signed in September 1696 resulted in a two-thirds rise in the bank’s stock by the following September. The bank paid off its debt to Holland, received a handsome return on its holdings of government loans, rapidly expanded its ordinary commercial business, and was able through very large dividends and capital repayments to return the entire principal of the original subscription to the proprietors by 1706. The bank stood at the center of a rapid expansion of the commerce and finance of London, enjoying the sole right to operate as a joint-stock banking corporation.34 As previously noted, the government only borrowed 13 million compared with 59 million collected in taxes in the fifteen years encompassing 1688–1702. This ratio would rise dramatically over the course of the eighteenth century. 34 As described in chapter 13, Massachusetts issued quasi-official government paper money in 1690, four years before the issue of Bank of England bills and notes, in response to a shortage of ready cash following a failed military expedition against French forces in Canada. Massachusetts bills of public credit were the first state-issued paper money in the Western world. A private bank in Stockholm, Stockholms Banco, issued the first paper money of the Western world in the 1660s.

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Imperial Governance: Constitutional and Commercial Policy, 1688–1714

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h e g l or io u s Revolution did not alter the ideas that underpinned England’s imperial system. The core beliefs of mercantilism—a favorable balance of trade, accumulation of specie, monopolizing markets in the colonies for English exports, expansion of shipbuilding, and access to naval stores and other commodities England did not produce—remained the accepted doctrine of English commercial policy. But there were flaws in the trade acts and gaps in the structure of their enforcement. To remedy these problems, Parliament moved to strengthen England’s commercial empire and ensure the collection of duty. These tasks grew in importance with the rising expense of the War of the League of Augsburg. On April 10, 1696, Parliament passed the last of the major trade acts, this one titled “An Act for Preventing Frauds and Regulating Abuses in the Plantation Trade.” Its objective was to ensure strict enforcement of all previous trade acts. To that end it reorganized the colonial customs ser vice to place more authority in the hands of royal officials, tightened the legal and judicial mechanisms of enforcement, and declared void all colonial laws that contravened the several previous trade acts. At the close of Queen Anne’s reign, the legal and administrative system of imperial governance was fully developed, and it remained basically unchanged up to the American Revolution.

Imperial Governance: Constitutional Issues

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he g l or io us Revolution established that Parliament was supreme, with monarchs subject to its laws. However, acceptance of this condition did not prevent them from seeking to maximize their prerogative. English monarchs preferred to conduct affairs of state by orders of the kingin-council or other royal instruments, rather than by direction of Parliament. At times they might seek legislation when royal orders failed to achieve colonial compliance, but resorting to Parliament was a last choice, taken when monarchs could not achieve their objectives through royal orders alone.

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A brief review of events leading up to the Navigation Act of 1696 helps explain its necessity. In December 1674, facing grave financial distress, Charles II abolished the Council for Trade and Plantations, transferring its colonial work in early 1675 to the Privy Council’s Committee for Trade and Plantations. In 1688 James II declared all its lords a standing Committee for Trade and Foreign Plantations. Committee members were assisted in their work by the secretary of state, the key official responsible for colonial affairs, the Admiralty and War Office, entrusted with enforcement of the Navigation Acts, the Treasury, and the Commissioners of Customs, a sub-branch of the Treasury. The Navigation Acts of 1660 and 1663 placed responsibility for enforcement in the hands of colonial governors. The plantation duty act of 1673 differed in this regard. Following its passage, the English government dispatched several categories of royal officers, collectors, comptrollers, and a surveyor-general to the colonies, or selected them from high-ranking local persons, to enforce the act and remit royal revenue. Colonial governors and courts were instructed to support royal appointees in their efforts to ensure compliance with the trade acts. However, colonial governors did not relish sharing enforcement duties or the rewards of prizes from condemned cargo with the new English customs officials. For the first seven years of his reign, preoccupied with war in Europe, William continued the institutions of imperial governance he inherited from James. Passage of the Navigation Act of 1696, discussed below, raised the matter of implementation: whether it was to be specified by act of Parliament or left to royal prerogative. William preferred to maintain administrative authority in his executive departments rather than approve any extension of power of Parliament to control trade and the colonies. He recognized the need for a body to oversee and coordinate the administration of England’s growing empire. To forestall an enlargement of parliamentary power and to secure in royal hands the power to regulate trade and manage colonial affairs, on May 15, 1696, William set up a body by the commission of the great seal to which he, not Parliament, exercised the power of appointment. Its formal title was the Lords Commissioners of Trade and Plantations, but it became commonly known as the Board of Trade.1 Parliament occasionally sought information from the board but did not interfere in its routine operations. For example, in October 1696 the House of Commons ordered it to lay before the house “the present state of trade.” The board’s reply dealt with the wool trade, which was followed three years later by legislation to limit Irish and colonial woolen exports. In February 1697, 1 Prerogative versus Parliament is discussed in Arthur Herbert Basye, Th e Lords Commissioners of Trade and Plantations Commonly Known as the Board of Trade, 1748–1782 (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1925), 1–2.

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the House of Lords ordered the board to lay before it a copy of its commission with comments on its adequacy and what it had done to improve trade. The board replied that it had written to colonial governors to suppress piracy and reduce illegal trade, and had investigated colonial conditions and laws and was thus able to make recommendations to improve trade.2 These orders did not have any force of law, but cooperation with Parliament was essential in preserving the board’s influence and its usefulness to ministers of the Crown. Royal establishment of the board, despite its limited success, was testimony to the king’s exercise of prerogative in the affairs of his colonies. The customs ser vice in the colonies that emerged from the 1696 Navigation Act, the principal agency of enforcement of English commercial laws and regulations, remained basically unchanged for most of the eighteenth century. However, its effectiveness varied with the shifting political winds in England. Whigs and Tories differed over the proper level of enforcement. Different branches of the English government often quarreled over how to manage colonial affairs. Most important, the colonists did not willingly accept the new legislation and the authority of its bevy of royal officers. A second constitutional issue was the exercise of royal prerogative against the express and implicit rights embodied in colonial self-government. The rejection of Poynings’ Law for Jamaica demonstrated the limits of prerogative once a grant of self-government was made. From time to time English ministers and departments sought rulings from England’s attorney general and other legal experts on whether they could command colonial governments and legislatures to comply with their instructions. In a majority of cases, the attorney general and other legal experts ruled in favor of the colonies. Kings, queens, admirals, the secretary of state, the Lord Treasurer, the Commissioners of Customs, and other English officials could not overrule advice and decisions based in law. The colonists were loyal to England, up to a point. They developed their own economic and political interests over the course of the seventeenth and eighteenth centuries. Governors, councillors, elected assemblies, local naval officers, and colonial courts resisted English efforts to centralize imperial control over commerce. Colonial interests rarely coincided with those of English merchants. Governors came to equate their personal welfare with those of their colonial subjects. One could say that many English governors became American rather than rule as faithful servants of the Crown. Governors with control over patronage were generally able to govern more effectively and with less friction than those unable to reward supporters; they strove to retain their power and prerogative against the secretary of state, the Customs Commissioners, and other English officials. Some became

2

Basye, Board of Trade, 20–21.

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partners in trading ventures with leading colonists. Common law courts in the colonies with colonial juries usually favored local litigants in cases involving violations of the trade acts.

Prelude to the Navigation Act of 1696

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mong al l the English colonies, Massachusetts had proved most troublesome to the Crown. Lax enforcement of the trade acts was an important justification for the revocation of its charter in 1684. The creation of the Dominion of New England in 1686 was a royal effort to bring Massachusetts and New England to heel. New England again became the target of both Crown and Parliament in the Navigation Act of 1696. Massachusetts subscribed to a commercial policy of relative free trade, in marked contrast with the empire-building mercantilists of England, who craved monopolies in manufacturing, shipping, commodities, and markets. By the late seventeenth century, Massachusetts had developed its own trade channels largely removed from England’s Navigation Acts. 3 During the Restoration period, England attempted to incorporate New England trade into its commercial system. Massachusetts resisted, insisting that its charter, which had been carried out of England to the New World, exempted it from English regulations. Unlike the southern colonies and West Indies, whose products were profitably shipped to England in exchange for manufactured goods and provisions, New England produced little that England wanted, apart from furs, lumber, and whale products. To import English products, New England would have to earn hard money, specie or bills of exchange, by exporting domestic agricultural products, livestock, and timber, and, more important, acquire other goods for processing, reshipment, or exchange. In the seventeenth century, Boston became the center of an extensive trade in all directions—to the fishing territories of Newfoundland and Cape Breton, to the wine islands of the Azores, Canaries, and Madeira, to Spain, Portugal, and southern Europe, and to northern Europe and the British Isles. Boston developed a network of suppliers of foodstuffs, timber products, naval stores, whale oil, furs, and fish, paying for these goods with enumerated products carried from the southern colonies and West Indies, with foreign and English goods, and with domestic manufactured goods. The latter included woolen goods, linens, hats, and tanned and dressed hides and skins; of these, the growth of woolen products posed a serious threat to one of England’s most important industries. 3

Th is section on New England’s commercial system draws from Viola Florence Barnes, The Dominion of New England: A Study in British Colonial Policy (New Haven: Yale University Press, London: Humphrey Milford, and Oxford University Press, 1923), 135–73.

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New England’s merchants purchased, shipped, and sold tobacco from Maryland and Virginia, grain from Virginia, Maryland, and Pennsylvania, and naval stores from the Carolinas. The proceeds paid for imported European goods, home manufactures, lumber, fish, and other provisions. New England’s most extensive trade was with the British West Indies, shipping refuse fish, lumber, horses, provisions, and European goods in exchange, illegally, for sugar, molasses, cotton, rum, ginger, and several dyewoods. The products of the West Indies were enumerated, which meant that they were to be sent directly to England, not to proceed indirectly via New England or to be carried on colonial ships directly to European ports without fi rst unloading and paying duty at an English port. London was losing its importance as the center for staples and the Crown was losing duty. New England also developed a flourishing trade with the French island colonies, supplying foodstuffs, livestock, timber products, and continental manufactured goods in exchange for sugar, molasses, and rum. This trade was profitable, although illegal under French commercial policy, which sought to exclude foreign traders from its possessions. The Treaty of Neutrality of 1686 allowed English and French ships to enter the ports of each others’ colonies for wood and water, or if driven there by storms. Under these terms, an illicit trade developed between New England and the French islands. Similar agreements between England and Holland and England and Spain enabled illicit trading by New England’s merchants. New England’s traders enjoyed a financial advantage over their English counterparts. They exported enumerated commodities that had been purchased in other American colonies, along with foodstuffs, timber products, and raw and manufactured wool to France, Hamburg, and Holland. They shipped fish and lumber to southern Europe in exchange for hard money or fruits, oil, soap, wine, brandy, or salt. The proceeds of these sales were used to buy a wide variety of manufactured products. Although the return trade, in keeping with the Navigation Acts, was required to stop at an English port, pay the required duty, and then proceed to the colonies, the colonists frequently evaded this requirement. They were able to import duty-free goods into New England for domestic consumption or resale in the West Indies. Massachusetts could sell duty-free Eu ropean goods in the colonies and West Indies at a substantially lower price than English merchants could; the latter had to pay English export duty. New England’s purchase of enumerated goods for resale in Eu rope was eating into the English trade monopoly of enumerated goods, as well as also costing the Trea sury thousands of pounds in duty. Colonial ships and sailors were displacing English ships and sailors in the carry ing trade. Colonial ships and crews were legal under the Navigation Acts, so long as they were not used in violation of them.

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New England’s policy of free trade is evident in Naval Office records. During 1686–89 only about ten ships of every two hundred or more, some 5 percent, departed Massachusetts ports each year for England, largely carry ing lumber, furs, whale products, and enumerated products, returning with some manufactured goods as return cargo. The overwhelming bulk of New England’s trade was with other colonies, the Ca ribbean, and Eu rope. Illicit trade intensified in response to the parliamentary acts of 1673 and 1685. The plantation duty act of 1673 resulted in double duty, export duty of the first port of lading in a colony and import duty in England. The act of 1685 imposed additional duty on sugar and tobacco, increasing the latter from 2d. to 5d. a pound. Duty had to be paid by the importer, which made marketing those products somewhat more difficult even if the additional tax was ultimately borne by English consumers or refunded on reexportation. New England had few products to supply England in exchange for manufactured goods, and thus had to balance its trade with specie and profits from trading with Europe and the Caribbean. Another irritant to England was New England’s sympathy with pirates, who brought in cheap goods in large quantities thus reducing the purchase of English goods. In the colonies, pirates freely spent silver and gold coins, which was an important source of hard money. Pirates brought in silver plate that could be used by the Massachusetts mint to coin money until its closure. Colonial governors in New England, all elected until 1684 (except New Hampshire after 1680), made little effort to suppress piracy. Indeed, they freely issued letters to privateers while England was in confl ict with France and Spain over the islands of the West Indies. Local merchants often invested in piracy. Piracy threatened England’s agreements with France, Holland, and Spain, and England wanted its suppression. As stated, New England’s most important trade routes were to Europe and the West Indies. In contrast with their English rivals, New England’s traders were not burdened by customs duty. They could buy and sell enumerated commodities more cheaply than the English could. The coast towns of New England developed a flourishing shipbuilding industry. When the Staple Act of 1663 resulted in the establishment of a royal customs ser vice separate from the colonial governor’s authority, New England’s governors routinely obstructed the enforcement efforts of the new royal officials. The creation of the Dominion of New England in 1686, and the arrival in 1688 of Governor Edmund Andros, who was temporarily paid from England to free him from colonial dependence for his salary, brought more rigorous enforcement of the trade acts and suppression of piracy. Andros succeeded in enforcing the Navigation Acts for the first time in New England’s history, and the region was effectively incorporated into England’s [ 306 ]

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mercantile system. As a result, its trade declined, and several merchants and numerous shopkeepers went bankrupt. Suppression was short-lived. William’s invasion of England led to the overthrow of the dominion. William granted a new charter to Massachusetts in 1691 and reinstated the charters of Connecticut and Rhode Island. Trading returned to its former channels but at a reduced level. Given that England was enmeshed in a lengthy continental war at great expense, a return to the old illicit practices of New England, even on a smaller scale, became intolerable to England’s merchants, manufacturers, and the Treasury. In response Parliament enactment the 1696 Navigation Act to more strictly enforce the trade acts. In 1699 it passed the Woolen Act to halt the development of a colonial woolen manufacturing industry (see below).

The Navigation Act of 1696

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dwar d rand ol ph, surveyor-general of the customs in the colonies, and other English officers dispatched to America following the plantation duty act of 1673 complained to London about the obstacles placed in their path. These included conflicts over jurisdiction between governors and English customs staff, along with general laxness, disregard, and even outright obstruction by the colonists of royal efforts at enforcement.4 The acts of 1660 and 1663 gave colonial governors the power and responsibility of enforcement. Parliamentary statute power was given to the Customs Commissioners only in the act of 1673. The existence of two sets of officers resulted in duplication, overlapping of duties, and disputes over jurisdiction. Governors routinely cited the 1660 and 1663 acts to block the efforts of royal officers, claiming the prerogative of enforcement for those caught violating the trade acts. To remedy these problems, Parliament passed the Navigation Act of 1696.5 4 The biography of Edward Randolph and his efforts in the colonies are described in Michael G. Hall, Edward Randolph and the American Colonies, 1676–1703 (Chapel Hill: University of North Carolina Press, 1960). 5 The text of the act is posted at http://www.founding.com/ library/ lbody.cfm?id=83& parent=17, 3–5 (June 29, 2004). Further discussion of the act appears in Thomas C. Barrow, Trade and Empire: The British Customs Ser vice in Colonial America, 1660–1775 (Cambridge, MA: Harvard University Press, 1967), 53–59. It should be noted that the collection of revenue in the colonies was generally incidental to the main purpose of the trade acts, which was to keep English trade out of the hands of foreigners and ensure an English monopoly over enumerated commodities. Customs officials established in the 1673 act were enforcers of these purposes rather than revenue collectors. The concern for revenue lay in the collection of customs in England, not so much in the colonies. The collection of duties to finance the expenses of colonial governments was generally in the hands of colonial, not royal, officials, although sometimes the same person performed both tasks.

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The purpose of the act was to ensure strict enforcement of the older acts of trade rather than impose new regulations on the scope and conduct of trade. Its provisions were to take effect on March 26, 1698. 1. No goods were to be carried to or from the colonies in any but Englishbuilt and English-owned vessels, except those of foreign construction that had become English-owned vessels as a result of capture. This provision was to preclude foreign shipping from the colonies and encourage shipbuilding in England and its dominions. 2. Colonial governors were required to take an oath to enforce every provision of all the Navigation Acts. Failure to take the oath or uphold the laws would result in removal from office and forfeiture of a 1,000 sterling bond governors were required to post upon their appointment to ensure compliance with their commission and instructions. 3. Naval officers appointed by colonial governors were to be approved by the Commissioners of the Customs in England and give bond for the faithful performance of their duties. Previously appointed local officers were now integrated into the official royal ser vice. Any naval officer opposing other royal customs officers or found negligent in his duties faced dismissal and loss of his bond. 4. The Lord Treasurer, Commissioners of the Treasury, and Commissioners of the Customs in England were empowered to appoint as many officers as they deemed necessary. Only natives of England, Ireland, and the colonies were permitted to sit on juries deciding violations of the Navigation Acts that could result in the forfeiture of ships and goods. The proceeds of seizures were to be divided among the Crown, the governor, and the person who brought suit. Suits could be brought in any English court at Westminster, or in Ireland, or in a vice-admiralty court in the colonies, with the venue to be chosen by the customs officer or informer. 5. Royal officers collecting and managing crown revenue in the colonies were to have the same powers and authorities as those of English customs officers and the protection of English courts in the conduct of their duties. This provision extended the Act of Frauds to the colonies. That act was passed in 1662 to protect English customs officers against personal harm and gave them extensive powers of enforcement, including general search warrants and the right of forceful entry in cases of supposed concealment of illegally imported goods. Colonial officers were given the equivalent status of English officers. 6. The burden of proof was placed on defendants in all cases arising from illegal importation or exportation of goods from the colonies. Payment of enumerated duties in the 1673 act on goods shipped between the colonies did not excuse a ship’s captain from posting bond to guarantee [ 308 ]

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carriage of goods only to England or another English territory. Failure to comply would result in the seizure of the ship and its goods. 7. Even if bad weather, lack of provisions, or other situations compelled a ship to land in Scotland and Ireland, its goods could not be unloaded there. All goods were to be fi rst landed in England or Wales. 8. All colonial laws contravening the Navigation Acts were declared illegal, null, and void. The hope that legislation in the colonies could be influenced or directed from England was replaced with the review of colonial legislation, which became a major administrative task in England up to the American Revolution. Other articles in the act tightened the registration of ships to ensure genuine English ownership and crews, and the imposition of severe penalties on forged papers. A general register of all vessels was to be kept in England. The act exempted from registration small fishing vessels, hoys (coasting vessels), lighters, barges, and open boats whose navigation was confined to the rivers or coasts of the colonies of the place where they normally traded.6 The Navigation Act of 1696 reorganized the colonial customs ser vice. It sought to eliminate illicit trade between Scotland and the colonies, which had developed under the eyes of lenient or negligent governors, bribed or inept customs officials, and favorable juries in colonial common law courts. All colonial legislation that limited the actions of royal officers was taken off the books. The creation of vice-admiralty courts was to afford a more effective venue for prosecuting violators of the Navigation Acts.

Operation of the Colonial Customs

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ng l i s h - sal ar ied g ov er nors were not appointed until the close of the colonial period.7 Until then, the general principle of the English Treasury was that the colonies should be self-supporting, including payment of the governor’s salary, save for the extraordinary costs of defense against foreign attack. Passage of the Navigation Act of 1696 required the Treasury to take a larger role in colonial affairs in the eighteenth century. The London Customs Board, a subordinate agency of the Treasury, was 6

Th is exemption reflected the achievement of common law courts in England in removing jurisdiction of inland waterways from admiralty courts as described in the next section of this chapter. 7 The functioning and management of the colonial customs system between 1696 and 1714 are discussed in Dora Mae Clark, The Rise of the British Treasury: Colonial Administration in the Eighteenth Century (Hamden, CT: Archon Books, 1969), 15–38 (fi rst published in 1960 by Yale University Press), and Barrow, Trade and Empire, 60–116.

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responsible for managing an enlarged colonial customs staff. It dispatched the principal officers to the colonies, and submitted the semi-annual salary bills for America to the Treasury for approval. It gave general instructions to the officers, disciplined them when necessary, granted leaves of absence, and approved the collectors’ accounts. The Commissioners of the Customs, serving under the Treasury, had been granted their authority by Charles II under the great seal of England. Their duties included collecting subsidies and imposts in England, Wales, and the 4 1 ⁄2 percent export duty in the West Indies; supervising the importation of dutiable goods; and boarding and searching ships and warehouses as required. In 1671 there were six commissioners, each receiving a salary of 2,000 sterling a year. Their numbers varied from five to eight, but their annual salary was lowered to 1,200 in 1675 and further to 1,000 in 1694, where it remained until the middle of the eighteenth century.8 The annual cost of the commissioners, secretary, clerks, solicitors, rent, and other expenses connected with their activities was somewhere in the neighborhood of 9,000–10,000 when the Navigation Act of 1696 was passed. Perhaps between a quarter to a third of this cost can be apportioned to their responsibilities for the American colonies, the rest mainly to the West Indies. During the reign of Queen Anne the Lord High Treasurer became her most important counselor. His colleagues included the chancellor of the Exchequer, second in the Treasury, and three junior lords. They were assisted with a secretary, clerks, and numerous servants. The Treasury, keeper of the government’s purse, was responsible for authorizing payments for colonial purposes from both the Civil List and the National Expenditure. The Lord High Treasurer had to share power with the secretary of state for the Southern Department, who had jurisdiction for the American colonies, and who sat in the royal cabinet. Treasury lords had to work with military officials whenever France or Spain threatened the American colonies. The involvement of more departments and individuals complicated the task of imperial governance. To free royal customs officers from financial dependence on colonial legislatures, the Treasury issued an administrative order on November 20, 1696, to pay their American officers from the English Exchequer. An establishment of twenty-seven men was initially planned at a cost of 1,525 sterling, and Edward Randolph, the surveyor-general of the colonies, was to supervise its activities. This cost, while in apposition to the general policy of colonial self-support, was deemed sufficiently modest at the time to ensure some measure of independence for the royal officers.

8 Lawrence A. Harper, The English Navigation Laws: A Seventeenth Century Experiment in Social Engineering (New York: Columbia University Press, 1939), 140–41.

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Randolph traveled extensively in the colonies until his death in 1703. His successor, Robert Quary, continued his efforts for the next seven years. With the exception of Virginia, where Quary judged enforcement of the trade acts to be competent, the general condition of lax enforcement, widespread illegal trade, and outright opposition to the customs collectors in New York, New England, Maryland, North Carolina, and Pennsylvania persisted. Governors resented the loss of patronage with the appointment of highlevel customs officials from England. They frequently contested collectors over prizes and jurisdiction, often coming to the aid of local councillors and other colonial friends whose support was required for smooth governance, not to mention the governor’s salary and land grants. Governors were often engaged in trade, accepted bribes, engaged in illicit activities themselves, and supported piracy. They sometimes encouraged violence against customs officials, ordered low-level customs officials not to perform their duties, and set low fees that made low-level jobs unattractive. The administrative system that had evolved by 1710 remained largely intact until 1763. The American customs ser vice was divided into several large districts: the northern colonies, Pennsylvania and the southern colonies, and the West Indies and Bermuda.9 There were thirty-four customs districts staffed by forty-two permanent officials. In general, a surveyor-general oversaw each of the large districts. In the twelve colonies, staffing varied with the size and importance of the port. Such large ports as New York were fully staffed, with a collector (and/or his deputy), a comptroller, surveyor, searcher, landwaiter, tidewaiter, and clerk to handle paperwork. The collector was required to see that all goods were entered properly in his presence, that no cargoes were loaded or unloaded without his warrant, that required duties were paid on enumerated items, and that proper bonds were given when necessary. He was not to engage in trade himself, and he was required to transmit customs receipts to England. The comptroller was to keep his own records, verify the accounts of the collector, and co-sign official reports. The surveyor and searcher were to inspect and control activities in the harbor. Tidewaiters were to board incoming vessels and ensure that no goods were landed before the mooring was reached, landwaiters were to watch ships at moor to see that no unauthorized loading or unloading took place, and searchers were to examine the loading and unloading process. In the small ports, the collector performed all of these functions. Colonial naval officers were largely concerned with keeping official port records.

9 Th is description of the structure of the customs ser vice draws from Barrow, Trade and Empire, 72–83.

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The more important officials were appointed from England (appointments that typically were based on connections and patronage), and fees had to be paid to secure the appointments. In addition to the official salary, customs officials were allowed certain fees for almost every transaction; these came to be regulated by colonial statute. Most colonials only obtained minor positions in the customs ser vice. Each surveyor was paid 495 sterling a year, plus 130 for a clerk, a boat, and four boatmen. Other salaries ranged from a high of 160 for the collector at Philadelphia to 35 for the surveyor at a small town in Maryland (larger ports generated bigger incomes). Altogether, the cost of the American customs ser vice to the British Exchequer in 1710 was 3,700, a figure that remained relatively constant over the next five decades. Revenue from collections fell short of the annual cost of the system. Annual average revenue during the four years 1707 to 1711 was 1,826. After subtracting income, locally incurred expenses of enforcing the trade acts in the colonies cost British taxpayers about 2,200 a year during those four years. Moreover, the salaries paid to the various customs officials were largely spent in the colonies. From a revenue standpoint, enforcing the trade acts was a losing proposition. Moreover, two-thirds of the duty were collected in the West Indies, where local colonial governments had agreed to a 4 1 ⁄2 percent export duty in exchange for certification of land titles. Much larger losses were incurred in operating the continental customs ser vice, which collected a meager 640 a year. Most of this remained in America for payment of costs. Sometimes the British Treasury authorized governors to use the proceeds in military operations. Few of the collectors ever remitted a surplus to the receivergeneral. Deposits in the English Exchequer between 1700 and 1709 never exceeded 2,700, again mostly from the West Indies; in 1710, the figure reached the unusually large amount of 5,420.10 Widespread reports of illicit trading, smuggling, acquittal of seizures, obstructions, and other opposition to enforcement of the trade acts suggest that the Navigation Act of 1696 failed to achieve fully its objective of regulating trade in the interests of English commerce and revenue.11 How far 10

Clark, The Rise of the British Treasury, 19. Customs officials did not always submit accurate accounts of colonial conditions. Submitting reports of colonial opposition to their efforts helped cover their tracks in accepting bribes, laxity in their duties, and conniving with smugglers, as well as other malfeasance. One must be careful not to accept at face value the contents of self-serving correspondence of customs officials, colonial governors, and others who sought personal benefit or wished to influence public policy. A constant theme of those who wished stricter regulation of colonial trade to enhance their fi nancial or political advantage was the large losses to royal customs revenue due to smuggling and lax enforcement. Stricter regulation invariably yielded only a small fraction of the previously estimated losses. 11

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short it fell is impossible to estimate given that evidence on smuggling and weak enforcement, by its nature, is not subject to rigorous calculation. Over time, the system of enumeration was expanded, partly to benefit industries in England and partly to increase revenue. The cultivation of rice, which was introduced into South Carolina around 1688, spread quickly, becoming the staple commodity of the colony. Rice planters developed markets in Spain and Portugal, supplanting rice grown in Egypt and Italy. In 1704 Michael Cole, a sea captain trading between England and South Carolina, persuaded the Lord High Treasurer and the Commissioners of the Customs to include rice in a revenue bill, which also included molasses. Cole claimed that exports of South Carolina rice to Holland and Portugal weakened England’s economic ties to the colony. He estimated that the shipment of 340 tons of rice to Holland in 1704 resulted in lost royal duty of 1,470. Rice and molasses were subsequently enumerated in an act of September 29, 1705.12 Molasses was included to keep that produced in English colonies from falling into the hands of Dutch and French traders, to prevent the importation of Dutch and French molasses into England, and to meet the home market demand for brandy from England’s own distilleries. As rum was increasingly used in the army and navy, it made sense for English soldiers and sailors to consume English rather than French and Dutch rum. Naval stores were enumerated in an act of January 1, 1706. The War of the Spanish Succession revealed the Royal Navy’s dire need for timber and other naval stores. In this case, whatever loss the colonists might have suffered from a restriction on their exports was offset by a system of bounties of 4 sterling per ton for tar and pitch, 3 for rosin or turpentine, 6 for hemp, and 1 for masts and bowsprits. Mast timber and naval stores were thereafter included on the enumerated list of colonial export items to be shipped to England. These commodities had previously been purchased from Sweden, Norway, and Russia, resulting in a British trade deficit of 350,000 with these countries. Moreover, naval officials were always concerned about the possibility that these countries might restrict their exports to England, raise export duties and hence their cost, and impose import duties on English 12 Th is episode is recounted in Charles McLean Andrews, The Colonial Period of American History, vol. 4, England’s Commercial and Colonial Policy (New Haven and London: Yale University Press, 1964), 95. The promised benefit to England failed to materialize and planters experienced a downturn in sales to their principal markets in southern Eu rope as a result of the higher costs due to the unloading of rice in England and its reloading for subsequent export. Acts of Parliament in 1730 and 1735 removed the restriction on direct sales of rice to southern Eu rope, but retained the ban on Holland, Germany, the Spanish main, and the Ca ribbean until 1765 when the ban on the latter two was removed. Little rice was consumed in England and nearly all the duty was rebated on reexportation, which meant that its inclusion in the list of enumerated commodities produced little revenue for the Exchequer.

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goods, thus reducing their sales.13 Inclusion of naval stores was not to increase royal revenue but to ensure a stable supply of naval stores. New England, in particular New Hampshire, and the Carolinas were beneficiaries of the bounties.14 Comprehensive trade figures on colonial exports to and imports from England are available from 1693. These exclude smuggling and illicit shipments to foreign counties and colonies. In 1693 the colonies exported a meager 113,600 sterling worth of goods to England. Of that sum, 67.2 percent came from Virginia and Maryland, almost entirely tobacco. In 1714, the last year of Queen Anne’s reign, colonial exports increased to 395,774, of which 70.9 percent was attributed to the two tobacco colonies. Between 1693 and 1714, New England’s exports grew from 36,662 to 51,541, reflecting a rise in the export of naval stores. The value of exports from the two Carolinas rose from 4,769 in 1694 to 31,290 in 1714 as a result of the expansion of rice cultivation.15 Between 1699 and 1714, colonial rice exports rose from 131,000 pounds to 3,139,000 pounds.16 Almost all of it was shipped from South Carolina, with a small fraction reshipped from New England, New York, and Pennsylvania. Tobacco was still preeminent, but other colonies were playing a larger role in trade with the mother country in the quarter century following the Glorious Revolution. During 1688–91, duties supplied 1,920,000, 22.3 percent of net public receipts of 8,613,000 of the English government. In 1714, duties yielded 1,599,000, 29.8 percent of net receipts of 5,361,000. During 1688–1714, duties generated 30,575,000, an annual average of 1,176,000; net public receipts came to 116,111,000, an annual average of 4,465,807. Th roughout the period, duties supplied 26.3 percent of net public income.17 It should be

13

Andrews, The Colonial Period of American History, 4:103. Indeed, in 1735 Sweden imposed a 10 percent duty on all imports. In later years, other goods were added to the list of enumerated commodities. These included beaver skins and furs on March 25, 1722, copper ore on September 29, 1722, and coffee, pimento (Jamaican pepper), cacao, hides and skins, whale fins, raw silk, pot and pearl ashes, iron, and lumber on September 29, 1764. The list and dates of these later enumerations are in Harper, The English Navigation Laws, 398–99. One relaxation of the 1663 Staple Act was approved on June 24, 1704, when Irish linen could be imported directly into the colonies from Ireland without fi rst having to be unloaded and reloaded in England (400). 14 North Carolina is known as the tar heel state because of its production of naval stores. 15 Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg429–42: “Value of Imports into and Exports from England, by Colony or Locality: 1693–1791,” S-710–13. 16 Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1160–65: “Rice Exported from South Carolina and Georgia: 1698–1790,” S-763–66. 17 These calculations are based on numbers published in B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance 2: Net Receipts of the Public Income—Great Britain, 1688–1801,” 575.

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noted that total customs duties included all imports, not just those from the twelve American colonies. Most of the products of the New England and middle colonies were not enumerated. Enforcement of the trade acts was of little economic importance and widely disregarded in them. The tax implications of the trade acts had little effect on their residents.

Vice-Admiralty Courts

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n l i k e e n g l an d, the colonies had no court of Exchequer, which had arisen for the trial of all matters relating to the revenue of the Crown. The jurisdiction of these courts was theoretically confined to matters of revenue, but it was gradually extended to all kinds of cases on the legal fiction that the wrong suffered by a plaintiff rendered him unable to pay his debts, especially taxes, to the king. From time to time, colonial officials appealed to England to create Courts of Exchequer to deal with the fi nancial issues involving the trade acts, particularly when ships were seized and the bonds of owners and shipmasters were put in suit. These appeals failed. Nor did the colonies have Courts of Admiralty. Admiralty courts originated in the fourteenth century in England and had been raised by Henry VIII to a position of equal importance with the common law courts at Westminster Hall. Over time, nineteen courts, each with a vice-admiral, were created. They were given jurisdiction in all marine cases, in cases of prizes taken in time of war, and to try criminal cases arising on the high seas involving life and death. Several of the colonies, including New York, New Hampshire after it became a royal colony in 1680, and Massachusetts in 1686, established viceadmiralty courts, but their justices, largely drawn from councillors in the colonies, had little experience with marine litigation. Colonial governments, always strapped for revenue, had few funds and little desire to set up a separate system of maritime courts, preferring to judge marine cases in the common law courts. Judgment rendered by juries in colonial common law courts Published figures on English customs duties are complete for the period 1660–88, but their geographical origin has not been dissected and published. The increase in tobacco duty from 2d. to 5d. per pound in 1685 was recorded in a distinct series of accounts for the increase declared by the collectors of customs to the Treasury. In 1685 (March 25, 1685–March 24, 1686) tobacco and sugar, recorded in a single numerical series, yielded 167,969, producing 163,449 and 155,172 in the next two years. These figures would have to be added to the previous impositions to obtain the full amount. Nor is it possible to separate the reported yield from tobacco and sugar. C. D. Chandaman, The English Public Revenue, 1660–1688 (Oxford: Clarendon Press, 1975), 305–6. There are no extant comprehensive published figures on the net customs yield, gross duties minus drawbacks or rebates, of each of the separate colonial commodities imported into England between 1688 and 1714.

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tended to favor colonial defendants against royal prosecution, thus negating provisions in the trade acts. Parliament saw the establishment of vice-admiralty courts in the colonies as a solution to the problem of enforcing the trade acts. This feature in the 1696 Navigation Act ran counter to developments in England during the seventeenth century, when members of Parliament, acting in their capacity as common law lawyers, strove to restrict the jurisdiction of admiralty courts. Among other achievements, they prevented admiralty courts from dealing with cases arising in semi-inland navigable waters, a provision incorporated in the 1696 act. Although Parliament’s common law lawyers worked to curtail the jurisdiction of admiralty courts in England, they saw the extension of viceadmiralty courts to the colonies as a more effective solution to maritime disputes and enforcement of the trade acts. Parliament generally put its own interests above those of the colonies. Vice-admiralty courts could sit without a jury, quickly deal with cases involving piracy and wrecks, and take testimony by depositions with written questions and answers (which common law courts could not), since seafaring witnesses did not always remain on land to testify in common law courts. In 1697 the Privy Council issued an order to draw up plans to establish vice-admiralty courts in all the colonies.18 The Admiralty prepared special commissions authorizing governors to erect such courts and appoint judges, advocates, and other officers along the lines of the English model. In 1701, the new system was put into effect with the dispatch of William Atwood from England to preside as judge of the Admiralty for colonies from New Hampshire through the Jerseys. He reported at the end of the year that his task had been rendered largely impossible by colonial opposition. The only customs officer appointed in Connecticut was a member of the colony’s council and opposed his work. In Boston the common law courts ordered that no one was to restrain the person of the deputy collector, which removed his actions from the reach of the vice-admiralty judge. Encountering equally difficult problems in New York, Atwood retired to England after two years of frustration in the colonies. Vice-admiralty judges in Pennsylvania and the southern colonies reported obstruction by locally selected councils, judges, sheriffs, juries, and other officers. Vice-admiralty courts were unpopular in the colonies because the expenses of proceedings often exceeded those in the common law courts. Taking their cue from Parliament, the colonists believed that vice-admiralty judges were prejudiced in their constitutional beliefs against the supremacy of common law courts. Vice-admiralty courts were thought to favor a gover-

18

The next few paragraphs draw from Barrow, Trade and Empire, 60–72.

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nor or an informant by awarding him a third of the prize to the detriment of a colonial owner or ship master.19 A raft of legal and technical problems further confounded these issues. Did common law or vice-admiralty courts have jurisdiction over creeks, bays, and harbors within the arms of the land? Were vice-admiralty courts courts of record for seizure in the colonies? Was the establishment of colonial vice-admiralty courts legal if the governor was not given clear authority in his commission, or could he create them by the exercise of his vice-regal powers? Did the power to appoint the judges, marshals, and registrars of vice-admiralty courts lie in England, in the colonial vice-admiral, or governor? How could countersuits and interference of one court with another be prevented or resolved? How was proof to be established without a jury? These and other technical loopholes resulted in confusion, discontent, and ultimately the general ineffectiveness of vice-admiralty courts in overcoming the colonial biases of the provincial common law courts. 20 Nor did England succeed in incorporating the colonial office of attorney general into the royal system. Edward Randolph had encouraged this move and, with support from the Customs Commissioners and the Board of Trade, asked England’s attorney general, Sir Thomas Trevor, for his opinion on the legality of this measure. Trevor ruled that the Crown could appoint advocates general to serve in vice-admiralty courts but that attorneys general, as officers of local provincial courts, were beyond its reach of royal appointive powers. The implications of this ruling were first, that the Crown could not alter legal proceedings in the colonies by royal order, and second, that with the top prosecutorial office in the colonies remaining outside the control of the English government, local provincial courts would play the leading role in enforcing the trade acts. A later ruling by England’s attorney general, Sir Edward Northey, declared that suits involving bonds posted in the colonies could not be heard in a vice-admiralty court unless it was expressly authorized by an act of Parliament, which the Crown did not request of Parliament. A standard practice of common law colonial courts was to issue a prohibition against a case being heard in a vice-admiralty court. The Admiralty sought to clarify the status of its jurisdiction under the 1696 act. The Privy Council referred the matter to a legal expert, who advised that a new act of Parliament would be required to redress the problem. This matter was left in abeyance for forty years. The Crown preferred prerogative over policy if recourse to Parliament was required. Customs collectors would have to 19 I am not aware of any publications that estimate the costs (salaries, travel, rent) and receipts (e.g., from prizes) of vice-admiralty courts in the American colonies between 1698 and 1714. 20 Harper, The English Navigation Laws, 182–203, and Andrews, The Colonial Period of American History, 4:222–71.

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depend on colonial officials, not English appointees, to prosecute their cases. Although trials could be held at Westminster, it was impractical to transport litigants and evidence across the ocean.

The Board of Trade he f irst meeting of the Board of Trade was held on June 25, 1696.21 The board, consisting of sixteen members, was the Crown’s chief advisory body in its exercise of imperial economic governance. Eight were “great members,” ex officio or ornamental members, including the secretary of state, the chancellor of the Exchequer, the Lord High Treasurer, the Lord Privy Seal, and the Bishop of London. Over time, these men took less interest in board meetings and ceased attending altogether. The other eight were salaried members, each receiving 1,000 sterling a year, along with 1,490 for clerical help. Several hundred pounds were provided for paper, ink, sand, ivory folders, calendars, almanacs, pens, knives, scissors, and so forth. Throughout its history, the Treasury was often in arrears in its payment to the board both for incidental current expenses and salaries for the clerks. Regularity of payments generally improved after 1715, with the advent of an extended period of peace.22 The eight salaried members were required to attend board meetings regularly and conduct its business. They included the Earl of Bridgewater, its first president and a close friend of the king. Others were John Locke (who had served as secretary of the Council of Trade under Charles II, drafted the Fundamental Constitution for the Carolinas, but was now an old man and left the board in 1700), John Pollexfen (one of the Lords of Trade in 1675, an ardent mercantilist with trade experience), William Blathwayt (secretary to the old committee under William III, auditor general of colonial revenues for the previous sixteen years, and the most knowledgeable person about conditions in America), Abraham Hill (a scientist), Ford Grey (Earl of Tankerville), John Methuen, and Sir Philip Meadows. The latter three were courtiers and diplomats without any real experience in colonial affairs. Blathwayt largely directed the activities of the board until his retirement in 1706. The board was entrusted with the responsibility of protecting royal prerogative. Its chief purpose was to coordinate the acts of trade and other aspects of England’s commercial policy for the benefit of England’s commercial and industrial development. It gave relatively little time and attention to the American colonies until much later in the eighteenth century.

T

21

Detailed treatment of the Board of Trade appears in Barrow, Trade and Empire, and Andrews, Colonial Period of American History, 4:272–317. 22 Basye, Board of Trade, 5–13.

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The board drafted instructions to governors, provided lists of councillors, suggested appointments to the Crown, and carried out other administrative functions. It was the conduit for information between the colonies and the executive branches of the English government. It could summon witnesses, take evidence under oath, and make recommendations for appointments, regulations, and legislation. However, the salaried members of the board had advisory power only. Executive authority lay in the hands of the secretary of state, who appointed colonial governors, the Treasury, the Privy Council, and other ministers of state. From its creation through the reign of Anne, the board played a somewhat more effective and important role in imperial governance than its several predecessors had in the Privy Council, but its work was hamstrung by poor communications. There were no official mail boats, which meant that letters were sent to and from the colonies by merchant ships, and had to be passed from hand to hand to reach their ultimate destination. The length of time for the passage of any letter ranged from two months to as long as two and a half years. Sometimes instructions to colonial governors arrived well after they were relevant or useful to the situation at hand. Numerous issues between England and its colonies, such as appeals from colonial to English courts, the liability of customs officers to seek protection from England against local colonial proceedings, and disputes involving narrow interpretations of the Navigation Acts, could not be resolved quickly. After 1715 the secretaries of state and the Treasury acquired increased influence, and the Board of Trade declined in influence. The agency of the English government most informed about colonial affairs was its least effective and least important one. Governors often bypassed the board, corresponding directly with the more powerful English departments and officers. Documents were passed back and forth between the board, the Customs Commissioners, and other officials before decisions were taken and instructions issued, after much delay, to colonial governors.

Regulation of Colonial Manufacturing

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nt il 1699, Parliament made no effort to suppress colonial manufacturing. The development of hemp and flax culture, which posed no threat to English industry, had been previously encouraged by the Virginia Company, the Crown, and several proprietors in lieu of tobacco cultivation. The development of naval stores in the colonies was regarded as highly desirable, which prompted Parliament to offer bounties for their production. As England lacked forest resources, the development and export of colonial timber products did not constitute an economic threat. The growth of shipbuilding in New England was legal under the Navigation Acts, and its ships were often built for or sold to English merchants. [ 319 ]

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A few attempts at mining iron and copper ores achieved little until later in the eighteenth century, after the reign of Queen Anne. Leather products were a growing line of endeavor, but most were for domestic consumption. Some household utensils of pewter, brass, iron, and wood were locally manufactured, but these did not threaten the predominance of English manufacturers. As the seventeenth century drew to a close, England became concerned about the development of woolen manufacturing in the colonies. Rhode Island’s flock of sheep had increased from one hundred to two hundred thousand sheep between 1661 and 1692. Weaving, dyeing, spinning, and processing of the wool clip were generating a substantial woolen industry. The colonists were manufacturing serge, worsted, kersey, and linsey-woolsey fabrics, and later woolen stockings. 23 English industries suffering from the East India Company’s import of cheap fabrics were not prepared to brook further competition from America. A flourishing shipbuilding industry would enable the colonists to export manufactured woolen goods to Europe and other foreign markets to the detriment of English producers. On May 4, 1699, Parliament passed the Woolen Act, the first of several laws restricting colonial manufacturing. The preamble to the act stated that woolen exports were critical to the value of land, trade, and woolen manufacturing in England, that production of woolen products was daily increasing in Ireland and in the English plantations in America, and that exports from both places were reducing the value of English land, ruining the wool trade, and depressing woolen manufactures within the country. To ensure that the colonies would not develop a flourishing woolen industry, article 19 extended the prohibition to the colonies.24 Parliament and the Crown had learned from rulings of England’s attorney general and its courts that poorly drafted laws were difficult to enforce and that the colonists would exploit any loophole or vague clause to escape legal prohibitions. To preclude this possibility, the act enumerated every conceivable woolen or blended woolen product that was or could then be made in the American colonies. The list specified wool, woolfells, shortlings, mortlings, woolflocks, worsted, bay, or woolen yarn, cloth, serge, bays, kerseys, says, frizes, druggets, cloth-serges, shalloons, or any other drapery stuffs or woolen manufactures whatsoever, made or mixed with wool or woolflocks, being of the product or manufacture of any of the English plantations in America. Effective December 1, 1699, the act precluded any of the enumerated items from being loaded onboard any ship or vessel in 23

The boxed text on page 321 describes each of these fabrics. The preamble and text of the Woolen Act are reproduced in Jack P. Greene, ed., Great Britain and the American Colonies, 1606–1763 (Columbia: University of South Carolina Press, 1970), 131–32. 24

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Definitions of Woolen Products

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any of the terms in article 19 of the 1696 act have fallen out of use or are obsolete forms of current terms. The definitions that follow were obtained from the on-line Oxford English Dictionary at http://www.oed.com (July 6, 2004). Woolfell is the wool skin. Mortling is a variation of morling, which is the wool taken from the skin of a dead sheep. Shortling is a variation of shorling, which is the wool taken from the skin of a sheep that has been recently shorn. Worsted is a woolen fabric made from well-twisted yarn spun of long-staple wool combed to lay the fibers parallel. Bay refers to baize, which is a fabric of a finer, lighter texture, the manufacture of which was introduced into England in the sixteenth century by fugitives, Protestant Huguenots, from France and the Netherlands. In the eighteenth century, baize referred to a coarse woolen used in work clothes. Serge is a woolen fabric mentioned chiefly as material for hangings, bed covers, and the like before the sixteenth century; later it was referred to as worn by the poorer classes because of its durability. Kersey is a kind of coarse narrow cloth, woven from long wool and usually ribbed. Frize is the obsolete form of frieze, which is a kind of coarse woolen cloth with a nap usually on one side only, manufactured in Ireland. Drugget is a kind of fabric, all of wool, or mixed of wool and silk or wool and linen, used for wearing apparel. Shalloon is a closely woven material chiefly used for linings. I was unable to find the meaning of says. Until the development of the cotton industry, woolen products were among England’s most important exports. The list of specific woolen products in article 19 illustrates the importance of regulating the woolen trade to England’s benefit. Members of Parliament wanted to minimize the possibility of any loopholes that would enable the colonists to seize any part of this trade from English farmers and manufacturers. Nor was this list exhaustive. A glossary of eighteenth-century trade terms is appended to Philip L. White, The Beekmans of New York in Politics and Commerce, 1647–1877 (New York: New York Historical Society, 1956), 645–55. Other terms applying to woolen products include the following: barragon a tightly woven woolen used for rain wear blanket heavy wool or wool combination fabric with a short nap on both sides broadcloth soft, lustrous woolen with the nap sheared close and pressed calamanco a plain or patterned woolen of Flemish or English manufacture camlet and camletine fabric that could be made from wool cassimere medium-weight woolen of soft texture used in men’s clothing cheviot woolen cloth named for a Scottish breed of sheep with very thick wool cotton wool raw cotton dorsetteen woolen made from the fleece of the Dorset horn sheep duffel a coarse woolen cloth with a thick nap Durant a thick, heavily felted woolen made to imitate buff leather

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Definitions of Woolen Products (continued) felt a fabric of wool made by beating and rolling the fibers under moist heat flannel loosely woven, lightweight wool material with a slightly napped surface forest cloth a woolen fabric grosgrain a coarse fabric of silk, mohair, and wool linsey short for linsey-woolsey, a coarse cloth made of linen and wool moreen a strong woolen or woolen-and-cotton material, often watered, used for curtains and in upholstery penistone a coarse woolen named for a town in Yorkshire and used in garments and linings poplin a ribbed dress fabric made of wool in combination with silk, or cotton, or other products ratteen a thick, twilled woolen similar to frieze sagathy a light woolen stuff, a kind of serge or ratteen shag a worsted cloth with a velvet nap tammy a fine worsted cloth often glazed and highly colored wether fleece from the second or later shearing of a sheep witney a heavy, loose woolen blanket with a nap These additional classifications indicate the possibility of evasion of the 1696 act by arguing in court that the woolen product in question is not included in article 19.

any of the American colonies, or loaded upon any horse, cart, or other carriage, or from being exported, transported, carried, or conveyed out of the said English plantations to any other of the said plantations or to any place whatsoever. The act limited the distribution of woolen products to the colony in which they were produced. Reservation of timber products to the Crown consisted of a series of royal orders and acts of Parliament. An order-in-council of 1699 extended the royal claim on mast trees to all of New England. The Naval Stores Act of 1706 restricted colonial exploitation of timber resources by preventing the cutting, felling, or destruction of any pitch, pine, and tar trees not within any fence or actual enclosure (privately owned land) under the growth of twelve inches diameter, at three feet from the earth, on penalty of 5 sterling for each offense. An act of 1711 gave the surveyor of pines and timber authority in all colonies from Maine to New Jersey. Other acts were

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passed in 1721 and 1729, which strengthened enforcement and closed loopholes; the latter act remained in force until the outbreak of the American Revolution. 25

Summary

I

mper ial g ov er nance required the time and effort of the secretary of state, the Customs Commissioners and their American agents, the Board of Trade, the Admiralty, the Treasury, the Privy Council, and other government officials. These officials and departments had responsibility for all of England’s foreign and domestic affairs, and were limited in the time they could devote to supervise Britain’s American empire and enforce the trade acts in the colonies. Between 1688 and 1702, William’s government spent 72 million, an annual average of about 5.1 million. Of this, Parliament approved 59 million in taxes, and 13 million was raised through borrowing. During Queen Anne’s reign net public expenditure came to 94,382,000, an annual average of 7,865,000, more than 50 percent above that of her predecessor. During her reign, net annual income from taxes averaged 5,394,000, supplemented with annual borrowing of 2.5 million to sustain the government. 26 Every pound of revenue was important to wars in Europe and expenditures in Britain. There was no spare cash to underwrite or subsidize internal colonial administration. Mercantilism dictated that colonies were to supply England with goods and specie, not the other way around. How might colonial history have evolved if governors and other key colonial officials had been paid from the English Exchequer, as were the handful of royal customs collectors in the colonies, rather than having to depend on votes of supply for their salaries and expenses from recalcitrant colonial assemblies? If all the governors—royal, proprietary, and elected in Connecticut and Rhode Island—were paid from the English Exchequer, the total cost would have run no more than 10,000 a year, and probably less given the modest salaries paid in the less-populated colonies. This number is roughly similar to the annual cost of the Board of Trade, or the Commissioners of Customs, or the annual salary of the Lord High Treasurer. It amounts to less than a tenth of English duties on American tobacco, and less than twotenths of 1 percent of annual English expenditure. Given the scarcity of 25 Samuel F. Manning, New England Masts and the King’s Broad Arrow, Maritime Monographs and Reports No. 42 (1797) (Greenwich, London: National Maritime Museum, 1979), 28. 26 These numbers and percentages are calculated from Mitchell, British Historical Statistics, table: “Public Finance 1: Net Receipts of the Public Income—Great Britain 1688–1801,” 575, and table: “Public Finance 2: Net Public Expenditure—Great Britain 1688–1801,” 578.

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money during the reigns of William and Anne, the English Treasury watched every penny of expenditure, ruthlessly enforcing the principle of colonial self-support.27 Was this a case of penny-wise, pound-foolish? 27 In 1725, the budget of the Commissioners of Customs was reduced by a third to save 1,270. The Treasury sought the application of frugality throughout the government. The savings of a thousand pounds was considered an important economy in government.

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The Colonial Constitution, 1688–1714

D

ur ing t he reigns of William and Anne, the British government rewrote the constitutions of several American colonies, notably those of Massachusetts, Maryland, and the Jerseys; Pennsylvania rewrote its own. Massachusetts had long been a primary target of English reformers. Its Puritan theocracy was an aff ront to Anglican England. Its lax enforcement of the Navigation Acts, indeed its complicity in illicit trade, challenged England’s monopoly of imperial commerce. When news of William’s overthrow of James II reached New England, Massachusetts took matters into its own hands. On April 18, 1689, several thousand colonists seized and imprisoned Governor Edmund Andros and other royalists, declared a resumption of the old charter government, and pleaded with King William for its formal restoration. King William responded in 1691 with a new charter that transformed Massachusetts into a royal colony with a broadened franchise and a royal governor appointed by the Crown. Connecticut and Rhode Island avoided their neighbor’s fate. William confirmed the 1662 and 1663 charters of Connecticut and Rhode Island, allowing for the continued election of their own governors and exempting their laws from review in England. New Hampshire was restored to its former royal status. A rebellion in New York overthrew the Dominion of New England, and its former royal government was restored. The English government’s drive to centralize royal control over its American colonies put Penn’s proprietary temporarily at risk, which required his return to England to defend his grant. The three lower counties of Delaware established a separate legislature and charted a separate path from that of Pennsylvania, sharing only a common governor. Chronic chaos in East and West New Jersey prompted the proprietors to surrender their charters to the Crown in 1702, which led to the reunification of New Jersey as a royal colony. Virginia continued as before, but not Maryland. The Crown imposed royal government, terminating Lord Baltimore’s proprietary right of governance but allowing him to retain quitrents and other revenues due him as proprietor. The Carolina proprietors were unable to provide effective government in either of their colonies. The Carolinas were affl icted with a devastating Indian war, notorious piracy, rapidly depreciating currency, [ 325 ]

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discontent over taxes, and fear of Spanish invasion. In response to these conditions, the Board of Trade recommended that the Crown acquire the Carolinas. After several years of negotiations, the proprietors sold their shares to the Crown in 1729. By 1714, the colonial constitution was firmly in place. It mirrored the British government of Crown, House of Lords, and House of Commons. Colonial governments consisted of a governor, or deputy or lieutenant governor in the case of proprietary colonies or when a vacancy existed, an upper house, and a lower house. The governor, the vice-regal representative of the Crown, was appointed by the Crown or by a colony’s proprietor(s) subject to royal approval. The two exceptions were Connecticut and Rhode Island; the freemen chose their governors. The legislature, usually termed the General Assembly, consisted of an upper house and a lower house, save Pennsylvania, which became unicameral in 1701. The upper house consisted of a council, whose members were appointed by the Crown on the recommendation of the governor. The exceptions were Connecticut, Rhode Island, and Massachusetts. In the first two, councillors were elected by the freemen; in the latter, they were chosen by members of the lower house. The lower house consisted of elected representatives or deputies. In Massachusetts and New Hampshire it was titled the House of Representatives, in Rhode Island the House of Deputies, in Maryland the House of Delegates, in Virginia the House of Burgesses, in the Carolinas it included the name Commons from the mother country, and in the rest of the colonies it was simply called the Assembly. Executive government resided in the hands of the governor and his council. Decisions were made and ordered by the governor-in-council, similar to that of the Crown-in-council, the king or queen meeting with members of the Privy Council. Governors were required by their commissions and royal instructions to seek the council’s consent before acting on a wide range of measures. In addition to sitting as an upper house during sessions of the legislature, the council had the separate function of assisting the governor in executive administration and helping make decisions when the legislature was not in session. The council’s approval was required for bills to become law. Councillors came from the wealthier classes and, as appointees of the Crown, were expected to support the governor in his efforts to carry out his instructions. During a vacancy, the president or senior member of the council assumed the powers of the governor until a replacement arrived. The role of the council tended to diminish over time as elected assemblies acquired the right to initiate legislation, especially on taxes, and other powers. Colonial politics typically pitted the lower house against the governor and council, especially on the appropriation and expenditure of public funds. During the reigns of William and Anne, the two lengthy European wars with France were partly fought on the battlefields of North America. [ 326 ]

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The War of the League of Augsburg was likened King William’s War in America. It was fought and financed by colonists in New Hampshire, Connecticut, Maine, New York, and Massachusetts against French forces in Quebec and Acadia (Nova Scotia). The war began with a series of Indian massacres instigated by the governor of French Canada. Several towns in New Hampshire, Maine, and New York were razed and their citizens killed or taken captive. After a series of indecisive major battles in 1690, the war dragged on in the form of minor battles, ending with the Treaty of Ryswick signed in 1697. As in Europe, peace was temporary. The outbreak of the War of the Spanish Succession was mirrored in Queen Anne’s War in America. It erupted in early 1704 with a raid on the town of Deerfield, Massachusetts, with French and Indian forces killing or capturing two hundred of its four hundred residents. In response, the colonists attacked Port Royal in Acadia by sea in 1704, and again in 1707, but neither attempt was successful. In 1710 the British government sent a small fleet to aid the colonists, which forced the surrender of Port Royal. It was renamed Annapolis in honor of Queen Anne, and Acadia was renamed Nova Scotia. Hostilities ended with the Treaty of Utrecht of 1713. France ceded Nova Scotia, Newfoundland, and the Hudson Bay territory to England, but retained Cape Breton Island, which commanded the entrance to the St. Lawrence River, on which it built the fort of Louisburg.

The Dominion of New England

B

e f or e e xa m i n i ng the development of the colonial constitutions in the American colonies following the Glorious Revolution, it is instructive to review the brief period of the Dominion of New England, the English government’s fi rst attempt at broad colonial unification.1 The constitution of the dominion marked several changes from the previous system of government in New England. First, it did not include a representative assembly. Dissolution of the popular assembly in Massachusetts was seen as the most effective way to disenfranchise the Puritan theocracy. Second was a change in the system of land tenure. Town grants of land to residents were to be replaced with royal titles encumbered with quitrents. Third was the grant of religious liberty for all dissenters to end, once and for all, Puritan dominance. 1

The history of the dominion is treated in Viola Florence Barnes, Th e Dominion of New England: A Study in British Colonial Policy (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1923), and Herbert L. Osgood, The American Colonies in the Seventeenth Century (New York: Columbia University Press, 1904–7), vol. 3, part 4, chapter 13, 378–414.

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To achieve a smooth transition from charter to dominion government, the Lords of Trade proceeded slowly with the drafting of a commission for the new governor, Edmund Andros, which was issued on June 3, 1686. In the interim, a temporary commission was issued in October 1685 to Joseph Dudley to serve as president of a provisional government of Massachusetts, Maine, New Hampshire, and the Narragansett County of Rhode Island. Dudley’s commission provided for liberty of conscience, but not a representative assembly. Dudley and his council would have legislative authority, save for passing new revenue acts and judicial authority. As the son of one of the colony’s Puritan founders but identified with the moderate elements of the Puritan community, Dudley was selected on the assumption that he would be acceptable to the colony. Eighteen councillors, all but two born in or longtime residents of the colonies, were also chosen from among moderate Puritans. Edward Randolph arrived in Boston on May 14, 1686, with Dudley’s commission. Six days later Dudley announced his new provisional government at a meeting of the General Court. The General Court rejected the new government on the ground that it lacked a representative assembly. Nonetheless, Dudley and his councillors took their oaths of office on May 25, 1686. They proceeded to govern by appointing civil and military officials, reaffirming the judicial system, and, to raise much-needed revenue, revived the old import duty, the excise, and the tonnage. Anticipating the loss of its charter, the General Court had previously repealed all revenue laws, which eliminated the constitutional basis for a new government to raise revenue on the basis of laws approved by a representative assembly. The repeal of the poll, property, and faculty taxes left Dudley with the proceeds of fines, forfeitures, license money, and tonnage as the only legal sources of revenue. He was reluctant to impose the former country rate lest it precipitate a rebellion. Edmund Andros arrived with his commission on December 20, 1686. By his commission he united Massachusetts, New Hampshire, Plymouth, New Haven, and the Maine counties under one government; Connecticut and Rhode Island had not formally surrendered their charters, though Rhode Island indicated its willingness to be included in the dominion. In response to this voluntary act, Andros displayed his instructions from the king to annex it and treat it as part of the dominion. Connecticut and a part of New York were added in the spring of 1687. 2 The dominion subsequently incorporated New York and the Jerseys. 2

Connecticut kept its charter government throughout 1686 and most of 1687. Andros arrived in Connecticut on October 27, 1687, and had his commission read together with the king’s order to annex the colony to the dominion. Connecticut assented, and its governor and secretary were added to the Council of the dominion. An interesting story of the hiding of the colony’s charter in an oak tree, known as the Charter Oak, and its later reemergence after the downfall

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The new government was highly centralized, with legislative, executive, and judicial authority held in a few hands. The Council was empowered to make laws, operate as the chief executive branch of government, and sit as a court to interpret its own laws. Council members fi lled the government’s key military and administrative positions. Members of the Council were selected to represent the interests of the separate colonies that were incorporated into the dominion, save the Jerseys. Andros was instructed to continue the previous system of taxation until the Council enacted new revenue laws. To provide him with financial security, England paid his salary until it could be shifted to the dominion government. A general set of revenue laws was adopted for the New England colonies. The Council enacted the former country rate, along with duties on wines, liquors, merchandise, and provisions, an excise, and tonnage. Although similar to previous laws, the reenacted measures imposed heavier taxes on farmers by rating cattle, horses, and other animals higher than previous legal and current market values. The previous discount for payment of taxes in cash instead of commodities was abolished, an increase of one-third for those who had availed themselves of the option. Duties on wine were more than doubled. The excise was greatly increased. The license requirement for the sale of small quantities of liquor was strictly enforced. Fines were more vigorously collected. Following instructions from the Lords of Trade, the dominion government also proposed to impose quitrents on royal regrants of land taken from the towns. The actual burden of taxes in Massachusetts under the dominion was lower than it had been during the previous years of King Philip’s War. Although Andros increased the basis of assessment, the Council set a low rate of 1d./1, which was less than the ten rates in May 1676, six rates in October 1676, six in May 1677, three in October 1677, three in 1678, 5 1 ⁄2 in 1679, eight in 1680, 2 3 ⁄4 in 1681, 4 1 ⁄2 in 1682, 4 1 ⁄2 in 1683, 21 ⁄2 in 1684, and 11 ⁄2 in 1685, levied in a mix of cash or commodities.3 The revenue acts of Andros’s government applied equally to Maine, New Hampshire, Connecticut, Plymouth, and Rhode Island. In Plymouth, the new rating of cattle and horses amounted to a fivefold increase in the tax. The new taxes were not applied to New York or New Jersey, where Andros, after receiving a new commission in 1688, continued the existing

of the dominion in the spring of 1689 as the means for restoring the old charter government and the reappointment of all the former officials to their offices is told by Bruce P. Stark, “The Dominion of New England,” http://www.ctheritage.org/encyclopedia/ctto1763/dominionne.htm ( July 9, 2004). 3 Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3 (Boston: T. R. Marvin, 1847), 275.

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revenue measures by proclamation.4 These were managed separately from those of New England. To weaken the opposition in New England, Andros and the Council passed a law limiting town meetings to one a year. Th is measure deprived the Puritans of the control of local affairs in the same manner that the lack of an elected assembly deprived them of influence in the provincial government. All the year’s business of the towns had to be completed in a single meeting. The repudiation of town government struck at the heart of a longstanding institution of New England government. Finally, stricter enforcement of the Navigation Acts reduced the number of foreign vessels trading illegally in Massachusetts, reducing the profits of Boston’s merchants. The overthrow of King James II ended the English government’s first brief experiment at colonial unification.5 Rebels in Massachusetts set up a committee of safety called the President and Council for Safety of the People and Conservation of the Peace. It sent a message to King William on May 20, 1689, thanking him for saving New England from the tyranny of the dominion. The committee appealed for the restoration of the colony’s charter and the preservation of its former liberties, pledging allegiance to the new king. It sent a second petition in June, but received no reply from William until November. His response did not deal with the issue of the charter and the government, simply instructing the provisional government of the colony under the committee to send Andros and the other officials it seized to England for trial. The provisional government was instructed in a letter of December 1, 1689, to continue its work until the new English government determined its next course of action.

4

“Commission of Sir Edmund Andros for the Dominion of New England, April 7, 1688.” The document is reproduced in The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), 3:1863–69, and at http://www.yale.edu/ lawweb/avalon/states/ mass06.htm (February 27, 2003). The earlier commission to Sir Edmund Andros, dated June 3, 1686, appointed him Captain General and Governor of the Territory and Dominion of New England, which included Massachusetts, New Plymouth, New Hampshire, Maine, and Narragansett County. It is similar to the later commission of April 7, 1688. 5 The overthrow of the Dominion of New England in Massachusetts on April 18, 1689, is recounted in G. B. Warden, Boston, 1689–1776 (Boston: Little, Brown, 1970), 3–14. Warden states that the overwhelming support for the seizing of government and the imprisoning of Andros and several of his councillors was due to the strict enforcement of the trade acts, which had diminished Boston’s prosperity, the alteration in town government that compelled all town business to be completed in one meeting, the loss of a representative assembly, the presence of redcoats, and the grant of large tracts of vacant and occupied land to Andros’s favorites. It is an interesting fact of history that the overthrow of British rule in America began with the battle at Lexington and Concord on the same April 18 eighty-six years later. The overthrow is also described in Barnes, Dominion of New England, 231–61.

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All the other colonies petitioned for the restoration of their charters and separate colonial status. Plymouth sought to continue its local autonomy. Connecticut asked for a recognition of its status quo, claiming its charter had not been legally nullified or withdrawn. Rhode Island asked for a confirmation of its charter, which had been voluntarily submitted to the Crown, claiming that it had not been formally accepted. New Hampshire requested local autonomy. New York petitioned against reannexation to the dominion were it to be restored, but expressed interest in a possible union with Pennsylvania or Connecticut and the Jerseys to better defend itself against France.

The New England Colonies

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h e n e w e n g l an d colonies were treated in substantially different ways. A new charter was granted to Massachusetts, which resulted in major changes in the franchise and operations of its government, the previous charters of Connecticut and Rhode Island were restored and confirmed, and New Hampshire was restored as a separate royal colony. New Haven was annexed to Connecticut and Plymouth to Massachusetts.

Massachusetts

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i l l i a m wan t e d a government in New England that could support his efforts against the French in Canada, enforce the Navigation Acts to supply him with revenue, and permit a degree of religious toleration.6 These goals were embodied in the new charter of October 7, 1691, which incorporated the Plymouth colony. Prior to the dominion, Massachusetts had lived with little royal interference. The new charter changed that for good. It was a compromise between the old order and the dominion. It combined royal appointment of the governor with substantial powers, but restored the right of taxation with representation. It compromised over the appointment of councillors. It reestablished the authority of the towns, but substantially expanded the electorate at the expense of the former Puritan theocracy. The governor was given veto power over the acts of the General Court. His signature was required to validate all orders, laws, statutes, ordinances, 6 A description of the features of “The Charter of Massachusetts Bay—1691” and its political aftermath appear in Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 119–38, 195–97; Warden, Boston, 34–79; and Richard L. Bushman, King and People in Provincial Massachusetts (Chapel Hill and London: University of North Carolina Press, 1985), 99–113. The charter is reproduced in Thorpe, Colonial Charters, 3:1870–86, and at http://www.yale.edu/ lawweb/avalon/states/mass07.htm (February 27, 2003).

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Crown Review of Colonial Legislation

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he review of colonial legislation is treated at length in Elmer Beecher Russell, The Review of American Colonial Legislation by the King in Council, Studies in History, Economics, and Public Law, vol. 64, no. 2 (New York: Columbia University, and London: P. S. King and Sons, 1915). With the Stuart Restoration in 1660, review of colonial legislation in the royal colonies was assigned to the Privy Council. Prior to 1685 the only royal colonies whose acts were subject to review in England were Jamaica, Barbados, the Leeward Islands, and Virginia. To this list were added New Hampshire in 1680, New York in 1691, Massachusetts in 1691, and Maryland in 1692. As other colonies came under crown rule, their laws became subject to review. Colonial legislation was customarily referred to the legal advisers of the Crown for an opinion on its fitness in point of law. On occasion the Lord Chief Justice, the Lord Chancellor, the Lord Treasurer, the Lords Commissioners of the Treasury, and the Lord Bishop of London supplied advice and assistance. In May 1696, the Board of Trade became the chief adviser to the Privy Council in matters relating to the colonies. After 1718, the King’s Counsel, with a yearly salary of 300, was established to pass upon the legality of colonial legislation, replacing the previous practice of referrals to the attorney general or solicitor general. A minority, less than one-fourth, of all colonial laws considered by the Board of Trade were recommended either for confi rmation or disallowance. A few were repealed by the colonial assemblies themselves before action could be taken in Britain. The majority were either neglected or permitted to “lye by probationary.” Th is procedure was used to allow an act to stand provisionally while a governor worked to eliminate objectionable features or secure an amendment. The procedure was used most frequently for acts involving the collection or payment of money. Sometimes the probationary period was temporary pending receipt of further information from a colony. The main reason for “lye by probationary” was that once an act was confi rmed it could never thereafter be disallowed. In 1703 Attorney General Sir Edward Northey delivered an opinion that absolute approval of a law without any limit of time or any reservation to the Crown to repeal it meant that it would remain in force until it was repealed by another act of the general assembly of the colony in question. Absolute confi rmation by the Crown of a colonial act was to have in the colony the force of an act of Parliament in England. Between 1690 and 1699, 48 percent of all the colonial laws in the royal colonies reviewed in England were either confirmed or disallowed. The proportion fell to 26 percent during 1700–1709 and 10 percent during 1710–19. Between 1690 and 1775, 25 percent of the acts of Massachusetts were either confirmed or disallowed (57n2). Altogether, the king-in-council disallowed 469, or 5 1 ⁄2 percent, of 8,563 acts submitted by the continental colonies from 1690 to 1775. Those of Massachusetts constituted 2.8 percent (240 disallowed acts) and New Hampshire 7.2 percent (617 disallowed acts) (221). Far more laws of Massachusetts were confirmed

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Crown Review of Colonial Legislation (continued) than disallowed, but the majority escaped judgment. Russell does not list disallowance rates by specific periods of time, which precludes discussion of the incidence of disallowance between 1689 and 1714. Of 437 disallowed laws for which detailed information has been identified, the average time between enactment and disallowance was three years and five months. Fully 35 percent were disallowed after four years on the statute book. A few were disallowed more than two or three decades after passage (222). A number of colonial laws contained a suspending clause, which created considerable uncertainty in the colonies while a decision was awaited from Britain. One reason for the decline in the proportion of disallowed acts over time was the limitation imposed on governors in the royal instructions to acts of colonial legislatures. The form of acts and their transmission to England was strictly prescribed. Duration of acts, especially revenue acts, was strictly specified. Laws of a specific nature, for example, imposing duties on European goods imported in English vessels, granting preference to colonial over English merchants, or affecting the trade and navigation of England, were forbidden. Any colonial act in confl ict with an act of Parliament could be summarily disallowed. Laws were to be clearly drafted. The charters of Connecticut and Rhode Island, confi rmed by King William, did not require the submission of laws to the Crown for review. Confi rmation and disallowance of colonial legislation in the twelve colonies between 1689 and 1714 involving revenue measures are examined in chapters 13–15.

instructions, and directions. All approved acts of the General Court were to be promptly transmitted to England for approval or disallowance under the sign manual and signet. All laws and other measures disallowed by the Crown-in-council within three years of their receipt were declared void but were to remain in force until disallowance or repeal by the General Court. The governor was authorized to call the General Court into session at the time and place of his choice and prorogue it at his will. He was empowered to appoint all the judges and remove them at his pleasure, and establish new courts on his judgment. He could call the militia into ser vice as he deemed necessary. Practical considerations constrained a governor’s powers. First was the distance of three thousand miles from London and the lengthy time it took for the arrival of royal instructions on how to resolve specific problems, sometimes long after conditions had changed. Another factor was the lack of tenure. The governor could be recalled or dismissed from office at the pleasure of

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the Crown. Turnover disrupted orderly government. It took a new governor, especially one with little previous experience, considerable time to learn the ropes of governance. The appointment and arrival of a new governor, which could take as long as a year, produced a lame-duck temporary administration under a lieutenant governor. Between 1692 and 1701, the government cycled through four governors until the appointment of Joseph Dudley, who served from 1702 to 1715. The most important constraint on a governor’s powers was dependence on the General Court for his salary. The English government strictly adhered to the policy of colonial self-support. Despite repeated pleas by a succession of governors for a fi xed and adequate salary for themselves and other appointed officials, the General Court refused to comply. It voted “presents” to the governor for a given year, or authorized his salary for a year at a time. Dependence on local representatives for his salary often put the governor at odds with his oath to enforce royal instructions. Effective governance, his salary, and the need to mobilize the military and secure funding for defensive or aggressive actions against the French required the cooperation of the colonial legislature. To assist the governor in his duties, the Crown retained for itself the power of appointing the lieutenant governor, who exercised the full powers of the governor during his absence from the colony or in between vacancies, a colonial secretary, the collector of customs, the surveyor of the woods, and several other lesser officials. The General Court consisted of the Council and the House of Representatives. This constitutional configuration differed from that of other royal colonies in which the Crown, on the advice of the governor, appointed councillors. The 1691 charter granted the General Court the power to select members of the Council, subject to the governor’s approval.7 Eighteen of the twenty-eight were to be inhabitants or proprietors of land in Massachusetts, four of New Plymouth, three of Maine, and one of the territory lying between the Sagadahoc River and Nova Scotia. Seven councillors constituted a quorum. Vacancies due to death or discharge by the General Court were to be fi lled by the court. The right of the General Court to appoint councillors deprived the governor of the patronage enjoyed by his counterparts in other colonies. Several governors complained that councillors, rather than act as their allies, were handmaidens of the House of Representatives on which they depended for reappointment. Although councillors were generally men of greater wealth and stature than were representatives, they came from the same communities 7

The Crown selected the fi rst twenty-eight councillors, named in the charter, who were to serve until the last Wednesday in May 1693, after which councillors were to be chosen by the method set forth in the charter.

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with shared values and experiences. They differed from the aristocrats who sat in the House of Lords. As often as not, council members sided with the house against the governor. The charter instructed the governor to convene an annual session of the General Court in May and as often as otherwise required. Eligibility to vote for members of the house was set at the English standard of a 40s. sterling freehold, real estate that could be rented for 2 a year, or other property worth at least 40. As many as 80 percent of adult males were qualified to vote for representatives to the lower house. General Court legislation reasserted the importance of town life, which became the foundation of provincial government. The Township Act of 1692 passed three days after Thanksgiving reaffirmed town boundaries and regulations and structure of town government, and established a low property qualification for voting in the annual March elections for town officials. All adult males “ratable at 20 estate” in addition to the poll tax were eligible to vote. Subsequent legislation required a voter to have taxable property within a town assessed for at least 20, which was determined by the total rent it could earn in six years. Selectmen or tax commissioners were to discover the rent or income of a piece of property and multiply it by six to arrive at the full value of the ratable estate. This increased the number of adult males who met the requirement for town voting, but had the corollary effect of raising taxes. Property included tools, livestock, clothing, household effects, income from trade, money at interest, and professional employment. A majority of adult males readily met the voter requirement in town affairs during the eighteenth century. The 1692 statute provided for annual election meetings to choose the selectmen and other officials and established procedures for dealing with the poor, admitting new residents, assessing property, and providing public education. Selectmen gradually lost authority to town inhabitants, who often convened meetings on their own initiative. New positions of assessor, constable, and treasurer diluted the power of selectmen. A statute of 1694 required all members of the General Court, without exception, to reside in the town they represented. The chosen representatives were generally accountable to their neighbors and often took instruction from them.8 Any incorporated town was entitled to elect one representative. Those with forty or more qualified voters were required to choose at least one. Towns exceeding one hundred twenty voters could send two, with Boston eligible for four. Annual elections, with votes cast in open session, reinforced the bonds between voters and representatives. 8

Tying representation to residence was a significant departure from English practice, in which members of the House of Commons did not have to live in the boroughs or counties that elected them.

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The House of Representatives claimed for itself the rights and privileges of the English Commons—freedom of debate, election of its own speaker, freedom from arrest while in session, the sole right to impose taxes, and control of public expenditure. It appointed a large number of officers, specified their salaries, and, most important, controlled the salary of the governor and other royal officials, although the Crown disallowed several of these demands. It exercised the right to initiate almost all legislation for the province.9 The charter confirmed all previous land grants and titles apart from those subject to dispute. New land grants were to be made by the governor and General Court following earlier precedence. The charter declared that all immigrants to Massachusetts and their children were to enjoy the liberties and immunities of free and natural subjects within any of the English dominions. All residents were granted liberty of conscience, except Catholics. Erection of vice-admiralty courts was reserved to the Crown or the High Admiral. The colonists were granted traditional fishing rights along the coasts except those possessed by other proprietors. To secure masts for the Royal Navy, trees of twenty-four inches diameter and upward of twelve inches from the ground on nonprivate land were forbidden to be felled, cut, or destroyed under penalty of 100 sterling. The charter of 1691 led to a realignment of political divisions in the colony. The freemen could no longer compel non-freemen to support their churches. Expansion of the franchise enabled the merchant community to gain representation in the councils of government. The confl ict between inward-looking Puritans and outward-looking merchants was transformed into united colonial opposition against England, particularly against measures that interfered with colonial trade. The new constitution took from the governor the right of nomination and patronage, which made executive 9 The acts of 1692 through 1694 sought to strengthen the House of Representatives against the new royal governor, even though the fi rst royal governor, Sir William Phips, was a colonial resident. Less than three months before the three-year review period expired, the Privy Council disallowed fi fteen of forty-five pieces of legislation. Disallowed acts included the right to specify how money was to be spent, the sole right to raise taxes, the Judiciary Act, and the incorporation of Harvard College. The legislature’s attempts in three successive acts to curtail the right of appeal from Massachusetts to England were disallowed. Bushman, King and People in Provincial Massachusetts, 106–7. The key constitutional issues that separated Massachusetts from England between 1700 and 1736 included appointing a speaker in the house, auditing expenditures, adjourning the legislature, and determining a permanent salary for the governor. These issues were less troublesome between 1692 and 1713 as colonial governors required the support of the legislature during England’s two lengthy Eu ropean wars. Successful prosecution of war time assignments was the governor’s chief priority during those years. With an extended period of peace ushered in after the Treaty of Utrecht in 1713, constitutional issues became more troublesome. Bushman, King and People in Provincial Massachusetts, 111–12.

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government dependent on a wholly local body of citizens. The realities and practicalities of governance required astute, politically sophisticated governors if crown instructions were to be obeyed and enforced.

Connecticut

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it h t he collapse of the dominion in April 1689, Connecticut resumed its old charter government. Former members of the General Court met and reestablished the laws of the colony, reappointed militia officers and nominated men for vacancies, and fi lled judicial vacancies in towns without assistants. Increase Mather, the colony’s agent in England, secured favorable opinions from England’s attorney general and solicitor general that Connecticut’s charter had never been formally surrendered and was therefore still valid, with its privileges intact. But those rulings did not ensure the colony’s autonomy. In the fall of 1692, Governor Benjamin Fletcher of New York sought to execute his royal commission to take control of Connecticut’s militia. The colony’s leaders resisted his move as a violation of their charter. On a second front, the Privy Council had previously given command of the entire militia of New England to Governor Sir William Phips of Massachusetts. Again the colony’s leaders resisted, refusing to acknowledge the validity of his commission without a direct royal order. Connecticut sent an agent, Fitz-John Winthrop, to England to petition for recognition of its charter liberties and privileges—including the colony’s right to control its militia. Winthrop argued a legal technicality: that all adult males in Connecticut were members of its militia, while the militia described in acts of Parliament under which the king had issued his commission to Fletcher was tied to specific property qualifications. On this view, the king’s militia was a different legal entity than that of Connecticut. The dispute was resolved to the colony’s satisfaction without a legal ruling on the issue. With Connecticut’s concurrence, and with no further demands placed on the colony, the Crown assigned a quota of one hundred twenty members of Connecticut’s militia to be placed under Fletcher’s command. For the rest of the colonial period, Connecticut governed under its 1662 charter, which did not require the colony to send its laws to England for review, relatively free from the demands of the Crown and the governors of neighboring colonies.10 The franchise was expanded after 1689. A succession of laws established eligibility to vote on the basis of the 40s. freehold, defined as producing an income of 2 Connecticut currency in country pay of wheat, peas, rye, or corn at fi xed rates, or a 40 personal estate, with fi xed values for land and 10

Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979), 87–89.

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livestock. Ten bushels of wheat met the standard. Up to 80 percent of adult males possessed enough property to qualify as freemen and for the right to vote, with about half choosing to vote in any given election.11 The General Assembly (renamed from the General Court) became bicameral in 1698. At the conclusion of its session ending October 26, 1698, the General Assembly separated into two houses. The first, consisting of the governor, or deputy governor in his absence, and assistants, was formally designated the Upper House. The other, consisting of the deputies selected from the towns, was termed the Lower House. The popular branch was to select a speaker, appoint all necessary officers, and make rules to regulate itself.12 As before, the freemen chose the governor in an annual election, who presided over his council of assistants, and was empowered to act in-council between sessions of the General Assembly. Salaries were small, but governors were also compensated with grants of land. In 1714 the General Assembly granted two thousand acres to Governor Gurdon Saltonstall (1708–25).13 Members of the legislature rewarded themselves with grants of two to three hundred acres from time to time.14 All in all, Connecticut picked up in 1689 where it had left off in 1686. Its leaders were chosen by and accountable to its voters. It enjoyed a high degree of autonomy, encountering royal interest and opposition only infrequently.

Rhode Island

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n apr il 23, 1689, five days after the Boston revolt toppled the dominion government, Rhode Island’s former leaders called a meeting of the freemen in the colony to reestablish an independent government.15 The meeting in Newport a week later on May 1 approved a declaration that the colony’s privileges had been confi rmed by King James. The freemen reasoned that because the colonial government did not resist absorption into the dominion, it was right to resume government under the charter after the collapse of the dominion. The freemen restored all previous officers to their former posts. 11

Taylor, Colonial Connecticut, 32–33. The University of Connecticut has placed an indexed copy of Connecticut’s colonial records from April 1636 through June 1776 on-line at http://www.colonialct.uconn.edu. The resolution dividing the General Assembly into two houses appears in vol. 4, 282 (August 5, 2004). 13 Executive governance was quite stable in Connecticut. Robert Treat served as governor during 1682–98, Fitz-John Winthrop during 1698–1708, and Gurdon (Gordon) Saltonstall during 1708–25. 14 Taylor, Colonial Connecticut, 65. 15 Th is segment on Rhode Island draws from Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 109–55. 12

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Political conditions remained unsettled while the colony awaited a formal reply from England, which was preoccupied with the onset of war against France, confirming its charter. Several towns refused to send representatives to meetings of the General Assembly or pay taxes to the provincial government. The first two individuals chosen as governor refused to accept the post. Events came to a head when Sir William Phips proclaimed his command over the colony’s militia. Fearing the demise of the colony’s privileges, the General Assembly sent an agent, Christopher Almy, to London to defend the charter. He secured a favorable opinion from the Crown’s attorney general, Edward Ward, that since no suit had been carried out against the Rhode Island charter in proper legal fashion, the colony’s privileges remained intact. Its charter had never been revoked, only suspended, and thus remained in full force and effect. The resolution followed that of Connecticut. The colony retained exclusive control over its militia in times of peace, but in times of war, Rhode Island could be required to furnish a reasonable quota of men, forty-eight in number fi xed by royal order, for ser vice outside its borders under a royal commander in chief. In August 1694 Queen Mary drafted a message to “her loyal subjects” in Rhode Island endorsing its charter government. The restored charter government of Rhode Island needed money. Control over taxation led the General Assembly to divide itself into a bicameral body. The twenty-eight town representatives established themselves as a separate body, the House of Deputies, with the right to elect their own speaker and the exclusive power to initiate money bills. The assistants as the Council sat in an upper house. This division and the power of the lower house to levy taxes followed the pattern of other colonies. For the next three decades, Rhode Island enjoyed remarkable political stability. Between 1698 and 1727, Samuel Cranston presided as the longest-serving governor in colonial American history. Preservation of the charter and its privileges were uppermost during Cranston’s long tenure in office. Rhode Island established a good working relationship with the imperial government in London. The colonial government quietly revised and enacted laws to comply with imperial requests, while formally opposing the changes demanded by imperial officials, thereby retaining a high degree of autonomy. In practical terms, the colony retained control over its own militia, partially preserved local enforcement of the Navigation Acts with a strong defense of the vice-admiralty powers of local magistrates, beat back a campaign by the Board of Trade to change it into a royal colony, and solved the problems of outside claims by groups in Massachusetts and Connecticut on its common land by parceling it out to Rhode Island individuals (of which the beneficiaries were Cranston, all the members of the General Assembly’s [ 339 ]

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committee on vacant lands, and other important men in the colony). The General Assembly established a uniform property qualification for the franchise in place of the previous admission of freemen by the towns. The judiciary was gradually separated from the legislature with the creation of justices of the peace who were not members of the upper house.

New Hampshire

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h e d om i n ion’s collapse placed New Hampshire in an awkward constitutional situation.16 The four towns remained intact but there was no provincial government or historical charter that could be readily restored. The province needed some way to defend itself against Indian attacks, but town rivalries sundered an attempt to establish a temporary government along the lines of the Cutt Commission. Some leading citizens sought union with Massachusetts, which was approved by its government in March 1690. However, annexation to Massachusetts was not uniformly accepted throughout the province, with several citizens refusing to pay taxes levied by the Massachusetts General Court. Union was ultimately thwarted by the king’s refusal to reduce the role of the Crown in imperial matters. The Board of Trade saw in New Hampshire a bastion of royal authority in New England. In 1690 Samuel Allen, an English merchant keen on transatlantic trade, purchased the proprietorship from Captain John Mason’s heir, obtained a contract to supply the Royal Navy with masts, and asked the Lords of Trade for appointment as governor of all the territory included in Mason’s various patents. For most of a year he fought with the agents of Massachusetts in London for control of New Hampshire, and won. Allen was appointed governor. His new lieutenant governor and Council included former dominion officials and holdovers from the earlier royal government. Another appeal in 1693 for merger with Massachusetts, to secure assistance in protecting its northern frontier, was again denied by the Lords of Trade. A compromise that guaranteed provincial independence was reached in which Massachusetts and New Hampshire would have a common governor but otherwise separate governments. The new government inherited the institutions of the Cutt, Cranfield, and Allen commissions, which typified royal government in colonial America. The governor or his lieutenant enjoyed executive authority specified in his commission and royal instructions. He governed with the assistance of a royally appointed council, which enjoyed a mix of executive, legislative, and judicial authority. Local officials continued to decide who could vote in pro16 Th is segment on New Hampshire draws from Jere R. Daniell, Colonial New Hampshire: A History (Millwood, NY: KTO Press, 1981), 99–131.

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vincial elections. An elected body of town representatives constituted an assembly or House of Representatives. After 1700, controversy between the several organs of government steadily yielded to efficient royal government. The colony’s chief resident executive, the lieutenant governor, was extremely stable. John Usher served in the post during 1692–97 and again during 1703– 15. The six years in between included the two-year term of William Partridge (1697–99), followed by a vacancy of four years. The common governors with Massachusetts, the Earl of Bellomont (1699–1701) and Joseph Dudley (1702–15), enjoyed harmonious relations with the colony’s legislature. Indeed, the provincial legislature was so pleased with Bellomont’s opposition to the claims of Mason’s (thereafter Allen’s) proprietorship that the General Court voted him a gift of 500 New Hampshire currency. Dudley granted the provincial legislature a high degree of autonomy, concentrating his efforts on the war. The house, with power over revenue bills, grew in importance, learning that well-paid governors tended to accept its advice. By 1715, the house determined the colony’s budget, authorized expenditures for specific purposes, and helped audit the accounts of money spent by the executive magistrates. The shaping of legislation took the form of joint sessions of the Council and the House of Representatives, replacing the previous arrangement in which the Council drafted bills for review by the house. By 1715, the deaths of Samuel Allen and his son Thomas ended any remaining controversy over land claims in the colony.

The Middle Colonies

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e w yor k was restored to its former status as a separate royal colony. Penn continued with his proprietary rule, issuing another Frame of Government in 1696 and a final “Charter of Privileges” in 1701, which included a separate legislature for the Delaware counties under a common governor with Pennsylvania. The most radical change was the surrender of the charters of East and West New Jersey by the proprietors to Queen Anne in 1702, which reunited them as a royal colony.

New York

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h e c ol l a p s e of the dominion brought a temporary rebellious government into office.17 In August 1688 Sir Edmund Andros proclaimed his commission extending the dominion over New York and the Jerseys. On March 1, 1689, news that William and Mary had landed in England finally 17

The story of Leisler’s rebellion and his brief interim government is told in Michael Kammen, Colonial New York: A History (New York and Oxford: Oxford University Press, 1996), 121–27. First published in 1975 by KTO Press in Millwood, NY.

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reached New York. Lieutenant Governor Francis Nicholson and the Council kept the news secret until April 26, when word spread that Andros had been overthrown and imprisoned in Boston’s jail. Royal authority quickly collapsed. In early June, Nicholson, who had taken refuge in a fort from an uprising of local militia and town residents, surrendered its keys to rebel militia captains. He returned to England to submit his complaint against the rebels, leaving the colony in their hands. On July 30, 1689, King William wrote a letter to the Council, appointing Francis Nicholson temporary lieutenant governor. The letter authorized the Council to appoint a lieutenant governor that “in his absence [Nicholson] to such as for the time being take care for the Preserving the Peace and administring the Lawes in our said Province.”18 In December Captain John Riggs delivered the letter to the two remaining members of the Council. Jacob Leisler, a militia captain, seized it from one of them, read it, and, deciding that he was the one in charge implied in the king’s instructions, proclaimed himself lieutenant governor. He formed a council, set up a government, and declared his Protestant loyalties to the new monarchs. In February 1690 he issued writs for electing an assembly, which met with no response. He issued new writs on April 8, 1690, which resulted in the election of an assembly. Leisler prorogued it shortly after it enacted a tax and eliminated New York City’s monopoly on bolting and baking flour. A subsequent assembly in September reenacted the tax, and imposed several draconian measures restricting travel outside the colony without Leisler’s consent and regulating the transportation of property. In January 1690 King William had issued a commission for a new governor to Henry Sloughter, who arrived fourteen months later on March 19, 1691. He read his commission before a public gathering and demanded surrender of the fort in which Leisler was holed up. Leisler surrendered the fort the next morning, was arrested, charged with treason and murder, and tried during the first two weeks of April. In the trial he refused to plead, claiming that he had acted under the authority of the king’s letter of July 30, 1689. A stacked court convicted him and seven others and sentenced them to die, but six were reprieved and pardoned by the Crown in 1694. A year later an act of Parliament cleared the names of Leisler and his accomplice, Jacob Milborne, restoring their estates to their proper heirs. The pro- and antiLeisler factions that emerged from his brief interim government unsettled New York politics for decades to come. Sloughter died later that summer, a few months after his arrival and setting up a new government.19 In keeping with royal policy, the Council 18 The statement is reproduced in Robert C. Ritchie, The Duke’s Province: A Study of New York Politics and Society, 1664–1691 (Chapel Hill: University of North Carolina Press, 1977), 209. 19 Th is summary of New York’s constitutional and political development between 1691 and 1714 draws from Kammen, Colonial New York, 128–60.

[ 342 ]

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appointed Major Richard Ingoldsby to serve on an interim basis. His successor, Benjamin Fletcher (1692–98), was unpopular and eventually recalled to England to face charges of bribery, stealing customs revenue, and failure to collect quitrents. The next six governors who served between 1698 and 1714 lasted an average of fewer than three years. During the reigns of William and Anne, several served over multiple jurisdictions. Fletcher served as governor of both New York and Pennsylvania during 1692–94. Between 1698 and 1701 Richard Coote, Earl of Bellomont, also served as governor of Massachusetts and New Hampshire. Edward Hyde, Baron Cornbury (1702–8), also served as governor of New Jersey. Rapid turnover and multiple governorships were not conducive to stable government or concentrated attention on the affairs of New York. Ingoldsby presided over the establishment of a new judicial system in 1691, which supplanted Roman-Dutch civil law with the common law. Citizenship was redefined in English terms. One had to be a freeman, which could be achieved by birth, apprenticeship, or redemption (purchasing the right) in order to vote, hold office, practice a trade, or carry out a business. The price of admission to freemanship was set in 1691 at 3 12s. New York currency for a merchant-trader or shopkeeper and 1 4s. for an artisan or handicraftsman. In 1701 both were set at 1 6s., with exemption for the poor or for payment only of the certificate. The oath of citizenship and payment of municipal taxes were required for those in New York City and other towns. Under Governor Sloughter, the legislature, the General Assembly, became bicameral, separating into the Assembly and the Council. Sloughter convened the General Assembly in April 1691. It levied taxes, confirmed earlier land grants and patents, provided for a militia, set up a system of courts, approved a table of fees for public ser vice, and declared the rights and privileges of English subjects in New York. The governor and Crown both retained veto power, but laws would remain in force until disallowance. The Assembly insisted on meeting annually and claimed several parliamentary privileges including when to meet and adjourn, its members’ qualifications, and immunity from arrest during sessions. It rapidly extended its powers. It rejected efforts by the Council to amend money bills and in 1705 received royal approval to appoint a treasurer to control the disbursement of funds outside the routine support of government. By 1707 it extended its control over the expenditure of all tax revenue, placing appropriated funds in the custody of a provincial treasurer and specifying the purposes of expenditure. It made all royal and provincial fiscal officers subject to its control. The arrival of Governor Robert Hunter in 1710, with support from the English government, reversed these measures. He recentralized the authority of the governor and Council over that of the Assembly, which did not regain control over colonial expenditures until the late 1730s. New York’s constitution remained unchanged until the Revolution, although its politics were vibrant and frequently bitter. [ 343 ]

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Pennsylvania

P

e n n r e t ur ne d to England in 1684 to defend some of his possessions from claims of the proprietor of Maryland, Lord Baltimore.20 During his absence from Pennsylvania, he established the Provincial Council, to which he delegated executive power. Although Penn planned to return to Pennsylvania as soon as he defeated Baltimore’s assault, he remained in England for fifteen years to address other threats to his proprietary. Penn’s friendship with James had protected him from incorporation into the Dominion of New England, but it made him suspect with the new Protestant monarchs. The crisis came to a boiling point in 1689 when Quaker politicians in Pennsylvania refused to provide troops to assist the governor of New York in its defense against the French and their Indian allies. Reports also reached London that Philadelphia merchants were trading with the French. The Lords of Trade recommended that the colony be brought under royal control. In late 1692, the Crown awarded Governor Benjamin Fletcher of New York a commission granting him governing power for Pennsylvania. It authorized him to appoint a deputy governor, name his own council, adjourn and dismiss the Assembly and veto its bills, establish courts and appoint judges, and undertake military preparations. Fletcher spent only a few weeks of his two-year tenure as governor of Pennsylvania in the colony, prying little money out of its legislature. By December 1693, several of Penn’s friends from the earlier reigns of Charles and James had joined the Privy Council. Promising to supply men and money to support King William’s War in America, Penn petitioned for the return of his proprietary. Over the opposition of the Lords of Trade, William returned the colony to Penn on the presumption that he might succeed where Fletcher had failed to garner much financial support. Penn’s recovery of his proprietary was quickly followed by a major constitutional change. Previously his Provincial Council had exercised executive, judicial, and certain legislative functions, in par tic u lar, submitting laws to the Assembly for its approval. As part of a money bill approved in 1695, the Assembly insisted on an “Act of Settlement,” a marked increase in its powers, which Deputy Governor Robert Markham rejected. However, in exchange for a bill raising 300 Pennsylvania currency for Fletcher the next year, a promise Penn made to the Crown in late 1693 that he felt obligated to honor, Markham accepted the act. The “Frame of Government of Pennsylvania—1696” 21 consisted of a 50 percent reduction

20 Th is segment draws from Joseph E. Illick, Colonial Pennsylvania: A History (New York: Charles Scribner’s Sons, 1976), 44–112. 21 Thorpe, Colonial Charters, 5:3070–76, and http://www.yale.edu/ lawweb/avalon/states/ pa06.htm (February 27, 2003).

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in the number of representatives to the Council and the Assembly, two to be selected from each county for the former and four for the latter, and a change in the franchise favoring Quakers. A principal change was the Assembly’s right to initiate legislation and determine its own adjournment and the qualifications of its members. It set the franchise at fi fty acres of land, of which ten had to be cleared, or 50 Pennsylvania currency personal estate. Voters and officeholders had to have been resident within the colony for two years. The 1696 frame was a major increase in the power of the lower house. Deep in debt, Penn returned to Pennsylvania in 1699 to try to close some land sales and collect back quitrents. Again events quickly compelled his return to England, this time to fend off a bill in Parliament in 1701 that would unite the charter and proprietary colonies to the Crown. The opposition of important London Quakers helped defeat the bill in the House of Lords. During his absence from the colony, representatives of the Pennsylvania counties decided to petition for separation from the deputies of the Delaware counties, sentiments that were mutually shared. The Assembly petitioned for a new frame of government, which resulted in the “Charter of Privileges Granted by William Penn, esq., to the Inhabitants of Pennsylvania and Territories, October 28, 1701.”22 This final frame endured up to the American Revolution. It established a unicameral assembly, the only such body among the thirteen American colonies. The Assembly would choose its own speaker and other officers, judge the qualifications and election of its members, determine its adjournment, appoint committees, prepare bills, and enjoy the powers and privileges of an assembly accorded the rights of freeborn subjects of England and as were usual in any of the Crown’s American colonies. The Council, appointed by the proprietor, would have no role in legislation. The charter included the important clause that provided for the separation of the three lower counties from the province of Pennsylvania. Penn also signed the Judiciary Act of 1701, which enlarged the scope and power of county courts in both equity and maritime cases, thereby decentralizing judicial authority away from proprietary or crown control. The Council was completely removed from the judiciary. Penn sailed for England three days after he signed the charter. The Assembly controlled the deputy governor’s salary. This power was usually sufficient to procure his signature on legislation. Under the terms of Penn’s charter, the colony enjoyed a five-year grace period in which to submit

22 Thorpe, Colonial Charters, 5:3076–81, and http://www.yale.edu/ lawweb/avalon/states/ pa07.htm (February 27, 2003).

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laws to England for review. To maximize its power, the Assembly typically submitted a list of laws once every five years to overwhelm the Privy Council. It often circumvented royal disallowance by enacting laws for less than five years, reenacting laws that had been disallowed, and not sending laws to England. As Queen Anne’s reign closed in 1714, the Assembly took from Penn the power to appoint the provincial treasurer, making him responsible to the legislature. Although the Assembly would fight with Penn and his successors over the prerogatives of the proprietor, especially the taxation of his vast landholdings, the colony’s local leadership was careful not to push him so far that he would sell his proprietary back to the Crown. The experience of other colonies suggested that direct royal control would mean a diminution in the power of local politicians and higher taxes.

Delaware

R

el at ions be t w een Pennsylvania and the Delaware counties steadily deteriorated. 23 Hoping to prevent a formal division of the two territories, Penn appointed William Markham as a separate deputy governor for Delaware in 1691. Markham and Thomas Lloyd, deputy governor of provincial Pennsylvania, joined in legislative union for one year, but maintained separate executive administrations. During Benjamin Fletcher’s short reign, Markham was appointed deputy governor of Pennsylvania. The Assembly was reorganized with both Pennsylvania and the Delaware counties enjoying equal representation. The 1696 frame of government added a complication to legislative unity. Although representation of the Delaware and Pennsylvania counties remained equal, the new frame required attendance of two-thirds of both sets of delegates to constitute a quorum. Delaware’s delegates could grind all legislative business to a halt by failing to attend legislative sessions. Several Delaware deputies failed to attend sessions in 1698 and 1699. In response, those present in 1699 passed a law levying a fi ne of 100 Pennsylvania currency on any county failing to elect representatives to the Council and Assembly. It also authorized the Council and Assembly to proceed with important business even if a quorum was lacking because some counties failed to elect delegates or if some elected delegates failed to attend. The more rapid growth of Pennsylvania’s population led to demands for greater representation in the Assembly. The Delaware counties were not

23 Th is segment draws from John A. Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978), 98–129.

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The Colonial Constitution, 1688–1714

prepared to accept minority status under Pennsylvania Quaker rule. On June 6, 1700, councillors from both Pennsylvania and Delaware surrendered the old charter to Penn, who called a new assembly into session in the fall of that year to revise the charter and the laws. The two sets of deputies failed to agree on the all-important matter of representation. Relations continued to deteriorate. The final frame of government granted to the residents of Pennsylvania on October 28, 1701, contained an escape clause for the lower counties. If within the next three years the majority of elected members from either Pennsylvania or Delaware informed Penn that they no longer wanted to meet in a joint assembly, he would permit them to meet separately. Delaware could choose its own distinct assembly with as many delegates as it wished. The 1701 charter of privileges was known in the lower counties as the “Charter of Delaware—1701.”24 Penn tried for the next three years to preserve the unity of the unicameral Assembly. Pennsylvania’s Quakers saw the Delaware delegates as an obstacle to their legislative control. Delaware wanted its own legislature. On May 12, 1704, writs were issued for an election of representatives to a separate Delaware legislature commencing May 22. It was postponed until October, finally meeting in November in New Castle. Thereafter, a separate legislature met in New Castle and enacted its own laws. Delaware remained bicameral, with the Council sitting as an upper house and the Assembly as a popularly elected lower house. Legislation still required the signature of the governor, who was common to both Pennsylvania and Delaware. Unlike that of Pennsylvania, Delaware’s legislation never became subject to royal disallowance. Deputy governors never forwarded acts of the legislature to England for review. Once they signed a bill, it was final, although laws violating the trade acts or other acts of Parliament could be overturned. Delaware’s constitution had to escape one final moment of uncertainty. In 1712, beleaguered with debt, Penn agreed to sell Pennsylvania and Delaware to the Crown for 12,000 sterling. The English government had paid him an installment of the purchase price when he suddenly suffered a stroke, leaving him unable to consummate the sale. For the final six years of his life until 1718, his wife, Hannah Penn, directed proprietary affairs. 25 Delaware remained a proprietary province until the Revolution under its 1701 charter, with the same franchise as Pennsylvania. 24

Thorpe, Colonial Charters, 1:557–62, and http://www.yale.edu/ lawweb/avalon/states/de01 .htm (February 27, 2003). 25 Charles Gookin, governor of Pennsylvania and Delaware between 1709 and 1717, bought a farm near New Castle, where he spent an increasing amount of time in his later years.

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New Jersey

D

ur i ng t h e 1 6 8 0 s , the New Jersey proprietorships changed ownership. 26 Twenty-four proprietors replaced the interest of Sir George Carteret in East New Jersey while Dr. Daniel Coxe became the chief proprietor of West New Jersey. Both were annexed to the Dominion of New England in 1688. On April 30, 1688, fifteen East New Jersey proprietors, in tandem with Coxe and the West New Jersey proprietors in London, signed a document of surrender to the Crown. The Glorious Revolution temporarily stayed the process of surrender. William and Mary postponed quo warranto proceedings against the two proprietaries, and pre-dominion governance was resumed. The proprietors of both Jerseys appointed a common governor, Andrew Hamilton, who served between 1692 and 1702, save for a brief period during 1698–99 when he was forced to vacate office under the terms of the 1696 Navigation Act that precluded Scottish natives from holding high colonial office. During his tenure Governor Hamilton managed to extract revenue and other important laws from the legislatures of East and West New Jersey. But little effort was made to enforce the trade acts, which resulted in a royal proclamation of April 1697 accusing the colonies of negligence. Another important issue was the claim of the Jersey proprietors to operate a free port at Perth Amboy over the periodic interference of New York, whose merchants argued that the free port was harmful to their commerce. Owning the Jerseys was more troublesome than profitable. Weary of their struggles, in July 1699 the proprietors submitted the terms under which they would surrender their proprietaries to the Crown. On August 12, 1701, after several years of negotiation, they presented their fi nal memorial of surrender. In exchange for giving up all rights of government, the proprietors asked for a united New Jersey with an elective assembly of thirty-six members meeting alternately at Perth Amboy and Burlington, with the franchise set at one hundred acres and house membership at one thousand, a full set of provincial courts, all Protestants eligible to hold public office, and several other matters of governance. For themselves, they asked for confi rmation of their lands and quitrents, the sole right of purchasing Indian land and monopoly of the 26

Th is segment on New Jersey draws from John E. Pomfret, Colonial New Jersey: A History (New York: Charles Scribner’s Sons, 1973), 67–134; Pomfret, The Province of West New Jersey, 1609–1702: A History of the Origins of an American Colony (Princeton: Princeton University Press, 1956), 150–215; and Pomfret, The Province of East New Jersey, 1609–1702: The Rebellious Proprietary (Princeton: Princeton University Press, 1962), 276–364.

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Indian trade, and the power of appointment of the surveyor-general and his assistants. Within a matter of months, the two Jerseys were reunited as a royal colony. Two documents concluded the transfer: “Surrender from the Proprietors of East and West New Jersey, of Their Pretended Right of Government to Her Majesty; 1702” dated April 15, 1702, and “The Queen’s Acceptance of the Surrender of Government” of April 17, 1702. 27 The concessions to the proprietors were included in the royal instructions to the new governor, Edward Hyde, Lord Cornbury, a cousin of Queen Anne. The first issue of royal instructions became New Jersey’s formal constitution. Cornbury was already in America, having been appointed governor of New York. His instructions for New Jersey were dated November 16, 1702, and reached him in July 1703. They stipulated that the General Assembly was required to confi rm the proprietors’ rights of the soil and reserve all quitrents due them. The colonial government was forbidden from taxing their unimproved lands, and only the proprietors could buy land from the Indians. Liberty of conscience was granted to all residents, but Roman Catholics and Quakers could substitute an affirmation for the oath. Customs and other impositions were to be equal to those of New York to ensure fair treatment of vessels doing business in both colonies. Cornbury arrived in New Jersey in the summer of 1703. His deputy, Lieutenant Governor Richard Ingoldsby, arrived a year later, but neither spent much time in the province. Colonial government was left in the hands of the Assembly and the Council. In 1705 the franchise was lowered to 50 sterling and 500 in personal property was required to sit in the lower house. By 1714, the Assembly had mastered its ability to withhold fi nancial support until the governor agreed to its demands. The treasurer was forced to submit his accounts and vouchers to the Assembly, thus curbing the governor’s access to public funds. Twelve years of royal government had empowered the Assembly in the art of self-government. The imposition of taxes would have to secure the consent of the people.

The Southern Plantation Colonies

V

i r g i n i a e n j o y e d continuity of governance that escaped Maryland and the Carolinas. The Crown terminated Lord Baltimore’s proprietary right of governance during the reigns of William and Anne, but allowed him to retain the revenues derived from his rights in the soil. The 27 Thorpe, Colonial Charters, 5:2584–85, 2585–90, and http://www.yale.edu/ lawweb/avalon/ nj13.htm and http://www.yale.edu/ lawweb/avalon/nj12.htm and (February 27, 2003).

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Carolinas were affl icted with a devastating Indian war, piracy, discontent over taxes, constant anxiety over a possible Spanish invasion, and gross mismanagement of colonial government, conditions that fed the colonists’ demand for royal rule.

Virginia

T

he g l or io u s Revolution effected no constitutional or political change in Virginia. 28 Between 1689 and 1714, the Council, composed of the great landowning gentry, was the dominant organ of provincial government. Members were selected by the governor as men “of good estates,” who produced the best tobacco and were best known in London. Governors could not afford to alienate its members. They had been able to effect the recall of an unpopu lar governor, Sir John Harvey, in 1635. The Council’s political power exceeded that of the burgesses and at times even that of the governor. Both Sir Edmund Andros (1692–98) and Francis Nicholson (1698–1705) lost their posts because of their inability to work harmoniously with the Council. The House of Burgesses was the weak sister in colonial governance during 1689–1714. The governor had the power to appoint the clerk of the House of Burgesses, which limited its independence. Regular meetings of the house were not required to support the colonial government or pay the governor’s salary. Quitrents, dues, and the 2s. hogshead export duty on tobacco supplied several thousand pounds of permanent revenue every year. Between the death of Lieutenant Governor Edward Nott in 1706 and the arrival of Governor Alexander Spotswood in 1710, the Council was in effect the colonial government of Virginia, with Edward Nott, president of the Council, serving as governor. During his tenure, Spotswood was able to partially curtail the influence of the Council, but not break its power. Since the approval of the House of Burgesses was not required for the governor’s salary, he was not compelled to call it into annual session to secure funds for his livelihood or finance colonial expenditures. Overall, politics in Virginia were relatively benign. The governors did little to expand royal authority over the colony, and the dominance of the Council left little for the scope of action of the more broadly representative burgesses. For its part, the Crown valued stability in Virginia. Tobacco duty was an important source of revenue both for the English and Virginia gov28 A good description of the politics of Virginia between 1689 and 1714 appears in Jack P. Greene, The Quest for Power: The Lower Houses of Assembly in the Southern Royal Colonies, 1689– 1776 (New York: W. W. Norton, 1972), 22–31. First published in 1963 by the University of North Carolina Press.

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The Colonial Constitution, 1688–1714

ernments. The Crown had little motivation to disrupt the status quo in its favorite royal colony.

Maryland

I

n a bloodless coup, rebels overthrew the proprietary government of Maryland on August 1, 1689.29 A group called the Protestant Association, or Associators, organized substantial numbers of Protestant colonists to march on St. Mary’s City and seize the government. The rebels moved quickly to obtain recognition from the Crown and establish their local authority, dispatching an address to King William and Queen Mary on August 5. While awaiting a reply, they summoned an assembly to meet at St. Mary’s on August 22. It petitioned the Crown for a Protestant government, passing an ordinance that provided for Maryland’s government for the next two-and-a-half years. The ordinance named civil and military officers for each of the counties, but did not appoint officials to the vacated offices of the provincial government. Lord Baltimore tried to preserve his right to govern, promising to replace all deputies, councillors, and justices with Protestants. His entreaties were rejected. On February 1, 1690, King William signed a letter prepared by the Lords of Trade instructing the Associators to continue their administration in the name of the Crown until he decided on a course of action. This letter legitimized the rebellion and the provisional government of the colony. In May 1690 the Crown selected Lionel Copley as governor and made his appointment official on June 27, 1691, affi xing the great seal to his commission. It appointed Thomas Lawrence, a baronet with no previous affi liation with Maryland, as provincial secretary. It selected the members of a council to work with the governor, provincial secretary, and Maryland’s planter-merchants. Lord Baltimore was permitted to retain his “rights in the soil,” to receive the revenues given to him in law. Copley arrived to a warm welcome in April 1692. He dissolved the legislature and issued writs for an election to the House of Delegates. During its first session, the General Assembly passed eighty-six acts, many continuing laws previously set to expire. House delegates established four permanent committees, gradually gained control of their membership, and learned how to use the power of the purse. The house disregarded Copley’s appointment of a clerk, selecting its own. Copley died on September 9, 1693. He was replaced by Francis Nicholson, a man with considerable experience in colonial administration, who arrived on July 26, 1694. 29 Th is segment draws from Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 87–115.

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Nicholson moved the capital from the inconvenient location of St. Mary’s City to a more central location, founding Annapolis. In 1698 he was promoted to the more important post of governor of Virginia, and was replaced on January 2, 1699, by Nathaniel Blakiston. The importation of slaves in large numbers beginning in the late 1690s altered Maryland’s economy, transforming traditional family plantations into large commercial operations. The new gentry played a larger role in colonial governance. During Blakiston’s tenure, the General Assembly enjoyed considerable deference in colonial government. After Blakiston left office in 1701, the position of governor remained vacant for nearly three years until the arrival of a military man, John Seymour, in 1703, who governed until his death in 1709. The House of Delegates had gradually increased its power since 1689, especially in the absence of a royal governor during 1701–3, and chafed under Seymour’s command approach to colonial governance. Seymour tried, but failed, to reform the court system, as many delegates sitting in the lower house were themselves justices of county courts. After Seymour’s death, the province had no royal governor until 1714. The senior councillor, Major General Edward Lloyd (1670–1719), presided as head of government while the province awaited a royal appointee. Lloyd enjoyed the support of a majority of the councillors, but found the House of Delegates reluctant to concede its power to the executive. The delegates ultimately won the support of the councillors in the important political issues of the courts and patronage. The native interest had begun to prevail over the royal interest. Maryland’s government was to change again in 1715 when the new king, George I, restored Baltimore’s right to govern.

North Carolina

N

ort h c ar ol i n a was not the plantation economy of Virginia and South Carolina.30 Its settlers, largely immigrants from neighboring colonies, were independent yeomen, active in farming and the production of naval stores. Its politics were turbulent during the proprietary period. The colonial government had temporarily fallen victim to Culpeper’s Rebellion over a tax dispute in the 1670s. Order was not achieved until 1714 with the administration of Governor Charles Eden. The Albemarle settlement secured the privilege of a representative assembly in 1664. In 1691, the legislature became bicameral. The lower house, the House of Commons, sat separately from the upper house, the Council acting in its legislative capacity. The commons secured the right to initiate legislation but did not achieve the same power of its South Carolina counterpart by 1714. 30

Th is segment draws from Greene, Quest for Power, 39–42.

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South Carolina

I

n keeping with the terms of their charter, the proprietors established a representative assembly in the Ashley River settlement in 1670, and allowed it to choose half the members of the Council. 31 However, the proprietors tried to control the political power of the colonists by requiring them to meet with the governor and Council in a single-house legislature and by denying them the right to initiate legislation. Th is changed with the Glorious Revolution. In 1691 the legislature, formally the General Assembly, became bicameral. The lower house took the name Commons House of Assembly with the Council sitting as an upper house. In 1693 the proprietors conceded the right to initiate laws to the commons. The planter-merchants of South Carolina, reflecting the colony’s plantation economy, dominated the colonial government. Between 1689 and 1714, five of them acted as chief executive for the colony. They furnished most of the members of the Council and the Commons House of Assembly. The colony did not have an established revenue with which to pay the annual cost of government. In addition, funds were required for defense against Indians and possible Spanish incursions. This necessitated frequent sessions of the General Assembly. From 1692 the commons met annually, and thus developed much more rapidly than Virginia’s House of Burgesses. It led the opposition to the proprietors. In 1609 the commons asserted its authority over the Indian trade and claimed the power to nominate all public officers receiving a salary from the public. It successfully resisted the efforts of several governors to remove these powers and curtail its authority. In 1718 it orchestrated a revolution against the proprietors, overthrew Governor Robert Johnson, and elected as governor their own man, James Moore II, in 1719. The revolt led to the establishment of royal government in 1721, which culminated in the Crown’s purchase of the shares of the proprietors in 1729.

Voting and Elections

B

y 1 7 1 4 , the franchise was well established in all the American colonies. Most followed the 40s. English freehold or required possession of 40–50 of personal estate or property. Most white adult males of Protestant faith met the requirement. Catholics were disenfranchised in many of the colonies. Data on voter turnout is extremely sparse between 1689 and 1714. Records were not kept or preserved in most of the colonies. The only two for which estimates have been attempted are New York and Massachusetts. Estimates of turnout in New York are confined to two counties and in Massachusetts to 31

Th is segment draws from Greene, Quest for Power, 31–36.

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Boston. In New York, 54.5 percent of the adult white males in Queens County in 1698 and 80 percent in New York City in 1699 voted for members of the Assembly. In Boston the estimated percentage of adult white males to have voted in eight elections for the House of Representatives between 1696 and 1715 ranged between 10.2 and 31.1 percent, with an average of 17.7 percent.32

Appendix: Colonial Legislatures in 1714

T

abl e 1 2 . a summarizes the formal names and unique circumstances of the twelve British colonies in North America in 1714; Georgia, although not founded until 1732, is included for completeness. tabl e .a Colonial Legislatures in 1714 Colony

Legislature

Lower House

Upper House

Massachusetts

General Court

House of Representatives

Council

Connecticut

General Assembly

Lower House

Upper House

Rhode Island

General Assembly

House of Deputies

Council

New Hampshire

General Court

House of Representatives

Council

New York Pennsylvania

General Assembly General Assembly

Assembly Assembly

Council None

Delaware

Assembly

Assembly

Council

New Jersey

General Assembly

Assembly

Council

Virginia Maryland

General Assembly General Assembly

House of Burgesses House of Delegates

North Carolina South Carolina

General Assembly General Assembly

Georgia

Assembly

House of Commons Commons House of Assembly Commons House of Assembly

Council Council of State Council Council Upper House of Assembly

Notes

Royal governor appointed in 1691 Bicameral in 1698; elected governor Bicameral in 1696; elected governor Common governor with Massachusetts Bicameral in 1691 Unicameral in 1701; Council advisory only Separate from Pennsylvania Common governor with New York Council sits as upper house Bicameral in 1691 Bicameral in 1691 Founded in 1732

32 Data on turnout are sparse before 1730. Robert J. Dinkin, Voting in Provincial America: A Study of Elections in the Thirteen Colonies, 1689–1776 (Westport, CT, and London: Greenwood Press, 1977), 144–80, and Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999), 193–98.

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Taxation of the New England Colonies, 1688–1714

B

y 1 6 8 8 the basic structure of New England taxation was largely in place. The principal sources of provincial revenue were the poll and property taxes, collected in fractions or multiples of the country rate, with small fractions assessed for counties, towns, and churches. These were augmented with retail excises and duty on alcoholic beverages, merchandise, and provisions, tonnage, and labor contributions. Normal peacetime taxes ranged between one and two rates, resulting in very low tax burdens. Payment was typically in commodities fi xed at legislated rates, with discounts up to a third or more for coin. An important development occurred in 1690 with the creation of official paper money in Massachusetts following a failed military expedition in Canada at the onset of King William’s War, which was replicated by Connecticut and New Hampshire in 1709 and Rhode Island in 1710. The printing of paper money radically altered the system of public finance in New England, easing the payment of taxes. However, the new monetary system soured relations with England, which feared that paper money would damage English merchants and creditors, whose costs and loans were fi xed in sterling prices, but whose receipts from the colonies were in depreciating colonial currency. To protect its mercantile interests, the English government sought to regulate the value of colonial money, but failed to achieve exchange rate stability until the middle of the eighteenth century.

The Development of the New England Colonies

T

h e p opul at ion of New England rose from 83,191 in 1688 to 137,414 in 1714. Of these, Negroes constituted 2.3 percent, a few thousand in Massachusetts and Connecticut and a few hundred in Rhode Island and New Hampshire. New England remained largely rural. In 1714 the population of Boston and Newport was estimated in the neighborhood of about 10,500 and 3,300, respectively.1 Adding in the port towns of Connecticut and New Hampshire 1

Derived by linear interpolation from figures for 1710 and 1720 in Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, which includes a chapter on colonial

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puts the total number in the main towns at around 16,000–17,000, an eighth the population of New England. Reflecting the rise in population and economic output, recorded trade between New England and England grew from 94,750 sterling in 1697, the first year for which comprehensive English records are available, to 172,829 in 1714. During this period, annual imports into New England exceeded exports by two and a half to five times in value, indicating that the four colonies were earning considerable specie and bills of exchange in their trade with the Caribbean, Europe, and other American colonies to complement the sale of locally produced or goods acquired from other colonies subsequently reexported to England. Less than a fifth of New England’s trade emanating from Boston was with the mother country. Over 80 percent was with the Caribbean, Ireland, and continental Europe. 2 Outside Boston and Newport, most of New England’s colonists were self-sufficient farmers, producing a small surplus of grain, wool, livestock, and timber products for export. Boston was the principal port of export for New England goods. The estimated value of its exports to Britain in 1714 is 51,541 sterling. On the assumption that the value of Boston’s exports to Britain was correlated with the tonnage of goods, the total value of goods shipped from Boston in 1714 to all destinations would amount to about 250,000. To this might be added another 50,000 shipped from ports in Connecticut, Rhode Island, and New Hampshire. Several more tens of thousands of pounds were smuggled from New England to avoid the penny in the pound tax on colonial exports imposed in the Navigation Act of 1673. Also, local customshouse officials tended to undervalue commodities. On these estimates, the value of exports from New England in 1714 was probably no more than 2 sterling per capita. Most of the output in the four colonies, estimated at 8–9 per capita, was consumed on self-sufficient farms.3 statistics. Table Eg60–64: “Population of Cities—Boston, Newport, New York, Philadelphia, and Charleston: 1630–1790,” S-655. 2 Accurate figures on the number and tonnage capacity of ships to and from Boston are not available until 1754. During 1714–17, an annual average of 416 ships, 20,927 total tons, departed Boston, of which only 48 were registered as proceeding to Great Britain. Of the remainder, 191 departed for the Ca ribbean and 117 for the other eleven American colonies. There are no figures for inward-bound ships and tonnage. Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg474–513: “Vessels Clearing Boston—Number and Tonnage, by Origin or Destination: 1714–1772,” S-718–20. 3 Per capita output for all the colonies in 1700 has been estimated at 8–9, of which commodity exports amounted to 14–18 percent of total output. These figures and percentages apply to all twelve colonies, not just New England. All figures of per capita output are estimates based on limited data. Without market pricing of goods, the value of output on self-sufficient farms is difficult to determine. James F. Shepherd and Gary M. Walton, Shipping, Maritime Trade, and the Economic Development of Colonial North America (Cambridge: Cambridge University Press, 1972), 44.

[ 356 ]

Taxation of the New England Colonies, 1688–1714

Residents of the Bay colony earned their living from farming, fishing, fur trading, timber, and shipping. Connecticut was more heavily selfsufficient farming. Rhode Island bred sheep, built, refitted, and repaired ships, and cavorted with privateers and pirates, who paid in coin for provisions and ship stores. Parliament passed a stringent law against piracy in 1698, but enforcement was difficult during Queen Anne’s War, as colonial governors issued letters to privateers to attack French shipping. It took until 1720 for the Royal Navy to end piracy.4 New Hampshire survived on farming, fishing, forestry, and turpentine.

King William’s and Queen Anne’s Wars

A

n i m p or ta n t factor in the development of New England was King William’s War (1690–97) and Queen Anne’s War (1702–14), the colonial counterparts of the Wars of the League of Augsburg and the Spanish Succession in Eu rope. They involved colonists in New Hampshire, Connecticut, Maine, New York, and Massachusetts against French forces in Quebec and Acadia (Nova Scotia). The wars had both positive and negative effects on New England.5 Orders from England fueled shipbuilding, some fi fteen vessels a year totaling 1,024 tons, during Queen Anne’s War. Shipping and provisioning the Royal Navy meant work for a large variety of skilled persons. On the loss side of the ledger, about a fi fth of all able-bodied males of Massachusetts participated in the two wars, of which about one-quarter died, a substantial loss of the colony’s productive population. Heavy war time taxation also drained resources from the economy.

Money

I

n addi t ion to commodity money, gold and silver coin, book credit, barter, a few promissory notes, and bills of exchange that circulated in New England in 1688, a new form of money was invented in Massachusetts.6 In 1690 the Bay colony issued the first quasi-official, which became

4 Emory R. Johnson et al., History of Domestic and Foreign Commerce of the United States (Washington, DC: Carnegie Institution, 1915), 1:83. 5 The impact of the war on Boston is discussed in Gary B. Nash, The Urban Crucible: The Northern Seaports and the Origin of the American Revolution, abr. ed. (Cambridge, MA, and London: Harvard University Press, 1986), 34–39. First published as The Urban Crucible: Social Change, Political Consciousness, and the Origins of the American Revolution in 1979 by Harvard University Press. 6 The history of colonial money has been extensively documented. Important sources include Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975); John J. McCusker, Money and

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fully official, paper money in the Western world.7 Its issue was not preplanned, although the idea had been discussed for some years, but was an accidental outgrowth of a failed military expedition to Canada in 1690. The overthrow of the Dominion of New England in April 1689 resulted in a provisional government that found the colony under attack from French forces and their Indian allies. The Council of Safety was formed in Boston, which resurrected the former charter government. By late summer the French had forced the abandonment of all settlements east of Portland. To recover its lost territory, Massachusetts mobilized men under the command of Sir William Phips and launched an attack against the French settlement of Port Royal in Acadia (Nova Scotia) in April 1690. Phips returned home victorious on May 30. Two days before, on May 28, a newly elected House of Representatives passed a bill for the “encouragement of volunteers for an expedition against Canada.” It stated that in addition to soldiers’ pay, “one just half of all plunder, taken from the enemy, should be shared among the officers, soldiers, Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978); Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997); Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (1934; repr., New York: A. M. Kelley, 1964); Edwin J. Perkins, American Public Finance and Financial Ser vices, 1700–1815 (Columbus: Ohio State University Press, 1994); Charles J. Bullock, Essays on the Monetary History of the United States (New York: Greenwood Press, 1969) (previously published in 1900 by Macmillan); E. James Ferguson, “Currency Finance: An Interpretation of Colonial Monetary Practice,” William and Mary Quarterly, 3rd ser., 10, no. 2 (April 1953): 153–80; and Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http:// www.studyworld.com/colonial _currency.htm (June 3, 2003). Specific studies of money in Massachusetts include Joseph B. Felt, Historical Account of Massachusetts Currency (New York: Burt Franklin American Classics in History and Social Science, 1968) (fi rst published in Boston in 1839); Charles H. J. Douglas, The Financial History of Massachusetts: From the Organization of the Massachusetts Bay Company to the American Revolution, Studies in History, Economics, and Public Law, vol. 1, no. 4 (New York: Columbia College, 1892), 117–35; Andrew McFarland Davis, Currency and Banking in the Province of the Massachusetts Bay (1900; repr., New York: A. M. Kelley, 1970); “The First Printed Currency: Massachusetts Bay—December 10, 1690,” http://www .coins.nd.edu/Col/Currency/CurrencyIntros/ IntroEarliest.html (August 10, 2004); and Roger W. Weiss, “The Colonial Monetary Standard of Massachusetts,” Economic History Review, n.s., 27, issue 4 (November 1974): 577–92. 7 The Wexelbank (bank of exchange), a private bank in Stockholm, issued paper money to circulate in lieu of Swedish copper money in the 1660s. The governor of French Canada issued paper money in 1685 in the form of cut-up playing cards with monetary values written on them, which was redeemed with the arrival of specie from France eight months later. The cards were treated as “bearer instruments,” which circulated as money and was used by French soldiers to purchase items within the garrison. The French government regarded the cards as promissory notes rather than official currency. Th is system continued off and on until 1755 when all trust was lost in this form of money. McCusker, Money and Exchange, 119, and “Canada’s Playing Card Money,” http://www.micheloud.com/ FXM/ MH/canada.htm (August 10, 2004).

[ 358 ]

Taxation of the New England Colonies, 1688–1714

Colonial Money Terms

I

n colonial times, the terms “money” and “currency” were practically synonymous. Both signified whatever was used as a medium of exchange, including wampum, commodities, provincial bills of exchange, and silver and gold coins by weight or count. The value of each colony’s money was based on its legal rating for silver, gold, and commodities. Currency did not refer solely to paper money or coins as it does today. Colonial legislatures set the value of their moneys or currencies in terms of the price of silver per ounce. The values of colonial currency varied between the colonies as some believed that a higher value would help keep silver in their colonies or that they would gain advantage in their trade by depreciating their currency against the silver of their trading rivals. In an effort to bring about uniformity of colonial money, Queen Anne issued a proclamation in 1704, reinforced in an act of Parliament of 1708, which limited the value of silver coins in the colonies to one-third above the official rate in England. Colonial money valued at 33.33 percent above sterling was known as Proclamation Money or Lawful Money as it conformed to the parliamentary statute. The term “Lawful Money” was used in New England while “Proclamation Money” was favored in the south. The term “current money” was interchangeable with “Proclamation” or “Lawful Money” when it passed at the 133.33 percent rate. When it passed at a different rate, current money meant the everyday (but internally lawful) value of colonial money. The middle colonies disregarded the English statute and set their currency 66.66 percent above sterling. Th is was referred to as “common money” or “Pennsylvania money.” New York had its own money, valued at 78 percent above sterling. “Ready money” typically referred to cash in the form of specie valued at each colony’s legislated rate. Commodity money was valued in terms of fi xed rates set by each of the colonial legislatures. The actual exchange rate of colonial money in London against sterling often departed from the rates set by colonial legislatures, depending on conditions of supply and demand for the different currencies or moneys. Details of the proclamation and legislation are discussed later in the chapter.

and seamen, stores of war excepted.” Greed seized the legislators. On June 6, they authorized a loan to finance the expedition. After all charges of the expedition were defrayed, the officers, soldiers, and seamen granted their share of plunder, and the loan repaid, the remaining booty would be equally divided between the lenders and the government. This was to be war for profit, for the soldiers, lenders, and the colonial government. Visions of profit quickly turned to loss. In early August Phips sailed with thirty-two ships and over two thousand men to seize Quebec. His siege of the fortress failed, and he returned to Boston on November 18 with [ 359 ]

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part of his fleet damaged. The cost of the expedition was estimated at 40,000–50,000 Massachusetts currency. Many of Phips’s men died from fever and other illnesses. Returning soldiers and suppliers of goods to the government demanded payment in full, and returning soldiers threatened to mutiny. The colonial government could not expect aid from England and it would take time to collect a special tax. The colonial government had assumed that French booty would finance the expedition and provide revenue for the colony. On this belief, it had not raised the necessary funds to underwrite the expedition in advance. The government had to find a way to pay the survivors of the expedition, widows of deceased soldiers, and other routine public expenditures. It hit upon an idea that had circulated for several decades: the issue of paper bills that would serve as money. On December 10, 1690, the General Court authorized the establishment of a committee of five men to issue 7,000 Massachusetts paper money on the credit of the colony in bills of 5s., 10s., 20s., and 5.8 The form of the note was as follows: “This indented Bill of Ten shillings [or other denomination] due from the Massachusetts Colony to the Possessor, shall be in value equal to money, and shall be accordingly accepted by the Treasurer and Receivers subordinate to him, in all payments, and for any stock at any time in the Treasury. Boston in New England, December 10, 1690. By order of General Court.”9 Three members of the committee signed each bill. The first bills were called indented Colony or Old Charter Bills as they were issued under the old charter. They were known as “bills of public credit,” or “bills of credit” for short.10 The bills were not called money since none of the colonies had received the right from England to print money. Soldiers and widows received payment in the new bills. They were valid for payment of taxes and other payments from the Treasury, but did not have

8

Newman, Early Paper Money of America, 180; “The First Printed Currency: Massachusetts Bay–December 10, 1690”; and Felt, Massachusetts Currency, 50. Various plans had been proposed exploring the idea of a private bank of issue. In 1682 Reverend John Woodbridge of Newbury published a pamphlet advocating the issue of paper money collateralized by land. A plan for such a bank was submitted to the General Court in 1684, but opposition in the lower house scuttled it. In 1686, John Blackwell presented a plan to the Council to establish a private bank in Boston that would issue bills for circulation on the security of pledges of personal property and mortgages of real estate. It was favored by the president of the Council and several of its members. A printing press was ordered, paper was purchased, and bills were printed, but the project was abandoned in 1688 before any of the notes were issued. 9 Newman, Early Paper Money of America, 180; Felt, Massachusetts Currency, 50; and Davis, Currency and Banking in Massachusetts, chapter 1, reproduced at http://etext.lib.virginia.edu/ users/ brock/davisch1.html (August 10, 2004). 10 “Bills of Credit,” http://www.coins.nd.edu/ColCurrency/CurrencyIntros/ IntroBillsof Credit.html (August 10, 2004).

[ 360 ]

Taxation of the New England Colonies, 1688–1714

f ig ur e 13.1. 1690 Massachusetts bill of credit (five shillings).

legal tender status for the purchase of commodities, bills of exchange, specie, or other forms of money. The treasurer paid out the bills to surviving soldiers, widows, wards of orphans, and other creditors. As a new, untried form of money, they were received with some suspicion. As the survivors and widows purchased [ 361 ]

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f ig ur e 13.2. 1691 Massachusetts bill of credit (twenty shillings).

necessities, merchants accepted the bills at 12–14s. in the pound, a discount of 30–40 percent. Heavy discounting threatened to destroy confidence in the new paper currency. Sir William Phips exchanged a large amount of his personal specie at par value for the new paper money, but he lacked sufficient wealth to stem the panic.

[ 362 ]

Taxation of the New England Colonies, 1688–1714

The legislature found a remedy with passage of a supplemental law of February 3, 1691. It removed the 7,000 limit, authorized an additional amount of currency to be printed, but, most important, decreed that bills would be accepted by the government for tax payments at a 5 percent advance or premium (“Bills of 20s. shall be accepted in all Publick Payments . . . at 21s. And so proportionally for all Bills”). A subsequent law of May 21, 1691, raised the limit to an aggregate of 40,000.11 As the deadline for tax payments approached, bills became 5 percent more valuable than commodities and other forms of money. Payment of taxes in paper bills was a self-granted tax reduction. Until 1690, the government of Massachusetts was largely financed on a pay-as-you-go basis. Current taxes were levied and collected in specie and country pay to meet current obligations. Extraordinary expenditures, such as those in war time, were financed with taxes levied in multiple sessions of the legislature through the imposition of multiple rates. The colonial government did not, indeed could not, borrow on a large scale, nor was the legislature willing to build up a rainy day reserve by raising more taxes than it needed to finance the ordinary costs of government. The issue of bills of credit changed this regime, shifting the collection of taxes from before or during to after public expenditure. Bills of credit were certificates of indebtedness of the province, similar to a government bond, with the difference that they circulated as currency. To retire this debt, the law of May 21 required that all bills remitted in taxes to the Treasury were to be destroyed each year as taxes earmarked to retire the notes were collected. In effect, the bills were a loan to the government, collateralized with taxes to be collected over the coming year. The bills amounted to taxanticipation notes. The colonial government used the bills to pay its creditors. They, in turn, used them to make other purchases which ensured their circulation. As individuals paid their taxes with the bills, the notes would be destroyed, and thereby removed from circulation. With each issue of bills, the legislature authorized specific taxes equal to the size of the note issue. The logic of the system was imperfect in practice. Some colonists continued to pay taxes with commodities. Some merchants chose to pay in silver to take advantage of the discount for coin. The result was that some bills remained in circulation until their redemption date, at which time individuals could return them for replacement notes with future redemption dates. The colonial government had inadvertently discovered a way to increase the money supply beyond specie, commodities, and the other limited forms of money.

11

Newman, Early Paper Money of America, 181, and Felt, Massachusetts Currency, 51.

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By October 16, 1691, a committee of the House of Representatives reported that it had burned 10,119 9s. in bills that were paid into the Treasury in taxes.12 Given the confidence with which the public accepted the new paper money, on December 15, 1692, the General Court gave legal tender status to all colony bills, extending to private debts and bills of exchange. Despite England’s prohibition against the printing of money in the colonies, Massachusetts printed paper bills which, as it received legal tender status for public and private debts, became official paper money. Much as the Bank of England later that decade was able to finance a credit revolution with its issue of private notes, Massachusetts brought about a monetary and fiscal revolution with the issue of public notes. Once accepted with confidence, the colony’s paper money could be used to purchase goods and ser vices, pay taxes, and buy other colonial and foreign bills of exchange. The importance of this monetary innovation cannot be overstated. Bills of credit enjoyed a considerable advantage over commodities and specie. Country pay had to be packaged, transported, stored, and protected from spoilage until it was paid out in public or private transactions. Commodities were an inconvenient and risky means of payment. Specie was hard to come by, and was often shipped abroad as foreign creditors demanded payment in coin. Paper was comparatively cheap to purchase and print. The colonists and the government found bills of credit a convenient medium of exchange that added a degree of economic and financial efficiency to, and in partial replacement of, the clumsy commodity and sometimes scarce specie monetary system. By February 1694, most of the colony’s early issue of bills had been redeemed and destroyed. Popular demand for bills, however, led to their periodic reissue. Bills were continuously printed, issued, and reissued under sixteen separate acts during 1702–8. An additional 70,000 of notes was printed during 1708–10. To finance another Canadian expedition in 1710, 40,000 in new notes was authorized in 1711, valid for two years at a 40 percent advance. Before Queen Anne died on August 1, 1714, two final issues totaling 40,000 were authorized.13 From time to time, notes were called in and replaced due to counterfeiting. The fears of the English government and creditors materialized. As the supply of bills increased, the value of Massachusetts money depreciated in terms of silver, and hence sterling. Outstanding bills of credit rose 12 Davis, Currency and Banking in Massachusetts, chapter 1, fn. 15, citing Massachusetts General Court Records, 6:185, reproduced at http://etext.lib.virginia.edu/users/ brock/davisch1.html (August 10, 2004). 13 Newman, Early Paper Money of America, 182–87.

[ 364 ]

Taxation of the New England Colonies, 1688–1714

from 6,431 Massachusetts currency at the end of May 1703 to 66,364 in 1709, reaching 152,126 in 1714 due to heavy military expenditures. During this period, the price of silver against Massachusetts money rose from 7s. per ounce during 1700–1704 to 8s. during 1705–10, 8s. 4d. in 1711, 8s. 6d. during 1712–13, and 9s. in 1714.14 The rate of Massachusetts currency on London per 100 sterling averaged 131.25 in 1691, depreciating to 140.48 in 1699, and 150.00 in 1706, hovering around that point through 1714 (see table 13.1). The legislature quickly discovered that postponing the redemption of bills enabled it to spend money it did not have while deferring the collection of taxes to a later date, a practice that was popular with voters. The consequence was a gradual loss of confidence in the stated value of bills as their growth outpaced the guarantee of redemption or sinking in taxes. More public debt meant more circulating currency relative to the supply of goods, silver, and sterling. Each authorization of an issue was accompanied by a resolution, a grant of taxes, to redeem the bills of credit at a future session of the General Court. Bills of credit issued in 1703 were to be canceled by taxes levied in just over a year. Issues up to 1707 were to be redeemed in sessions of the court held over the subsequent one and a half to nearly two years. Those of 1707 were scheduled for retirement with taxes to be levied in May 1710. Subsequent printings were to be retired with taxes levied at increasingly deferred sessions of the General Court: four years after the emission of 1709, five years after 1710, and six years after 1711, 1712, 1713, and 1714.15 The colony’s growing stock of paper currency was collateralized with ever-deferred taxes. Increasing resort to paper money brought about a revolution in public finance. To the extent that bills of credit constituted a growing share of the colony’s money supply, monetary policy fi rst supplemented and then began to supplant taxes in the conduct of fiscal policy.16 Each year bills of credit increasingly replaced commodities and specie as the means of financing government spending. Simply put, bills of credit enabled the colonial gov14

Brock, Currency of the American Colonies, table 2 (revised), part B, 591, and table 3, interspersed between pages 30 and 31. 15 The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Wright and Potter, state printer, 1869), 1:634–35, 645–46, 668–69, 687–88, 707, 733, 752. 16 There are no scholarly studies that have determined the composition of the money supply in New England during 1689–1714, that is, what share of money in the colony consisted of bills of credit, commodities, other forms of paper money, book credit, and specie. We know that the volume of silver in circulation declined by about a third in Massachusetts, declining even more rapidly after 1714. Rhode Island, a haven for privateers and pirates during the French wars, was able to attract and retain a higher proportion of silver than was Massachusetts for a short while, but it, too, relied increasingly on bills of credit.

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chap t er 13 tabl e . New England Bills of Credit Outstanding, Silver Price per Ounce, and Sterling Exchange Year

Mass.

R.I.

Conn.

N.H.

Total

Silver

Sterling

1703 1704 1705 1706 1707 1708 1709 1710 1711 1712 1713 1714

6,341 17,675 29,455 31,124 40,825 57,003 66,364 86,648 103,426 169,022 173,970 152,126

0 0 0 0 0 0 0 7,000 13,330 13,300 13,300 12,198

0 0 0 0 0 0 0 13,739 18,687 23,637 24,178 22,876

0 0 0 0 0 0 3,000 5,500 7,500 8,000 8,000 9,200

6,431 17,675 29,455 31,124 40,825 57,003 69,364 112,887 142,913 213,959 219,448 196,400

7s. 7s. 8s. 8s. 8s. 8s. 8s. 8s. 8s. 4d. 8s. 6d. 8s. 6d. 9s.

140.00 135.00 150.00

151.06 155.00 146.67 150.00 150.00 153.33

Sources: Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), table 3, interspersed between pages 30 and 31, and 591, and John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 140.

ernment to spend more each year than it collected in taxes. Taxation became prospective, rather than current. In some years, the court voted no supplies, skipping a year and approving a double assessment the following year. Since the protracted war with France required greater expenditure than the government would or could raise in current taxes, paper money financed the difference. By 1714, the provincial government pledged all taxes to be levied through 1720 to retire bills it emitted through 1714.17 Paper money was issued in Connecticut and New Hampshire in 1709 and Rhode Island in 1710 to finance their participation in the waning years of Queen Anne’s War. On December 5, 1709, New Hampshire authorized 8,000, approved for payment in taxes at face value plus 5 percent interest. Between December 2, 1710, and May 14, 1714, an additional 7,200 was 17 It was clear that new bills would have to be issued to fi nance expenditures after 1714. There was also the risk that the legislature would further postpone the necessary levies to retire bills of credit, perhaps even default on them at some future date. The risk associated with holding bills of credit led to a decline in their value relative to silver and sterling. Between 1700 and 1713, English merchants increasingly demanded payment in silver, resulting in a decline in the stock of silver in the colony from 200,000 to 130,000, with virtually all silver gone by 1720. The Board of Trade periodically wrote to the governor and Council of the colony urging them to ensure that sufficient taxes were levied to back fully the colony’s bills of credit, lest they deteriorate against sterling to the detriment of British merchants. Acts and Resolves of Massachusetts Bay, 1:706.

[ 366 ]

Taxation of the New England Colonies, 1688–1714

approved for issue. The credit of 5 percent interest was repealed on May 12, 1711. The first issue of Connecticut was dated July 12, 1709, for 24,000 at 5 percent advance, but did not constitute legal tender apart from payment in taxes. Four subsequent acts authorized another 30,000, the latter two acts of 20,000 replacing all prior issues, which had been altered by the extensive practice of raising denominations by overwriting the original value.18 The printing of 1709 was to be redeemed by 1715, that of 1710 by 1718, of May 1711, May 1712, and October 1712 by 1720, of June 1711 by 1723, of May 1713 by 1718, of October 1713 by 1721, and of May 1714 by 1724.19 Poll and property taxes of Connecticut were mortgaged as far as twelve years into the future to support current spending with paper money. Rhode Island issued 13,000 in bills dated August 16, 1710, based on five acts between May 3, 1710, and November 14, 1711, to be redeemed in taxes after five years. 20 The openness of trade within New England led the bills of each colony to pass at the same rate, thus New England’s paper money can be treated as a single unit during 1690–1714. The stock of outstanding New Hampshire bills was 9,200 at year’s end in 1714, with those of Connecticut and Rhode Island, respectively, at 22,876 and 12,198. Each colony’s notes were imprinted with the colony’s name and signed by provincial officials, but for practical purposes, the stock of outstanding paper currency in New England was 196,400 in 1714. 21

Proclamation Money

A

s pr e v io usly explained, colonial monetary units of pounds, shillings, and pence were a bookkeeping system, a money of account, used to keep track of the value of the various foreign coins, based on their content of precious metal, of Amsterdam, Hamburg, Copenhagen, Spain, Portugal, and France circulating in the colonies. 22 Foreign coins were not equivalent 18

Newman, Early Paper Money of America, 86–89. Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut (Hartford: Case, Lockwood and Brainard, 1850–90), vol. 5, From October, 1706, to October, 1716 (1870), 111–12, 127– 18, 157, 182, 228–29, 252, 285, 313, 352, 381, 407, 427 (hereafter Public Records of Connecticut). The University of Connecticut has placed an indexed copy of these records on-line at http://www .colonialct.uconn.edu (August 6, 2004). 20 Newman, Early Paper Money of America, 368. 21 Brock, Currency of the American Colonies, table 2 (revised), part B, 591. 22 For coherence, this section surveys the results of the attempt to establish uniform currency beyond New England to all the colonies. Chapter 7 describes the international standard for weighing precious metals, the troy scale, and the silver content and weight of Spanish reales, English sterling, and other foreign coins. 19

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in silver or gold weight and value to English coins, but the former predominated in the colonies because England forbade the export of sterling coins to them. The varying values of colonial monies of account and their difference from the English silver standard complicated the conduct of business for English merchants trading with the colonies. (See the tables in the appendix to this chapter for an illustration of this problem.) English merchants also believed that the “crying up” of silver above the sterling standard induced the colonists to keep silver in the colonies where its value was higher rather than spend it on English goods. The case of Pennsylvania confirmed English concerns that crying up caused a loss of royal revenue. Robert Quary, judge of the vice-admiralty court and surveyor of the customs for Pennsylvania and New Jersey, complained that a rise in the Spanish dollar from 6s. to 7s. 8d. in 1698 resulted in a loss of duty. The reason was that merchants paying duty under the old valuation were allowed 25 percent toward making up the difference between Pennsylvania currency and sterling, but continued to pay the same 25 percent under the higher valuation. Twenty-five percent of a depreciated colonial currency generates less revenue in terms of the sterling value of duty than the same percentage of a higher-valued currency.23 Opinion prevailed in the colonies that rating coins above their sterling silver value, more local shillings per ounce of silver, would retain them in local circulation. As a corollary, it was believed that higher ratings would attract coin from neighboring colonies, thus enhancing the internal commerce of a colony with a higher rating. On May 25, 1701, Governor Nathaniel Blakiston of Maryland wrote to the Board of Trade that Pennsylvania (and New York and Virginia) were luring coin out of his colony because of its higher rating. 24 23

Brock, Currency of the American Colonies, 130–31. The prevailing view that reducing the content of silver in colonial coins (or by raising the number of local shillings per ounce of silver) would keep them in the colonies does not enjoy support in the experience of the Massachusetts mint. A Massachusetts pine tree shilling contained 221 ⁄2 percent less silver than the standard English shilling. The object of debasement was to keep the coins in Massachusetts to facilitate commerce. In response, importers tended to raise the price of English goods to reflect the reduced bullion value of the Massachusetts shilling; in short, the exchange rate moved to compensate for the difference in silver content. A legal ban on the exportation of pine tree shillings did not succeed. In England, the Treasury and the mint believed that higher-rated coins of lower silver standard in Massachusetts would draw silver from England to America. During various periods in English history, when the market value of silver exceeded the sterling standard, silver coins were melted down and exported to Eu rope where silver had higher value. The belief produced an order-in-council of October 27, 1686, precluding the Massachusetts mint from resuming its operations under the Dominion of New England after revocation of the colony’s charter in 1684 removed the legal basis of its mint. See Nettels, Money Supply, 171–74. 24

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Taxation of the New England Colonies, 1688–1714

The Board of Trade undertook a review of the subject of colonial valuation of coin. Any interest in setting colonial values at parity with sterling was ruled out due to an opinion of the attorney general, Edward Northey, that royal approval of a 1697 Massachusetts law rating the Spanish dollar of full 17 pennyweight (dwt.) at 72d. (versus 54d. in England) could not be altered by royal proclamation. As there was little prospect that Massachusetts would repeal its law, the ready course was to adopt the valuation of Massachusetts. To avoid a problem with a different valuation in Pennsylvania, its act of November 27, 1700, rating the Spanish dollar at 7s. (84d.) was disallowed on July 30, 1703. The value of a troy ounce of silver stabilized in England at 62d. in 1601, where it remained throughout the seventeenth and eighteenth centuries. Due to England’s international trade, foreign gold and silver coins were regularly exchanged for English coins, both at home and abroad. To determine the relative value of foreign coins, an assay had to be performed. Government assays were completed in 1626, 1651, 1696, and most important, 1702, the latter undertaken by Sir Isaac Newton, then director of the London mint. Newton assayed forty-four foreign silver and twelve foreign gold coins in relation to the English standard. 25 Consider, for example, the Dutch Lyon dollar of 40 stivers. Its silver weight was 14 dwt. 2 gr. (grains) 7 mi. (mites) (totaling 483.6 grains), which had a sterling value of 43.7d., and a trading value of 44d. (20 dwt. = 480 gr. = 1 troy oz.) The Spanish dollar in terms of silver weight at the sterling standard was valued at 54d. Acts in force in the colonies in 1701 revealed a wide disparity of legal values given the pennyweight of silver in the Spanish dollar. 26 The highest value given formed one legal standard of current money in the province concerned. Pennsylvania and South Carolina became known as centers of light money, with rates far exceeding parity to sterling. (Table 13.A displays the cross-rates of full-weight Spanish pieces of eight rated at the sterling standard of 54d. against their highest legal ratings in the several colonial currencies and other foreign coins circulating in the colonies in 1702.) An examination of New Jersey mortgage records during 1763–82 revealed twenty-five different terms for money, although many are different

25 A copy of Newton’s report and ratings to the Lords Commissioners of the Treasury dated July 7, 1702, appears in William A. Shaw, Selective Tracts and Documents Illustrative of English Monetary History, 1626–1730 (New York: A. M. Kelley, 1967), 135–49. First published in 1896 in London by Wilsons and Milne. 26 Nettels refers to comments in reports of the legislatures of New England, New York, Pennsylvania, East New Jersey, and South Carolina that coin values had to be raised to retain coin in, and attract merchants to buy the produce of, their colonies. Everyone of consequence in these colonies believed that high rates of valuation attracted coin. See Money Supply, 240–41.

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chap t er 13 tabl e . Legal Rating of Colonial Currencies Based on Full-Weight Spanish Dollar and Relation of Colonial Currencies to Sterling

Colony

New England New York and East New Jersey Pennsylvania and West New Jersey South Carolina Virginia Maryland

Colonial legal value of dwt. in Spanish dollar

Legal value of Spanish dollar, 1701 (Nettels)

Legal value of Spanish dollar, 1701 (Penn)

Relation of colonial money to sterling, 1701 (Nettels)

Relation of colonial money to sterling, 1708 (Nettels)

4.23d. 4.8d.

73.7d. 84d.

72d. 81d.

137:100 155:100

137:100 155:100

5.6d.

98d.

72d.

181:100

178:100

5d. 3.42d. no legal value

87d. 60d.

60d. 54d.

161:100 111:100 no legal value

161:100 120:100 133:100

Notes: 1. Nettels’s ratings use the highest value placed on the full-weight Spanish dollar in each colony in 1701. Using the same method, he made a similar calculation for 1708 (but Brock does not report the latter figure on page 8). Concurrent circulation of light- and full-weight coins often resulted in different legal rates set by a colony on a pennyweight of silver. For example, in 1701 South Carolina valued the pennyweight in a standard piece of eight of 17 dwt. at 4.6d. whereas the pennyweight in the lighter 12 dwt. coin was declared worth 5d. (Brock, Currency of the American Colonies, 241.) Thus the figure in the table for 1701 for Nettels is entered at the higher rate (although merchants trading in both coins would be aware of the different valuations). The ratio of colonial money to sterling for both years is based on Nettels’s calculations. 2. William Penn’s ratings for 1701 are based on his contemporaneous compilation for heavy (full-weight) pieces of eight. Penn did not make a later compilation in 1708 that would permit comparison for the two years. 3. Rounding off was common in calculating pennyweights and trading values. A full-weight piece of eight contained 17.42 dwt. of silver, but colonial legislation often used 17 1 ⁄2 dwt. as the weight. Newton reported the sterling value of of a full-weight piece of eight at 53.881875d., which was rounded off to 54d. for daily use. Sources: Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (New York: A. M. Kelley, 1964) 241, and Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), 7–9.

terms for the same meaning (e.g., Proclamation Money and Proclamation Money of New Jersey). Different terms include Proclamation Money, Lawful Money, current money, money in silver at eight shillings per Spanish milled dollar, sterling money, hard money, light money, and gold money. Proclamation Money clearly means colonial currency at Queen Anne’s 133.33 par rate per 100 sterling. Lawful Money is sometimes synonymous with Proclamation Money, at other times with legislated rates that may exceed (or be set below as in Virginia) proclamation rates. Current money typically means legislated rates, the customary rate at which money passes current, as does silver rated at eight shillings per full-weight Spanish dollar (par of 177.77). Sterling money is the English standard of the Spanish dollar at 54d. Hard money signifies full-weight silver coins, with light money clipped or shortchanged coins possessing lower silver pennyweight content. Gold money refers to gold coins based on their gold content. Doing business suc-

[ 370 ]

Taxation of the New England Colonies, 1688–1714

cessfully in the colonies required keeping careful track of the different monetary units. 27 To impose uniformity on the colonies, Queen Anne issued a royal proclamation on June 18, 1704, to take effect January 1, 1705. The proclamation specified that a full-weight Spanish dollar valued at 54d. would pass in the colonies at 72d., a third above the sterling rate. The proclamation also provided the weight and intrinsic values of other, but not all, foreign coins included in Newton’s 1702 assay, and the corresponding rates at which they should pass in the colonies.28 The colonists would be forbidden, at the risk of royal displeasure, to trade silver coins at more than a third above the sterling rate, a par rate of 133.33. Nor, by implication, should they trade coins below the par rate, although this was not precisely stated in the law. (Table 13.B displays the cross-rates of sterling, the proclamation rate, and the legal rates of colonial currencies in terms of the number of pounds of each currency it takes to buy one hundred pounds of any other in 1714.) Most of the colonies disregarded the proclamation. Virginia took the royal order to mean that coins could not trade above 133.33, but could trade below it. Governor Francis Nicholson reported that the piece of eight continued to trade at 60d., only 11 percent above sterling, following past custom. Raising the rate to 6s., a devaluation against silver, would cost the Crown revenue in sterling terms. Lieutenant Governor John Evans of Pennsylvania reported no change in the value of his colony’s money, and that its legislature awaited the actions of New York. Governor Lord Cornbury of New York suspended the proclamation, with the approval of the Board of Trade, as coin flowed to Boston, whose merchants offered a premium to the proclamation rate. Cornbury directed that silver continue to be accepted in payment at 96d. per ounce, 55 percent above sterling. In 1708, New York’s legislature increased the value of an ounce of silver in Spanish reales to 96d., 55 percent above sterling. The Spanish dollar

27

Miriam R. Waxberg, “Money in Morris County, 1763–1782, as Indicated by Mortgage Records,” Proceedings of the New Jersey Historical Society 53, no. 1, whole no. 200 (January 1935): 20–26. Reproduced at http://www.rootsweb.com/~njmorris/general _info/morrismoney.htm (August 24, 2004). 28 Queen Anne’s proclamation listed the highest rate at which the following coins could pass in the colonies: “Sevill Pieces of Eight Old Plate (6s.), Sevill Pieces of Eight New Plate (5s. 91 ⁄2d.), Mexico Pieces of Eight (6s.), Pillar Pieces of Eight (6s.), Peru Pieces of Eight (5s. 101 ⁄2d.), Cross Dollars (5s. 10 1 ⁄4d.), Ducatoons of Flanders (7s. 4d.), Ecu’s of France or Silver Lewis (6s.), Crusados of Portugal (3s. 91 ⁄4d.), Th ree Gilder Pieces of Holland (6s. 11d.), Old Rix Dollars of the Empire (6s.). All Halves, Quarters, and Lesser Pieces are to Pass in Proportion to the above Rates.” The list also indicated the weight of each coin in pennyweight and grains, and the value of each piece in sterling. The table of values embodied in the queen’s proclamation is reproduced in Brock, Currency of the American Colonies, 135.

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was legislated in Massachusetts at 72d., which met the proclamation rate, but Massachusetts money, enforced by local courts, traded at 84d. in 1705 because the legal rate of 72d. applied in practice to underweight coins of 15 dwt., and heavier 17 1 ⁄2 dwt. coins were clipped to this weight. Light-weight coins were used when current (provincial lawful) money was required. In 1691, the Spanish dollar in the Carolinas was legislated at 81d., 50 percent above sterling, where it remained after the queen’s proclamation. The proclamation rate was effective in Maryland and, after 1710, in Virginia when the royal governor finally compelled the House of Burgesses to accept the rate.29 The Board of Trade sought an opinion of England’s attorney general if royal prerogative could be used to enforce obedience to the proclamation in the charter governments. He replied that the proclamation set the legal tender rates of foreign coins in the colonies, but that individuals could voluntarily accept them at a higher rate without offense. Individuals agreeing to accept coins at rates different from those in the proclamation could not be used as a legal basis to undertake quo warranto proceedings against the charter or corporate colonies. The attorney general recommended an act of Parliament that would impose penalties on individuals who received coin at values that differed from those in the proclamation. On January 28, 1708, a select committee of the House of Lords instructed the Board of Trade to draft an act to establish the value of foreign coins in the colonies. The bill was sent to the House of Commons on March 6, and received royal assent on April 1, 1708, to take effect after May 1, 1709. The act imposed a penalty of six months’ imprisonment and fine of 10 on any individual who received, accepted, or paid any foreign silver coins mentioned in the queen’s proclamation at a higher rate than 33 percent above the sterling standard. The act permitted Virginia and Maryland to pass silver at rates below the proclamation.30 The act contained an escape hatch. Unless disallowed, future acts of colonial legislatures to which colonial governors assented would permit rates to differ from those in the proclamation. Economic and financial conditions in the separate colonies might persuade governors, whose salary and local investments required prosperity in their jurisdictions, to approve such legislation. Parliament’s act was little more effective than the earlier proclamation. The issue of bills of credit in Massachusetts, gradually infl ating the colony’s currency against silver, resulted in an outflow of coin to England as merchants demanded payment in hard money. Silver was transformed from a fi xed standard of value in coin to a commodity, whose value was determined

29 30

Brock, Currency of the American Colonies, 136–40. Brock, Currency of the American Colonies, 141–48.

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Taxation of the New England Colonies, 1688–1714

by its internal supply, the volume of outstanding bills of credit in circulation, and the demand to pay overseas invoices. After bills of credit were declared legal tender in all transactions, the value of coins stipulated in the proclamation could not be regulated in the Bay colony. Similarly, the issue of bills of credit in the other New England colonies negated the parliamentary act of 1708. In late 1710 Connecticut’s legislature passed an act stipulating that silver should be receivable in the colonial Treasury “as it shall generally pass in New England at the time of payment,” that is, at the market price of silver, well above the proclamation rate. Rhode Island followed course with legislation that bills of credit shall “be in equal value to current silver money of New England,” that is, at its trade value. 31 Shortly after receiving a copy of the act, New York passed an act rating silver at 8s. an ounce, arguing that a reduction to the proclamation rate would have a ruinously deflationary effect on its economy. The Privy Council disallowed the act on March 3, 1709. The new governor, Richard Ingolsby, reported that the colony’s legislature paid no heed to the act. It repealed previous legislation forbidding the clipping of standard pieces of eight, which allowed lower-weight coins to pass at 6s., thereby maintaining the 8s. an ounce rate. Furthermore, the colony levied taxes in ounces of silver plate, not pounds, or in Dutch Lyon dollars, which were not listed in Queen Anne’s proclamation. The legislation stipulated the specific number of ounces of silver due each creditor of the colony, which precluded the governor from paying out plate at the proclamation rate. After several efforts at resistance, the governor and Council acquiesced in evasion of the act. New York bills of credit after 1709 further enabled evasion of the act, issued “for the same Value, and equal to the current Coin passing in Colony,” and made them legal tender in public and private payments. New Jersey duplicated the measures of New York, authorizing payment of taxes in standard pieces of eight valued at 8s. an ounce of silver (7s. per piece of eight) for taxes and bills of credit, issued in 1711, equal to “current coin.” Bills of 8s. were worth an ounce of silver. Pennsylvania seemingly complied with the act of Parliament. On April 30, 1709, the Assembly passed an act which stated that all debts contracted prior to May 1, 1709, were to be paid in silver at 9s. 1d. an ounce (8s. per piece of eight). After May 1, 1709, when the value of a piece of eight was reduced from 8s. to 6s., the act provided that prices of goods would be computed at three-fourths of the previous sum of generally known salaries and fees of all officials and workmen and prices of commodities and manufactures. The act remained in force for five years until disallowed in 1714. The proclamation

31

Brock, Currency of the American Colonies, 149–53.

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rate subsequently became effective until the outflow of silver to England drove its price above 8s. an ounce after 1723. 32 Until 1708, the Spanish piece of eight circulated in Maryland at its sterling value, a par rate of 100 against 100 sterling, save for three brief periods between 1671 and 1676, 1686–89, and briefly during 1692, when it passed at 6s. Maryland currency, a par rate of 133.33. In 1708, after Parliament acted to impose penalties on those who passed currency higher than Queen Anne’s proclamation rate of 33.33 percent above the sterling rate, Maryland raised its legal rate to the proclamation rate in the spring of 1709. In 1708, North Carolina was on a commodity currency basis, with few coins circulating in the colony. Bills of credit were issued in 1712, which quickly depreciated in value. Similarly in South Carolina, bills of credit issued in 1709 rapidly depreciated in London. Gold and silver coins became merchandise, rising in value with the depreciation of the two colonies’ bills. Neither the royal proclamation nor act of Parliament successfully achieved currency uniformity in the colonies. Each colony continued to set its own rate. To cope with multiple values of coins, merchants resorted to tables that equated the currencies of the several colonies and England for foreign coins, colonial bills of credit, bills of exchange, and other forms of money used in the colonies. This task was eased with the appearance of newspapers. The Newsletter, published in Boston since 1704, was the first in the colonies.33

Taxation in Massachusetts, 1688–1714

W

it h it s new charter of 1691, the General Court promptly enacted legislation to collect past arrears and levy town and country rates. It approved a tax on polls and estates; duties, excises, and tonnage; and an extension of the duration of previously issued bills of credit. Exemption from the poll tax was granted to the governor, lieutenant governor and their families, members of the Council, ministers, church elders, schoolmasters, Harvard faculty and students, the aged, poor, and infirm. Assessment of property, first set at 25 percent of the annual income from personal property and real estate, was changed to seven years’ rental income in 1695. 34 Recall that about a fifth of Boston’s recorded exports were shipped to Britain. Some of these goods were produced in other New England colonies, or purchased from the middle and southern colonies. Some were subsequently reexported from Britain, refunding most or all of any import duty. 32

Brock, Currency of the American Colonies, 153–62. It is important to distinguish between acts rating colonial currency in terms of the price of an ounce of silver or in terms of the silver content of a piece of eight. The ratio of the silver in a piece of eight to an ounce is 0.87. 33 G. B. Warden, Boston, 1689–1776 (Boston: Little, Brown, 1970), 53. 34 Douglas, Financial History of Massachusetts, 59–60.

[ 374 ]

Taxation of the New England Colonies, 1688–1714

The modest increase in the price of Massachusetts products to British consumers due to import duty did not depress domestic British demand to any significant degree. Accordingly, the tax burden on Massachusetts’s producers stemming from English duty was negligible. Offsetting the impact of English import duty on New England’s exports was the system of bounties, a direct subsidy, offered for specific colonial products. The Naval Stores Act of 1706 awarded premiums on indigo, tar, pitch, hemp, turpentine, masts, and related products. During Queen Anne’s reign, bounties were offered of 4 sterling a ton of eight barrels for good merchantable tar, 3 a ton of turpentine or rosin, 6 a ton of hemp (water-rotted, bright and clear), and 1 a ton for all masts, yards, and bowsprits at forty feet a ton. The offer of bounties was largely strategic, to reduce British dependence on Baltic naval stores, and the colonies could be encouraged to engage in their production if costs were competitive with Sweden. The solution was to subsidize transportation in the form of a bounty and remove the duty on colonial naval stores. The law was in force for nine years, renewed for another eleven on expiration.35 During the first year of the act, New England received subsidies on 6,191 barrels of tar, 647 of pitch, 1,145 of turpentine, and 90 of rosin, but most of the bounties went to the Carolinas. 36 During the next nine years, English imports of colonial naval stores gradually rose while those of Sweden declined. 37 The purpose of granting bounties to Massachusetts had the secondary objective of discouraging colonial manufacturing of woolen products apart from purely local domestic needs. Parliament had already addressed this problem in 1699, prohibiting colonial export of woolen articles to other English territories. Bounties on masts were directed at New England. However, the number of masts shipped from the colonies never surpassed 12 percent of English imports. John Bridger, who was made surveyor of the woods and strove to secure the preservation of trees that could provide masts for the Royal Navy, met with limited success. Although the Naval Stores Act put three sorts of timber, masts, yards, and bowsprits on the same footing as the enumerated 35

Rolla Milton Tryon, Household Manufactures in the United States, 1640–1860: A Study in Industrial History (Chicago: University of Chicago Press, 1917), 22–23, and Eleanor Louisa Lord, Industrial Experiments in the British Colonies of North America (1898; New York: Burt Franklin, 1969), 56–71. 36 During the course of the bounty system, which continued for naval stores up to the American Revolution, the bulk of the subsidies was received in the two Carolinas. Tryon, Household Manufactures, 23. 37 Board of Trade papers for 1700–1718 show the amount of pitch and tar, hemp, rosin, turpentine, and masts imported into England from Sweden, the rest of Eu rope, and the plantations, but does not further divide the plantations into individual colonies. Lord, Industrial Experiments, appendix B, 140.

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commodities, evasion was widespread. An act of 1711 declared all four New England provinces subject to crown reservation of trees over twenty-four inches in diameter. The colonists undermined the act by harvesting trees under twenty-four inches in diameter. They routinely cut trees without license and loaded them onto ships in full disregard of the surveyor. Trees over twenty-four inches in diameter were taken to local mills and sawn into planks. They further evaded the law by incorporating townships, in which timber could be harvested without violating the act, thereby granting private status to previously public stands of timber. 38

Direct Taxes

A

pat t er n of incomplete assessment and tax evasion, which affl icted all the New England colonies, immediately arose. 39 Seven successive acts were passed to clarify the duties of assessors and penalize towns for noncompliance. Enforcing payment of taxes was equally difficult, even under threat of seizure of property for nonpayment and a hefty fine on collectors who failed in their duties. Tax evasion remained a chronic problem. Between 1692 and 1714, the General Court levied a specific rate on polls and on property, the latter based on the assessed value of housing, land, animals, personal property, and faculties. Towns were instructed to prepare lists of assessment, and to collect and remit the requisite taxes. In the first 38

Lord, Industrial Experiments, 108–20. Assessment of polls and real and personal property was undertaken by the towns. Valuation lists are found in some local records. Comprehensive provincial summaries of valuations do not exist in the Massachusetts Archives or other libraries. The Massachusetts Archives contains 328 volumes known as the Felt Collection named after the Reverend Joseph Felt, who fi rst organized the materials in the collection in the 1830s. The collection includes twelve volumes of sporadic accounts of payments made by the treasurer; one volume of valuations and taxes during 1738–77, which primarily consists of valuations of twelve towns in 1755 of names of individuals and the sum of taxes to be collected with sporadic information for 1763–67 and 1771–75; one volume of the records of the treasurer and receiver-general in 1753–97; and one volume of warrants of Council authorization of payments from specific accounts for 1738–79. The W. E. B. Du Bois Library of the University of Massachusetts in Amherst has comprehensive tax valuations for 1771 (and several more after 1776). Archive Publishing, publishers of Massachusetts town and vital records, has published a few tax lists for the period 1629–1775. These include Andover (1670–1851), Dracut (1749–80), Dunstable (1743–1801), and Hingham (1749). Beginning in 1692, annual treasurer’s statements are extant in the Massachusetts Archives. The statements from 1692 through 1714 are often incomplete and difficult to read. Information for fiscal years 1701/02 to 1711/12 was compiled by the auditor general, William Blathwayt, which is reasonably thorough in accounting for revenues and is easy to read. Blathwayt’s report is located in the Public Record Office of the National Archives (PRO/TNA) in Kew, United Kingdom, available on microfi lm at the University of Texas in Austin, and presented later in this chapter. 39

[ 376 ]

Taxation of the New England Colonies, 1688–1714

few years, either the rate or total taxes were stipulated, but not how the sum was to be allocated between polls and estates. From 1695 direct taxes stipulated a specific poll tax with the balance to be collected with a specific rate on estates, to be raised or lowered as required to meet the revenue target. Table 13.3 summarizes direct tax levies between fiscal years 1692/93 and 1713/14. It reveals the greater weight attached to poll tax relative to real property. From 1695, the poll tax ranged between 1–10s. depending on the size of the levy, while the rate on property rarely exceeded 1d./1 assessed valuation (0.4 percent). Large landowners with few servants paid a steady rate of tax. Those with many servants bore higher assessments. In the most burdensome year, when direct taxes of 22,000–23,000 were levied, per capita direct tax levies amounted to about 5s. In peacetime years, the levies were half that rate or less. Throughout the period, evasion reduced the real burden of direct taxes.40 Indeed, as seen in table 13.4, the level of tax receipts from all sources, especially the tax on polls and estates, was a small fraction of the bills of credit that were issued (column 8) to fi nance public spending. The treasurer’s statements do not permit the calculation of direct taxes paid between 1701 and 1712. The best approximation is to subtract the amount of revenue received from excises and duties (columns 5 and 6) from bills received in direct taxes, duties, and excises (column 4). For the six years in which the combined figure appeared in the treasurer’s statements, the amount of direct taxes that was collected never exceeded nine thousand pounds, and not much more than a thousand pounds in the other three years for which data are available. Public fi nance during 1701–12 consisted of a regime of debt.

Indirect Taxes

I

ndirect taxe s were easier to administer, but compliance was also difficult due to smuggling and other illicit trade. The three principal taxes were import duties,41 excises, and tonnage. Indirect taxes were imposed primarily on luxury goods, with exemptions for necessities of consumption, including salt, cotton-wool, provisions, and all commodities produced in New

40 The acts and resolves of the General Court do not report the volume of arrears in direct taxes, and thus the degree of evasion cannot be determined. Nor does the court report the extent of evasion of indirect taxes due to smuggling and other illicit trade, which would similarly reduce the tax burden below the legislated rate. 41 Apart from an export duty of 10s. for every 100 worth of peltry in 1691, export duties were not generally levied until 1721. Albert Anthony Giesecke, American Commercial Legislation before 1789, University of Pennsylvania Series in Political, Economic, and Public Law (New York: D. Appleton and Company for the University of Pennsylvania, 1910), 54n82.

[ 377 ]

chap t er 13 tabl e . Massachusetts Direct Tax Levies, 1692/93–1713/14 (£.s.d. Massachusetts Currency) Year

Amount

1692/93 1693/94 1694/95 1695/96 1696/97 1697/98 1698/99 1699/1700 1700/1701 1701/02 1702/03 1703/04 1704/05 1705/06 1706/07 1707/08 1708/09 1709/10 1710/11 1711/12 1712/13 1713/14

Poll Rate

30,000 11,412 18s. 3,189a 18,296 19s. 3d. 10,759 10s. 8,168 5s. 3,079 10s. 9,117 12s. 6,041 9s. 6d. 6,063 14s. 6d. 16,984 22,613 10s. 22,422 22,489 10s. 22,401 22,986 7s. 4s. 22,778 7s. 3d. 22,689 3s. 9d. 22,845 7s. 3d. 22,648 17s. 3d. 22,648 17s. 3d. 16,500

10s. 12d. 5s. n.s. 10s. 5s. 2s. 4s. 3s. 3s. 7s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 7s. 6d.

Property/d./ 1

⁄4 income of estates 1d. 5d. n.s. n.s. 2d. 1d. 2d. 1d. 1d. 2d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d.

Notes: a The figure in the table was set in the session of February 27, 1695. The rates for that sum were 1s. poll tax and 1d./ on estates, assessed at seven years annual rent (changed to six years in 1700). The remaining 4s. poll tax and 4d./ on estates did not include a specific revenue figure. 1. The laws listed the basis of assessment, with precise values for cows, horses, other real and personal property, including Indian, mulatto, and Negro slaves, and income derived from trade or faculties. In 1707, each male Negro above fourteen years of age was valued at 20, female Negroes at 15, steers over four years at 40s., and so forth. 2. From 1694 each town was ordered to collect a specific sum. For example, direct taxes of 8,165 5s. levied in 1698 stipulated the tax to be collected in each of the eighty-four towns of the nine counties of Massachusetts. Boston, the largest town, was taxed at 585. The smallest sum was 2 5s. in each of the settlements of York and Wells in York County. Sources: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, vol. 1 (Boston: Wright and Potter, state printer, 1869), 29–39, 92, 93, 165–66, 177, 185, 197–99, 213, 228, 240, 258, 278, 301, 337, 358, 386, 413, 438, 483, 494–95, 521, 533, 548–51, 567–69, 591–99, 607–10, 624–27, 658–61, 691–94, 711–14, 743–47, and Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3, (Boston: T. R. Marvin, 1847), 221–581. Data for 1714–39 are on 309 and 310. The poll rates listed in table 13.3 are the sum of rates applied to all votes in each fiscal year.

England. Nonexempt goods were subject to a small ad valorem duty. An act of June 19, 1697, doubled the duty on English goods against other nonenumerated goods, despite royal instructions that the governor withhold his assent from all bills imposing duty on English goods.42 42

Douglas, Financial History of Massachusetts, 78–86.

[ 378 ]

Taxation of the New England Colonies, 1688–1714

On June 8, 1692, the General Court imposed specific rates on duties, excises, and tonnage for one year. The act imposed duties on wines ranging from 6d. a gallon of rum to 30–40s. a pipe of Spanish, Madeira, Canary, Malaga, port, or sherry wine. Duties on other goods were set at 10s. on every 100 sterling of English merchandise, 6d. per hogshead of molasses and tobacco, 1s. per hogshead of sugar, 1s. per ton of wood, and 1d./ valuation on all other items. Retail excises on various wines, spirits, and liquors ranged between 4 and 12d. a gallon on Spanish and Portuguese wines, 1s. a gallon on rum and other distilled spirits, and 18d. a barrel on beer, ale, and cider. Tonnage of 12d., or one pound of good, new gunpowder, was levied on vessels exceeding twelve tons trading in any port of the colony.43 In 1697 the General Court reenacted indirect taxes. Rates on liquors were slightly higher, while those on other commodities were set at double to triple those of 1692. The higher rates were required to defray the cost of fitting out a military expedition to prosecute the war against the French. Excises on consumption and tonnage followed those of 1692.44 From 1697 duties, excises, and tonnage were routinely renewed, becoming a source of annual revenue. Along with direct taxes, they were later earmarked to redeem bills of credit. From time to time, the standard list of dutiable items was amended. In 1702 the colony imposed duties on certain silk products, lace, ribbons and necklaces, shoes, gloves, and a few other items. The measure was not renewed when it was reported that total revenue from duties declined due to a falloff in trade. On December 5, 1705, the colony enacted a law “for the better preventing of a spurious and mixt issue” to discourage the importation of Negroes. It imposed an import duty of 4 per head, with full drawback on reexportation and sale to any other colony within a year or death within six weeks.45 Provision of rebates allowed Boston and, later, other New England ports to become free-trade markets for slaves. To ensure that the colony’s population would remain largely white, in 1709 the General Court approved a 40s. subsidy for the importation of white male servants between the ages of eight and twenty five. The surveyor and auditor general for New England compiled accounts for Massachusetts for fiscal years 1701/02 through 1711/12, excluding 1708/09, which

43 Acts and Resolves of Massachusetts Bay, 1:31–34. The legislature’s records do not specify specific revenue targets or report the sums collected in any given year. The absence of published audited accounts makes it difficult to determine how much money was collected in indirect taxes. 44 Acts and Resolves of Massachusetts Bay, 1:269–74. 45 Th is act was the sole Negro duty imposed in New England during 1689–1714. W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1896), 31. Du Bois states that the 1705 act was evaded, and that evasion persisted until 1728 when the penalty on evasion was raised to 100.

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listed arrears of direct taxes, the levy on polls and estates for the year in question, a combined entry for the value of bills received in direct taxes, duties, and excises, separate entries for excises, duties, and tonnage, bills of credit transferred to the provincial treasurer, and approved payments. The numbers, in table 13.4, do not record a separate entry for actual receipt of direct taxes.46 Duties supplied between 2,000–3,500 a year in revenue, save the low sum in 1702/03. Excises generated a considerably lower 500–1,000, and tonnage a modest 100–500. The three together supplied the colonial government with revenue of 2,500–5,000 a year. These sums pale against the striking of bills of credit, especially from 1707, to meet the rising level of payments (column 9). Despite the accumulation of provincial debt, the value of Massachusetts currency held steady against sterling, falling only 2–3 percent during the first decade of the eighteenth century. It rebounded in 1712 to the rate that prevailed during the last three decades of the prior century.47 Reflecting previous practice, the General Court authorized the towns to assess their residents, mirroring the provincial system of direct taxation, to pay town charges. Bounties of 20s. a head for wolves were approved in 1693, but the towns were permitted to deduct these charges from their provincial obligations.48 In 1692 the court established a naval office and set fees for specific ser vices. It also enacted fees for various court, surveying, and other ser vices, which it revised from time to time, that provided private benefits to individuals. In June 1701, for a period not to exceed seven years, the General Court granted a bounty of one farthing a pound to anyone who would create a partnership or company and contract to purchase all the hemp grown in the colony at 1d. a pound (extended and increased after 1715).49 Town and other miscellaneous taxes added little to tax burdens.

Taxation in Connecticut, 1688–1714

P

rov incial expenditur e s were financed largely by direct taxes on polls and estates and from import and export taxes.50 The assessment 46

William Blathwayt’s accounts do not follow the standard listing of debits and credits that appears in later fi nancial statements of the colonial treasurer (see chapters 17, 21, and 26). 47 The explosive rise in outstanding bills of credit from just over one hundred thousand in 1711 to more than three hundred thousand in 1725 resulted in a steady rise in the price of silver and depreciation against sterling, from 210 Massachusetts currency to 100 sterling in 1718 to a low of 1,050 in 1748 (see chapters 17 and 21). 48 Acts and Resolves of Massachusetts Bay, 1:120. 49 Acts and Resolves of Massachusetts Bay, 1:473. 50 Comprehensive valuation lists for Connecticut are reported in Public Records of Connecticut. Volume 3 covers 1678–89. Volume 4 covers August 1689 to May 1706 (published in 1868). Volume 5 covers October 1706 to October 1716 (1870). An indexed copy of the records is posted

[ 380 ]

tabl e . New England Auditor General’s Financial Statements, 1701/02–1711/12 (£.s.d. Massachusetts Currency) c ol u m n 1

[ 381 ]

c olum n 2

c olum n 3

column 4

Year

Outstanding Taxes

Current Year Levy on Polls and Estates

Bills Received in Taxes, Duties, and Excises

1701/02 1702/03 1703/04 1704/05 1705/06 1706/07 1707/08 1709/10 1710/11 1711/12

1,206.8.3 853.0.6 560.8.9 8,634.14.5 10,742.1.9 9,630.11.4 10,755.11.6 9,982.17.10 10,696.1.7 10,516.7.0

7,247.17.8 6,115.5.7 22,984.0.0 24,580.9.2 22,402.10.0 22,482.0.0 22,401.0.0 22,748.7.3 22,689.3.9 22,815.7.0

3,032.14.10

4,069.9.0 4,821.11.3 12,601.8.2 12,158.4.1 10,213.11.9

column 5

column 6

column 7

colu m n 8

c ol u m n 9 Approved Payments

9,847.14.1 14,429.1.1 26,051.7.0 33,706.6.3 28,018.18.5 23,407.8.4 42,458.17.5 51,131.10.1 42,219.1.7 51,266.14.0

Excises

Duties

Tonnage

Transfer of Bills of Credit to Treasurer

1,007.3.8 919.15.5 675.5.5 577.4.0 576.3.3 506.16.11 570.11.8 527.6.6 604.8.3 1,156.3.0

2,493.14.11 1,255.13.4 2,013.19.2 2,646.6.2 2,112.2.3 2,083.1.11 2,882.16.2 3,221.7.5 3,116.12.8 3,448.14.4

168.4.0 103.18.0 195.0.0 419.5.0 246.18.0 370.7.0 365.5.0 540.0.0 516.0.0 300.0.0

10,000.0.0 15,600.6.5 13,330.7.9 5,544.13.7 10,000.0.0 22,000.0.0 15,000.0.0 40,000.0.0 32,167.5.0

Source: “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfilm, University of Texas, Austin, 465–95.

chap t er 13

and collection of direct taxes combined a poll tax on every male over sixteen years of age with a general property tax, largely land and houses. The two were combined in a grand list for each town, which was submitted to the General Court in time for the beginning of its annual October session. A comprehensive grand list for the colony enabled the legislators to impose a rate that would yield each year’s necessary revenue to finance anticipated expenditure. Initially treated as a separate charge, the poll tax was later combined with property to yield a total assessment. All males sixteen years of age and over were assessed at a value of 18. Servants and children earning their own way paid their own tax. Parents or masters paid the tax on grown sons living at home and apprentices. Real and personal property— houses, land, animals—were assessed at specific rates set by the legislature. Handicraftsmen and merchants were taxed on their gains at a rate similar to the probable income of estates for owners of real and personal property. The governor, deputy governor, assistants (Council members), ministers, schoolmasters, faculty, and students of Yale (after 1703) were exempt from the poll tax. Individual towns were occasionally granted relief from part or all of their provincial rates for one or a few years to finance local infrastructure (e.g., Westbury in 1694 to defray the cost of building a meetinghouse, Danbury in 1702–4 to construct a cartway to transport their produce to the sea). Each town selected “listers” to monitor self-assessed lists submitted by adult males and process them for submission to the General Court. After 1706, only summary lists were submitted, as the court found it too timeconsuming to examine each individual list. Once the decision was taken to impose the rate, the court apportioned the sums to be collected from each town and forwarded them to Hartford. Each town also used its list to compute local rates for church, school, and town expenses. Town rates added a small amount to the provincial rate (e.g., 15s. upon every hundred acres in Killingley to build a meetinghouse).51 The General Assembly session of May 4, 1702, imposed on each town a rate at http://www.colonialct.uconn.edu (March 9, 2004). The list of persons and valuation of estates in each town of the colony were sent to the General Court, later General Assembly, in October and reported in legislative proceedings. These lists permit a rough estimate of the rising value of real and personal property in the colony and the burden of direct taxes (annual assessment divided by total valuation). 51 The alleviation of taxes for the support of the Congregational Church began with acts in 1727 and was completely abolished in 1818. Even though individuals were given the freedom to worship as they pleased in May 1708, they were still compelled to support the Congregational Church. Frederick Robertson Jones, History of Taxation in Connecticut, 1636–1776, Johns Hopkins University Studies in Historical and Political Science, ser. 14, no. 8 (Baltimore: Johns Hopkins Press, 1896), 60–67.

[ 382 ]

Taxation of the New England Colonies, 1688–1714

of 40s./1,000 estate (0.2 percent) to maintain a school. The order failed, prompting the assembly in October 1702 to levy a rate of 21 ⁄2d./ to pay the charge.52 In October 1705 county courts were authorized to levy a rate of one-half farthing (1 ⁄ 8d./), 0.005 percent.53 Special rates, earmarked taxes, were levied to build and repair bridges. Another direct tax was the requirement of able-bodied men to work on the highways. In most years, the General Court enacted one levy. During periods of heavy expenditure, most notably in the confl ict with the French, the General Court would meet in additional sessions to approve extra war rates. In 1693, for example, rates were levied in three sessions held in March, September, and October. Extra levies were often ordered to support the colony’s agent in England. Rates were levied, and taxes were generally collected, in country pay, also called ordinary pay in Connecticut. In 1689, one-third was to be paid in wheat, with winter wheat at 4s. 6d. and summer wheat at 4s. per bushel, one-third in Indian corn at 2s. 6d. per bushel, and one-third in peas or rye at 3s. per bushel and pork at 3 10s. a barrel; or, taxes could be paid half in wheat and half in corn at the above prices. Full rates could be discharged with two-thirds payment in current money, meaning specie at the official rate. Additional commodities were declared acceptable in subsequent years, for example, beef at 40s. a barrel in 1690. From time to time, commodity values were changed to reflect market prices. Cash discounts were raised and lowered as the desire for current money increased or declined; in 1690, the cash discount was increased to 50 percent, but then reduced to one-third in 1693. In some years, as in 1692, cash discounts were suspended, reflecting less need for hard currency. In others years, as in 1698, taxes were specified solely in current silver money, suggesting a relative abundance of silver coins in the colony from privateers and pirates. Changes in the value of current money were specified in law. In 1708, the one-third discount in payment of taxes was stipulated at 15 dwt. for 6s., which valued a full-weight piece of eight at 8s., one-third above the proclamation rate of 6s.54 Compliance was a problem. The General Court periodically remarked on the lack of full and true assessment of cattle, hogs, and horses, legislating that town officials, on penalty of substantial fines, ensure complete assessment. Taxes in peacetime were low, reflecting the few activities of provincial government and the low salaries of public officials. The governor’s salary in 1690 was 100 Connecticut currency, his deputy 20, with lesser officials receiving smaller amounts. In some years his salary was reduced, in others modestly increased, reaching 200 in 1711, but in depreciated current money. 52

Public Records of Connecticut, 4:375, 398. Public Records of Connecticut, 4:523. 54 Public Records of Connecticut, 4:13, 37, 60, 84, 110, 267, 5:88. 53

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Annual peacetime outlays in the early 1700s rarely exceeded 800 current money. Fees for ser vices provided compensation for a number of provincial and local officials, but fees represent payment by individuals for specific services benefiting them directly that ought not to be charged against general revenue. Another reason that rates could be kept low was that compensation was also made in land grants. For example, the General Court awarded three hundred acres of land to Governor Robert Treat in October 1696.55 His successor, Fitz-John Winthrop, received two hundred acres in October 1698.56 Governor Gurdon Saltonstall received two thousand acres in October 1713. 57 As previously noted, Connecticut first issued paper money in 1709, with several subsequent printings through 1714. These were to be redeemed by taxes levied in future sessions of the General Assembly, deferred until 1724 for the emission of May 1714. After 1709, public spending was largely financed with issues of paper money, not annual tax levies. Monetary and fiscal policy were unified in the public finances, with monetary policy driving the process. Table 13.5 summarizes direct taxation. It displays annual valuations and levies assessed in country pay or ready money (silver), usually at a discount. The valuations were on the low side, based on probable income from property, not its market value. In some years, the towns submitted lists only in pounds, in other years pounds and shillings, and in a few years even down to the last penny. Figures in the table are rounded off to the nearest pound. Between 1689 and 1710, the lists included the number of persons in each town, though some years omitted the number of adult males in one or more towns. From 1711, the number of assessed persons was no longer included in the colonial records. For the years with full enumerations of assessments and persons, it is possible to estimate the per capita value of estates in the colony.58 From 1711, rates were levied to redeem bills of credit issued from 1709. The General Assembly approved tax levies in numbers of Connecticut pounds, payable over a number of years, with specific rates set in later sessions. In October 1714, two months after the death of Queen Anne, a rate of 2d. was levied to retire the remaining bills of credit issued in 1710.

55

Public Records of Connecticut, 4:185. Public Records of Connecticut, 4:280. 57 Public Records of Connecticut, 5:409. 58 An exact calculation of the value of property per assessed individual requires compensating for any changes in legislated valuations (e.g., the assessed value of cows) and changes in the value of current money. Between 1689 and 1714, both were relatively stable. As new towns were established, they were added to the list. There are no extant annual treasurer’s statements prior to 1743. 56

[ 384 ]

Taxation of the New England Colonies, 1688–1714 tabl e . Connecticut Direct Taxes, 1689/90–1713/14 (£ Connecticut Currency) c ol u m n 1 Year

1689/90 1690/91 1691/92 1692/93 1693/94 1994/95 1695/96 1696/97 1697/98 1698/99 1699/1700 1700/01 1701/02 1702/03 1703/04 1704/05 1705/06 1706/07 1707/08 1708/09 1709/10 1710/11 1711/12 1712/13 1713/14

c ol u mn 2

c olum n 3

c olum n 4

c olumn 5

column 6

column 7

Grand List ()

Tax Rate (d./)

Tax Rate ()

Estimated Taxes ()

Population

Per Capita Taxes (d.)

172,820 175,972 184,109 162,978 172,137 174,530 180,858 183,945 184,897 188,058 196,181 198,540 209,050 214,573 244,680 241,730 245,964 251,554 249,885 262,257 283,156 281,640 284,003 300,893 297,142

1.5 4 3 3 6 4 2 2 4 2 3 3 2.5 2.5 2.5 12.5 5 4 4 7 10 0 4 3 0

0.625 1.667 1.25 1.25 2.5 1.667 0.833 0.833 1.667 0.833 1.25 1.25 1.042 1.042 1.042 5.208 2.083 1.667 1.667 2.917 4.167 0 1.667 1.25 0

1,080.1 2,933.5 2,301.4 2,037.2 4,303.4 2,909.4 1,506.5 1,532.3 3,082.2 1,566.5 2,452.3 2,481.8 2,178.3 2,235.9 2,549.6 12,589.3 5,123.4 4,193.4 4,165.6 7,650.0 11,799.1 0.0 4,734.3 3,761.2 0.0

21,025 21,645 22,078 22,510 22,943 23,375 23,808 24,240 24,673 25,105 25,538 25,970 27,318 28,666 30,014 31,362 32,710 34,058 35,406 36,754 38,102 39,450 41,388 43,326 45,264

12.3 32.5 25.0 21.7 45.0 29.9 15.2 15.2 30.0 15.0 23.0 22.9 19.1 18.7 20.4 96.3 37.6 29.6 28.2 50.0 74.3 0.0 27.5 20.8 0.0

Note: Per capita taxes are based on interpolations of population for all years other than 1690, 1700, and 1710, which appear in the appendices to this book. Source: Charles J. Hoadly, ed., Th e Public Records of the Colony of Connecticut (Hartford: Press of Case, Lockwood and Brainard, 1850–90), 4:9–10, 13, 16, 33, 37, 56, 60, 79, 84, 90, 103, 106, 110, 118, 131, 133–34, 150, 152, 175– 76, 222, 224–25, 265, 267, 297, 302, 329, 360, 405, 440–41, 466, 488–89, 519, 521–22, 5:5–7, 31, 71, 82, 112–13, 115–16, 170, 188, 277, 286, 289, 350, 357, 409, 464.

Peak war time years of 1693, 1704, and 1708–9 required well aboveaverage rates. Between 1689 and 1709, excluding those heavy years, the average rate was about 21 ⁄2d./, a tax rate of just over 1 percent of probable income. Town, church, and school rates added several tenths of a percent. With the advent of paper money, which set in motion a system of deferred financing, the average annual rate for the four years encompassing 1710–13 was an even lower 13 ⁄4d. The lower rate was accompanied by a modest depreciation of the colony’s money. The average assessment of an individual’s list was 58 4s. in 1689, 52 12s. in 1698, 54 16s.in 1702, 59 18s. in 1705, and 56 6s. in 1708. During that [ 385 ]

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period, the number of persons subject to assessment increased by 57 percent, from 2,971 to 4,668. The rise in assessed valuation roughly kept pace with population growth, although assessors may have toughened or relaxed their efforts during any of those years, and thus it is impossible to know for certain changes in per capita wealth and income. Per capita direct taxes ranged from a low of 15.2d. in 1695 to a high of 96.3d. in the peak war time year of 1704. The decline in 1705 was reversed to finance Queen Anne’s War, with peace restoring the lower burden. By any standard, peacetime burdens were light.

Indirect Taxes: Duties, Excises, and Tonnage

I

ndir ect taxe s were a feature of Connecticut as early as 1638 with a tax on beaver, followed with one on wine in 1646. During the brief dominion, in addition to the poll tax and rates, on March 3, 1686, Governor Andros and his Council enacted duties that were continued by the restored charter government. These duties were 10s. on every butt or pipe of Fayal (Azores) and some of the Spanish Canary Islands wines, 13s. 4d. per pipe of Madeira, 20s. per pipe or butt of Sherry, Malaga, other Canary, Muscadel, Tent, and Alicante wines, and 20s. on every hogshead of brandy, rum, and other strong liquor. All imported goods were taxed 1d./, except fish, sheep’s wool, cotton-wool, and salt. For purposes of taxation, values were adjusted to reflect exchange rates so that 100 sterling of imported merchandise would be valued at 120 Connecticut money. Andros also imposed retail excises of 50s. for every butt or pipe of wine, 2d. for every quart of brandy, rum, and other distilled waters, and 2s. 6d. on every hogshead of cider, ale, and beer. Total taxes on any given alcoholic beverage consisted of duty and excise. All vessels coming into any of the colony’s ports exceeding twelve tons were required to pay 12d. or one pound of powder per ton. The act was to continue without limit of time until the governor and Council enacted other rates, taxes, and impositions.59 On February 15, 1687, Andros and the Council met to raise additional funds. Extra duties of 20s. were laid on Azores and Canary Island wines, 16s. 8d. on Madeira, and 10s. on remaining wines. In place of a retail excise per pipe of alcoholic drinks, a higher charge of 1s. a gallon was imposed. Additional excises ranging between 4d. and 1s. 3d., depending on the specific item, were added to the 1686 legislation.60

59 Public Records of Connecticut, 3:405–11. The records do not indicate quantities of alcoholic beverages imported and consumed or the amount of funds collected from duties and excises. 60 Public Records of Connecticut, 3:433–34. Andros’s laws applied to all the New England colonies, and thus duties for Connecticut were the same as those for Massachusetts.

[ 386 ]

Taxation of the New England Colonies, 1688–1714

Imported liquor subsequently reexported was exempt from tax. An act of 1708 exempted all liquor imported in Connecticut-owned vessels. The rating system of 1687, treating the value of imported goods equivalent to internal land and property and taxing them at 1d./, was replaced in 1696 with a 2 percent ad valorem duty. Duties on wine and liquor were repealed in May 1699. In May 1708, the legislature reimposed excises on wine, rum, brandy, and distilled liquor at 4d. per gallon and metheglin (mead, a beverage typically made of fermented honey and water) at 2d. per gallon, payable in current money. Import duties were set at 50s. a hogshead for rum, brandy, and distilled liquor, and 50s. per pipe of wine, payable in current money. Five months later, the excises on cider and metheglin were repealed. Tonnage in the form of cash or powder was occasionally imposed, with vessels above eight tons paying one quarterpound of ammunition per ton.61 Export duties were rarely levied. They were first imposed in 1673 on barrel staves, pipe staves, barrel headings, plank, boards, and bark to encourage home industry of cooperage, not to generate revenue. A special case of high export duty on lumber imposed in May 1714 was not for the purpose of revenue but to encourage local trade, rather than allow the neighboring colonies to capture the benefit of shipping timber products to the West Indies.62 In times of food shortages, the governor and Council occasionally prohibited grain exports. Summing up, the effective peacetime burden in Connecticut was no more than 1.5 percent of probable income, which was even lower than in Massachusetts. Direct taxes were levied annually until the close of the period, while indirect taxes were sometimes levied (1689–99, 1708–14). Apart from the peak war years, Connecticut’s residents were lightly taxed.

Taxation in Rhode Island, 1688–1714

T

he smal l population of Rhode Island paid even lower taxes than did the residents of Massachusetts and Connecticut. The colony relied largely on property taxes, supplemented with liquor duties and tonnage. Table 13.6 summarizes direct tax levies in Rhode Island after the restoration of charter government. In some years the levy is recorded, but not the rate. In some years neither a sum nor a rate is reported. There are no extant records between August 1, 1692, and July 1695. Rhode Island consisted of jealously independent towns, which only reluctantly remitted their apportioned share of provincial taxes. Towns complained 61 62

Public Records of Connecticut, 4:129, 287, 5:56–57, 84. Giesecke, American Commercial Legislation before 1789, 51.

[ 387 ]

chap t er 13 tabl e . Rhode Island Direct Tax Levies, 1690–1714 Year

Amount

1690 1698 1699 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710

300 800 600 400 500 1,100 1,200 2,000 1,000 2,000 800 2,500 2,200

Source: John R. Bartlett, ed., Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968), fi rst published in 1859 by Knowles, Anthony and Company of Providence, vol. 3 (1678–1706), 273, 343–44, 378, 426, 441, 450, 466, 467, 489, 500, 520, 533, 541, 557, 564, vol. 4 (1707–40), 6, 24, 33, 46, 65, 70, 75, 84, 106.

that their apportionment was too large or their boundaries too vague to determine who was to be included in the list. An illustration is found in the General Assembly that met in July 1698, which resolved to assess the share of the 1690 levy of 300 Rhode Island currency that was “neglected to be collected and paid.”63 Eight years later, the full 300 had not yet been remitted. In May 1699, the assembly complained that the towns were not exerting themselves in the collection of 800 voted the previous year.64 Despite some improvement in town assessment and collection by 1704, back taxes were never cleared off the books. Arrears of 2,912 0s. 7d. were noted in the session of May 1713.65 Taxes were levied for general provincial expenditure, typically for the maintenance of forts and jails, to redeem debts, to underwrite war time exigencies, to support the colony’s agent in England, and, after 1710, to retire bills of credit. Apart from a single levy of 1,000 enacted in 1710, no further acts to retire bills of credit, which the assembly resolved in August 1710 to be passed at an annual rate of 1,000 over the next several years, materialized 63 John R. Bartlett, ed., Records of the Colony of Rhode Island and Providence Plantations, in New England (Providence: A. C. Greene, 1856–65), 3:301. 64 Bartlett, Rhode Island Records, 3:369. 65 Bartlett, Rhode Island Records, 4:149.

[ 388 ]

Taxation of the New England Colonies, 1688–1714

before the death of Queen Anne. More than its neighbors, Rhode Island financed its public spending with bills of credit after 1710, a pattern it continued for the next four decades. Listers did not submit valuations to the General Assembly, which exist only in limited surviving town records. There are no records of provincial valuation. Direct tax usually consisted of 1s. poll tax on adult males between sixteen and sixty years of age, with the rest apportioned on estates, adjusted up or down as necessary to meet the assembly’s target. Taxes were to be paid in money or country pay of wool, butter, corn, rye, or pork, with items and rates amended from time to time. In May 1695, valuations were placed on oxen, steers, swine, and horses, with older livestock assessed at progressively higher rates, ranging from 1 ⁄2d. to 3d. per head, and sheep at 5d. per score. Negro male servants were valued at 20d., with Negro female servants at 10d. A rate of 1d./ was to be placed on the total.66 For the thirteen years in table 13.6 for which data exist, total direct tax levies sum to 15,400, an annual average of 1,184, about 8d. per capita.67 Moreover, the frequent complaints of noncompliance and citations of arrears confirm that the full levies were never collected. If one subtracts the relatively heavy taxes of 8,700 for four wartime years in which annual taxes were set at or above 2,000, about 15d. a person, the annual rate of the other listed years was in the neighborhood of 400, about 5d. a person. Both averages are even lower for the entire period 1689–1714 when the four years of no taxation during 1711–14 are included, and actual payment lower still. In a session of the General Assembly that convened on July 1, 1696, duties on wine and “strong waters” were reinstituted, which had been suspended after the overthrow of the dominion, to augment the country rate. Duties were set at 10s. a pipe on Azores wine, 12s. 6d. a pipe on Madeira, 1d. a gallon on brandy, rum, and distilled liquor, and 1 ⁄2d. per gallon on molasses (used to distill rum). The act was to be in force until changed by the assembly.68 In 1707 an import duty of 3 on Negro slaves was enacted, which was routinely renewed.69 The duty was rebated if the slave was reexported within a specific period of time. This provision created duty-free ports for trading slaves, which remained up to and beyond the American Revolution. On occasion tonnage of one pound of powder per ton of vessel was levied. The volume of revenue from duty was modest, much of which was evaded by smuggling. Rhode Island’s miles of waterways made it difficult to enforce import duties. 66

Bartlett, Rhode Island Records, 3:308. The records are incomplete. There are no surviving records for 1692–95. 68 Bartlett, Rhode Island Records, 3:319. 69 Bartlett, Rhode Island Records, 4:34. 67

[ 389 ]

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Low provincial expenses permitted low taxes. The governor’s salary was 10–20. During the period between October 26, 1699, and August 22, 1702, total disbursements from the provincial Treasury amounted to 1,756 Rhode Island currency, an annual rate below 620, about 6d. per capita.70 Annual spending slightly more than doubled to 1,256 the year after war broke out with France. In the three peak years of Queen Anne’s War, 1709–12, provincial expenditures amounted to 19,750, but only 4,700 was levied in taxes, not all of which was collected, with the balance paid in newly issued paper bills.71 Taxes could be paid in specie, Massachusetts bills (after 1690), and numerous commodities, including corn, barley, wheat, rye, and rosewood. After 1709, provincial taxes could also be paid in bills of Rhode Island, Connecticut, or New Hampshire.

Taxation in New Hampshire, 1688–1714

S

i m i l ar tax e s were enacted for all the New England colonies during the brief years of the dominion.72 After its overthrow, New Hampshire was briefly reunited with Massachusetts until the summer of 1692, when John Usher arrived in the province and was designated lieutenant governor of the royal province of New Hampshire by a commission, with Samuel Allen as governor. During the brief reunion with Massachusetts, local and provincial taxes were levied as “agreeable to former custom.” The restoration of separate provincial status required the appropriation of funds for New Hampshire. Allen’s commission did not include provision for raising revenue, but the Crown authorized an assembly to enact tax laws. In October 1692 the House of Representatives and the Council appointed a joint committee to establish a settled revenue for the colony. The legislature passed two acts for the support of the government and to finance the war

70 John Blanchard MacInnes, “Rhode Island Bills of Public Credit, 1710–1755” (Ph.D. thesis, Brown University, 1952), 95–96. 71 MacInnes, Rhode Island Bills of Public Credit, 108. 72 Data on annual levies in New Hampshire during 1689–1714 appear in William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (New York: Columbia University, 1908), 329–48. Fry cites volume and page numbers for each levy from the Laws of New Hampshire and New Hampshire Provincial Papers. A general description of taxation in New Hampshire appears in Maurice H. Robinson, A History of Taxation in New Hampshire, Publications of the American Economic Association, 3rd ser., no. 3 (New York: Macmillan, 1902). The colonial treasurer’s annual accounts for 1701–12 appear in “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfi lm, University of Texas, Austin, 465–95. The accounts include annual direct tax levies, but not actual receipt of direct tax payments, indirect taxes of excises and duties, other miscellaneous revenue, and annual expenditure. The accounts do not present annual or cumulative arrears of direct taxation.

[ 390 ]

Taxation of the New England Colonies, 1688–1714

against the Indians. One levied a rate on polls and estates, the other a combination of import duties, excises, and tonnage.

Direct Taxes

T

he b ul k of provincial revenue derived from the tax on polls, ratable estate, and “returns and gains” from trade and labor. The act of 1692 was valid for the temporary period of one year, for fear that a royal governor might continue taxes without the consent of the house. Assessment and collection followed the provisions of Massachusetts law. Initial exemptions included the governor, lieutenant governor, members of the Council, settled ministers, and schoolmasters, but later acts exempted only ministers. Adult males were taxed 18d. a head, with skilled laborers rated in proportion to other men based on the probable income from their property. In addition to this poll tax, three 1d. rates, 3d./, were added for all persons according to specified valuations of cattle. The upshot was a direct tax of an 18d. poll tax and a 3d. country rate. The specification of a country rate in 1692 was discontinued the following year, when the legislature stipulated a specific sum to be raised, apportioning the amount among the several towns. This system of administration remained in place through 1714 (and thereafter). Table 13.7 lists annual direct tax levies between 1692 and 1714, along with the proceeds of indirect taxes, and such other miscellaneous sources of revenue as seizures. As in Massachusetts, Connecticut, and Rhode Island, the issue of bills of credit beginning in 1709 substantially altered the imposition and collection of direct taxes between 1709 and 1714. New Hampshire also experienced chronic tax evasion, which prompted laws imposing penalties on constables who failed to remit their towns’ quota of revenue. Periodic reenactment of heavy penalties indicates that the problem of tax evasion was not curtailed. Even more than its three neighbors, New Hampshire failed to be forward looking, never accumulating a rainy day reserve fund to finance war time and other exigencies. The legislature only approved what taxes were required to pay immediate bills, and often not even that sum. Its members constantly complained that their constituents were impoverished from defending the colony’s borders from Indians and could not afford to pay any more in taxes. As previously indicated, the 1692 act imposed rates, not a specific number of pounds. The reduction in direct taxes between 1698 and 1707 was due to general peacetime conditions in the colony. The rise in taxes from 1708 reflected heavy military costs in the later years of Queen Anne’s War. The fi rst issue of 8,000 in bills of credit (5,000 to pay existing obligations, which indicates the extent to which taxes had fallen into arrears, and 3,000 for new expenses) approved in December 1709 changed the system of public fi nance. Levies enacted after 1709 were paid in bills of [ 391 ]

chap t er 13 tabl e . New Hampshire Taxes, 1693–1714 (£.s.d. New Hampshire Currency) Year

1693 1694 1695 1696 1697 1698 1699 1700 1701 1702 1703 1704 1705 1706 1707/08 1708/09 1709/10 1710 1710/11 1711/12 1712 1713

Annual Levies

800 700 700 600 950 400 460 missing 300 500 0 missing 800 900 1,310 1,100 2,020 1,500 1,500 1,000 1,500

Excises

Duties

34.17.2 19.5.0 9.1.0

25.15.7 59.16 291.8.0

21.0.0 44.0.0 147.12.0 20.0.0 42.0.0

67.1.6 75.1.3 Incl. in excise 13.0.8 53.11.6

42.0.0 38.15.0

68.1.0 26.8.0

Miscellaneous

Expenditure

28.10 1.10.0

555.0.9 1,054.3.6 332.11.5

3,000 3,000 3,000

934.13.6 1,034.18.5 1,477.9.6 1,351.13.5 2,124.1.2 2,930.1.8 3,788.11.11 3,137.19.3

Notes: Neither Fry nor Blathwayt presents actual receipts of direct taxes. Neither presents numbers for 1700 and 1704. In Blathwayt’s accounts, the annual statement was changed from a single year to an overlapping two years beginning in 1707. A separate entry appears in Blathwayt for 1710 that lists receipt of 3,000 in bills of credit with corresponding expenditure of those funds. Miscellaneous entries for 1710, 1710/11, and 1711/12 consist of bills of credit transferred to the colonial trea surer. No tax was enacted to sink the fi rst issue of 3,000. Taxes of 1,500 levied in 1710/11 and 1711/12 were enacted to ensure partial redemption of bills issued in those years. The levy of 1710/11 was due for payment by December 1716 while that of 1711/12 was due a much earlier December 1711. The entry for excises in 1707/08 includes the proceeds of duties for that year. Sources: Direct tax levies for 1693–99 and the last two entries for 1712 and 1713, which are presumably for 1712/13 and 1713/14, are from William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (Ph.D. thesis, Columbia University, 1908), 333, 339, 341–43, 348. Fry cites as his sources the Laws of New Hampshire and New Hampshire Provincial Papers. Figures for 1701–12 are from “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfi lm, University of Texas, Austin, 465–95.

New Hampshire and those of other New England colonies that found their way into the province. New Hampshire bills used to pay taxes beginning in 1710 were reissued rather than destroyed to retire the colony’s debt. Tax levies in 1710–13 amounted to recycling tax-anticipation notes. By 1713 it had become necessary to exchange New Hampshire bills for those of Massachusetts, Connecticut, and Rhode Island that had been paid into the provincial Treasury, which precluded the reissue of local bills. In re-

[ 392 ]

Taxation of the New England Colonies, 1688–1714

sponse, in May 1714 the legislature resolved to loan out at interest the 1,500 tax levied in 1713 for a period of two years to individuals who would give good land as security for its repayment in New Hampshire bills.73 Another 1,200 in tax-anticipation bills was issued for immediate payment to the colony’s creditors. By 1713 paper bills of the four colonies formed practically the only currency in New Hampshire, replacing specie and country pay as daily money.74

Indirect Taxes

T

h e se c ond act of 1692 continued the Andros system of indirect taxes by adopting the Massachusetts statute on duties and excises with a few changes. Retailers were required to pay excises of 50s. for every butt of wine and 2s. 6d. per hogshead of cider, ale, or beer. Import duties were set at 10s. per butt of Azores and Canary Island wines, 13s. per butt or pipe of Madeira wine, 20s. per butt of Sherry, Malaga, Canary, Muscadel, and Alicante wines, and 10s. per hogshead of brandy, rum, and other strong distilled liquors. Except for fish, sheep, woven cotton, wool, salt, and other necessities, all other imported goods were taxed at 1d./ valuation. The price of goods was reckoned in New Hampshire money at 10 percent above its sterling price. Molasses and sugar were taxed at 4d. and 8d., respectively, per hogshead. Duties and excises were renewed annually until 1711 with some changes, when the levies were allowed to expire.75 As revealed in table 13.7, annual revenue from duties and excises was modest, only once exceeding 200, when no direct tax was levied in 1703. Members of the House of Representatives argued that a free port would provide greater economic benefit for the province. During peacetime years, revenue from modest direct taxes, along with the proceeds of indirect taxes, were sufficient to finance provincial expenditure. Indeed, the legislature approved a present of 500 to the governor for his ser vices in 1699. For the first four years of Lieutenant Governor Usher’s administration, he received no salary from the legislature. Thereafter grants of salary were annual, until they became regular in 1704. After a lag of two years, in June 1714 modest duties were placed on rum (8s. per hogshead), Azores wines (5s. per pipe), Madeira (2s. per pipe), mo-

73 Th is resolution was a harbinger of the creation of loan office, or land office, bills of credit in Massachusetts (November 1714) and most of the other colonies in later years, through which the government loaned money to be repaid with interest to residents who pledged land and property as collateral. Loan office bills were backed by real property, not the expectation of future taxes. Interest on these payments became a major source of revenue in several of the colonies between 1720 and 1750. 74 Fry, New Hampshire, 348. 75 Robinson, Taxation in New Hampshire, 45–54.

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lasses and sugar (2s. per hogshead), and tobacco (3s. per hogshead with 75 percent refund if reexported within six months).76 The governor extracted duties from the legislature by threatening additional direct taxation to retire bills of credit. Export duties were imposed for brief periods only. In 1702 and 1703, duty was levied on all kinds of lumber exported from the colony, which explains the relatively late entry for duties in 1703, when most of it was collected. The lieutenant governor’s attempt to persuade the legislature to reenact export duties in 1704 failed. The act of 1714 reestablished, for one year, duties on lumber manufactured into boards (1s.), pine planks (3s.), red oak staves (6d. hogshead), white oak staves (9d. hogshead), white oak staves (1s. pipe), and Indian-produced staves (10 to be prohibitive).77 Finally, the act of 1692 also imposed tonnage on vessels of thirty tons and above. The rate was one pound of powder, or 18d. in money, per ton. Tonnage was continued every year to 1702, when the act was made permanent. Locally owned vessels were exempt until 1698. The proceeds of tonnage were not recorded in Blathwayt’s accounts.78 Highways were maintained by mandatory contributions of labor. Annual taxes to support the ministry and education were renewed until 1714 when they were made permanent. A minister typically received an annual salary of 50–100. Portions of his payment consisted of contributions of labor, provisions, and the sale of pews. The ministry tax was repealed in 1792. These taxes were modest.79 Given New Hampshire’s smaller population and larger frontier that required heavier defensive expenditures, the tax burden of 3–4s. per person was closer to that of Massachusetts and considerably higher than that in Connecticut and Rhode Island. Massachusetts and New Hampshire shared a common governor, who was able to coordinate military activities of the two colonies, whereas the fully elective governments of Connecticut and Rhode Island were able to retain control over their own militias and expenditures.

Summary

T

he sy st ems of taxation in New England had been constructed prior to the Glorious Revolution and remained largely unchanged during the reigns of William and Mary and Anne. Direct taxes on polls and property were the principal source of revenue, fi rst to meet annual provincial obligations, later to underwrite the sinking of bills of credit on an 76

Robinson, Taxation in New Hampshire, 56–57. Robinson, Taxation in New Hampshire, 56–57, and Fry, New Hampshire, 340. 78 Robinson, Taxation in New Hampshire, 65. 79 Robinson, Taxation in New Hampshire, 176–79. 77

[ 394 ]

Taxation of the New England Colonies, 1688–1714

increasingly deferred basis. These were supplemented with modest indirect taxes. Levels of taxation were higher in Massachusetts and New Hampshire, the frontier of the confl ict with France, than in Connecticut and Rhode Island. Taxes in war time were substantially heavier than in years of peace, but were invariably rolled back after the conclusion of hostilities. Despite low levels of tax, especially in years of peace, evasion was widespread, even though Connecticut and Rhode Island chose their own governors and councillors. Although New England had the most developed of all the tax regimes in the American colonies, its residents rarely, if ever, cheerfully coughed up their obligations in full in a timely manner.

Appendix: Colonial Currencies and Foreign Coins

T

he g eneral description of colonial currencies and foreign coins presented in the appendix to chapter 7 applies here, with different legal ratings between sterling and the colonies and among the colonial currencies. Table 13.A shows the cross-ratios of sterling, the highest legal values of the Spanish reale, and other foreign silver coins circulating in the colonies. The values of the foreign coins against sterling were based on an assay on their respective silver content conducted by Sir Isaac Newton in 1702. The table is read from left to right. For example, one sterling coin valued at 54d. buys 1.37 New England units of currency, 1.56 New York and East New Jersey, 1.74 Pennsylvania and West New Jersey, and so on. One Dutch ducatoon of 63 stivers, valued at 66d. in silver content at the sterling standard, buys 0.82 sterling, 1.12 New England currency, and so forth. In the bottom row, one Portuguese cruzado of 480 reis worth 34d. valued at the English sterling standard buys 1.59 units of sterling, 2.18 New England, 2.47 of New York and East New Jersey, and so forth. A merchant doing business in some or all of the colonies had to reckon relative values. He would have to convert his sales and purchases tendered in multiple foreign coins in the various colonies into some common standard, say sterling, to determine his profits or losses. To do this he would have to multiply the ratio of each colony’s money defined in values of Spanish reales to each other colony’s money for every other coin. He would need a schedule of values akin to that in table 13.A. Queen Anne’s proclamation rate was added to the mix in 1704. Table 13.B presents the cross-ratings of sterling, Proclamation Money, and the currencies of the colonies against each other in 1714. Take row three. The legislature of New England set the legal value of its currency as the value of an ounce of silver, 8s. per ounce, which determined [ 395 ]

chap t er 13 tabl e .a 1702 Ratios of Sterling (54d.) and Colonial Legal Values of Full-Weight Spanish Piece of Eight and Other Foreign Silver Coins against Each Other (One Unit of Each Coin Buys How Many Units of Every Other Coin)

Currency

English sterling (54d.) = New England (74d.) = New York and E. New Jersey (84d.) = Pennsylvania and W. New Jersey (94d.) = Maryland (54d.) = Virginia (60d.) = N. Carolina and S. Carolina (87d.) = Dutch ducaton 63 stuvers (66d.) = Dutch 3 guilder of 60 stivers (62d.) = Dutch rix dollar of 50 stivers (52d.) = Dutch lion dollar of 40 stivers (44d.) = Flemish cross dollar of 48 sous (53d.) = French écu of 60 sous (54d.) = German old rix dollar, Hanover (55d.) = Portuguese cruzado of 480 reis (34d.) =

English sterling

New England

NY and ENJ

PA and WNJ

MD

1.00 0.73 0.64 0.57 1.00 0.90 0.62 0.82 0.87 1.04 1.23 1.02 1.00 0.98 1.59

1.37 1.00 0.88 0.79 1.37 1.23 0.85 1.12 1.42 1.42 1.68 1.40 1.37 1.35 2.18

1.56 1.14 1.00 0.89 1.56 1.40 0.97 1.27 1.35 1.62 1.91 1.58 1.56 1.53 2.47

1.74 1.27 1.12 1.00 1.74 1.57 1.08 1.42 1.52 0.08 2.14 1.77 1.74 1.71 2.76

1.00 0.73 0.64 0.57 1.00 0.90 0.62 0.82 0.87 1.04 1.23 1.02 1.00 0.98 1.59

Notes: 1. The sterling value of a full-weight Spanish reale is 418 grains = 17.42 dwt. = 54d.; 1 dwt. = 3.1d. 2. Delaware had the same legal rating as Pennsylvania, but its currency traded at a 5–10 percent discount against Pennsylvania currency. 3. North and South Carolina had the same legal rating until their separation in 1712. Sources: Brock, Currency of the American Colonies, 7–8, and http://www.coins.nd.edu/ColCurrency/ Currency/Intros/ Intro1702Assay.html (July 8, 2003).

the value of a Spanish reale based on its silver content (417.15/480 grains sterling, or 83.4d. New England currency) and other foreign coins. Reading from left to right, it took 100 New England currency to buy 65.22 sterling, 101.02 New York currency, 93.17 New Jersey currency, 86.41 Pennsylvania currency, and so forth. These rates are expressed in decimals, for example, 65.22 sterling equaled 65 4s. 5d. The rate of New England currency on sterling is based on its trades in London. The cross-rates of the colonial currencies are based on their relative valuations in London. Pennsylvania currency was more highly valued in London than that of New England. The ratio of the two valuations in terms of sterling determined the rate between the two colonial currencies. Actual rates between colonial currencies could fluctuate around their comparative valuations in London as it took time for information to reach the colonies, and there were differences in local supply and demand considerations for bills of exchange. Intercolonial exchange of provincial [ 396 ]

Taxation of the New England Colonies, 1688–1714

VA

NC and SC

63 St.

60 St.

50 St.

40 St.

Flemish 48 sous.

French 60 sous

German rix dol.

Port. cruz.

1.11 0.81 0.71 0.64 1.11 1.00 0.69 0.91 0.97 1.15 1.36 1.13 1.11 1.09 1.76

1.61 1.18 1.04 0.93 1.61 1.45 1.00 1.32 1.40 1.67 1.98 1.64 1.61 1.58 2.56

1.22 0.89 0.79 0.70 1.22 1.10 0.76 1.00 1.06 1.27 1.50 1.25 1.22 1.20 1.94

1.15 0.84 0.74 0.66 1.15 1.03 0.71 0.94 1.00 1.19 1.41 1.17 1.15 1.13 1.82

0.96 0.70 0.62 0.55 0.96 0.87 0.60 0.79 0.84 1.00 1.18 0.98 0.96 0.95 1.53

0.81 0.59 0.52 0.47 0.81 0.73 0.51 0.67 0.71 0.85 1.00 0.83 0.81 0.80 1.29

0.98 0.72 0.63 0.56 0.98 0.88 0.61 0.80 0.85 1.02 1.23 1.00 0.98 0.96 1.56

1.00 0.73 0.64 0.57 1.00 0.90 0.62 0.82 0.87 1.04 1.23 1.02 1.00 0.98 1.59

1.02 0.74 0.65 0.59 1.02 0.92 0.63 0.83 0.89 1.06 1.25 1.04 1.02 1.00 1.62

0.63 0.46 0.40 0.36 0.63 0.57 0.39 0.52 0.55 0.65 0.77 0.64 0.63 0.62 1.00

bills took place in the main ports and fi nancial centers of Boston, Newport, New York, Philadelphia, and Charleston, later spreading to other towns. Other factors also caused fluctuations around the fi xed legal values of the different colonial currencies against each and other and sterling. These included the volume of bills of credit issued in each colony and expectations of future issues with fears of inflation. The actual rates of exchange varied with trading conditions in London and the different centers of exchange, as well as changes in the price of silver in world markets. Currency rates were typically based on bills of exchange. Specie was shipped when its price, plus shipping and insurance, was lower than bills of exchange. To repeat, the efforts of the English government to achieve a measure of uniformity of currency values in the colonies failed. Uniformity was only gradually achieved from the middle of the eighteenth century.

[ 397 ]

tabl e .b Cross-Rates of English Sterling and Colonial Currencies in 1714 (Average for Year) (One Hundred Pounds of Each Currency Buys How Many Pounds of Any Other Currency)

[ 398 ]

Currency

Sterling

Proclamation Rate

New England

New York

New Jersey

Pennsylvania

Maryland

Virginia

N. Carolina

S. Carolina

Sterling = Proclamation Rate = New England = New York = New Jersey = Pennsylvania = Maryland = Virginia = North Carolina = South Carolina =

100.00 75.00 65.22 64.56 70.00 75.47 90.00 90.91 66.67 50.00

133.33 100.00 86.96 86.07 93.33 100.63 120.00 121.21 88.89 66.67

153.33 115.00 100.00 98.99 107.33 115.72 138.00 139.39 102.22 76.67

154.90 116.18 101.02 100.00 108.36 116.91 139.41 140.82 103.27 77.45

142.86 106.86 93.17 92.23 100.00 107.82 128.58 129.87 95.24 71.43

132.50 99.38 86.41 85.54 92.75 100.00 119.25 120.45 88.33 66.25

111.11 83.33 72.46 71.73 77.78 83.86 100.00 101.01 74.07 55.56

110.00 82.50 71.74 71.01 77.00 83.02 99.00 100.00 73.33 55.00

150.00 112.50 97.83 96.84 105.00 113.21 135.00 136.36 100.00 75.00

200.00 150.00 130.44 129.12 140.00 150.94 180.00 181.82 133.33 100.00

Note: The rate for New Jersey is for 1716 and for North Carolina 1715. Source: McCusker, Money and Exchange in Europe and America, 1600–1775, 140, 163, 172, 184, 197, 209, 217, 222

c h ap t e r 1 4
Taxation of the Middle Colonies, 1688–1714

N

e w yor k was restored as a royal province in 1691. Although it developed factious politics in the aftermath of Jacob Leisler’s execution, the legislature sustained a regular system of revenue that proved adequate until military requirements during Queen Anne’s War led to the issue of paper money. Pennsylvania and Delaware, which established a separate legislature in 1704 but retained a common governor with Pennsylvania, barely developed a fiscal regime. The Jerseys were chaotic until their reunification under royal rule in 1702, and opposition to Crown-appointed governors stalled the establishment of a fiscal regime until the second decade of the eighteenth century.

The Development of the Middle Colonies

T

h e e st i m at e d population of the middle colonies in 1688 stood at 30,856, rising to 82,989 in 1714. Although it was smaller than that of New England, it was increasing at a faster rate, reflecting the opportunity for immigrants to acquire fertile land. The wars of King William and Queen Anne were the major determinant of New York’s well-being, alternately stimulating and depressing shipping.1 During King William’s War, New York’s fleet increased from about 35 to 124 vessels between 1689 and 1700, shipping foodstuffs to the British fleet in the Caribbean and the Spanish colonies in the West Indies. Pirates freely spent their booty in the colony, sharing it with tavern keepers, shopkeepers, ship carpenters, suppliers, merchants, and government officials. Governor Benjamin Fletcher granted commissions to pirates to sail as privateers, promising them immunity from prosecution. Several merchants built fortunes from conniving with pirates. Queen Anne’s War had the opposite effect. Spain outlawed the trade in American foodstuffs with its West Indies colonies. The French navy attacked 1 Gary B. Nash, The Urban Crucible: The Northern Seaports and the Origins of the American Revolution, abr. ed. (Cambridge, MA, and London: Harvard University Press, 1986), 39–43. First published as The Urban Crucible: Social Change, Political Consciousness, and the Origins of the American Revolution in 1979 by Harvard University Press.

[ 399 ]

chap t er 1 4

the colony’s merchant fleet, destroying a quarter of its vessels by 1704. Trade with London contracted. Lord Bellomont, who replaced Fletcher as governor in 1698, cracked down on pirates. New York suffered an economic slowdown from which it did not fully recover until peace arrived in 1713. During the eras of William and Anne, the population of New York City increased only modestly from 3,900 in 1690 to about 6,300 in 1714, lagging behind Boston and Philadelphia.2 Pennsylvania was less affected by the wars. The pacifist beliefs of its Quaker population kept the colony out of the French wars. Its legislature supplied no men and little money to the war effort, nor did the colony print money to support provincial expenditure. Still, Pennsylvania’s fortunes fluctuated with the wars. Trade slumped in the early years of King William’s War, recovered in the mid-1690s following the Treaty of Ryswick, fell during the first half of Queen Anne’s War, and recovered after 1706. It emerged from war time in better shape than its northern neighbor. The fortunes of Delaware and New Jersey rose and fell in tandem with those of Pennsylvania and New York.

Money

N

e w yor k’s participation in the war against France prompted its General Assembly to issue paper money to supplement coin, country pay, barter, and other forms of negotiable paper. On May 25, 1709, it voted 6,000 in taxes to support its quota of 487 men for the expedition to Canada. Since this sum would take time to collect, and as funds were urgently required, the General Assembly voted on June 8 to issue 5,000 in bills of credit, which were dated May 31, 1709. 3 As in New England, the bills were declared receivable in taxes. New York’s military expense exceeded 20,000, prompting two further issues totaling 8,000. Dated November 1, 1709, one consisted of bills of 4,000 stipulated in New York money and the other of bills worth 4,000 but stated in ounces of plate or Lyon dollars receivable for taxes with 21 ⁄2 2

Derived by linear interpolation from figures for 1710 and 1720 in Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg60–64: “Population of Cities—Boston, Newport, New York, Philadelphia, and Charleston: 1630–1790,” S-655. 3 John H. Hickcox, History of the Bills of Credit; or, Paper Money Issued by New York, from 1709 to 1789; with a Description of the Bills, and Catalogue of the Various Issues (1866; repr., New York: Burt Franklin, 1969), 12–13. Details of the emissions of New York between 1709 and 1714 are found in Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997), 265–70. The fi rst paper emissions of Pennsylvania and Delaware were in 1723 and are treated in part IV.

[ 400 ]

Taxation of the Middle Colonies, 1688–1714

percent interest.4 Interest was suspended at the next session of the General Assembly. To defray the cost of another expedition, the legislature approved 10,000 of bills dated July 20, 1711, stated in plate totaling 25,000 ounces, valid for eight years. The expedition failed. To clear the colony’s debts, the legislature authorized the issue of 27,680 in bills dated September 4, 1714, shortly after the death of Queen Anne. These bills, denominated both in New York money and plate, were valid until December 31, 1739, thus becoming known as the “First Long Bills.” With the act approved by the Crown on June 17, 1715, the colony was formally exempted from the proclamation rate. New Jersey’s paper money paralleled that of New York. It issued 3,000 in legal tender bills of credit dated July 1, 1709, for the Canadian expedition, and another 5,000 dated July 14, 1711, stated as 12,500 ounces of silver plate, valid until April 1, 1717.5

Taxation in New York, 1689–1714

B

e t w e e n 1 6 89 and 1708 New York collected the majority of its provincial revenue from indirect taxes of import and export duties and liquor excises, supplemented with fines and weigh-money.6 The term “general revenue” referred to duties and excises. Legislation stated indirect taxes in rates per unit of volume and ad valorem percentages, not revenue targets. Records of receipts for some years have survived, which appear below. General revenue was used to pay the salaries of the governor and other officials, as well as to finance routine administrative expenses. Efforts by the Crown and its governors to secure a regular salary for the governor met with little success, which placed the power of collection, custody, and expenditure of taxes in the hands of elected representatives sitting in the Assembly. 4 The Lyon dollar was shorthand for the Leeuwendaalder, the silver ducatoon of Holland, not included in the list of coins subject to Queen Anne’s proclamation. Ten thousand ounces of plate or 14,545 Lyon dollars equaled 4,000 New York money. The General Assembly evaded Queen Anne’s proclamation by enacting legislation requiring payment of taxes and expenditures in ounces of plate or Lyon dollars. Th is explains why its issue of bills of credit was declared valid in terms of plate or Lyon dollars, not pieces of eight or the price of an ounce of silver. One Lyon dollar equaled 5s. 6d. New York currency, or 13 dwt. 18 gr. of silver plate. Tables 13.A and 13.B show that in 1714 New York currency was rated at 155 against sterling, that is, it took 155 New York money to buy 100 sterling. 5 Newman, Early Paper Money of America, 243–44. 6 A detailed treatment of provincial taxes in colonial New York appears in Samuel K. Anderson, “Taxation in Colonial New York, 1691–1755” (M.A. thesis, University of Wisconsin, 1953). Anderson concentrates on the period 1737–55, but provides summary information on the composition and amount of taxation in earlier years. Acts of the colony appear in The Colonial Laws of New York from the Year 1664 to the Revolution, 5 vols. (Albany, NY: J. B. Lyon, state printer, 1894). Volume 1 covers 1664, beginning with the fi rst grant to the Duke of York, to 1717.

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The trend reversed from 1709, when direct taxes on real and personal property supplied the majority of provincial revenue (see tables 14.1 and 14.2). Unlike New England, New York did not levy a poll tax. The word “tax” in general usage meant direct taxes, which were regarded as “extraordinary revenue” for such non-routine expenses as forts and troops. Direct taxes were levied in specific sums and allocated to the counties for collection, but records of actual receipts are not extant for the period. Quitrents never became an important source of provincial revenue (see table 14.2 below). The proprietary regime of the Duke of York failed to secure effective control over quitrents, having exempted many patentees from payment when it confi rmed Dutch grants. When English rule commenced, governors were instructed to reserve quitrents on new land grants. On large grants, a nominal rent was set at one bushel of wheat per hundred acres. When specie was plentiful, the rate was set at 4s. current money per hundred acres.7 Despite instructions to governors, little money was collected. Reestablishment of royal rule required some immediate source of funds. On April 24, 1690, the General Assembly voted a direct tax of 3d./ on real and personal property, a rate of 1.25 percent of assessed valuation.8 Recourse was made to the property tax on twenty-nine occasions, several in a single year, between 1689 and 1714. Most was for the pay and supply of troops in war time. Table 14.1 lists the amounts and purposes for which direct taxes were levied. Between 1691 and 1700, annual levies averaged 2,425 New York currency, rising to about 3,100 during 1702–10. Direct taxes were a relatively stable source of provincial funds, although there are no extant accounts to determine the extent of evasion and avoidance.9 From time to time the General Assembly resolved to enforce collection of tax arrears. In June 1703 it demanded prompt payment of arrears of the 1,000 levied in November 1700. Import duties and excises on liquor were the other main sources of funds. First enacted on May 13, 1691, they were typically extended for several years at a time. The bulk of general revenue came from duties on wine, distilled liquor, and European or East Indian goods imported from the 7

Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 254–57. 8 Colonial Laws of New York, 1:218. 9 The Journals of the House of Representatives, also identified in the colonial records as Votes of the House of Representatives for His Majesties Province of New-York between 1692 and 1702 after which the title changed to Votes of the General Assembly of His Majesty’s Province of New-York in America, refer to various accounts of the different collectors of revenue that were laid before the house. With few exceptions, however, the accounts do not appear in either the handwritten or printed records of the proceedings through 1714. There is no way to assess the degree of compliance with the direct tax levies, comparing levies with payments. Arrears reduced the actual burden of direct taxes by some unknown amount.

[ 402 ]

Taxation of the Middle Colonies, 1688–1714 tabl e . New York Direct Tax Levies, 1690–1714 (£.s.d. New York Currency) Month and Year

Amount

Purpose

April 1690 May 1691 September 1691 April 1693 March 1694 October 1694 July 1695 October 1695 October 1695 April 1696 October 1696 April 1697 May 1699 November 1700 November 1702 November 1702 June 1703 October 1703 June 1704 October 1706 October 1706 September 1708 October 1708 October 1708 May 1709 June 1709 November 1709 June 1711 November 1711

3d./ (no amount) 2,000 1,500 6,000 2,660 500 800 1,000 700 2,593 6s. 8d. 1,200 2,300 2,000 1,000 1,800 2,000 1,500 1,300 143 10s. 10d. 3,000 983 10s. 1,200 253 16s. 756 4s. 6,000 4,000 14,545 Lyon dollars (4,000) 10,000 2,850 ounces of plate

general expenditure 100 soldiers and officers 150 soldiers 300 volunteers 170 soldiers 100 soldiers 100 soldiers colonial agent soldiers soldiers soldiers 300 soldiers gift to governor fort 150 soldiers two batteries 100 soldiers General Assembly room fortify New York City defense defense clear governor’s debt reimburse defense payments Canadian expedition

Source: The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), 1: 218, 239, 259, 315, 335, 339, 344, 352, 354, 358, 364, 369, 381, 396, 444, 493, 508, 550, 562, 569, 593, 598, 607, 624, 628–29, 654, 669, 693, 730, 746.

British West Indies. To encourage the development of local shipping, wines imported in New York–owned vessels were taxed one-third less than those of other colonies or countries, with rum, brandy, and other spirits enjoying a discount of 40 percent. Duties and excises were extended, modified, or repealed in acts of November 1692 (which took effect for two years from May 18, 1693), April 1693, September 1693 (which extended the 1692 act for five years from 1695 to May 18, 1700), May 1699 (from May 18, 1700, to May 18, 1706), October 1701 (extending duties for an additional two years), May and November 1702 (the latter extending the act due to expire on May 1708 for one more year), June [ 403 ]

chap t er 1 4 tabl e . New York Provincial General Revenue (Excluding Direct Taxes), 1690–1695 and 1698–1709 (£.s.d. New York Currency) Dates

1690–91 1692 1693 1694 1695 6/98–6/99 6/99–6/1700 1701 1702 1703 1704 1705 1706 1707 1708 1709

Duties 3

2521.2.11 4⁄ 2463.3.1112⁄ 1916.8.14⁄ 3055.11.3 2313.17.1014⁄ 3198.11.5 4641.7.7 2694.8.7 12⁄ 2208.1.11 2362.16.438⁄ 3812.2.512⁄ 2705.11.1134⁄ 3090.15.834⁄ 3239.2.6 2568.19.0 640.14.712⁄

Excises

203.12.0 834.15.8 665.16.8 862.4.10 919.18.212⁄ 1079.5.6 662.12.612⁄ 724.0.812⁄ 401.8.1012⁄ 1055.12.412⁄ 856.14.9 939.9.6 878.13.412⁄ 302.0.11 423.18.2 188.0.0

WeighHouse

Quitrents

Forfeiture

Total

38.11.0 149.0.12⁄ 36.17.6 165.4.9 10.19.0

306.10 60.8.0 229.17.534⁄ 15.0.7 264.17.412⁄ 284.0.134⁄ 2.5.4

3202.17.534⁄ 3358.7.734⁄ 2490.13 4299.19.11 3601.11.11 4292.10.1134⁄ 5405.19.612⁄ 3895.4.034⁄ 3160.17.414⁄ 4598.3.11⁄8 5334.17.214⁄ 4095.0.1 5686.5.814⁄ 3585.11.1012⁄ 3094.8.2 857.19.7 12⁄

150.0.0

218.3.2 66.0.1134⁄ 195.9.2 87.15.1

337.11.0 207.8.6 24.3.0 148.5.1014⁄

218.15.3 60.9.6 289.7.0 230.13.912⁄ 167.8.1012⁄ 53.16.6 101.11.0 29.5.0

377.19.214⁄ 105.6.0 202.15.634⁄ 1389.1.1034⁄

Notes: 1. As mentioned in the text, the Votes of the Journal of the House of Representatives of October 14, 1700, states that the Commissioner of the Customs documented 26,341 for the period January 30, 1690, to the arrival of the Earl of Bellomont, the new governor, in 1698. 2. The Commissioner of Customs, S. V. Cortland, reported total revenue of 5,267 11s. 2 3 ⁄4d. between June 8, 1698, and June 24, 1699, and 5,400 19s. 6 1 ⁄4d. between June 24, 1699, and June 24, 1700. The figures appear in O’Callaghan, Documentary History of New York, 702. The number for 1698/99 differs from the total summed from the individual entries for the several sources of revenue by about a thousand pounds for 1698/99, but by exactly five pounds less for 1699/1700. Some other source of revenue must have been included for 1698/99. 3. The total for 1701 includes 417.14.43 ⁄4 in the category of incidental revenues that I cannot trace in the description and figures of each individual entry. The total for 1702 includes 32.11.4 in incidental revenues. 4. Customs for 1703 include 453.12.6 on slave imports. 5. The total for 1707 includes 0.11.10 1 ⁄2 , which was an error in the previous year’s sum. Sources: E. B. O’Callaghan, ed., Th e Documentary History of the State of New York (Albany: Weed, Parsons, 1849), 1:701–2, and Julius M. Bloch et al., eds., An Account of Her Majesty’s Revenue in the Province of New York, 1701–09: The Customs Records of Early Colonial New York (Ridgewood, NJ: Gregg Press, 1967). The figures for 1701–9 were computed from raw entries and subtotals in the records of the receiver-general at the customshouse of New York.

1709 (reenactment of liquor excises), October 1710 (renewal of liquor excises), and June 1711 (renewal of liquor excises). Tonnage of 2s. per ton was included in general revenue from 1709 (until 1726). In 1709, the export tax on peltry was dropped. No new general revenue act was passed from 1709 until October 1713. For four years, duties were not collected, with only quitrents, weigh money, and fines providing general revenue. From 1709, funds were approved for only one year at a time, paid to a treasurer appointed by the

[ 404 ]

Taxation of the Middle Colonies, 1688–1714

Assembly, with their use specified in the acts. For the moment, the people’s representatives triumphed over the Crown.10 In May 1702, the General Assembly levied duty of 15s. on each imported Negro slave, but the act was disallowed the same year.11 Another in 1709 charged 3 on every slave not imported directly from Africa. Aimed to prohibit the import of slaves from the West Indies, it was continued by acts of 1710 and 1711 until 1713. A bill to lay further duty in 1711 was defeated in the Council. In addition to import duty, in 1709 owners of slaves were charged 2s. for each slave housed in their dwellings (along with 1s. per hearth or stove).12 Table 14.2 reveals the composition of general revenue between January 30, 1690, and December 25, 1695, between June 8, 1698, and June 24, 1700, and between December 25, 1700, and May 18, 1709.13 In contrast with direct tax levies, the figures in the table are actual revenues. 10

Colonial Laws of New York, 1:243, 248–50, 288–90, 313, 322–23, 325–26, 403–4, 419–22, 449, 467, 487, 517, 662–63, 675, 708, 714, 735, 785, 789. Duties were itemized in great detail. The act of May 1691 is illustrative of duties and excises in force during the period 1691–1714: 4d. per gallon of rum and distilled liquor; 40s. per pipe of Madeira, Azores, St. Georges, Canary, Malaga, Sherry, and all sweet wines; 20s. per hogshead of white, red, and Rhenish wines; 40s. per 100 value, 2 percent, on all other imported merchandise. Exemptions were granted to some fi fty items including salt, bricks, coal, fish, sugar, molasses, ginger, several dyeing woods, cocoa, hides, tobacco, bullion and plate, peltry, wool, onions, and other items grown in neighboring English colonies. Indian goods shipped up the Hudson River were taxed at 10 percent ad valorem, with each item given a specific rating for purposes of valuation. (The rate was reduced to 5 percent the following year.) Retail excises were set at 12d. per gallon on brandy, rum, other distilled liquor, and wine, and 6s. per barrel on beer and cider. Specific export duties were imposed on skins of beaver, raccoon, mink, otter, bear, wolf, muskrat, mice, and deer, and ox, bull, and cow hides. To assist Albany with its recovery from being on the colony’s front line of defense, in May 1691 the General Assembly approved a 2 percent retail excise on Indian goods and 3d. a gallon of rum sold in Albany. Th is measure was renewed in 1695 and 1699. New York City was authorized to impose duties of its own in November 1701 (1:243, 347, 411, 449). 11 Colonial Laws of New York, 1:484. 12 Colonial Laws of New York, 1:675, 682, and W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (1896; repr., Baton Rouge: Louisiana State University Press, 1969), 18. The general view of New York’s slave traders was that the slaves imported from the West Indies “are generally Refuse and very badd.” This remark is cited in Anderson, Taxation in Colonial New York, 53. The original is contained in a letter from Rip Van Dorn to the Lords of Trade dated November 2, 1731, reproduced in E. B. O’Callaghan, ed., Documents Relative to the Colonial History of the State of New York (Albany, NY: Weed, Parsons, 1853–87), 1:479. 13 For 1692–95 and from 1701, the data include the last six days of the preceding December. Figures are incomplete for 1707–9. For 1707, data are missing between December 25, 1606, and February 1, 1707. For 1708, data are missing from October 18, 1708, through December 25, 1709. For 1709, data are missing between December 25, 1708, and January 20, 1709. Figures for 1701–9 are derived from a recently published photostatic compilation of raw customshouse entries found in several libraries in New York and the Public Record Office in London. As the general revenue acts expired in 1709 and were not reenacted until 1713, there is little purpose in estimating

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Duties were reenacted in July 1713 after a four-year lull and generated 3,222 over the next year.14 Given the huge shortfall in annual revenue after 1709, it is no wonder that the General Assembly found it financially and politically expedient to issue bills of credit beginning that year. Several trends emerge from the table. Quitrents supplied a small, in some years nonexistent or negligible, portion of provincial revenue. Forfeitures, seizures of ships found violating the Navigation Acts, or duty levied on goods seized by officially sanctioned privateers supplied almost a quarter of revenue in 1706, but never more than 10 percent in any other year. Excises were a steady, productive source of revenue. The bulk of the general revenue derived from import duties on alcoholic beverages and dry goods. General revenue always supplied several thousand pounds a year with reestablishment of royal rule in 1691, from a low of about 2,500 in 1693 to a high of nearly 5,700 in 1706. Excluding the transition and partial figures for 1690–91 and 1709, and adjusting for the missing data in other years, the average for the fourteen years included in the table is about 4,100. During 1691–1708, indirect taxes generated about three-fi fths of provincial taxes. The steady flow of general tax revenue disclosed in the customshouse records of 1701–9 confl icts with other studies on the state of the provincial economy during the first decade of the eighteenth century. Michael Kammen, for example, writes that it underwent a severe contraction. As the basis of this contention, Kammen cites reports of Lord Bellomont in 1700 that what that year’s revenue would have been. Julius M. Bloch et al., eds., An Account of Her Majesty’s Revenue in the Province of New York, 1701–09: The Customs Records of Early Colonial New York (Ridgewood, NJ: Gregg Press, 1967). The Journal of the House of Representatives dated October 14, 1700, includes the accounts of the Commissioner of the Customs from January 30, 1690, to the arrival of Governor Lord Bellomont in 1698. The amounts were duties of 17,031 9s. 7 3 ⁄4d.; excises, 5,349 4s. 121 ⁄2d.; quitrents, 498 6s. 1 1 ⁄2d.; weigh-house money, 697 5s. 8 3 ⁄4d.; fines and forfeitures, 882 5s. 5 3 ⁄4d.; additional duty, 1,882 13s. 4d.; and money sent by the colony’s neighbors for the assistance of New York, 4,375 10s. 7 1 ⁄2d. The five categories of revenue listed in the table for 1690–98 sum to 26,341 4s. 91 ⁄4d., which is roughly 9,400 more than for the years in the table. The difference implies annual revenue of about 4,700 in the two years 1696–97. The Journal record goes on to state the following: “That the Commissioner of the Customs laid before them the abstract of the Tax Account, which could not give them any satisfaction, and the Taxes by act of Assembly amounts unto the sum of 23,318 1s. 8d. So that the revenue and of the duties arising to the King, since the 30th of January 1690 till the Earl of Bellomont’s arrival, amounted to 54,534 16s. 9 3 ⁄4d. Of this sum, the treasurer spent 53,577 9s. 9d. by warrants from the Governor-in-Council, the spending authority in the colony. “ But they cannot find by those books whether the Taxes raised by Act of Assembly were employed for the uses they were raised for because the Accounts were all intermixed.” 14 Colonial Laws of New York, 1:779, and Herbert Alan Johnson, Th e Law Merchant and Negotiable Instruments in Colonial New York, 1664 to 1730 (Chicago: Loyola University Press, 1963), 49.

[ 406 ]

Taxation of the Middle Colonies, 1688–1714

forty-three topsail vessels and eighty-one sloops belonged to the port of New York and of Lord Cornbury in 1708 then counting only twenty-eight of both. Kammen states that apart from wartime losses, the decline was also due to lower freight rates offered by Boston carriers. He states that exports from the port of New York declined by five-sixths and the value of imports by two-fifths between 1700 and 1706.15 The raw data in the customshouse records break down customs into import duties on dry goods, wine, rum, Indian goods, goods shipped up the Hudson River, and export duty on peltry. The figures show that the most heavily taxed commodities were rum and wine, followed by dry goods of European manufacture. There is no significant reduction in their volume and duties collected during the first decade of the 1700s. Rum was used in the African slave trade, and liquor of all kinds was consumed by New York citizens and visiting sailors and merchants. It is difficult to derive an accurate estimate of per capita taxes and taxes as a percentage of personal income. A good part of the colony’s output and income consisted of self-sufficient farming, which was taxed in the form of undervalued property, not income based on the imputed market value of output. A portion of the wine and rum duties and excises on liquor was paid by consumers, many of whom were visiting sailors and non-resident merchants. The modest export duty on peltry was borne by European consumers until it was also repealed with other trade taxes in 1709. Some portion of general revenue taxes was shifted onto non-residents. Total provincial revenue during 1690–1709 averaged about 6,800 New York currency (4,390 sterling), somewhat lower in the 1690s, somewhat higher during 1700–1709. Between 1709 and 1713, the colony resorted to bills of credit to fill the void left by the expiration of trade taxes. The provincial population averaged about sixteen thousand in the 1690s and a higher twenty thousand in the first decade of the eighteenth century. Annual per capita taxes, if borne wholly by the provincial population, would have amounted to about 7 1 ⁄2s. Adjusting for the portion falling on non-residents, the tax would be a shilling or so less. If per capita income was in the range of 8–10, the tax burden of the provincial population would be around 3 percent. It would be lower still when undervaluation of property, arrears of direct taxes, and evasion of trade taxes are taken into account. New York as a royal province inherited and retained a feature of its Dutch past, namely, the propensity of drink among its settlers and visitors. Peter Stuyvesant remarked that his colony’s chief asset was its taverns and drunken residents, whom he proceeded to tax for their depravity. Taxes on

15 Michael Kammen, Colonial New York: A History (New York and Oxford: Oxford University Press, 1996), 151–52. First published in 1975 by KTO Press in Millwood, NY.

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alcoholic beverages, the largest source of general revenue, continued under royal rule.

Taxation in Pennsylvania, 1688–1714

P

ennsy lvania was subject to the same imperial regulations imposed on the other colonies.16 Between 1701 and 1713, when tobacco growing was superseded by wheat, the colony exported several thousand hogsheads of tobacco a year. Most went directly to England but those shipped to other colonies were charged 1d. a pound in accordance with the 1673 act of Parliament. Table 14.3 shows receipts for the eight fiscal years encompassing 1704/05 to 1711/12. Annual receipts averaged about 432, with over half the total collected in just the two years 1704–6. In the other years, the tax was more of a nuisance than a source of revenue. Turning to internal taxes, in 1683, the year after Penn founded his “holy experiment,” the Assembly approved a direct tax, half on polls and half on land, assigned as quotas by county and collected by the townships, with nonresidents to pay 50 percent more in proportion than residents. For example, in Chester County in October 1685 the tax was set at 2s. 6d. per hundred acres taken up and surveyed, with non-residents charged 3s. 9d. The poll tax was set at 2s. 6d. on all male citizens between sixteen and sixty.17 The effective rate was considerably lower since assessments of real estate holdings recorded in Chester and other counties were well short of the known value of residents’ holdings.18 Other revenue measures included a tax of 12d. per gallon on all strong spirits and 2d. on beer and cider, which was extended for several years. A small levy was imposed on shipowners to provide buoys in the river. Pennsylvania briefly became a royal colony under the commission of Governor Fletcher of New York between October 1692 and August 1693, when it was restored to Penn. Responding to English pressure to contribute to the confl ict with France during Fletcher’s brief regime, the legislature approved for one year a tax of 1d./ on all real and personal property, exempting the proprietor, the deputy governor (Fletcher’s deputy, William Markham), parents with many children, and the indigent with property 16 Taxation in Delaware was identical with that of Pennsylvania during the period of legislative union between 1682 and 1704, after which the two jurisdictions enacted separate taxes. For this period, see M. M. Daugherty, Early Colonial Taxation in Delaware (Wilmington: Delaware Tercentenary Commission, 1938), 21–41. 17 William R. Shepherd, History of Proprietary Government in Pennsylvania, Studies in History, Economics, and Public Law, vol. 6 (New York: Columbia University, 1896), 436. 18 Mary M. Schweitzer, Custom and Contract: Household, Government, and the Economy in Colonial Pennsylvania (New York: Columbia University Press, 1987), 84–85.

[ 408 ]

Taxation of the Middle Colonies, 1688–1714 tabl e . Pennsylvania Intercolonial Duty on Tobacco Exports, 1704/05–1711/12 (£.s.d. Sterling) Fiscal Year

Revenue

1704–05 1705–06 1706–07 1707–08 1708–09 1709–10 1710–11 1711–12

825.18.1 973.13.10 398.11.6 615.0.0 118.14.4 214.6.2 95.11.4 209.4.4

Source: Mary Alice Hanna, Trade of the Delaware District before the Revolution (Northampton, MA: Department of History of Smith College, 1917), 249n35. The figures are from the customshouse papers of Philadelphia.

valued less than 30. Freeman out of servitude more than six months, not rated for the poll tax or worth less than 100, were required to pay a poll of 6s. The act also authorized county taxes for the poor, building and repairing of prisons, paying the salary of assembly members, wolves’ bounties, judicial expenses, and other necessary charges, again exempting the proprietor and deputy governor. County courts were assigned the task of estimating expenses and levying any needed sums, using the rate of assessment specified in the provincial land tax.19 On May 23, 1694, Fletcher appointed a committee to examine the assessment and collection of taxes. It reported widespread undervaluation of property and shortfall in collection. The six counties of Pennsylvania and Delaware were assessed taxes of 760 16s. 2d., of which Philadelphia was apportioned 314 11s. 11d.20 The receiver-general only collected 406 9s. 4d, leaving arrears of 354 6s. 10d., a staggering 46.6 percent of assessed taxes. In 1694 the Assembly renewed the 1d./ levy on property, of which the fi rst 19 In October 1695, the grand jury of Chester County made an assessment of 1d./ and 3s. per poll. Land under cultivation was rated at 1 per acre, uncultivated land at 10 per hundred acres, with woodlands at 5 per hundred acres. Assessments were also imposed on horses, cattle, sheep, Negro slaves, mills, and handicrafts. Shepherd, Proprietary Government in Pennsylvania, 437–39. 20 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, April 25, 1694. The house also referred to itself as the Assembly. The two names are interchangeable.

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400 collected was to pay Deputy Governor Markham and Speaker David Lloyd for their ser vices, leaving little money for any other public purpose. With the restoration of the colony to Penn, Markham began to govern in accordance with Penn’s former charter, with the Provincial Council elected by the people instead of appointed by the governor. The revenue bill approved in 1695, 1d./ plus a poll tax of 6s., was tied to further political reform, which reduced representation by half in the Council and the Assembly, gave Quakers greater representation, and gave the Assembly the right to initiate legislation. The levy was to pay 300 to Markham, 250 for general support of the government, with any surplus to redeem the debts of the province. The property levy was reenacted in 1696.21 Pennsylvania and Delaware failed to resolve the problems of valuation and collection. Assessments were low in relation to property values and both colonies were plagued with tax arrears. For example, in New Castle, a hundred and fifteen people were assessed a total of 50 12s. 8d., an average of 8s. 9d. Only nine persons were assessed more than one pound. Another investigation by the Assembly concluded that collection was lax. 22 Efforts to collect import and export duties also met with little success. A bill to levy a tax of 4d./ and 24s. per poll was defeated in the house on June 7, 1700. On November 22, 1700, the Assembly approved a tax of 2,000, 1d./ provincial tax, an additional 1d./ county tax, and a liquor tax, allocated to the counties for collection. 23 On January 31, 1711, it voted a tax of 2d./ and 8s. per poll, duties of 40s. a head on Negroes, 4d./gallon on rum and wines, 3s./barrel on cider, and 9d./ton on vessels entering the ports of the province. A higher fee of 2s./ton was voted down.24 On December 6, 1711, a levy to raise 2,000 consisting of 5 1 ⁄2d./ and 20s. per poll was signed into law. 25 As in rival colonies, the Assembly gave preference to locally owned shipping in the form of lower duties. Taxes were chronically in arrears. 26 The Assembly periodically enacted legislation to call in arrears. In 1711, for example, county commissioners, a

21

The session of 1696 also imposed a fine of 12d. on persons smoking tobacco in the streets, the proceeds allocated for the purchase of fi refighting equipment. Daugherty, Early Colonial Taxation in Delaware, 36. 22 Daugherty, Early Colonial Taxation in Delaware, 37. 23 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, June 7, 1700, and November 22, 1700. 24 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, January 31, 1711, and February 17, 1711. 25 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, December 6, 1711. 26 Joseph E. Illick, Colonial Pennsylvania: A History (New York: Charles Scribner’s Sons, 1976), 83, 111–12; Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, February 17, 1711.

[ 410 ]

Taxation of the Middle Colonies, 1688–1714

post unique to Pennsylvania, were appointed to collect taxes heavily in arrears. 27 Payments approved by the Assembly were also frequently in arrears, with instructions given to the provincial treasurer to clear the colony’s debts when he received the arrears of former taxes. Indirect taxes gradually became the principal source of revenue in the colony. The legislative record reveals a levy on wine, rum, and beer, approved in October 1701. On June 20, 1705, to raise 1,200, the following rates were stipulated: 4 per pipe on all wines save those coming directly from their place of growth, which were charged 30s./pipe; 20s./pipe retail excise; 9d./gallon duty on rum, spirits, and brandy; 10s./barrel on cider; and a variety of rates on imported horses, cattle, sheep, swine, beef, pork, bacon, mutton, lamb, butter, and cheese. On reconsideration of the rates on November 1, 1705, the 30s. duty on wine was raised to 40s. and the 20s. retail excise to 50s., along with increases on other items. To the list of dutiable items was added 40s. per head on Negroes. 28 During the last three years of Queen Anne’s reign, the provincial government had little success collecting property or poll taxes. Reliance shifted entirely to the few indirect taxes that were on the books. The means chosen to raise 500 in 1713 included excises of 4d./gallon on alcoholic beverages sold in public houses in quantities under a gallon, 12d./gallon on beer, ale, and cider sold in public houses, and duty of 3d. per pound of weight on imported hops, save from Jersey and Delaware, to last for one year from March 10, 1713.29 Quitrents never provided any significant revenue during 1688– 1714, with arrears permitted to run for years. Pennsylvania developed a reputation as a low-tax colony, expressed in letters written by settlers to family and friends in Europe. Penn considered low taxes an important factor for his colony’s population and economic growth. Local politicians came to regard the low level of taxation in Pennsylvania as a “civil right.”

Taxation in Delaware, 1688–1714

I

n 1 7 05 , the Assembly levied 1d./ on property, projected to yield 200. This tax, the first that the colonists were obliged to pay since 1701, was the principal source of revenue until 1727. Counties levied taxes if they saw fit.30 27

Illick, Colonial Pennsylvania, 104. Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, October 17, 1701, June 20, 1705, and November 1, 1705. 29 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, February 13, 1713. 30 Daugherty, Early Colonial Taxation in Delaware, 43. 28

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In the fall of 1706, the Assembly decided to construct a fort at New Castle for protection of the river, financed with a tax of one-fourth of a pound of powder per ton of locally owned vessels and one-half of a pound on all others, except ships of war, on all vessels trading along the river. Governor Cornbury of New York and New Jersey protested the attempt to tax his colony’s vessels on the reasoning that it interfered with trade between them and Pennsylvania. His protest was reinforced with a petition signed by more than two hundred Pennsylvanians who insisted that Delaware could only control vessels bound for ports in the lower counties. Attempts to collect powder money were abandoned.31

Taxation in New Jersey, 1688–1714

I

n 1 69 2 the legislature of West New Jersey imposed a poll tax of 2s. 6d. on all persons aged sixteen and over. In 1693 it replaced the poll tax with direct taxes on real and personal property, 1d. per acre on improved land, 6s. per hundred acres on unimproved land, 6d. per head of cattle and sheep, and 12d. on horses. In 1696 a tax of 2s. 6d. was imposed on all Negro slaves ten years and older. In 1697, all rates on land, slaves, and livestock were cut in half. The act was projected to raise 200 New Jersey currency to be paid to the departing governor as a token of the colony’s esteem.32 Records from April 1698 to December 1699 are scanty; the last minutes are those of the session of November 1697. The legislature reconvened in regular session of December 20, 1699, with the return of Governor Andrew Hamilton, focusing on land grants and the terms of the colony’s surrender by the proprietors to the Crown.33 Seven legislative sessions were held in East New Jersey between 1692 and 1702. That of 1692 approved a revenue bill of 400, consisting of a poll tax of 4s. on all householders, 2s. on all non-householders, and 1s. on all females, with any balance to be collected from a 1d./ levy on the value of land and livestock. Improved land was valued at 10 per hundred acres and unimproved land at 5. No tax was levied on farm produce. 34 The 1692 act also placed excises of 4s. per barrel of beer and cider and 12d. per gallon on wine, brandy, rum, and other spirits. Excises were repealed in 1693. 35 31

John A. Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978),

125–26. 32 John E. Pomfret, The Province of West New Jersey, 1609–1702: A History of the Origins of an American Colony (Princeton: Princeton University Press, 1956), 182. 33 The Votes and Proceedings of the General Assembly of the Province of New Jersey do not include the accounts of the colony’s treasurers or any reports of an audit committee of the General Assembly during 1688–1714. 34 John E. Pomfret, The Province of East New Jersey, 1609–1702: The Rebellious Proprietary (Princeton: Princeton University Press, 1962), 282. 35 Pomfret, East New Jersey, 283.

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Taxation of the Middle Colonies, 1688–1714

Legislation in 1694 exempted sheep from taxation to encourage their breeding. An act of 1695 levied 150, with the twelve townships taxed according to the rate laid down in 1694 for reimbursing the governor’s expenses. Townships were directed to deliver their receipts to the governor. 36 No funds were appropriated in 1696 on the contention that the people were too poor to remit the requested sum of 200. Governor Hamilton dissolved the legislature. The session of 1698 approved 675 to litigate the colony’s right to maintain a free port at Perth Amboy. The poll was set at 6s. on males aged sixteen and older. Improved lands were charged 15 per hundred acres, with unimproved at 7 10s. Cows, oxen, steers, horses, mares, and Negro slaves were evaluated. A small tax was placed on boats and sloops, on saw, grist, and fulling mills, on retailers, and on Indian traders. 37 The two Jerseys were reunited under royal rule on April 15, 1702. The reunited colony’s fi rst legislative session of 1703 offered to raise 1,000 to support the colonial government and 300 for the representatives’ fees and incidental charges. Governor Cornbury (1703–8, of both New York and New Jersey) rejected the offer as too small and prorogued the legislature. In 1704 a new session of the legislature offered 1,500 for one year, and 1,000 for each of the next two, again rejected by Cornbury. He succeeded in a second session of 1704 in securing supplies of 2,000 for each of the next two years, with both years’ assessments to be paid simultaneously in gold or silver. The appropriation was to pay the salary of eleven officials, 650 for Cornbury himself and 180 for his house rent. The levy subjected unimproved lands to taxation for the first time, in part as a means of collecting revenue from the proprietors’ speculative holdings. The bill was disallowed by the English government on the grounds that the sum was too large, the salaries too high, especially Cornbury’s, and that 1,500 would have been sufficient. The disallowance came too late to reduce the sum for the first year. Cornbury pledged to accept a reduction in his salary and abide by the lower level of taxation in future years, but the representatives never granted him another penny for the duration of his reign until his recall in late 1708. 38 John Lovelace (1708–9) replaced Cornbury as governor of New York and New Jersey in 1708. The Assembly approved 1,600, of which 800 was

36

Pomfret, East New Jersey, 291–93. Pomfret, East New Jersey, 319. 38 Edwin P. Tanner, “The Province of New Jersey, 1664–1738” (Ph.D. thesis, Columbia University, 1908), 502–4, and Thomas L. Purvis, Proprietors, Patronage, and Paper Money: Legislative Politics in New Jersey, 1703–1776 (New Brunswick, NJ, and London: Rutgers University Press, 1986), 80. The denial of revenue to Cornbury for the balance of his tenure was such an extreme course of action that it occurred only three other times in all of Anglo-America during the colonial period. Purvis, Proprietors, Patronage, and Paper Money, 85. 37

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to be paid to Lovelace, but only for one year. The untimely death of Lovelace, replaced by Richard Ingoldsby (1709–10), gave Ingoldsby 600 of the 800 approved for Lovelace. Lovelace’s wife secured a letter from Queen Anne that the full 800 be paid to her, but the request was rejected by the colony’s Council and never paid. The arrival of Governor Robert Hunter in 1710 put the colony’s finances on a regular basis. His fi rst meeting with the Assembly that year secured support for the next two years. By resolution, it stipulated the amount of salary given to each officer, beginning with 500 for the governor and 100 house money. Ten other officials were given a combined 334, and each assemblyman was to receive 5s. a day during sessions, for which 300 was included in the act. Members of the Council were not paid. In 1713 the Assembly again granted support for two years, with roughly similar salaries, but this time including 6s. a day for council members in session. 39 The session of 1713 laid a duty of 10 on the importation of Negro slaves. Governor Hunter wrote the Board of Trade that the slave duty was “calculated to Encourage the Importation of white Servants for the better Peopeling that Country.”40 The accounts of Thomas Gordon, the receiver-general of New Jersey, from June 23, 1710, to June 23, 1712, show appropriations of 2,591 12s. 8d. Proclamation Money. Of this 1,888 was for salaries of government officials and 103 12s. 8d. was for the charges and expenses of assessing and collecting taxes. In his accounts Gordon stated that arrears in unpaid taxes stood at 772 18s. 10d., but that he had been able to meet expenses equivalent to appropriations out of bills of credit in his possession.41 Annual appropriations in the neighborhood of 1,500, consisting of poll and property taxes, amounted to a per capita levy of about 2s. during the years supplies were voted. Moreover, that rate assumes full compliance with legislation. Furthermore, no taxes were levied between 1705 and 1708 after the Crown disallowed the revenue measure of 1704. New Jersey deserved its appellation of tax haven.

Summary

N

e w yor k , a center of trade and commerce, was subject to indirect taxes, which supplied three-fifths of provincial revenue between 1688 and 1714. Direct taxes were voted to underwrite military expenditures during the years of war with France. The annual average over the period 39

Tanner, “Province of New Jersey,” 505–7. Cited in Du Bois, African Slave-Trade, 24–25. 41 William A. Whitehead, ed., Documents Relating to the Colonial History of the State of New Jersey, vol. 4, 1709–1720 (Newark, NJ: Daily Advertiser Printing House, 1882), 185. 40

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Taxation of the Middle Colonies, 1688–1714

amounts to about 7 1 ⁄2s. New York currency (about 5s. sterling). Residents of Pennsylvania, Delaware, and New Jersey bore much smaller burdens, amounting to no more than a few shillings a head. To make matters worse for the executive administrations of all four colonies, arrears plagued the collection of all direct taxes, and indirect taxes were reduced by some unknown degree due to smuggling and bribery. Pennsylvania acquired the appellation “low tax colony.” For their part, Delaware and New Jersey were more akin to “no tax colony,” the modern-day equivalent of tax havens. Serving as governor or deputy governor in the middle colonies was no easy assignment.

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c h ap t e r 15
Taxation of the Southern Plantation Colonies, 1688–1714

T

h e i mpac t of the Glorious Revolution differed among the southern plantation colonies. Virginia remained on a stable path, Lord Baltimore’s proprietary of Maryland was seized by the Crown, and the two Carolinas remained unsettled until their surrender to the Crown in 1729. The power of Governor Philip Ludwell of Carolina to appoint a deputy governor for North Carolina in 1691 is considered the beginning of the separation of North and South Carolina. The lengthy distance that representatives of North Carolina would have to travel to attend a single Carolina legislature in Charles Town (hereafter Charleston) required separate assembles for each jurisdiction. To separate assemblies were added the appointment of separate governors, approved by the proprietors in 1712.1

The Development of the Southern Plantation Colonies

T

h e d om i n a n t demographic factor in the southern plantation colonies was the growing reliance on Negro slaves to cultivate tobacco in Virginia and Maryland and rice in South Carolina. Between 1688 and 1714, their population nearly doubled from 84,482 to 163,000. The Negro population grew from about 13 percent of the total, a fraction comparable to that of New York, to 26 percent, or double its share.2 Only North Carolina remained relatively free of slave labor. Slaves increasingly replaced indentured servants. They were more durable and less costly than having to replace a stream of indentured servants every four years and train them to work under difficult conditions. Indentured servants could more easily escape from their masters and seek refuge in western lands where recovery was more difficult. Despite pleas to diversify, Virginia and Maryland remained focused on tobacco, with South Carolina beginning to prosper from rice and naval 1

Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 68. 2 In the 1690s New York City had as many slaves per capita as did any part of Virginia, a condition also evident in certain New England port towns. Clarence L. Ver Steeg, The Formative Years, 1607–1763 (New York: Hill and Wang, 1964), 190.

[ 416 ]

Taxation of the Southern Plantation Colonies, 1688–1714

stores. These conditions determined money and taxes in the two tobacco colonies, with North Carolina remaining a colony of small yeoman farmers. Virginia, Maryland, and tobacco remained synonymous during the reigns of William and Mary and Anne. Between 1688 and 1714 neither economy underwent any major change or new phase in its development. Tobacco cultivation expanded into the hinterlands and continued to provide the colonies with the bulk of their income. 3 Prosperity was disrupted by French privateers blocking shipping into colonial waters during King William’s War, which resulted in considerable spoilage of tobacco sitting on docks. Th e Treaty of Ryswick in 1697 brought five years of peace and an economic boom. Queen Anne’s War again disrupted the tobacco trade. Freight rates doubled, which eroded most of the profits from shipments of tobacco to En gland and also raised the prices of imports vital to commercial agriculture. Attempts at agricultural diversification or manufacturing met with little success.4 North Carolina gradually expanded outside the original Albemarle settlement, fueled by the arrival of French Huguenots, Swiss, and German colonists. Their movement into the backcountry provoked fear among the Indians regarding the security of their lands, enslavement of their women and children, and encroachment on their hunting grounds, as well as anger over the dishonest practices of white traders. The settlement of New Bern in 1710 with the commencement of farming near an Indian village prompted an uprising by Tuscarora Indians and four other tribes in September 1711. The massacre of 130–140 settlers, largely Swiss and German, was followed by a series of mutual reprisals. The colonists defeated the Indians in a final battle of March 25, 1713, but the economy lay in ruins and the colonial government was deep in debt. The one benefit to the colonists was that the defeat of the Tuscarora opened up vast new tracts of land for settlement that would permit future growth.5 The key issues that had forestalled South Carolina’s prospects were largely resolved with the appointment of John Archdale, himself a proprietor, as 3 The economic development of Virginia during 1689–1715 is discussed in John M. Hemphill II, Virginia and the English Commercial System, 1689–1733: Studies in the Development and Fluctuations of a Colonial Economy under Imperial Control (New York and London: Garland, 1985), 5–51. That of Maryland is described in Margaret Shove Morriss, Colonial Trade of Maryland, 1689–1715, Johns Hopkins University Studies in Historical and Political Science, ser. 32, no. 3 (Baltimore: Johns Hopkins Press, 1914). The tobacco trade in Maryland is discussed in Morriss on pages 85–107, and the importation of indentured servants and slaves on pages 76–81. 4 Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 102–14. 5 Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 56–80.

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governor in 1695.6 He immediately addressed the controversial issues of land policy, regulation of the Indian trade, and the status of Huguenot settlers. The legislature approved his land proposals, known as Archdale’s laws, which resolved the controversies over the sale, tenure, and quitrents on land. The status of Huguenots was settled when Parliament passed a naturalization law for all Huguenots in British domains in 1708. Archdale was less successful in regulating relations between whites and Indians, failing to suppress abuses of the trade in furs and Indian slaves. The growth of the Negro slave trade brought repeated efforts to regulate slavery and encourage white immigration, but economic realities prevailed. The local use of Indian slaves and indentured servants declined. The shift to rice cultivation eliminated the use of white field labor in favor of Negroes. The Indian trade for deerskins remained the colony’s most profitable commercial activity between 1690 and 1705. Thereafter rice, which was added to the list of enumerated commodities to be shipped directly to England, drove the colony’s expansion. Parliament granted bounties on tar, pitch, turpentine, and rosin arriving in England after January 1, 1706.7 Lumber and lumber products became part of the trade in naval stores with Britain. By 1714 the freemen in South Carolina were enjoying good times.

Money

T

obacco r emained the principle currency in Virginia and Maryland during 1688–1714. Steps were taken to improve its use in Virginia in 1713 with an act that established forty public warehouses. Planters were instructed to bring their tobacco to one of them where it would be inspected, tested, weighed, and stored. They were given certificates called tobacco notes, stating the amount and quality of tobacco deposited in their names, which could be used in all tobacco payments in place of physical delivery of tobacco. Any holder of a note had the right to remove and sell the tobacco specified in it.8 This attempt at stricter regulation of tobacco was short-lived. Large planters opposed the measure on the grounds that it was costly to transport tobacco to warehouses and pay inspection fees, enabling Maryland tobacco to undersell 6 The economic development of South Carolina during 1689–1714 is discussed in Converse D. Clowse, Economic Beginnings in Colonial South Carolina, 1670–1730 (Columbia: University of South Carolina Press, 1971), 95–183. 7 Parliament was prompted to act when the Stockholm Tar Company, following Sweden’s own commercial mercantilism, commenced a policy in 1703 of refusing to ship tar to England unless the goods were delivered in Swedish vessels. 8 Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (1934; repr., New York: A. M. Kelley, 1964), 253.

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Taxation of the Southern Plantation Colonies, 1688–1714

that of Virginia by 10 percent. British merchants complained that enforcement of the act cost hundreds of pounds in lost time and additional seamen’s wages. Complaints were lodged that inspectors mixed the hogsheads, which vitiated the certification of quality. In response to claims that the act caused a decline in tobacco exports with a fall of one-eighth in import duties, the British government disallowed the act by an order-in-council in 1717.9 The value of Virginia currency in relation to sterling remained stable during 1688–1714.10 The General Assembly rated a piece of eight at 5s. Between 1655 and 1710, Virginia currency had a par of exchange on London of 115 to 100 sterling. The General Assembly passed a new currency act in 1708, which the Board of Trade and the Privy Council allowed to stand in 1710, confirming the existing situation. In Maryland the piece of eight circulated at the sterling standard of 54d. until 1708.11 In that year the General Assembly revalued it to Queen Anne’s proclamation rate of 72d., one-third above sterling. From the spring of 1709 through the fall of 1753, the official rate of exchange on London was 133.33 to 100 sterling, with fluctuations reflecting market conditions. South Carolina supplemented its traditional forms of currency—corn, peas, pork, beef, tobacco, tar, specie—with bills of credit in 1703.12 The first issue of 1703 for 6,000 South Carolina currency was to pay the cost of an expedition to St. Augustine against the Spanish in the early phase of Queen Anne’s War; subsequent issues provided for defense and Indian wars. The first issue paid 12 percent interest computed from the date the bills were put in circulation, but this benefit was abandoned after 1707 as it led to hoarding and a heavy cost on the colonial Treasury. The bills were to be redeemed by various taxes within two years, but as money was received in the Treasury, the legislature spent it for other purposes. Apparently none of the bills was redeemed, remaining in circulation until 1707. On July 5, 1707, the legislature voted to issue 8,000 to pay for fortifications in Charleston and retire the old bills of 1703 still outstanding. Redemption was earmarked from duties on skins, furs, Negroes, and other goods for four years. Subsequent issues of 3,000 and 5,000 in 1708 and 3,000 in 1711 were approved for defense against Indians, and duties to redeem them were 9 Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore and London: Johns Hopkins University Press and the Maryland State Archives, 1984), 134–37. First published by the Mariners’ Museum, Newport News, VA, in 1953. 10 John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 205–6, 209. 11 McCusker, Money and Exchange, 189–90, 197. 12 Clowse, Colonial South Carolina, 147–56; Maurice A. Crouse, The Public Treasury of Colonial South Carolina (Columbia: University of South Carolina Press, 1977), 27–29; and Nettels, Money Supply, 259–77.

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continued until July 1716. The bills of 1708 were not declared legal tender, but were printed in relatively small denominations of 1 and 5 to facilitate commerce. The 1711 issue consisted of 5s. and 10s. notes, which were declared “tender in law” for debts of 40s. and less. Bills were not redeemed on schedule, which meant that each new issue increased the outstanding stock, making their scheduled retirement less likely. To assist North Carolina in its war with the Tuscarora Indians in 1711, so-called Tuscarora bills amounting to 4,000 were issued in November 1711. By the beginning of 1712, 20,000 in bills was issued. If the legislature had followed its enactments to the letter, duties would have retired 8,000 of the earlier bills, leaving a total of 12,000 in circulation. A major development occurred in 1712. A new act, the Bank Act of 1712, created 52,000 in new bills, known as Bank Bills, of which 32,000 was to be lent on private security, 4,000 to be spent by the government for general purposes, and the remaining 16,000 to draw in old bills apart from the Tuscarora issue. The new feature in the act, adopted later in other colonies, was the creation of a government loan office, also called a land bank. Anyone wishing to borrow some of the 32,000 could contract to borrow at least 100 but not more than 300 from the colonial government on collateral of bonds or mortgages on land and slaves for double the amount borrowed. Bills were to be retired in twelve years with the borrowers to repay one-twelfth of the principal each year, plus 121 ⁄2 percent interest on the outstanding balance. The paper money enabled the government to meet its financial needs, but it also provided a new, politically attractive, tax-free source of funds in the form of interest payments on the loans. The bills were negotiable and made legal tender for all payments including, for the first time, private debts. Despite the fact that mortgages of land and slaves were worth double the 32,000 of the 1712 Bank Act allocated for loans, the total volume of bills was large relative to the colony’s economy and tax base. South Carolina’s lawful money remained stable at 8s. an ounce of silver in 1710, with the par rate of exchange on London of 150 to 100 sterling. The increasing stock of bills due to the issue of 1712 depreciated the currency to a par rate of 200 in 1714 and 10s. 2d. an ounce of silver in 1715. To pay the expenses of the Tuscarora War, North Carolina issued 8,000 in interest-bearing bills of credit in 1712 and 4,000 in 1713. Interest was discontinued in 1715. Security for the act consisted of a variety of taxes to redeem the notes.13 13 The bills remained current until 1715, when a new act approved 24,000. The issue was backed by annual taxes of 2,000 on polls and land to be continued until all the bills were retired. Half of the 24,000 was to redeem earlier emissions. In the 1715 act the legislature rated silver at 7s. 6d. an ounce, declaring that 150 North Carolina currency was worth 100 sterling. Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997), 310–12, and McCusker, Money and Exchange, 215, 217.

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Taxation of the Southern Plantation Colonies, 1688–1714

Taxation in Virginia, 1688–1714

T

h e s y st e m of taxation in Virginia in 1688 remained largely unchanged up to the Revolution. It consisted of the two imperial taxes of English duty on tobacco and royal quitrents, and domestic taxes of export duty on tobacco, poll tax, import duties, and tonnage.

Imperial Taxes: English Import Duty and Quitrents

T

he pr incipal external tax affecting Virginia was England’s import duty on tobacco. It had been recently raised from 2d. to 5d. per pound in 1685. To generate additional revenue, the duty was increased to 61 ⁄3d. in 1703. The tax, several-fold the purchase price of tobacco of about 1d. a pound in the colonies, contributed 130,000 to the English Treasury in 1689, reaching 330,000 at the time of the Revolution.14 About two-thirds of the tobacco imported into England was reexported in 1700, rising to 75–80 percent in 1750, and 90 percent by 1775. All but 1 ⁄2d. per pound of the duty was rebated on reexportation after 1660 and the entire duty was refunded after 1723.15 Duty fell only on the minor share consumed in Great Britain. The second external tax was royal quitrents (see table 15.1).16 Although the best Tidewater lands had been taken up by 1697, planters moved into the interior to expand tobacco cultivation. More than 150,000 acres of new land were patented between October 1697 and May 1700; by 1702, planters held 2,164,232 acres of land subject to quitrents, an increase of more than a million acres over five years.17 In 1714 total acreage paying quitrents numbered 1,145,925, but this jumped to 2,515,870 in 1715 with a sharp rise in the number of acres paying current rent to 1,808,939 and the inclusion of 706,930 in arrears.18 14

Middleton, Tobacco Coast, 123–25. Middleton, Tobacco Coast, 124. 16 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 228–40, Percy Scott Flippin, The Royal Government in Virginia, 1624–1775, Studies in History, Economics, and Public Law, vol. 84, no. 1 (New York: Columbia University, 1919), 233–37; William Z. Ripley, The Financial History of Virginia, 1609–1776, Studies in History, Economics, and Public Law (New York: Columbia College, 1893), 51–55; and “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfi lm, University of Texas, Austin, 623–40. 17 Hemphill, Virginia and the English Commercial System, 17. 18 Leonidas Dodson, Alexander Spotswood: Governor of Colonial Virginia, 1710–1722 (Philadelphia: University of Pennsylvania Press, and London: Humphrey Milford and Oxford University Press, 1932), appendix 3, 309. In August 1713 Spotswood issued a proclamation requiring all who had surveyed land since the death of Governor Edward Nott to secure patents by the following April. Within a month over a hundred patents for new land had been issued while 15

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chap t er 15 tabl e . Virginia Quitrents, 1690–1715 (£.s.d. Sterling) Year

Bond Collected

1690 1695 1700 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710 1711 1713 1714 1715

747.15.8 975.19.10 1,750.10.2

1,843.0.0 1,841.1.634⁄

Blathwayt Collected

Blathwayt Discharged

Blathwayt Balance

1,719.8.314⁄ 1,795.19.8 1,958.8.5 1,855.13.534⁄ 1,257.11.514⁄ 1,957.3.3 1,024.5.6 1,852.11.83⁄4

386.5.134⁄ 3,783.5.312⁄ 409.18.212⁄ 377.3.414⁄ 6,428.19.034⁄ 508.16.634⁄ 4,341.15.834⁄ 901.1.5

6,294.5.614⁄ 4,296.19.1034⁄ 5,745.10.114⁄ 7,222.0.234⁄ 2,060.12.434⁄ 3,508.19.1 191.8.1014⁄ 1,143.1.2

889.1.4 1,152.17.1

1,381.18.234⁄ 1,307.12.812⁄

433.0.1114⁄ 278.5.414⁄

1,852.13.834⁄

1,286.5.912⁄ 1,306.2.412⁄ 2,298.17.914⁄

Sources: The figures in column 2 are from Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 235. The figure in column 2 for 1703 is from Percy Scott Flippin, The Royal Government in Virginia, 1624–1775, Studies in History, Economics, and Public Law, vol. 84, no. 1 (New York: Columbia University, 1919), 233. The figures in column 2 for 1713 and 1714, and a higher 2,540 2s. 6 1 ⁄2 d. for 1715, are from Leonidas Dodson, Alexander Spotswood: Governor of Colonial Virginia, 1710–1722 (Philadelphia: University of Pennsylvania Press, and London: Humphrey Milford and Oxford University Press, 1932), appendix 3, 309. Dodson’s calculations include arrears of prior years received during the year in question. All other figures are from “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfi lm, University of Texas, Austin, 623–40. The figures I transcribed from Blathwayt’s accounts differ from those of Bond, who also cites Blathwayt as his source. I am unable to reconcile this difference.

The collection of quitrents tripled between 1690 and 1715. The balance left in Virginia was sums accumulated from previous years that were allocated for the use of the colonial government in that par ticular year. In the early years of William and Mary, a majority was left in or returned to the colony for salaries of officials and other extraordinary or occasional expenses. Between 1686 and 1692, 4,375 was collected in quitrents, of which 2,390, about 55 percent, was spent in Virginia.19 In 1691, the Crown granted the balance of quitrents on hand of 1,983 14s. 10d. to found the College of those who had held escheated land for many years applied for grants. Failure to secure patents would mean withdrawal of rights (138). 19 Bond, Quit-Rent System in the American Colonies, 234.

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Taxation of the Southern Plantation Colonies, 1688–1714

William and Mary, and set aside the entire quitrent revenue for the next three years to support the Virginia clergy and give the commissary a salary of 100 annually. During 1691–93, the Crown directed that 702 15s. 9d. be sent to New York to aid in its defense. 20 In 1698 the Crown approved the receiver-general’s request to grant 2,955 for provincial general expenses. 21 Collection of quitrents for the years 1701–11 inclusive, excluding 1709 for which no entries appear in Blathwayt’s accounts, totaled 15,464, an annual average of 1,546. Of this amount, 5,745 10s. 1 1 ⁄4d was remitted to London in 1705 and another 2,060 12s. 43 ⁄4d. in 1707, a total of 7,806 2s. 6d., just over half of total receipts during the years in question. Another 917 7s. 3d. was used to support an expedition to Canada in 1711. Other locally disbursed funds were used to compensate the governor, attorney general, sheriff, auditor and receiver-general (the colonial treasurer), and commissary. The remaining foreign tax was the 1673 plantation duty of 1d. per pound of tobacco on intercolonial shipments. It generated little revenue. In 1692 the Crown directed its annual proceeds of about 200 a year be allocated for the support of the College of William and Mary.

Domestic Taxes: Indirect Taxes

T

he main sources of provincial and local taxes in Virginia were indirect taxes on exports and imports and the direct poll tax. The 2s. hogshead export duty on tobacco remained in force until the Revolution. Annual exports of tobacco averaged about thirty thousand hogsheads between 1671 and 1701. In 1688, the last year of James II, the duty yielded 3,731. In 1696 and 1697 it yielded about 2,500 and 3,000, respectively, from which shipmasters received 10 percent, the collector 10 percent, and the auditor 7 3 ⁄4 percent. 22 Goods shipped in Virginia vessels were exempted from duty. 23

20

Bond, Quit-Rent System in the American Colonies, 238. Ripley, Financial History of Virginia, 54. 22 Ripley, Financial History of Virginia, 62–63. The export duty was made permanent by Governor Culpeper in 1680. No longer being accounted to the General Assembly, it was considered royal revenue, appropriated for salaries of the governor and other officials and the usual contingent charges of government. It became the principal fund on which the governor depended. Virginia was one of the few colonies in which royal governors were free from the claims of the colonial legislature in return for their salary. Th is factor, along with the handsome revenue garnered from English import duty on tobacco, made Virginia the Crown’s favorite continental American colony. 23 A hogshead contained about five hundred pounds of tobacco. At a penny a pound, the purchase price of a hogshead in Virginia amounted to about 500d., just over 2. The 2s. export duty amounted to about 5 percent of the value of a hogshead, thereby reducing the planter’s income in that proportion. Not all tobacco was exported as some was used for currency in the colony. 21

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Blathwayt’s accounts included the proceeds and disbursements of the 2s. hogshead duty from 1702 to April 25, 1712, which are reproduced in table 15.2. The accounts are irregular, sometimes one year in duration, on occasion more than half but less than a year, and at other times a half year. The widely varying volume of receipts illustrates the ups and downs of the tobacco trade. Typical disbursements of hogshead duty included the governor’s salary of 2,000, a housing allowance of 150, 350 for members of the Council, 100 for Blathwayt, 100 for the solicitor, and funds for other salaries and incidentals. The low disbursements between August 30, 1706, and October 25, 1707, were due to the absence of a resident governor. The high disbursements over the next two years represented payment of two years’ salary to the president of the Council serving as acting governor. During 1702–12, the hogshead account always held a substantial balance of revenue, falling below a thousand pounds on only two occasions. It most frequently ranged between one and two thousand pounds, but exceeded three thousand pounds in seven of the reporting periods, three times surpassing four thousand. Import duties on liquor were another source of colonial revenue, yielding about 600 a year between 1682 and 1688. Liquor duties were extended for three years until 1691, charging 3d. a gallon on wine, brandy, rum, and other imported spirits to build a new courthouse for the sitting of the General Assembly. In 1691 the rates were changed to 4d. a gallon on liquor imported in foreign-built ships, 2d. a gallon on ships owned in Virginia in which the importer had an interest, with Virginia-built vessels exempt. In 1695, the English government required that all liquor imported directly from England, Wales, or the town of Berwick upon Tweed be exempted. The rate was made uniform at 4d. a gallon. In 1699 ale and beer were taxed for the first time at 1d. a gallon. 24 Annual revenue from duties on liquor (and slaves; see below) contributed about 600 to the provincial budget. An act of 1705, reenacted in 1710, raised rates to 6d. a gallon on rum, brandy, and spirits, except from the West Indies for which it was fi xed at 4d. Wine was taxed at 4d. a gallon, and cider, beer, and ale at 1d., with liquor from England free of duty. Virginia shipowners were allowed to import rum from the West Indies on their own account at half this duty. The exports of Great Britain were exempt. 25 Governor Spotswood reported in 1718 that duties on liquor and slaves had financed a house for the governor, assisted North Carolina in an Indian war, helped build a church, and left 17,872 still in the bank. 26 24

Ripley, Financial History of Virginia, 69–70. Dodson, Alexander Spotswood, 59–60. 26 Ripley, Financial History of Virginia, 70–71. Dodson writes that duties on liquors and slaves from 1710 to 1718 yielded 27,840 10s. 7d. By 1718 a large balance had piled up, prompting the legislature to discontinue the duty. Alexander Spotswood, 60n78. 25

[ 424 ]

Taxation of the Southern Plantation Colonies, 1688–1714 tabl e . Virginia Hogshead Receipts and Disbursements, 1702–1712 (£.s.d. Sterling) Year

Year ending July 1702 To April 25, 1703 To April 25, 1704 To October 25, 1704 To July 20, 1705 To October 25, 1705 To August 30, 1706 To April 25, 1707 To October 25, 1707 To October 25, 1708 To October 25, 1709 To October 25, 1710 To July 20, 1711 To April 25, 1712

Hogshead Receipts 1 4

4,961.13.4 ⁄ 1,263.0.514⁄ 2,910.7.3 3,662.8.5 2,619.10.614⁄ 642.11.9 4,620.12.212⁄ 921.4.1 1,722.16.1134⁄ 4,490.4.312⁄ 3,437.7.534⁄ 3,076.10.934⁄ 3,091.0.612⁄ 795.15.11

Disbursements

4,304.12.1014⁄ 3,421.0.514⁄ 3,770.11.1114⁄ 2,213.13.5 2,355.13.514⁄ 936.0.214⁄ 2,921.5.8 801.10.712⁄ 652.5.214⁄ 3,879.6.914⁄ 5,455.3.1 4,981.17.634⁄ 2,301.3.514⁄ 3,217.4.412⁄

Source: “The Accounts of Her Majesties Revenues in America as Brought in and Presented to the Honorable Commissioners of Accounts by William Blathwayt, Esquire, Surveyor and Auditor General Thereof,” microfi lm, University of Texas, Austin, 642–70.

As the seventeenth century came to a close, the system of indentured white labor was giving way to slavery. 27 The 1699 act mandated that importers pay 20s. a head per slave (changed to 5 percent ad valorem in 1732), and shipmasters, for a brief time, 6d. The act assessed importers 15s. a person on white servants not coming from England; after 1710 duties on servants are not mentioned in acts of the legislature. The measure was lucrative, which prompted its reenactment in 1705, along with duty of 6d. a poll upon all passengers in merchant vessels. Colonial governors were instructed to “give all due encouragement and invitation to merchants and others, . . . and in particular to the royal African company of England.”28 The number of slaves in Virginia doubled during the decade following the termination of the Royal African Company’s monopoly in 1698 as others were permitted to engage in the trade. The demand for slaves grew slowly. From the importation of two hundred fifty in a single vessel in 1700, selling at 28–35 a head, the number rose to six thousand in 1708, a year when war, 27 In 1699 the English Crown was the largest shareholder in the Royal African Company, and thus had a stake in the profits of the company. In this regard, the Crown was keen to avoid impediments to the slave trade and looked upon colonial slave duty as a potential loss of business. 28 Cited in W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1969), 4. First published in 1896 by Russell and Russell, Inc.

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low tobacco prices, and previous slave purchases had virtually wiped out the credit of Virginia planters. By then Negro slavery had largely replaced white indentured servitude in the cultivation of tobacco on large plantations. 29 Having grown dependent on slave labor, Virginians were becoming somewhat alarmed at the rate at which slaves were being imported. They sought to slow it in 1710 with a duty of 5 a head. Governor Spotswood was opposed to the measure but relented when the burgesses threatened the loss of the entire revenue bill. The act of 1710 was continued in 1714 and was allowed to expire in 1718. 30 Revenue from the 2s. hogshead duty, tonnage of 15d. per ton burden on ships loading or discharging cargo in Virginia, and the 6d. poll on passenger vessels supplied 3,036 10s. 103 ⁄4d. for the year ending October 1710.31 Revenues for the periods October 1710–June 1711 and July 1711–April 1712 came to 3,0443 5s. 9d. and 601 9s. 6d., respectively. For the next two years ending April 1713 and April 1714, they totaled 3,818 19s. 9d. and 3,0385 15s. 111 ⁄2d.32 In 1691, to support the College of William and Mary, the General Assembly approved export duty on hides and skins, levied at the rate of 1s. per raw hide, 2s. per tanned hide, buckskins 8d., doeskins 5d., 6d. a pound on wool, and 1d. per pound of iron. The levels were deemed too high and subsequently reduced to 3d. per raw hide and 6d. per side of leather, with fox, mink, raccoon, and other skins taxed from 3 ⁄4d. to 1d. 33

Domestic Taxes: Poll Tax

T

h e p ol l tax steadily diminished as a source of provincial revenue. It was set at 104 pounds of tobacco per poll in 1686; to 1691, 18 1 ⁄2 lbs.; to 1692, 171 ⁄2 lbs.; for 1692, 133 ⁄4 lbs.; to 1694, 21 lbs.; 1695, 223 ⁄4 lbs.; 1696, 16 lbs.; 1697, 16 lbs.; to 1699, 19 lbs.; to 1700, 9 lbs.; 1705, 3 1 ⁄4 lbs.; and 1710, 91 ⁄4 lbs.34 29 Hemphill, Virginia and the English Commercial System, 21–22. After 1710, most of the Negroes were imported by separate traders, not the Royal African Company. 30 Du Bois, African Slave-Trade, 12–13, and Dodson, Alexander Spotswood, 47. Dodson writes that between 1699 and 1708 over 6,600 slaves were imported, with some 15,500 brought into Virginia between 1710 and 1727. Hemphill writes that while the high duty of 5 was in effect from 1700 to 1718, just over 4,000 slaves were imported, whereas between 1718 and 1729, when no duties were collected, more than 11,000 slaves entered Virginia. Virginia and the English Commercial System, 59, 72. 31 All three duties were entered in the accounts under the category of the 2s. hogshead. Their sums were light compared to duty in England and thus not regarded as a serious impediment to trade. Dodson, Alexander Spotswood, 59. 32 Dodson, Alexander Spotswood, appendix 2, 307. 33 Ripley, Financial History of Virginia, 78–79. 34 Ripley, Financial History of Virginia, 32n3. The raw data are from volume 3 of William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619, 13 vols. (Richmond, VA: Samuel Pleasants, 1809–23).

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Taxation of the Southern Plantation Colonies, 1688–1714

The poll tax further diminished in importance after 1710. It was condemned by the burgesses “as grievious and burthensome.”35 Estimated revenue from the poll tax was put at 1,333 Virginia currency in 1697, falling by more than half to 625 in 1711. The export tax on tobacco supplied a much more robust 3,000 in 1700. A small sum was also derived from fees for new land grants. The colonial government charged 5s. for every fi fty acres of land granted and 2s. per acre of escheated land.

Local Taxes

L

o c al expenditur e s were generally met from a local poll tax rated by justices of the county courts. Similarly, church tithes were imposed on all residents of a parish. In 1696 a tax of sixteen thousand pounds of tobacco was fi xed for support of a minister, along with a house and land allocation of two hundred acres. 36 Tax evasion, fraud, and neglect were chronic. Large blocks of land were owned on which no quitrents were collected.37 The 2s. export duty on tobacco was widely evaded, and governors were constantly instructed to prevent fraud and abuse in collecting this revenue. Liquor and other goods were often smuggled into the colony to avoid duty. 38 The population of Virginia grew from 51,156 to 79,811 between 1688 and 1714, of which slaves numbered 22,234. The burden of English duty on Virginia tobacco was largely borne by English consumers, not Virginia producers. During Queen Anne’s reign, annual taxes collected in Virginia from quitrents, the 2s. hogshead duty, tonnage, poll tax, and other miscellaneous revenues ran in the neighborhood of 5,000–6,000, about 2s. for each white resident.

Taxation in Maryland, 1688–1714

T

h e imp o s i t ion of royal rule in Maryland in 1692 divided the colony’s revenue into funds belonging to Lord Baltimore, who was permitted to retain his traditional revenue, and funds accruing to the colonial 35

Ripley, Financial History of Virginia, 33. Ripley, Financial History of Virginia, 89. 37 Governor Spotswood (1610–22) acquired eighty-five thousand acres of Virginia land during his tenure, including a block of sixty thousand acres on the Virginia frontier, making himself a series of grants in collaboration with grants to members of his Council. His name is attached to Spotsylvania County. Walter Havighurst, Alexander Spotswood: Portrait of a Governor (New York: Holt, Rinehart and Winston, 1967), 95, and Leonard Woods Labaree, Conservatism in Early American History (New York: New York University Press, and London: Geoff rey Cumberlege and Oxford University Press, 1948), 9–10. 38 Flippin, Royal Government in Virginia, 240. 36

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government. Baltimore continued to receive quitrents, the proceeds of land sales, fines for alienation of land, port dues, and ferry licenses. Colonial revenue derived from the 2s. export duty on tobacco, other duties, poll tax, and county and church levies.

Indirect Taxes: Duties

D

ur i ng t h e early years of the colony, Lord Baltimore monopolized the fur trade. In 1650 the legislature opened the trade to the public. The act required each trader to obtain a license but granted one-tenth of his profits to the proprietor. Baltimore collected little under this system. In October 1695 a small export duty on fur replaced the license system, with double duty on aliens and those not trading directly with England. The law was later reenacted for an indefinite length of time, with the proceeds allocated for the free school at Annapolis. Annual fur exports to England amounted to about 650. The modest duty, averaging about 6 percent of export value, collected for the four years encompassing 1695 to 1698, was 154 4s. 93 ⁄4d., an annual average of about 38. 39 The relative profitability of tobacco discouraged the production of grain, livestock, and fruit for export. Between 1688 and 1714 the colony was devoted almost exclusively to raising tobacco, which served as both money and an economic staple. Only once during this period, in 1709, was there sufficient specie in the Treasury for annual disbursements to be made in coin.40 Annual exports of tobacco from Maryland during the years that royal governors were in the colony were about twenty-five thousand hogsheads or ten million pounds.41 The level remained relatively stable during 1702–14, with low prices discouraging increased production. Between 1697 and 1714 tobacco passed for money at 1d. per pound, although from 1704 it passed at the slightly higher rate of 10s. per hundred pounds (1.2d. per pound) for payment of public salaries. Since 1671 Lord Baltimore had been accepting tobacco for his quitrents at the inflated rate of 2d. per pound in return for the 1s. hogshead duty on tobacco exported from the province.42

39 Morriss, Colonial Trade of Maryland, 11–14. Duties were set at 3 ⁄4d. per skin of raccoon, 1 1 ⁄2d. on skins of wildcat, fox, mink, fisher, and wolf, 2d. on young bear, 3d. on otter, 4d. on beaver, deer, and muskrat per dozen, and 9d. on bear. 40 Morriss, Colonial Trade of Maryland, 29. 41 Morriss compiled the estimate from Maryland Naval Office lists, the inspector general’s account, and customshouse accounts (Colonial Trade of Maryland, 30–35). She states that illegal exports from Maryland were small and do not appreciably affect her computed estimates. 42 Morriss, Colonial Trade of Maryland, 39.

[ 428 ]

Taxation of the Southern Plantation Colonies, 1688–1714

English officials in Maryland were almost entirely supported from the hogshead duty, of which half was for the proprietor and half for support of the colonial government. The duty remained in place during 1689–1714. Baltimore continued to receive half.43 Of the remaining half, three-fourths were paid to the royal governor and one-fourth financed arms for the defense of the colony. Two other duties were collected during this period. The fi rst, levied in 1692 and reenacted for every governor during his term of office, was an additional 3d. per hogshead. A law enacted in May 1695, renewed in 1696, 1701, 1704, 1708, and 1714, imposed an additional 3d. hogshead duty for general support of the government. The three laws together imposed duty of 2s. 6d. per hogshead, of which 1s. 6d. supported the colonial administration of Maryland.44 Annual average exports of 25,320 hogsheads yielded about 1,266 from the 1s. duty for the support of the government. Adding in the two extra duties increased the amount available to the governor and his officials. Accounts of revenues in colonial America show receipts of 1,786 12s. 6d. in 1700, and 1,605 15s. 6d. in 1701. According to a report of the Committee of Accounts in Britain in 1711, annual receipts of governors averaged about 1,600. Apart from the tobacco duty, another modest source of colonial revenue was tonnage of 3d. on ships not belonging to Maryland residents.45 Including the 1s. hogshead duty accruing to Baltimore increased the export tax on tobacco to about 3,165 a year. The traffic in imported servants was regulated to restrict convicts and curtail the number of Catholics in the colony. England overruled Maryland laws banning convicts. In 1699 the colonial legislature imposed a heavy duty on Catholic servants, in addition to a previous act of 1696 levying duty on all servants for general revenue.46 A new governor, John Seymour, who took office in 1702, persuaded the legislature to impose an

43 After the Crown took control of the government of Maryland, the legislature continued to appropriate half the 2s. export duty on tobacco for Baltimore in return for payment of quitrents at the infl ated rate of 2d. per pound of tobacco. Baltimore received little profit from his quitrents at this rate. In 1699 he leased them to Richard Heath and James Bennett for eight years. The new lessees did not press their claims because the low price of tobacco made the quitrents barely worth the cost of collection. Until 1715, Baltimore’s receipt of quitrents took the form of a shilling per hogshead of tobacco. Bond, Quit-Rent System in the American Colonies, 180–81. 44 Morriss, Colonial Trade of Maryland, 47. 45 Morriss, Colonial Trade of Maryland, 48–49. Tonnage, unlimited in duration, was imposed in September 1694. Its yield in 1700 was estimated at 186 16s. Th roughout the whole royal period, various laws remitted duty on imports brought in on native ships to encourage local building. 46 Morriss, Colonial Trade of Maryland, 77–78.

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import tax of 20s. per person to discourage Catholic immigration.47 Duty was fi rst levied on imports of slaves in 1695, at 10s. per head, raised to 20s. in 1704.48

Direct Taxes: The Poll Tax

P

ol l tax (which encompassed the pre-royal property levy) was another source of revenue for the colonial government. On June 17, 1697, the Board of Trade received a report on Maryland estimating the presence of about eleven thousand tithables in the province. The public levy was then put at sixty pounds of tobacco for every tithable (see table 15.3). Adding in the jointly collected church tax of forty pounds increased the total to about one hundred pounds (about 100d., or 8s. 4d.). The annual poll tax steadily declined in importance, falling from about one hundred pounds of tobacco in the mid-1690s to about twenty pounds during 1708–13. The amount of tobacco annually levied from 1694 to 1715 was on the order of several hundred thousand pounds, with additional charges of up to another several hundred thousand levied in certain years. Payment in coin added several hundred pounds in poll tax revenue. In good years, poll tax may have generated 1,000 sterling or Maryland current money.49

Church Taxes

I

n 1 69 2 the Anglican Church was established by an act of the Maryland legislature, but the English government overruled the measure on a technicality. It was disallowed on the basis that it tried to claim the laws of Mary47

Land, Colonial Maryland, 106. Du Bois, African Slave-Trade, 14–15. Duty was raised to 40s. in 1717, 50s. in 1754, 4 in 1763, and a prohibitive rate of 9 in 1771. 49 A table of assessments levied in Maryland from 1694 to 1715 appears in John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University, 1955; Ann Arbor, MI: University Microfi lms), 287. Kinnaman warns that the data in the table are compiled from several non-comparable sources, and that the money values are often unclear as to sterling or Maryland current values. Moreover, the data are incomplete in some years and absent for others. Money collected in lieu of tobacco also declined in the latter years of the royal period. The poll tax paid the members and clerks of both houses of the legislature, the justices of the provincial and county courts, for the construction of public buildings and other infrastructure, and the expenses of small-scale military operations. In 1692 the counting of taxables raised the age limit of slaves and imported male servants to sixteen from the previous age of ten, and exempted paupers from the tax. In 1715 only Church of England clergymen were exempt from the tax. Newton D. Mereness, Maryland as a Proprietary Province (New York and London: Macmillan, 1901), 340–41. 48

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Taxation of the Southern Plantation Colonies, 1688–1714 tabl e . Maryland Assessments on Taxables, 1694–1713 Tobacco Assessment in Pounds

Year

1694 1695 1696 1697 1698 1699 1700 1701 1703 1704 1705 1706 1707 1708 1710 1711 1712 1713

109 86 79 100

Number of Taxables

9,747 10,390 10,381 11,000

12,214

13–14,000

23 16 22 24 19

15,840 16,335 16,284 16,337 16,667

Total Tobacco Levied in Pounds

1,062,928 894,537 823,874 451,233 710,952 346,879 222,258 196,481 164,436 336,794 236,647 261,726 208,256 369,252 277,695 358,248 392,094 316,673

Total Money Levied (.s.d.)

Further Tobacco Charges in Pounds

Further Maryland Current Money

500,000 500,000 156.10.0 st 183.7.5 st 569.5.8 st 248.17.4 m 84.16.10 1,434.8.912⁄ m 267.17.912⁄ m 198.11.4c m 471.13.4 m 662.0.8 st 216.17.3 m 255.2.5 m 394.16.6 m 338.9.1 m

60,000 60,000 40,000 50,000 200,000 200,000 200,000

300 100 500 100 1,000

Notes: 1. Kinnaman states that the numbers in his table are to be read with caution since much of the material is not comparable from a statistical viewpoint. Some of the fi gures are for only part of one year’s levy and do not represent the full charge of the year. 2. The letters m and st signify Maryland money and sterling, respectively. The unit of currency for the figure of 84 16s. 10d. total money levied in 1703 is not clear in the source used in Kinnaman. Source: John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University, 1955; Ann Arbor, MI: University Microfi lms), 287.

land would be administered according to the laws of England. English officials had decided that colonial legislatures could not claim the authority to adopt the statute law of England, which violated royal prerogative in administration of the colonies. All colonial acts of establishing English law were routinely disallowed. Acceptable legal language was finally approved in 1702, when the Church of England became the official church of the colony. It was supported by an annual tithe of forty pounds of tobacco (at a penny a pound this amounted to 40d.) on each taxable in the province. The evidence previously presented indicates that the full amount was not collected in the later years of the royal era.50 50

Land, Colonial Maryland, 99–100, 104–5.

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The tax burden on Maryland residents consisted of export duties on fur and tobacco, modest import duties on servants and slaves, and a provincial and church poll tax. The annual average of all these sources of revenue amounted to about 4,000–5,000.

Taxation in North Carolina, 1688–1714

T

he propr ie tors of North Carolina failed to establish an effective fiscal regime during 1689–1714, or profit from their revenue rights in the colony. Until 1715, the colonial administration of North Carolina was impoverished, having to make do with annual revenue of a few hundred pounds a year from quitrents.

Quitrents

T

he f irst settlers of North Carolina, emigrants from Virginia, were granted land with quitrents of 2s. per hundred acres, a rate of 1 ⁄4d. an acre. When the proprietors were given title to the Carolinas, they sought to reserve a rate of 1 ⁄2d. an acre in their grants, which was fiercely resisted by those who had already settled. In a document known as the Grand Deed of Albemarle, the proprietors agreed to the 1 ⁄4d. rate. The settlers insisted it apply to all of North Carolina, while the proprietors claimed it could be revoked at their will. This difference in interpretation was a source of continual conflict. Later attempts to raise quitrents from 1 ⁄4d. to 1d. an acre were withdrawn in the face of great hostility. Collecting quitrents required drawing up a rent roll, but the existence of many questionable land titles issued by the agents of the proprietors prevented its establishment. Political disturbances in the colony and the struggles with Indians made collection extremely difficult. The few records that survived suggest that little money was collected, which was wholly allocated for local salaries. In 1713, quitrents amounted to a meager 482 0s. 101 ⁄2d.51

Other Taxes

O

t her t han q uit r ent s, the colonial administration had no other source of funds other than bills of credit issued in 1712 and 1713. Import duties on liquor were negligible or nonexistent during the remainder of the proprietary period. The poll tax became the chief source of revenue in the colony, but along with a land tax it was first levied by the General Assembly in 1715 for the purpose of redeeming bills of credit.52 51

Bond, Quit-Rent System in the American Colonies, 113–18. Coralie Parker, The History of Taxation in North Carolina during the Colonial Period, 1663–1776 (New York: Columbia University Press, 1928), 87–89, 101–2. 52

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Taxation of the Southern Plantation Colonies, 1688–1714

Taxation in South Carolina, 1688–1714

T

he proprietors were little more successful in establishing a sound fiscal regime in South Carolina than they were in their northern colony. With the issue of bills of credit in 1703, the colonial government increasingly relied on paper money, to be sunk with revenue from duties on skins, fur, Negroes, and other goods, to pay its bills. Tax revenue increasingly lagged behind the stock of bills, as the little taxes paid into the Treasury were spent on other items. In 1712, the General Assembly established a government loan office that generated interest income, further reducing the incentive to levy taxes.

Quitrents

A

s i n North Carolina, the proprietors tried to impose a higher rate of quitrents than in Virginia, this time 11 ⁄2d. an acre, which they later reduced to 1d. Quitrents were often waived on the frontier to encourage settlement. Although the General Assembly approved several acts that specified the payment of quitrents, the proprietors failed to enforce payment. No satisfactory rent roll was established or kept. Revenue from quitrents was insignificant, barely able to pay local salaries.53 Governor John Archdale’s account to the proprietors of September 21, 1697, disclosed that he had collected 1,838 9s. South Carolina currency from sales of land and quitrents from the fall of 1695 through calendar year 1696 (March 25, 1697). Of this, probably a fifth was from quitrents, with the balance from land sales.54

Duties

D

u t ie s w e r e levied on alcoholic beverages, foodstuffs, wood products, animal skins, and slaves. Altogether eighty separate items, with fi xed duties stated in North Carolina currency, were specified in the several acts; all other goods paid an ad valorem duty. Eight statutes were enacted between September 1691 and November 1711, each with a specific termination date. Acts approved in 1691, 1695, 1696, 1700, and 1701 expired on or before May 6, 1703. The acts of May 6, 1703, and November 10, 1711, largely to redeem bills of credit, were set to expire on June 30, 1716.55 53

Bond, Quit-Rent System in the American Colonies, 118–23, and Robert K. Ackerman, South Carolina Colonial Land Policies (Columbia: University of South Carolina Press, 1977), 38–41. 54 In 1695 Paul Grimbell, the receiver-general, reported that he held on hand 73 current money from quitrents and 277 from land sales. Clowse, Colonial South Carolina, 99. 55 Crouse, Public Treasury of Colonial South Carolina, 43–55.

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The 1691 law gave South Carolina residents preferential treatment, taxing exported skins at 3 ⁄4d. with non-residents taxed at 11 ⁄2d. By 1703 duties were imposed on liquor, biscuits, and herring, at two-thirds the stated rate if exported in vessels owned in the province.56 The first “Negro Duty” was levied in the act of May 6, 1703, which taxed any slave over eight years of age. Those imported from Africa were assessed 10s., with those from the West Indies or other continental colonies 20s. The November 1711 act added additional duty of 20s. Subsequent acts widened the differential with duty as much as ten times higher on slaves imported from places other than Africa. It was widely believed that West Indian slaves were undesirable owing to their troublesome nature.57 Concern over the rapid growth of slaves in the colony prompted the General Assembly to encourage the importation of white “healthy male British servants” between the ages of twelve and thirty. A law of 1712 authorized the payment of 14 North Carolina currency for each servant delivered to the public receiver, with certification that the individual was not a criminal or had served time in jail. The assembly appropriated 300 for this purpose, but anticipated that profits from sales would refi ll the fund.58 In later years some of the proceeds of Negro slave duty were allocated to finance white immigration. A small tonnage, levied for the first time in 1686 at a half pound of powder per ton, was also made payable in 1690 in South Carolina currency at 15d. per ton.59

Other Taxes

I

n 1690 a poll tax was collected from each freeman and white servant over the age of sixteen. In 1701, a poll tax was levied only on freemen. In 1703 land, stocks, and faculties were taxed. In 1703 4,000 was collected from the poll tax.60 There is no record of any direct taxation between 1704 and 1713.61 56

Clowse, Colonial South Carolina, 117–19. W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967), 15–17, 127–28. 58 Clowse, Colonial South Carolina, 160. 59 Edson L. Whitney, Government of the Colony of South Carolina, Johns Hopkins University Studies in Historical and Political Science, ser. 13, nos. 1–2 (Baltimore: Johns Hopkins Press, 1895), 103. 60 Whitney, South Carolina, 99. 61 Crouse, Public Treasury of Colonial South Carolina, 67. Whitney, South Carolina, 97, writes that until 1713 tax acts were intermittent and few, with the government supported out of the quitrents, and direct taxes imposed only in cases of emergency, a slight disagreement with Crouse over the existence of direct taxes during 1704–13. 57

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Taxation of the Southern Plantation Colonies, 1688–1714

Licenses for liquor, 5 for a permit to sell all kinds of liquor and 3 to sell everything but wine, generated small sums for the colonial government.62

Small Government, Low Taxes

P

r omot ional pa m p h l e t s for South Carolina, as for Pennsylvania and other colonies, were written to lure immigrants to the New World. Two such pamphlets were written by Thomas Nairne in 1710 and John Norris in 1712.63 Thomas Nairne titled his pamphlet “A Letter from South Carolina; Giving an Account of the Soil, Air, Product, Trade, Government, Laws, Religion, People, Military Strength, &c. of that Province; Together with the Manner and necessary Charges of settling a plantation there, and the Annual Profit it will produce. Written by a Swiss Gentleman, to his Friend at Bern.” John Norris titled his “profitable advice for rich and poor in a Dialogue, or Discourse Between James Freeman, a Carolina Planter and Simon Question, a West-Country Farmer. containing a Description, or true relation of South Carolina an English Plantation, or Colony, in America: with Propositions for the Advantageous Settlement of People, in General, but especially for the Laborious poor, in that Fruitful, Pleasant, and Profitable Country, for its inhabitants.” Both pamphlets echoed similar themes. Two, in par ticu lar, stand out. The fi rst was an emphasis on the simplicity and cheapness of government compared with that of England. Nairne reported that public expenses were less than 3,500 a year, and that representatives in the legislature controlled the expenditure of revenue. These conditions meant that taxes were exceedingly low and that there were no taxes on real or personal estates as the colony collected sufficient revenue from duties on imports and exports to meet all needed public costs. Low taxes permitted the accumulation of wealth in South Carolina that high taxes in England rendered virtually impossible. The second theme was the advantage of slavery. For a small sum a settler could purchase a few slaves, more with greater funds, that would enable him to develop a profitable estate and avoid the hardship of tending the soil in an inhospitable climate. Both Nairne and Norris presented hypothetical budgets based on the ownership of slaves that would permit a family to live with comfort and decency. To a poor person in England or elsewhere in Europe, these pamphlets painted an attractive opportunity—relief from high taxes and hard labor. 62

Whitney, South Carolina, 104. Jack P. Greene, ed., Selling a New World: Two Colonial South Carolina Promotional Pamphlets, by Th omas Nairne and John Norris (Columbia: University of South Carolina Press, 1989). 63

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chap t er 15

Summary

I

n cont rast with poll and property taxes in New England, and a relatively heavy mix of direct and indirect taxes in New York, the colonial governments of Virginia and Maryland received regular annual revenue from quitrents, export duty on tobacco, other duties, modest poll taxes, and other miscellaneous revenues. Neither colony experienced marked fiscal difficulties or depreciating currencies between 1688 and 1714. North Carolina was barely taxed at all, with South Carolina relying largely on paper bills of credit.

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appendix
Tax Burdens in the American Colonies, 1714

T

axe s w er e extremely heavy during the years of King William’s and Queen Anne’s wars but were otherwise light during the quarter century preceding the coronation of George I. On average, the burden of taxation in the colonies was similar to that in the preceding century. Estimates of taxes in the colonies reflect an average during the latter years of the period. The advent of paper money reduced taxes in New England and South Carolina. Although figures for each colony are rough, they reflect fair estimates of taxes collected in 1714. A few hundred pounds more or less added to the totals would not change the overall picture very much. Column 2 in table A lists estimated internal taxes levied in each colony in 1714, based on the discussion and compilations presented in chapters 13–15. Column 4 presents the exchange rate of the colonial currencies on London from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook, which permits colonial taxes to be converted into sterling equivalents.1 Columns 6 and 7 present per capita taxes in pence colonial currency and their equivalent in pence sterling. Column 8 compares the ratio of per capita taxes in Great Britain with that in each colony. 2 The sterling value of all internal colonial taxes appears at the bottom of column 3, summing to 38,097 18s. Royal quitrents of several thousand pounds sterling in Virginia and Maryland drained abroad. Internal colonial taxes, including quitrents, were a small fraction of British taxes of about 5,361,000 in 1714. Average capita taxes of all the colonists came to 23.7 pence sterling in 1714. On a per capita basis, the inhabitants of Great Britain paid

1 John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 138, 162, 183, 209. New Jersey’s exchange rate is for 1716. 2 Estimates of internal taxes in each colony are approximate rather than precise.

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i i i .a Per Capita Taxes in the American Colonies, 1714 c ol u m n 1

Colony

[ 438 ]

Massachusetts Connecticut Rhode Island New Hampshire New York Pennsylvania Delaware New Jersey Virginia Maryland North Carolina South Carolina

c olum n 2

c olumn 3

column 4

column 5

column 6

colu m n 7

c olu m n 8

Colonial Taxes in Colonial Currency ()

Colonial Taxes ( Sterling)

100 Sterling Exchange Rate

Population 1714

Per Capita Taxes (d. Colonial Currency)

Per Capita Colonial Taxes (d. Sterling)

Ratio of Per Capita Taxes in Britain to the Colonies

21,150 4,000 800 2,000 6,800 1,000 200 1,500 5,830 4,500 480 300

18,338.2 2,608.8 521.8 1.3 4,389.9 754.7 163.3 1,050.0 5,300.0 4,500.0 320.0 150.0

153.33 153.33 153.33 153.33 154.9 132.5 132.5 142.86 110 100 150 200

73,837 47,202 9,216 7,159 27,743 27,055 4,341 23,850 82,071 52,098 17,580 13,349

68.7 20.3 20.8 67.0 58.8 8.9 11.1 15.1 17.0 20.7 6.6 5.4

44.8 13.3 13.6 43.7 38.0 6.7 8.3 10.6 15.5 20.7 4.4 2.7

5.4 18.1 17.7 5.5 6.3 35.8 28.8 22.7 15.5 11.6 54.9 89.0

23.7

10.1

38,097.9

385,501

Tax Burdens in the American Colonies, 1714

some ten times as much as the average of all their British cousins across the Atlantic. Tax burdens varied among the colonies. The heaviest were in Massachusetts, New Hampshire, and New York, a change from 1688 when the inhabitants of Maryland and Virginia were among the most heavily taxed. Others paid very little.

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pa r t f o ur
Salutary Neglect in the Colonies, 1714–1739

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P

art iv traces taxation of the American colonies from the coronation of King George I in 1714 to the outbreak of the War with Spain (Right of Search) in 1739. This quarter century is known as the age of Sir Robert Walpole and the triumph of the Whigs. Walpole became prime minister in 1721 and led the British government until his resignation in January 1742. He focused on keeping Britain at peace, maintaining political stability in the form of Protestant continuity under the Hanoverian monarchy, and expanding the British economy. His achievements include a major overhaul of the public revenue that reduced the burden of taxation on trade and the economy. Between 1714 and 1739 the colonies experienced demographic, territorial, and economic expansion, pushing inland and westward from the coastal settlements. The population more than doubled, surpassing nine hundred thousand people in 1740. In 1729 the Carolinas were transferred from proprietary to royal rule, leaving only Pennsylvania, Delaware, and Maryland in proprietary hands. The thirteenth colony of Georgia was founded in 1732 as a trusteeship for British debtors. Parliament added two laws to its imperial commercial code. In 1732 it prohibited exports of hats and restricted their manufacture for sale within each colony in America. In 1733 it passed the Molasses Act, which imposed heavy duties on molasses, sugar, and rum imported into the American colonies from the French and Spanish West Indies, but neither measure was rigidly enforced. The general policy of imperial administration was “salutary” or “benign” neglect to maximize the growth of trade, British manufactures, and prosperity in Britain and its colonies. This was seen as an effective means of enhancing British power and influence against its European rivals. Salutary neglect allowed the colonies to run their own affairs with little intervention. Taxation remained low, almost completely disappearing in several colonies that utilized the loan office system of paper money, which generated sufficient interest to meet the ordinary expenditures of administration. Part IV consists of four chapters. Chapter 16 describes major political events in Britain that bore upon the American colonies and constitutional developments in the colonies during 1714–39. Chapters 17, 18, and 19 analyze the taxation of the New England, middle, and southern colonies.

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c h ap t e r 1 6
Imperial Governance and the Colonial Constitution, 1714–1739

I

n cont rast with the chronic warfare that dominated the reigns of William and Mary and Anne, the next quarter century under George I (1714–27) and George II (1727–60) was one of comparative peace. In succeeding Queen Anne, George Ludwig, a minor German princeling who could not speak English, began the reign of the House of Hanover. George was a great-grandson of the marriage of a daughter of James I and an elector of Hanover a century before. To the benefit of the emerging Whig party, George was dependent on his ministers, to whom he left the business of domestic government. His interest lay in foreign affairs that could assist his beloved homeland.1 The crowning of George I reinforced the supremacy of Parliament. Royal prerogative could still shape foreign affairs but royal initiative was constrained by the need to secure funds from Parliament. British politics now lay firmly in the Commons, even though its members were chosen by a tiny minority (less than a twelfth) of the adult male population. Disgruntled rivals to high office and leading opponents of the government were often neutralized with a peerage and shunted to the Lords. So long as a few key ministers could muster a majority in the Commons, they controlled the levers of government.

The Triumph of the Whigs and Commons

T

h e br i t i s h constitution required that a new election for the Commons be held six months after the coronation of a new monarch. In the election of 1715 the Whigs triumphed. Passage of the Septennial Act of 1716 1

A brief discussion of the major events during the reign of George I and the fi rst dozen years of George II, with their heavy dependence on Robert Walpole and Whig ministers, appears in R. W. Harris, England in the Eighteenth Century, 1689–1793: A Balanced Constitution and New Horizons (London: Blandford Press, 1963), 76–93. Britain’s foreign policy during this period is discussed on 106–13. Another treatment appears in chapter 11, “Imperial Policy and Administration (1714–1742),” in Evarts Boutell Greene, Provincial America, 1690–1740 (New York: Harper and Brothers, 1905), 166–89.

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allowed the new Whig majority to sit in Parliament for seven years without facing the electorate, thereby strengthening both itself and the Commons against the Lords and the Crown. Whigs enjoyed uninterrupted power and influence for the next four decades. With the political diminution of the Tories, the former disputes between Whigs and Tories that affl icted Anne’s governments gave way to competition between leading Whigs. In 1721 Sir Robert Walpole emerged as the unchallenged Whig leader of government. Walpole concentrated his efforts on commercial and industrial expansion. He inherited an oppressive land tax of 3s./ assessed valuation, a rate of 15 percent if assessment was accurate, that had been voted by Parliament to finance a war with Spain during 1718–21 costing 4 1 ⁄2 million. Holding both positions of First Lord of the Treasury and chancellor of the Exchequer, Walpole undertook a program of tax reform and reduction.2 In 1722 he reduced the land tax to 2s. After a temporary reversion to 3s. during 1728–29, he again reduced it to 2s. in 1730, halving it to 1s. in 1731 and 1732. The reduction from 3s. to 1s. amounted to 500,000 of total public income of 6 million. Between 1721 and 1724, Walpole reformed the tariff. He repealed the duty on American timber, thus eliminating British dependence on Baltic sources. To encourage manufacturing, he repealed import duties on drugs used in dyeing cloth; all articles used for the production of paper and pasteboard; whale fins caught by British crews and imported by British subjects; seal oil, sealskins, and all other fish and sea creatures; and, a previously imposed additional duty of 20 percent on drugs. He reduced excessive duties on pepper and spices and on beaver skins for the fabrication of hats. He extended the previous repeal in 1700 of export duties on woolen manufactures, corn, grain, biscuits, and meal to all goods and merchandise manufactured in Great Britain, save certain minerals, raw materials for the manufacture of leather goods and hats, and white woolen cloths. The manufacture of silk faced a comparative disadvantage in foreign trade owing to high import duties on raw and thrown silk. Walpole granted a rebate on the exportation of silk ribbons, stockings, gloves, fringes, laces, sewing silk, and other silk products. His most important fiscal measures involved tea, wine, tobacco, and salt. High duties had fostered smuggling, which diminished the revenue from these taxes. Walpole established a compulsory warehousing system for tea, coffee, and cocoa nuts. Importers were required to pay a small duty and deposit their goods in a warehouse, after which the goods could be exported without further payment. When the articles were removed for domestic 2

Walpole’s reforms and reductions are described in Stephen Dowell, A History of Taxation and Taxes in England: From the Earliest Times to the Year 1885, vol. 2, From the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 82–105.

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sale, the full tax was chargeable. Although the taxes were defined as duties of customs, they were in effect transformed into excises. Imposed in 1723, the revenue increased by 120,000 over the next seven years. The growth of revenue enabled Walpole to repeal the salt tax in 1730. In 1732 Walpole tried to reduce the smuggling of French wine, estimated at half of British consumption, and tobacco with another warehousing bill.3 He sought to increase revenue from wine and tobacco, as he had done for tea and coffee, in order to maintain the land tax at the low rate of 1s. His plan was to shift the duty on imported wine paid by the merchant to an excise paid by the retailer.4 Walpole was defeated by opponents who portrayed the change as a fi rst step toward extending consumption taxes on all necessities of life. With the restoration of the higher rate in the land tax in the wake of this one defeat, its yield rose from 710,000 in 1734 to 1,070,000 in 1735, and averaged about 1,130,000 for the next four years. Walpole took advantage of peace to reform the tariff and reduce the burden of taxation. For twelve of the nineteen years encompassing 1721–39, he held the country’s tax burden below 6 million. Only once did it surpass 6.3 million, averaging under 6.2 million the remaining six years.5 Holding the line on taxation meant that its burden was steadily declining as a share of a growing economy.6

3

In 1733 the House of Commons issued a report on customs fraud, documenting in detail the practices used to reduce import duty on tobacco. These included adding stones, lead, dirt, rubbish, and sand to tobacco to claim higher drawbacks on being exported. Weighers were bribed to call out short weights to landwaiters. After the merchant had acquired a debenture to reclaim his import duty, the tobacco was often illegally relanded and sold for domestic consumption. Tobacco was also smuggled from Scotland, which was made possible by a sparsely populated Scottish coastline and collusion between merchants and customs officers in Glasgow. Estimates of lost duty ran in the tens of thousands of pounds. William J. Ashworth, Customs and Excise: Trade, Production, and Consumption in England, 1640–1845 (Oxford: Oxford University Press, 2003), 170–76. 4 The role and views of Virginians in Walpole’s proposed shift from duties to excises are recounted in John M. Hemphill II, Virginia and the English Commercial System, 1689–1733: Studies in the Development and Fluctuations of a Colonial Economy under Imperial Control (New York and London: Garland, 1985), 190–286. Originally a Ph.D. thesis, Princeton University, 1964. 5 B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance I: Net Receipts of the Public Income—Great Britain, 1688–1801,” 575–76. 6 The wars of King William and Queen Anne left Britain heavily burdened with debt. Debt ser vice consumed more than half of the budget when Walpole became leader of the government in 1721. By 1739 he had reduced the burden of debt ser vice and net public expenditure by over one million pounds. Mitchell, British Historical Statistics, table: “Public Finance 2: Net Public Expenditure—Great Britain, 1688–1801,” 578. Walpole’s tenure in office in the 1720s and 1730s is the only period in the eighteenth century when the ratio of money wages to tax revenues increased, that is, the growth in wages outpaced the rise in taxes. It was also a period of steady economic growth. The index of tax revenues

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chap t er 16

Imperial Governance, 1714–1739

T

he sy st em of imperial governance was largely in place when George became king. Few changes were made to the commercial regulations during 1714–39.7 In 1721 Parliament approved a new bounty act for naval stores, and other acts placed furs and copper on the list of enumerated articles.8 In 1727 Parliament began to relax several restrictions on colonial trade. Pennsylvania, followed several years later by New York, was allowed to import salt directly from Europe. In 1730 planters in South Carolina and five years later in Georgia were allowed to send rice, an enumerated article, directly to European countries south of Cape Finisterre. Thereafter about one-fifth of rice exports went directly to such non-British markets as Portugal, Spain, and other Mediterranean countries. Direct shipment of rice to parts of Eu rope south of Cape Finisterre was subject to the payment in Great Britain of the import duty less the drawback on the quantity of shipped rice. Although the duty was payable in Britain, it served as a colonial export tax imposed by Parliament at the suggestion of the colony itself. Between Christmas 1730 and Christmas 1737, 32,523,871 pounds of rice were directly exported south of the cape, producing about 1,200 sterling annually for the British Treasury.9 On this figure, the remaining four-fi fths of rice exported directly to Britain would have yielded 4,800 a year. Exported rice to Britain and Europe south of the cape would provide 6,000 yearly for his majesty’s government. The tax rate on rice came to 1 per 3,870 pounds, not quite 1 per two tons, on recorded shipments, lower still depending on the extent of smuggling.

to money wages declined from 104.7 in 1721 to 99.1 in 1736 (base year 1701 set at 100.0). The index rose from 100.0 in 1701 to 115.6 in 1715, and again from 108.3 in 1741 to 133.4 in 1776, the result largely of the Seven Years’ War and the American Revolution. J. V. Beckett and Michael Turner, “Taxation and Economic Growth in Eighteenth-Century England,” Economic History Review, n.s., 43, no. 3 (August 1990): 390, and Phyllis Deane and W. A. Cole, British Economic Growth, 1688–1959: Trends and Structure, 2nd ed. (Cambridge: Cambridge University Press, 1969), 78. 7 The next few paragraphs follow Greene, Provincial America, 178–80. 8 Very little copper was produced in the colonies during the colonial period. It was placed on the enumerated list in 1722 following the discovery of what was deemed a rich mine in New York. The enumeration of beaver and other peltry was accompanied with a reduction in the duty of 16d. on skins in place since 1692 to 6d. George Louis Beer, The Commercial Policy of England toward the American Colonies, Studies in History, Economics, and Public Law, vol. 3, no. 2 (New York: Columbia College, 1893), 56–57, 60–61. 9 George Louis Beer, British Colonial Policy, 1754–1765 (Gloucester, MA: Peter Smith, 1968), 36. First published by Macmillan in 1907.

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Imperial Governance and the Colonial Constitution, 1714–1739

In 1732 and 1733 Parliament passed two restrictive acts. In response to the Company of Feltmakers, which lobbied for protection, the fi rst banned the export of colonial hats to Europe, England, and to other colonies, restricting their production for sale within each colony. It was not strictly enforced. The second was the Molasses Act, passed in response to the declining trade of British West Indies planters. It was the fi rst import duty levied in the colonies by an act of Parliament. Effective December 25, 1733, the act imposed heavy duties of 9d. a gallon on rum or spirits, 6d. a gallon on molasses or syrups, and 5s. per hundredweight of sugar imported into the American colonies from the French and Spanish islands in the West Indies. In the fi rst year of the Molasses Act, 330 in duties was collected. Receipts through 1737 averaged 249 a year, falling to 76 a year during 1738–41.10 These funds were consumed in administrative costs. No deposits from duties collected under the Molasses Act were made into the British Exchequer during Walpole’s administration.11 The law ceased to be relevant in 1739 when Parliament permitted direct shipment of West Indies sugar to Europe if carried in British-built ships. A later act of 1748 granted an export bounty on sugar refined in Great Britain from raw sugar grown in the British West Indies, coupled with a drawback of the full amount of import duty paid on raw sugar. In 1739 Walpole was urged to impose direct taxes on the American colonies to help Britain finance its impending war with Spain. Th is suggestion ran counter to his views on the colonies; he preferred to leave them alone. His guiding rule was that economic expansion in America would help keep France at bay in the New World, facilitate the growth of trade, and provide a market for English manufactured goods. In opposing taxes on the colonies, he replied, “I have old England set against me, do you think I will have New England likewise?”12 The Board of Trade exercised little influence in colonial affairs during Walpole’s tenure.13 Walpole, his younger brother Horace, and several other key Whigs constituted the beginning of the cabinet system in British government based on support in Parliament. They supplanted the Privy Council, which had lost much of its importance in colonial matters. Under Walpole, 10

Thomas C. Barrow, Trade and Empire: The British Customs Ser vice in Colonial America, 1660–1775 (Cambridge, MA: Harvard University Press, 1967), 136–37. 11 Dora Mae Clark, The Rise of the British Treasury: Colonial Administration in the Eighteenth Century (Hamden, CT: Archon Books, 1969), 62. First published in 1960 by Yale University Press. In general, deposits in the Exchequer under the head of enumerated commodities were less than the annual salary bill paid by the receiver-general. The attitudes and behavior of the Treasury toward the colonies during the age of Walpole are discussed on 39–75. 12 Quoted in Barrow, Trade and Empire, 116. 13 Barrow, Trade and Empire, 106–16.

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the Treasury sought to minimize British government expenditure in the colonies. The secretary of state had other important European business to manage. The Admiralty was generally disregarded in the colonies. Without wars to fight, the British government looked to America as a source of goods and supplies and a market for its products. Walpole treated the colonies as an asset, not a liability.

The Colonial Constitution, 1714–1739 h r e e i m p ortant developments took place during 1714–39.14 The first was the restoration of the Maryland proprietary to Lord Baltimore. The second was the sale of Carolina by its proprietaries to the Crown in 1729 and the installation of royal government. The third was the founding of Georgia in 1732.

T

Maryland

A

lt ho ug h c har l e s, Lord Baltimore, had lost his right to govern in 1689, the Crown preserved his rights to millions of acres of empty land and quitrents to all patented land.15 A new monarch afforded an opportunity for restoration of proprietary rule. Lord Baltimore was eighty-five years of age. In anticipation of reclaiming Maryland, his son and heir, Benedict Leonard, had renounced his Catholic faith, took communion in the Church of England, and removed his children from Catholic schools to be brought up as Protestants. His lawyers mounted a campaign to recover the province for the Baltimore family. The elder Baltimore died in February 1715. Benedict Leonard, the new Lord Baltimore, succeeded in his quest. The Crown restored the right of government in Maryland to him, subject to royal approval of governors. The previous sitting royal governor, John Hart, was confirmed in office and served as proprietary governor until his retirement in 1720. The new Lord Baltimore only lived eight weeks after succeeding to his title. His son Charles, a minor, became the fifth Lord Baltimore with Lord Guilford serving as guardian. Maryland remained under proprietary rule until the Revolution. 14

Political life in the colonies underwent considerable development and change during 1714–39, and is treated in the context of tax policy in the next three chapters. Th is section deals only with major constitutional events. 15 Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 118–19.

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Imperial Governance and the Colonial Constitution, 1714–1739

The Carolinas

D

e s pi t e t h e restoration of Maryland to proprietary rule, the Board of Trade continued to advocate the Crown’s acquisition of all remaining corporate and proprietary colonies.16 It maintained that royal rule would result in better colonial government, harmony between the colonies, and more effective imperial governance. On June 1, 1729, the Carolinas became royal provinces. The Crown paid the proprietors 2,500 for each of seven shares and an additional sum to cover arrears of 4,824 7s. 1d. in quitrents, almost 22,500 in total. Sir George Carteret, who became Earl Granville, refused to sell his share. He eventually received title to an area in North Carolina known as the Granville tract equal to one-eighth the area of the two Carolinas. His heirs retained his right to this tract until it reverted to the state of North Carolina in 1776.

Georgia

T

h e f o un di ng of Georgia in 1732, the thirteenth American colony, achieved two goals.17 From the British perspective, it settled territory that Spain coveted. From the standpoint of James Edward Oglethorpe and his philanthropic friends, it provided an opportunity to resettle poor and unfortunate British subjects who languished in debtors’ prison. Spaniards had founded St. Augustine in 1565, which became the nucleus of its Florida colony. With the settlement of Charleston, South Carolina, in 1670, Spain and England contested the land between Charleston and St. Augustine. Spanish military incursions threatened the stability and growth of South Carolina. The settlement of the territory south of the Savannah River would halt French interference with the Indian trade and prevent the Spanish advance north of St. Augustine, thus blocking both Catholic rivals. The philanthropic mission of James Oglethorpe and his friends played an equal part in the founding of Georgia. Oglethorpe was elected to the House of Commons in 1722, serving until 1743. In 1728 a friend, Robert Castell, an architect, was sentenced for debt to Fleet Prison in London. He contracted smallpox in prison and died. Oglethorpe moved an investigation on the conditions in British prisons in the Commons and was appointed chairman of the investigating commission in 1729. His inquiry led to the 16

Th is segment draws from Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 87–88, and Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 102. 17 Th is segment draws from Kenneth Coleman, Colonial Georgia: A History (New York: Charles Scribner’s Sons, 1976), 1–69.

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chap t er 16

prosecution of several notorious wardens and the release of an estimated ten thousand prisoners, mainly debtors. Concerned about the welfare of the released debtors, Oglethorpe contemplated a charity colony in America to which some could be sent. He joined with Dr. Thomas Bray, a leading philanthropist, to apply for a royal charter to settle the part of South Carolina south of the Savannah River. The Georgia charter was approved by the Privy Council on January 27, 1732, signed by the king on April 21, and passed the privy seal on June 9, 1732, its official date.18 The document created “the Trustees for Establishing the Colony of Georgia in America . . . to be a Body politick and Corporate in Deed and in name for ever.” It encompassed the land between the Savannah and Altamaha rivers and westward from their headwaters to the Pacific, taken away from South Carolina and made into a separate province. The trustees were granted political power for twenty-one years, after which the Crown was to direct the colony’s government. Command of the colony’s militia was vested in the governor of South Carolina. The Crown reserved the right to approve the appointment of any governor or laws passed. The charter contained no requirement for a legislative assembly. To ensure that the colony met its philanthropic purposes, no trustee could own land, hold any office of profit or trust, or receive any salary or income from his efforts on behalf of the colony. Twenty-one trustees headed by Oglethorpe were initially named, but only a few were active in promoting the colony’s development. The charter provided for a Common Council of fifteen members that was empowered to make all laws and ordinances necessary for good government, administer justice, and naturalize foreigners willing to settle in Georgia. All people born in Georgia were to enjoy the rights and liberties of native-born Britons. Residents were to enjoy freedom of conscience. The trustees were required to fi le annual reports of receipts and expenditures with crown officials and submit reports on the progress of the colony to the secretary of state and Board of Trade. To encourage immigration, the charter granted all settlers exemption from quitrents of 4s. for every hundred acres of land for ten years, thereafter to be paid in South Carolina currency. A maximum limit of five hundred acres per settler was imposed to prevent the development of large estates and land speculation. Slavery was initially prohibited. 18

“Charter of Georgia: 1732,” in The Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, compiled and edited under the Act of Congress of June 30, 1906, by Francis N. Thorpe (Washington, DC: GPO, 1909), 2:765–77, and http://www.yale.edu/ lawweb/avalon/ states/ga01.htm (February 27, 2003).

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In May 1733 Parliament allotted the trustees 10,000, the fi rst of fourteen government grants totaling 136,000, which helped finance the trusteeship period of administration. For their part, the trustees secured public donations of 260,160 to transport, settle, feed, clothe, provision, and govern 5,604 colonists for almost twenty years. Over its twenty-year period, the cost per colonist amounted to 46.19 The first boatload of settlers qualified as charity cases. However, the plan to make Georgia a charity colony did not materialize. Future waves of immigrants came in search of land. The trustees stopped sending charity colonists after 1738. From that point until the end of the trusteeship period in 1753, they transported about eleven hundred indentured servants from Scotland, Germany, Switzerland, Ireland, and England. 19 Milton LaVerne Ready, “An Economic History of Colonial Georgia, 1732–1754” (Ph.D. thesis, University of Georgia, 1970; Ann Arbor: University Microfi lms, 1971), 307.

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c h ap t e r 1 7
Taxation of the New England Colonies, 1714–1739

D

ur i ng t h e e ra of salutary neglect, reproduction and immigration more than doubled the population of New England from 137,414 to 282,442, with Negro slaves numbering a modest 3 percent. As the period began, the tax system in New England was well developed, consisting of poll and property taxes, duties and excises, and modest parish, education, and county taxes. Imperial taxes were of little importance as New England shipped few enumerated products to Britain. The Molasses Act of 1733 collected little money and died almost aborning. Bills of credit became the primary means of financing government expenditure, with taxes assessed for their redemption increasingly deferred. The rising stock of paper money resulted in its depreciation against silver and sterling. Between 1714 and 1739 paper money dictated the timing and level of taxation.

Money

T

ho s e w i t h capital and money to lend in Massachusetts envisaged the establishment of a private commercial bank.1 The Bank of England was proving extremely profitable to its shareholders. In February 1714 four prominent Boston merchants placed an advertisement in the Newsletter proposing to create a private bank, inviting subscribers to purchase shares ranging in value from 50 to 4,000, up to a total capital of 300,000 1

The treatment of money in this chapter draws from Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975); John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978); Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997); Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld .com/colonial _currency.htm (June 3, 2003); Joseph B. Felt, Historical Account of Massachusetts Currency (New York: Burt Franklin American Classics in History and Social Science, 1968) (fi rst published in Boston in 1839); and John Blanchard MacInnes, “Rhode Island Bills of Public Credit, 1710–1755” (Ph.D. thesis, Brown University, 1952). Th is following episode is described in G. B. Warden, Boston, 1689–1776 (Boston: Little, Brown, 1970), 69–71.

[ 454 ]

Taxation of the New England Colonies, 1714–1739

Massachusetts currency. The bank planned to lend money to property owners, up to two-thirds the value of their land and homes pledged as collateral. The loans would take the form of private notes equivalent to public bills of credit. Borrowers would be required to repay the loans with 5 percent interest over five years to redeem their mortgages. To build support for the bank, the partners pledged a share of their profits to Harvard and other public schools. Politicians and governments generally dislike private competition. If established, the bank’s capital of 300,000 would give its shareholders enormous influence over the provincial economy and the electorate that chose representatives to the General Court. To forestall this threat, royal officials recommended that the colony establish a public bank of credit, or public loan office, under control of the General Court. An act of November 4, 1714, authorized the trustees of a public bank to lend 50,000 for five years at 5 percent interest, with loans ranging between 50 and 500.2 The act specified that interest income be used to pay government expenses, which would have the desirable political and economic benefits of reducing the tax burden of civil administration. The act conveniently banned the establishment of private land banks. On December 4, 1716, a second issue of 100,000 was approved for tenyear loans at 5 percent interest. Subsequent issues of 50,000 were approved in March 1721, a ten-year loan at 6 percent, and 60,000 in 1728. In addition to repayment of principal and interest, redemption of the loans was to be insured with taxes on polls and real and personal property. By 1725 the stock of all Massachusetts bills of credit, both fiat and loan office, stabilized in the threehundred-thousand-pound range, fluctuating with the pace of repayment and reissue. An issue of promissory notes temporarily augmented the colony’s currency between 1733 and 1742, when Parliament banned their issue and circulation. In 1733, to prevent an issue of 100,000 in Rhode Island bills from flooding Massachusetts, a private partnership of 102 merchants, who pledged themselves not to accept notes of Rhode Island, issued 110,000 in Merchants’ Notes repayable in silver at 19s. per ounce, 30 percent to be redeemed by December 30, 1736, 30 percent by December 30, 1739, and 40 percent by December 30, 1743. 3 The bills of all four colonies circulated among each other at par value. The total stock of New England currency, and its price in terms of silver and the exchange rate against sterling, was determined by the combined issues of all four colonies. In this regard there was considerable difference between them. Connecticut was extremely judicious in its emissions. Its bills of credit peaked at 24,000 in 1713, after which steady repayment reduced its

2 3

Felt, Massachusetts Currency, 64–68. Newman, Early Paper Money of America, 192.

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stock to 2,554 in 1732. In 1733 the colony issued 50,000 on loan. Financing the modest cost of colonial administration in Connecticut required little recourse either to taxation or bills of credit. New Hampshire issued few bills, which was due to its status as a royal colony. In 1717 New Hampshire established a loan office, lending 15,000 for eleven years at 10 percent. Under instructions from London, its joint governor with Massachusetts, Jonathan Belcher (1730–41), restrained further note issues during his tenure. New Hampshire and Connecticut contributed only 9 percent of the outstanding stock of New England paper money in 1739. Rhode Island was the chief culprit in issuing bills of credit to finance its public expenditures. The colony’s first paper money issued in 1710 was fiat currency backed by future taxes.4 Subsequent issues were mainly loan office disbursements for ten-year mortgages at 5 percent interest. Interest on the first loan, known as the First Bank, was earmarked for the repair of Fort Ann. A subsequent issue in 1715, redated 1721, known as the Second Bank, was extended for five years, with interest payable in flax and hemp. These loans were later extended to twenty-three years in duration. The Third Bank, approved in 1728, issued 49,000 to replace all prior printings and provide funds for further repair of Fort Ann. The Fourth Bank (1734) issued 60,000 at 5 percent interest as ten-year delayed mortgage loans. The Fifth Bank (1733) issued 104,000, with interest earmarked for cannon at Fort George. The Sixth Bank (1738) issued 100,000 for twenty-year mortgages at 5 percent interest. (Subsequent banks in 1740 and 1743 issued another 64,000 for twenty years at 4 percent interest.) The interest paid by borrowers was sufficient to pay almost the entire cost of the colony’s government during 1714–39. Rhode Island’s legislature did not levy any direct taxes during the era of salutary neglect.5 Table 17.1 displays the growth in outstanding New England bills of credit, the price of silver per ounce of New England currency, and its sterling exchange rate. Current money of the four colonies traded at the same value during 1714–39, although some colonies granted a premium for taxes paid in their own provincial paper. The four currencies can be treated as a single monetary unit. The volume of Rhode Island emissions, which exceeded those of Massachusetts in 1739, stands out in the table. How was that colony, one-sixth the

4 Brock, Currency of the American Colonies, 1700–1764, 37–43, and MacInnes, “Rhode Island Bills of Public Credit,” 121–235, 542–70. 5 The last rate mentioned in the General Assembly records of the colony appears in the session of February 1714. Instructions were issued to complete the collection of the rate of 1,000 that was to have been collected in 1712. John R. Bartlett, ed., Records of the Colony of Rhode Island and Providence Plantations in New England (Providence: A. C. Greene, state printer, 1856–65), vol. 4, 1707–40, 165. Originally published in 1859 by Knowles, Anthony and Company of Providence.

[ 456 ]

Taxation of the New England Colonies, 1714–1739 tabl e . New England Bills of Credit Outstanding (£), Silver Price per Ounce, and Sterling Exchange

Year

Mass.

R.I.

Conn.

N.H.

Total

1714 1715 1716 1717 1718 1719 1720 1721 1722 1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1735 1736 1737 1738 1739

152,126 171,760 157,062 231,875 217,510 200,660 189,906 182,194 235,100 260,087 289,984 325,188 358,140 338,658 356,388 344,423 335,323 327,786 310,520 290,640 352,588 339,054 359,211 360,000 375,815 365,237

12,198 51,948 51,948 50,225 48,837 47,685 46,826 86,541 85,854 85,211 84,726 84,403 84,247 82,387 129,370 128,861 128,063 186,065 192,729 292,197 289,669 287,618 285,021 280,979 280,979 376,202

22,876 22,490 23,681 20,433 20,080 19,822 17,828 17,487 17,499 16,832 14,663 12,198 7,975 10,274 9,220 6,738 4,381 4,667 2,554 52,024 52,459 52,799 51,228 55,714 54,226 50,883

9,200 8,335 8,335 8,335 22,435 22,345 22,299 21,381 24,993 24,635 26,314 24,611 27,567 28,353 27,375 27,308 27,155 27,155 26,200 25,207 24,840 22,783 21,783 27,319 24,989 22,985

196,400 254,533 241,026 310,868 308,862 290,512 276,859 307,603 363,446 386,765 415,687 446,400 447,929 459,672 522,353 507,330 494,922 545,673 532,003 660,068 719,556 702,254 717,243 724,012 736,049 815,307

Total Including Merchants Notes

Silver

Sterling

770,068 829,556 812,254 827,243 801,012 813,049 892,307

9s. 9s. 10s. 10s. 11s. 12s. 12s. 4d. 13s. 6d. 14s. 6d. 15s. 6d. 16s. 6d. 15s. 16s. 16s. 18s. 22s. 21s. 19s. 20s. 6d. 23s. 27s. 27s. 6d. 26s. 6d. 27s. 28s. 29s.

153.33 160.33 162.50 170.00 200.00 216.88 219.43 225.98 229.79 241.81 267.92 289.11 290.19 291.98 298.82 313.33 337.73 334.31 339.51 350.00 355.00 360.00 430.00 516.67 500.00 500.00

Sources: Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), table 2 (revised), part B, 591–92, table 3, interspersed between pages 31 and 32; corrected figures for 1736 and 1739 inserted by Ron Michener of the Department of Economics of the University of Virginia in Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld.com/ colonial_currency.htm ( June 3, 2003), and John J. McCusker, Money and Exchange in Europe and America, 1600– 1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), table 3.1, 140–41.

population of Massachusetts, able to emit such a large share of New England currency while maintaining its money at par with the other three colonies? New Hampshire and Massachusetts were royal colonies, which enabled Belcher to restrain the issue of paper money. Connecticut found little need to finance its public expenditures with paper money. Rhode Island differed in that it was more a trading center than an agricultural community and did not suffer the heavy hand of royal restraint.

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In 1731 merchants in Rhode Island, who granted local currency credit internally and financed British imports on sterling credits from England, attempted to restrain the colony’s paper money issue. Depreciation of local currency posed the risk of substantial loss if merchants had to pay fi xed sterling debts with depreciated Rhode Island paper. Several merchants asked London to uphold the governor’s veto of the General Assembly’s issue of local currency. To their dismay, British legal officers ruled that the colony’s charter granted supremacy to the will of the General Assembly and that imperial authorities lacked the power to overturn local legislation without an act of Parliament. This ruling permitted the colony’s legislature to continue to issue paper money with minimal restraint until an act of Parliament in 1751 restrained the practice.6 Why did Massachusetts, Connecticut, New Hampshire, New York, and other colonies accept Rhode Island’s bills at par with those of Massachusetts? Royal restraint in Massachusetts and New Hampshire had constrained the issue of paper money. The demand for money and a medium of exchange in Massachusetts resulted in its absorption of five-sixths of all Rhode Island bills.7 The issue of paper money enabled Rhode Island residents to purchase produce throughout the New York and New England countryside, fit out vessels, and even lend money to residents outside the colony. As early as 1724, merchants and taxpayers in Rhode Island complained to their representatives of difficulties paying their debts and taxes because the colony’s money tended to flow into Massachusetts. The outflow of Rhode Island bills prompted the legislators to extend the terms of repayment of previous issues, and issue new loans to provide the means to repay old ones. Rhode Island’s currency issues were a response to the regional demand for currency that was not satisfied by the caution of Connecticut and the imperial restraint imposed on New Hampshire and Massachusetts. So long as New York merchants could redeem Rhode Island bills in any New England colony, they were acceptable in payment. Taking the currency issues of New England as a whole, the market did not judge the growth of paper money to be excessive until after 1743. The per capita balance of bills of credit outstanding for all of New England rose from 2.6 in 1714 to 3.3 in 1739, a modest rise of 27 percent over twenty-five years. The balance ranged from a low of 2.4 in 1720 to a high of 4.3 in 1734.8 The price of an ounce of silver in New England currency began a slow ascent in 1716 and continued to rise through 1739. Between 1714 and 1739, it rose from 9s. to 29s. British merchants increasingly demanded payment in silver. The need for silver to pay overseas invoices bid up the local price of 6

MacInnes, “Rhode Island Bills of Public Credit,” 123, 565. Brock, Currency of the American Colonies, 41. 8 MacInnes, “Rhode Island Bills of Public Credit,” table 19, 599. 7

[ 458 ]

Taxation of the New England Colonies, 1714–1739

silver in New England currency. The exchange rate against sterling correspondingly fell. The price of 100 sterling increased from 153.33 to 500 New England currency. Depreciation of New England currency resulted in a decline in the per capita balance of New England bills valued in terms of sterling. The era of salutary neglect witnessed the culmination of tax-deferred debt and mortgage-interest financing of colonial administration. For a quarter century, New England’s taxpayers enjoyed falling tax burdens.

Taxation in Massachusetts, 1714–1739

T

he c hart er of 1691 had transformed the formerly corporate province into a royal colony, with a royal governor subject to instructions from London. The principal of royal restraint was weakened in practice by the rapid turnover of governors: William Tailer (1715–16), Samuel Shute (1716–23), William Drummer (1723–28), William Burnet (1728–29), William Drummer (1729–30), William Tailer (1730), and Jonathan Belcher (1730–41). In addition, the General Court’s control over the governor’s salary limited his effective power. Each new governor sought but failed to achieve a permanent salary. Belcher let the issue die, choosing to accept generous annual grants of salary, but he struggled with the General Court over control of public spending. The court insisted that appropriated funds be spent strictly in accordance with its instructions. Belcher vetoed each of these encumbered appropriations, which strained the colony’s public finances. Politicians sitting in both chambers of the court yielded little to a succession of royal governors.9 The economy remained largely agricultural. Tax assessments in 1735 disclosed ownership of thirty-six cows, ninety sheep, and eighteen horses per one hundred people. Massachusetts became a major supplier of food and horsepower to the West Indies. The movement of second and third sons off ever-smaller holdings of decreasingly productive farmland into crafts and trade helped diversify the economy, weaving a commercial network tying countryside to town and busy seaports, especially Boston, to the world of overseas commerce. This evolution is best personified in the mercantile career of Thomas Hancock, who became the colony’s wealthiest resident.10 Each year the General Court stipulated the total amount of taxes it would take to redeem bills of credit that had been previously issued and 9

Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 135–40. 10 Labaree, Colonial Massachusetts, 146–65. The career of Thomas Hancock is recounted in W. T. Baxter, The House of Hancock: Business in Boston, 1724–1775 (Cambridge, MA: Harvard University Press, 1945).

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become due. First it estimated receipts from (1) excises on rum, wine, other alcoholic beverages and, beginning in 1737, lemons, limes, and chariots; (2) import duties on alcoholic beverages, merchandise, sugar, molasses, and tobacco; (3) tonnage on logwood and other goods; (4) interest on public loans; and (5) lighthouse charges. To this it added the difference in poll and property taxes, and not a farthing more. Excises were enacted for a period of five years, while duties and direct taxes were imposed yearly, and more frequently in a few instances. To complete the picture, counties and parishes were authorized to tax residents to support ministers, the building of schools, and teachers, as well as the construction of meetinghouses.11 From time to time, bounties were offered on the production of hemp (1715, 1718, 1725), duck canvas (1722), flax (1728), and paper (1728).12 Table 17.2 provides an overview of tax legislation between 1714 and 1739 printed in the official legislative record, The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay.13 Tax measures were generally enacted in June or July of a given year and scheduled to expire on May 31 of the following year. The fiscal year effectively ran from June 1 to May 31 of the next year. Column 1 lists the fiscal year. Column 2 states the total taxes required to redeem bills of credit resolved in previous sessions. Column 3 lists the estimate of receipts from excises, duties, tonnage, interest, and lighthouse fees. Column 4 lists assessed poll and property taxes that were apportioned among the counties and towns. Beginning in 1727/28, salaries of representatives to the General Court were itemized as a separate charge (column 5), and from 1730/31 fines were imposed on towns that failed to send representatives to its sessions (column 6).14 Columns 7–9 list the separate and total poll rates, with column 10 listing the property tax rate in pence per pound of assessed valuation. From time to time, the legislature adjusted valuations on land, houses, animals, and faculties.15 Column 11 displays per capita taxes in pence of the colony’s residents, on the presumption of full compliance with the total taxes to redeem bills of credit stated in the legislation.

11

The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Wright and Potter, state printer, 1874), 2:100, 234, 306, 308–9, 459–60. 12 Acts and Resolves of Massachusetts Bay, 2:26, 102, 218, 241, 362, 498, 500, 518. 13 Table 17.4 presents the debits and credits that were posted to the colonial treasurer’s accounts during 1713–39, excluding the years for which the records are missing. The principal difference between the information in the two tables is the statement of tax evasion and noncompliance, which indicates that the amount of direct taxes on polls and property that was collected was less than the amount specified in the annual levies. 14 A specific tax was authorized to pay members of the council during 1731/33. Acts and Resolves of Massachusetts Bay, 2:604–12, 654–54. 15 For example, the act of July 30, 1715, rated Indian and Negro servants at the judgment of the assessors, land and houses at six years’ income of yearly rents, and oxen, cows, horses, pigs, and sheep of different ages at specific rates. Acts and Resolves of Massachusetts Bay, 2:21.

[ 460 ]

Taxation of the New England Colonies, 1714–1739

With the important caveat of assuming full compliance, column 11 shows a large degree of variation in per capita taxes during 1715–39, from 68.8d. at the beginning of the period to 28.2d. at the end, with a high of 83.7d in 1735/36.16 The high numbers of 114d. and 131.5d. for 1725/30 and 1728/33 were each evenly divided over five years, thus amounting to annual rates for each of the five years in question as 22.8d. and 26.3d., respectively, which must be added to any additional taxes levied for each of the individual years in question during these five-year spans. A decline in tax burdens occurred in the early 1730s and again in the late 1730s, when the quarrel between Belcher and the General Court over control of public spending resulted in smaller tax levies. The growth in economic output roughly mirrored the growth of population between 1714 and 1739. The rate of annual growth of per capita income in New England was fl at between 1720 and 1735, and slightly negative after 1735, which means that only a very small part of the decline in per capita taxation can be attributed to a reduction in output and trade.17 Table 17.2 indicates a roughly even split between direct and indirect tax levies. With the exception of a second act in 1737, the property rate remained constant at 1d./ valuation, a rate of 0.4 percent, less given the extent of undervaluation. The balance of direct taxes was supplied by a variable poll rate, which ranged from a low of 1s. 6d. to a high of 12s. 2d. The General Court apportioned direct taxes to towns and counties. After collecting the poll tax, assessors were to adjust up or down by fractions of a penny the precise rate of property tax to meet revenue targets.

16

These numbers require the caveat that the burden of taxation on trade (duties and tonnage) and that on consumption (excises) did not fully fall on the Bay colony’s residents, but was partly borne by the producers of items imported into Massachusetts and by visitors (for example, sailors, people conducting business, and itinerant travelers). A precise derivation of per capita taxes paid by Massachusetts residents requires subtracting the portion of duties, tonnage, and excises paid by non-residents, further reduced by the degree of tax evasion. There is no way to know the exact amount or percentage, which means that the numbers listed in column 11, which divide total taxes by population for each year, are on the high side. Indirect taxes are likely to be 10–20 percent less and direct taxes also less as a proportion of levies. 17 Mark Egnal, “The Economic Development of the Th irteen Continental Colonies, 1720 to 1775,” William and Mary Quarterly, 3rd ser., 32, no. 2 (April 1975): 200, table 2. Egnal’s calculation is based on changes in per capita exports and imports. Data on the value of exports to and imports from England are found in Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, which includes a chapter on colonial statistics. See table Eg429–42: “Value of Imports into and Exports from England, by Colony or Locality: 1693–1791,” S-710–13. MacInnes estimated, in five-year moving averages, that the per capita volume of British imports into New England fell slightly from 1.1 in 1714 to 1 in 1729, then to 18s. in 1731, at which level it remained through 1738. “Rhode Island Bills of Public Credit,” 585.

[ 461 ]

chap t er 1 7 tabl e . Massachusetts Taxes, 1715/16–1738/39 (Massachusetts Currency) c ol u m n 1

c olum n 2

c olum n 3

column 4

column 5

Year

Total Taxes to Redeem Bills of Credit (.s.d)

Excises, Duties Tonnage, Interest, Lighthouse Money (.s.d)

Poll and Property Taxes (.s.d)

Representatives Pay (.s.d)

22,000 22,000 22,000 22,000 16,000 17,000 16,250 16,000 17,000 24,666.13.4 29,666.13.4

11,000 10,948.6.2 11,000 13,750 11,989.9.6 10,999.2.9 10,250 10,000 10,794.4.5 10,666.13.4 9,666.13.4

29,666.13.4 32,278.6

9,666.13.4 24,000

32,912.12 24,643.16 22,351.15 23,499.14 27,278.15 21,000 35,195.0.4 46,350.19.8 47,121.13.2 9,000 18,500 69,044.18 6,000 16,933.2.8

21,000 11,720 11,759.7 11,552.14 13,617.19 13,012.4 12,509.8 13,425.5.8 13,893.0.8

1715/16 1716/17 1717/18 1718/19 1719/20 1720/21 1721/22 1722/23 1723/24 1724/25 1725/26 1725/30 1726/27 1727/28 1728/33 1728/29 1729/30 1730/31 1731/32 1732/33 1733/34 1734/35 1735/36 1736/37 1737/41 1737/37 1737/38 1738/38 1738/39

20,124.8.9 2,958.6.8

11,000 11,051.13.10 11,000 8,250 4,010.10.6 6,000.17.3 6,000 6,232.13.11 6,205.15.7 14,000 20,000 48,719 20,000 6,000 60,000 8,000 8,280 8,000 6,818 8,007.16 7,987.16 16,015.12 30,093 29,953.7.6 9,000 18,500 44,930.1.3 6,000 13,000

2,278.6 3,912.12 4,643.16 2,351.15 5,109 5,573 6,342.8 2,806.9 3,135.5

3,825.8 974.16

Source: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, vol. 2. (Boston: Wright and Potter, state printer, 1874), 17–22, 46, 52–57, 80–85, 112–18, 143–48, 174–80, 211–17, 251–57, 293–99, 324–30, 350, 352–58, 370–76, 388–95, 440–50, 475–77, 508–15, 533–41, 565–73, 604–12, 645–54, 679–86, 726–35, 802–13, 819–27, 860–76, 893–904, 906–13, 929–37, 952–64.

The property tax included an assessment of income from trade or a profession. The governor, lieutenant governor, and their families, the president, fellows and students of Harvard College, settled ministers and grammar-school masters, and the old, infi rm, and poor deemed unable to contribute to the cost of government were exempt from the poll tax and

[ 462 ]

Taxation of the New England Colonies, 1714–1739

c ol u m n 6

No-Show Fine (.s.d)

240.13 20 80 327.16.4 26.5 140

165 100

c olum n 7

c olum n 8

c olum n 9

column 1 0

column 1 1

Males 16+ Poll Rate

Rounded in Proportion to Additional Poll Rate

Total Poll Rate

Property Tax (d./)

Levied Per Capita Taxes (d.)

5s. 5s. 5s. 3s. 9d. 1s. 8d. 2s. 6d. 2s. 6d. 2s. 6d. 2s. 6d. 5s. 10d. 8s. 4d. 4s. 2d. 8s. 6d. 3s. 5d. 4s. 4s. 4s. 2d. 3s. 5d. 4s. 8d. 4s. 6d. 2s. 8d. 7s. 5d. 7s. 8d. 8s. 2d. 2s. 3d. 4s. 7d. 12s. 2d. 1s. 6d. 3s. 6d.

1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 2d. 1d. 1d. 1d.

68.8 66.4 64.1 61.9 43.6 44.8 41.8 40.3 41.7 71.0 69.4 114.0 67.9 72.3 131.5 72.1 52.9 47.0 47.8 53.8 40.2 65.4 83.7 82.8 15.4 31.6 118.1 10.0 28.2

5s. 5s. 5s. 3s. 9d. 1s. 8d. 2s. 6d. 2s. 6d. 2s. 6d. 2s. 6d. 5s. 10d. 8s. 4d. 4s. 2d. 8s. 6d. 2s. 6d. 4s. 2s. 8d. 2s. 8d. 2s. 8d. 2s. 8d. 2s. 8d. 2s. 8d. 5s. 4d. 7s. 7s. 6d. 2s. 3d. 4s. 7d. 11s. 3d. 1s. 6d. 3s. 3d.

11d. 1s. 4d. 1s. 6d. 9d. 2s. 1s. 10d. 2s. 1d. 8d. 8d.

11d. 3d.

property taxes on estates in their own hand and under their actual management or improvement. Table 17.3 displays duties and tonnage rates. Column 14 lists the proceeds of duties and tonnage that were dedicated to sink specific sums of bills of credit. In the mid-1720s and again in the mid-1730s, rates were substantially increased across the board. Duties on alcoholic beverages roughly doubled during 1715–39, those on tobacco rose by a factor of twenty-five to thirty by the 1730s, and tonnage more than tripled. In 1719 Britain disallowed the imposition of duties on British goods. Duties on

[ 463 ]

chap t er 1 7 tabl e . Massachusetts Duties and Tonnage, 1715/16–1738/39 c ol u m n 1

Year

1715/16 1716/17 1717/18 1718/19 1719/20 1720/21 1721/22 1722/23 1723/24 1724/25 1725/26 1726/27 1727/28 1728/29 1729/30 1730/31 1731/33 1733/34 1734/35 1735/36 1736/37 1737/38 1738/39

c ol u m n 2

c olum n 3

c olum n 4

Pipe West Indies Wine

Pipe Canary Malaga

Pipe Madeira Passado

15s. 15s. 15s. 15s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 25s. 25s. 30s. 30s. 30s. 10s. 7s. 4d.

25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 30s. 30s. 30s. 30s. 30s. 30s. 37s. 6d. 37s. 6d. 45s. 45s. 45s. 15s. 11s.

20s 20s 20s 25s 25s. 20s. 20s. 20s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 30s. 30s. 35s. 35s. 35s. 12s. 8s. 9d.

c olumn 5

column 6

column 7

Pipe Others

Rum Hogshead (100 Gallons)

100 lbs. Sterling English Goods

15s. 15s. 20s. 20s. 20s. 20s. 20s. 20s. 25s. 25s. 25s. 25s. 25s. 25s. 30s. 30s. 35s. 35s. 35s. 12s. 8s. 9d.

15s. 15s. 15s. 15s. 15s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 25s. 25s. 30s. 30s. 30s. 10s. 7s. 4d.

20s. 20s. 20s. 20s. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Source: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, vol. 2 (Boston: Wright and Potter, state printer, 1874), 10–15, 47–52, 75–80, 107–12, 138–42, 169–74, 206–10, 246–51, 288–92, 319–24, 347–52, 395–400, 430–35, 502–8, 528–33, 559–64, 626–32, 674–79, 720–26, 765–71, 796–801, 887–93, 946–52.

sugar and molasses remained steady over the entire period as these products were crucial ingredients in the lucrative rum and slave trade business. In 1737/38 and 1738/39 duties were required to be paid in silver coin at the rate of 6s. 8d. an ounce of silver or gold coin at 4 18s. an ounce of gold; the rate was increased to 7s. 4d. an ounce of silver in 1738/39. Excises on consumption of alcoholic beverages, generally renewed for one or five years at a time (1715, 1716, 1721, 1726, 1727, 1732, 1737), were set at 8d. a gallon on rum, brandy, and distilled spirits and 6d. a gallon on all kinds of wine in 1715. Wine was increased to 8d. in 1721 and both beverages were raised to 12d. in 1737. In 1737, excises were extended to lemons (8s. 4d. per hundred), limes (3s. per hundred), coaches (50s.) and other four-wheel vehi-

[ 464 ]

Taxation of the New England Colonies, 1714–1739

c ol u m n 8

c ol u m n 9

c olum n 10

c olum n 1 1

c olumn 1 2

column 1 3

column 1 4

NonEnglish Goods

Hogshead Sugar

Hogshead Molasses

Hogshead Tobacco

Tonnage Logwood

Tonnage Per Ton

Pounds to Retire Bills of Credit Collected in Duties

1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 1d./20s. 2d./20s. 2d./20s. 3d./20s. 3d./20s. 3d./20s. 3d./20s. 3d./20s.

2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 2s. 1s. 6d.

1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 1s. 6d. 4d.

1s. 6d. 1s. 6d. 1s. 6d. 1s. 6d. 5s. 5s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 20s. 25s. 25s. 35s. 70s. 35s. 10s. 8s. 9d.

3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 3s. 6s. 3s. 1s. 9d.

18d. 18d. 18d. 18d. 18d. 18d. 18d. 18d. 18d. 18d. 30d. 30d. 30d. 30d. 30d. 30d. 30d. 30d. 5s. 5s. 5s. 1s. 8d. 1s. 4d.

n.s. 5,000 4,000 4,000 16,000 2,500 2,500 2,500 3,000 3,666.13.4 3,666.13.4 3,666.13.4 5,200 8,000 5,000 5,000 21,000 21,000 28,525 43,525 43,986.8.2. 65,054 not stated

cles (20–30s.).18 The specific goal of 1,300 was fi xed in 1715/16 after which excises were set in rates rather than revenue targets. The proceeds were assigned to redeem bills of credit issued in specific years. The treasurer’s annual statements, save those years in which the records are missing, provide an accounting of the colony’s public finances.19 The accounts employ the standard double-entry accounting of debits and credits. The treasurer debited receipts and balances due from the taxpayers, receipts and balances due from collectors of indirect taxes, receipts of loan principal 18

Acts and Resolves of Massachusetts Bay, 2:15–16, 39–41, 203–5, 400–403, 415–18, 639–43, 849–54. 19 Appendix B to this chapter explains the structure of the treasurer’s statements, using the statement of 1734/35 to illustrate the debit and credit entries that reflected the double-entry accounting employed by the treasurer.

[ 465 ]

tabl e . Massachusetts Treasurer’s Statements, 1713/14–1738/39 (£. s. p. Massachusetts Currency) Debits c ol u m n 1

Year

1713/14 1714/15 1715/16 1716/17 1717/18 1718/19 1719/20 1721/22 1722/23 1724/25 1726/27 1727/28 1728/29 1729/30 1730/31 1731/32 1733/34 1734/35 1735/36 1736/37 1737/38

c olum n 2

c olum n 3

column 4

column 5

Outstanding Taxes of the Towns

Current Tax Year Levy

Loans Outstanding to Be Repaid

Principal Repayment Received

7,775.3.8 4,418.16.2 5,689.3.6 5,404.4.3 3,237.18.3 2,777.14.9 2,929.3.8 3,285.14.4 14,046.8.8 11,407.15.0 5,589.8.11 6,878.17.11 11,940.19.5 10,420.9.11 13,976.7.0 9,196.19.0 73,679.12.4 69,306.4.8 79,424.9.11

22,648.17.3 16,500.0.0 11,000.0.0 11,061.4.10 10,998.10.0 11,250.10.0 4,010.11.6 6,003.19.10 6,232.13.11 14,000.0.0 19,999.9.7 8,278.6.0 11,912.9.0 11,023.16.0 10,591.18.0 11,947.6.0 7,987.16.0 22,685.16.4 32,933.8.3 33,228.12.6 48,920.9.3

48,719.0.0 48,182.16.0 37,594.15.0 87,250.0.0 78,689.3.11 71,136.5.9 62,816.3.10 62,638.2.11 61,878.8.6

2,619.3.2 8,502.0.0 5,744.0.0 4,757.8.0 10,629.18.0 858.19.10 1,327.2.4 632.0.5 3,306.14.2 29,233.3.10 7,043.8.9 5,111.5.6 8,604.17.4 10,370.15.1 2,454.19.8 10,179.0.10 1,453.17.1 1,370.17.9 2,371.0.4

Credits c ol u m n 1

c olum n 1 8

Year

Outstanding Taxes of the Towns

1713/14 1714/15 1715/16 1716/17 1717/18 1718/19 1719/20 1721/22 1722/23 1724/25 1726/27 1727/28

4,418.16.2 5,689.3.6 5,404.4.3 3,237.18.3 1,801.3.8 2,929.3.8 2,574.7.8 5,674.8.4 11,407.5.10 5,589.5.11

c ol umn 1 9

column 20

Loan Office Bills Burned

Bills Received of Taxes, Duties, Excises, Burned

10,763.1.3 6,908.2.3 15,427.5.6 13,252.10.10 7,584.7.6 4,587.7.0 3,095.14.7 2,196.8.3

[ 466 ]

464.13.7 14,883.19.5 12,334.15.1 1,702.9.2

3,235.13.2 18,064.5.7

c ol u m n 6

c olum n 7

c olum n 8

column 9

column 1 0

Interest Money Received

Bills of Credit Received from Trustees or General Court

Bills Received in Taxes, Excises, Duties

Excises

Duties

20,258.11.4 15,222.10.10

1,799.10.5

4,463.14.2 4,069.1.2 13,622.3.3 8,111.3.0 3,092.10.5 3,160.13.10 5,127.0.4 6,191.17.6 20,772.6.4 34,716.2.6 30,811.14.6 52,776.15.7 61,876.15.11 40,220.2.8 77,366.9.5 8,488.0.5

946.0.3 67,107.19.11

43,939.13.5

1,156.11.6 2,443.12.11 2,366.16.11 3,065.15.11 2,133.4.5 2,582.18.8 2,701.18.1 3,158.12.1 3,480.15.5 3,451.14.7 3,270.11.7 3,240.13.2 3,282.15.7 3,974.12.9 3,158.2.7 3,780.10.3 3,828.18.4 3,230.11.3 4,048.0.7

3,095.6.11 4,050.15.5 4,967.15.8 5,119.9.0 2,301.12.6 2,917.0.2 2,656.4.2 3,588.1.8 4,849.13.3 4,922.14.6 4,862.19.10 2,937.9.5 3,519.3.0 3,731.19.5 4,686.8.10 4,384.6.0 4,409.15.5 5,347.8.6 2,532.7.3

539.0.3 1,722.1.0 1,164.2.3 3,181.4.11 5,688.2.3 2,687.13.9 6,811.7.1 11,614.12.4 8,916.8.6 13,211.17.8 5,093.5.10 4,555.15.11 3,657.17.11 3,846.1.11 3,021.0.8 3,992.1.11 215.0.10 149.19.5 1,981.8.6

c ol u m n 2 1 Bills Exchanged or to Be Exchanged for Counterfeits

15,000.0.0 15,471.2.3 68,193.5.10 108,719.0.0 40,000.0.0 75,281.0.0 10,000.0.0

c olum n 22

c olumn 23

column 24

Bills Reissued

Bills Outstanding of Loans

Bills in Hand Not from Taxes in Treasurer’s Hand

9,000.0.0 9,300.0.0

7,952.5.9 3,991.9.10 3,991.9.10

7,597.14.0 400.0.0 450.0.0

48,719.0.0 48,719.0.0 48,719.0.0 37,594.15.0 138,553.10.0

[ 467 ]

1,222.10.10 2,537.11.9 507.14.6 13,471.2.3 214.8.6 7,817,12.2 31,864.3.3 17,700.18.11 10,027.4.5

tabl e . (continued) Massachusetts Treasurer’s Statements, 1713/14–1738/39 (£. s. p. Massachusetts Currency) Debits (continued) c ol u m n 1

Year

1713/14 1714/15 1715/16 1716/17 1717/18 1718/19 1719/20 1721/22 1722/23 1724/25 1726/27 1727/28 1728/29 1729/30 1730/31 1731/32 1733/34 1734/35 1735/36 1736/37 1737/38

c olum n 1 1

c olumn 1 2

column 1 3

Fines

Tonnage Gunpowder

Lighthouse Money

13.9.6 12.16.0 19.9.2 41.6.2 38.12.3 29.8.4 13.8.0 4.19.0 20.2.9 14.18.4 31.15.0 3.15.0 26.13.4 13.8.4 9.15.0 8.13.4 15.5.0

131.18.4 365.1.0 560.2.6 679.12.4 69.16.0 85.16.9 195.15.5 80.11.4 142.3.11 98.13.11 65.8.3 74.7.6 0.10.0 226.18.1 303.17.0

104.16.0 207.1.10 118.7.7 102.14.5 116.15.7 113.16.0 104.7.6 113.5.8

3,224.0.0

201.13.1

47.5.0

1,536.0.0

200.3.1

c olum n 25

c olumn 26

column 27

Bills Received in Taxes, Duties, Excises in Treasurer’s Hand

Total Bills Received in Taxes, Duties, Excises

Approved Payments

4,069.1.2 13,622.3.3 8,111.3.0 3,092.10.5 4,278.5.5 5,127.0.4 12,017.13.9 11,041.1.7 34,716.2.6 30,811.14.6

4,069.1.2 14,086.16.10 22,995.2.5 15,427.5.6 5,980.14.7 5,127.0.4 12,017.13.9 13,366.14.9 52,780.8.1 30,811.14.6

32,342.10.5 9,481.15.8 11,402.12.2 11,521.9.1 15,670.18.0 20,285.0.2 43,937.0.0 60,208.11.7 29,958.16.3 43,449.19.4

Credits (continued) c ol u m n 1

Year

1713/14 1714/15 1715/16 1716/17 1717/18 1718/19 1719/20 1721/22 1722/23 1724/25 1726/27 1727/28

[ 468 ]

col u m n 1 4

c olum n 15

c ol umn 1 6

column 1 7

Bills Remaining in Hand But Not Yet Spent

Bills for Exchange

Miscellaneous Debits

Total Debits

2,537.11.9 507.14.6 2,315.4.1 5,641.13.3 18,084.3.1 19,849.16.5

4,191.9.10 3,991.9.10

1,043.7.0 1,453.2.0 210.18.5 190.11.0 75.0.0 200.7.1 4.10.0 522.0.4

50.3.0 309.17.1 30,442.2.6 508.8.7

c ol u m n 2 8

c olum n 29

c olumn 30

Total Credits

Massachusetts Currency on London Sterling

Sterling Equivalent of Total Credits and Total Debits

51,052.18.7 51,858.8.11 47,670.15.0 54,117.9.2 46,710.15.9 96,847.8.8 147,799.5.6 149,675.8.2 143,964.17.10 218,404.9.9

151.67 156.83 161.42 166.25 185.00 208.44 218.16 227.89 235.80 278.52 291.09 295.40

31,627.4 31,193.1 25,768.0 25,963.1 21,411.3 42,497.5 62,680.0 53,748.5 49,455.4 73,935.3

[ 469 ]

51,052.18.7 51,858.8.11 47,670.15.0 54,117.19.2 46,710.15.9 96,847.8.8 147,799.5.6 149,675.8.2 143,964.17.10 218,404.9.9 166,234.3.3 167,313.15.7 175,682.17.11 147,678.4.8 175,716.14.9 126,769.3.4 138,267.12.1 153,571.13.9 250,738.9.4

chap t er 1 7 tabl e . (continued) Massachusetts Treasurer’s Statements, 1713/14–1738/39 (£. s. p. Massachusetts Currency) Credits (continued) c ol u m n 1

c olum n 1 8

c olumn 1 9

column 20

Year

Outstanding Taxes of the Towns

Loan Office Bills Burned

Bills Received of Taxes, Duties, Excises, Burned

1728/29 1729/30 1730/31

6,878.17.11 11,940.19.5 10,420.9.11

29,193.11.4

included in loan office bills

1731/32 1733/34

11,168.7.2 9,196.19.0

28,930.18.0

included in loan office bills

1734/35 1735/36 1736/37 1737/38

72,263.3.1 73,323.13.2 79,424.9.11 88,428.12.10

90,385.12.2

c ol u m n 1

Year

1728/29 1729/30 1730/31 1731/32 1733/34 1734/35 1735/36 1736/37 1737/38

c olum n 25

c olumn 26

column 27

Bills Received in Taxes, Duties, Excises in Treasurer’s Hand

Total Bills Received in Taxes, Duties, Excises

Approved Payments

42,776.15.7 61,876.15.11 40,220.2.8 57,486.6.4 8,488.0.5 22,022.1.0 24,455.18.3 43,939.13.5 49,383.0.8

26,989.5.10 22,359.14.6 33,032.10.3 16,761.16.8 67,222.8.0 32,483.3.4 40,488.0.6 30,214.10.5 21,421.9.1

42,776.15.7 61,876.15.11 40,220.2.8 57,486.6.4 8,488.0.5

Notes: 1. The treasurer’s statements are missing for fiscal years 1712/13, 1720/21, 1723/24, 1725/26, 1732/33, and 1738/39. 2. The table excludes a small entry dated May–June 1736 that listed total debits and credits of 4,033 11s. 8d. The debits are not itemized. The credits consist of 2,603 19s. 1d. for bills received in taxes, duties, excises, and loans, and 1, 429.12.7 in approved payments. 3. Light house money appeared as a separate entry beginning in 1724/25. 4. The 77,366.9.5 in column 8 for 1733/34 includes repayment of loans and interest. 5. In column 2, beginning in 1735/36 for the debits and 1734/35 for the credits, outstanding loans and outstanding interest were combined with outstanding taxes of the towns. Outstanding taxes and outstanding loans plus outstanding interest were no longer recorded as separate items. 6. Beginning in 1724/25, loans outstanding to be repaid (column 4) were included as a debit, but were combined with outstanding taxes of the towns (column 2) from 1735/36.

[ 470 ]

Taxation of the New England Colonies, 1714–1739

c ol u m n 2 1 Bills Exchanged or to Be Exchanged for Counterfeits

c olum n 22

c olumn 23

column 24

Bills Reissued

Bills Outstanding of Loans

Bills in Hand Not from Taxes in Treasurer’s Hand

82,666.13.11 71,136.18.8 62,816.3.10

10,000.0.0

62,251.14.6 61,878.9.6

c ol u m n 2 8

c olum n 29

c olumn 30

Total Credits

Massachusetts Currency on London Sterling

Sterling Equivalent of Total Credits and Total Debits

166,234.3.3 167,313.15.11 175,682.17.11 147,678.4.8 175,716.14.9 126,769.3.4 138,267.12.1 153,571.13.9 250,738.9.4

306.08 325.52 336.01 336.91 352.50 357.50 395.00 473.34 508.34

54,307.2 51,398.9 52,286.5 43,834.4 49,848.7 35,459.9 35,004.5 32,444.3 49,325.0

7. The statements show an entry for bills received in taxes on polls and estates, excises, and duties (column 8), along with separate entries for excises (column 9) and duties (column 10). The three entries are additive in summing to total debits. Neither the statements nor the legislature rec ords in which the statements were printed explain the difference between excises and duties incorporated in the fi gures in column 8 with the separate entries in columns 9 and 10. 8. The debit entry for bills of credit received includes new bills, bills previously received in principal and interest, and bills received for exchange that were not yet burned or spent. The credit entry for bills remaining in hand includes new bills not yet distributed, bills received in principal and interest not yet burned, and bills for exchange. The difference between the debit entry for bills received and the credit entry for bills in hand is new bills issued that were transferred to the trea surer. Source: Treasurer’s annual statements, Massachusetts Archives.

[ 471 ]

chap t er 1 7

and interest, bills of credit received for expenditure or for distribution to the towns and counties for lending, fines from justices of the peace, and other miscellaneous items that arose from time to time. He credited payments he made on approval of the General Court, bills of credit that were redeemed (burned), outstanding taxes (tax arrears), loan office bills reissued on authority of the General Court, new bills exchanged for worn, ragged, and counterfeit bills, bills remaining in hand for expenditures to be approved by the General Court, and bills collected in direct taxes, duties, and excises. Total debits matched total credits. Table 17.4 reveals several trends in the colony’s public finances. Column 2 shows that arrears of direct taxes on polls and property, labeled outstanding taxes of the towns in the statement, was chronic throughout the era of salutary neglect. In 1727/28, 1730/31, and 1733/34, arrears exceeded the current year’s direct tax levy. Beginning in 1735/36, loans outstanding to be repaid were combined with outstanding taxes, which explains the eightfold rise in the number for that year. Outstanding taxes in 1735/36 were in the neighborhood of twelve thousand pounds, derived by subtracting outstanding loans the prior year (column 4) from the total in column 2. It should be noted that the real value of the annual tax on polls and property, measured in terms of the exchange rate of Massachusetts currency against sterling (column 28) rather than depreciated Massachusetts currency, was higher during the six fiscal years encompassing 1713/14 to 1718/19 than during the rest of the period, until the outbreak of the war with Spain in late 1739. In the same vein, the sterling equivalent of receipts from excises, duties, and tonnage was lower in the 1720s and 1730s. The era of salutary neglect was an era of declining taxation. Table 17.4 reveals that repayment of loan principal (column 5) and interest (column 6) fluctuated widely. Annual receipts from these two sources were modest compared with an outstanding stock of bills exceeding three hundred thousand pounds during 1725–39, save only a slightly smaller two hundred ninety thousand pounds in 1733. The provincial government did not give priority to reducing the colony’s public debt. Bills of credit were too valuable as currency and a source of revenue to reduce the stock in circulation. Receipts from excises (column 9), duties (column 10), fines (column 11), tonnage (column 12), and lighthouse money (column 13) were relatively modest throughout the period. The increases in the recorded entries of these funds largely reflect the devaluation of Massachusetts currency. Table 17.5, taking into account four missing years of treasurer’s statements, compares the General Court’s resolutions of total taxes (column 2) with the treasurer’s statement of revenue received in taxes and interest (column 4). Total taxes resolved by the General Court for the period 1715/38 amounted to 784,150. The comparable figure in the treasurer’s statements is 643,317, but including data from the missing four years would likely narrow the gap [ 472 ]

tabl e . Massachusetts Annual Levies Compared with Receipts of Taxes and Interest, 1715–1738 (£ Massachusetts Currency) col u mn 1

c olum n 2

c olum n 3

column 4

column 5

column 6

column 7

column 8

col u m n 9

c olu m n 10

Interest Money Received

Bills Received in Taxes, Excises, Duties

Excises

Duties

Tonnage Gunpowder

Lighthouse Money

[ 473 ]

General Court Year

Total Taxes to Redeem Bills of Credit (.s.d.)

Treasurer Statement Year

Sum of Separate Taxes and Interest

1715/16 1716/17 1717/18 1718/19 1719/20 1720/21 1721/22 1722/23 1723/24 1724/25 1725/26 1725/30 1726/27 1727/28 1728/33 1728/29 1729/30 1730/31 1731/32 1732/33 1733/34 1734/35 1735/36 1736/37 1737/41 1737/37 1737/38 1738/38 Total

22,000 22,000 22,000 22,000 16,000 17,000 16,250 16,000 17,000 24,667 29,667 48,719 29,667 32,279 60,000 32,913 24,644 22,352 23,500 27,279 21,000 35,195 46,351 47,122 9,000 18,500 69,045 6,000 784,150

1715/16 1716/17 1717/18 1718/19 1719/20

9,387 12,651 22,681 20,157 13,286

539 1,722 1,164 3,181 5,688

4,464 4,069 13,622 8,111 3,093

1,157 2,444 2,367 3,066 2,133

3,095 4,051 4,968 5,119 2,302

132 365 560 680 70

1721/22 1722/23

11,435 17,492

2,688 6,811

3,161 5,127

2,583 2,702

2,917 2,656

86 196

1724/25

24,740

11,615

6,192

3,159

3,588

81

105

1726/27 1727/28

38,369 56,520

8,917 13,212

20,772 34,716

3,481 3,452

4,850 4,923

142 99

207 118

1728/29 1729/30 1730/31 1731/32

44,206 63,701 72,451 52,104

5,093 4,556 3,658 3,846

30,811 52,776 61,876 40,220

3,271 3,241 3,283 3,975

4,863 2,937 3,519 3,732

65 74 1 227

103 117 114 104

1733/34 1734/35 1735/36 1736/37

88,648 20,645 11,880 8,727

3,021 3,992 215 149

77,366 8,488

3,158 3,781 3,829 3,231

4,686 4,384 4,410 5,347

304

113

3,224

202

1737/38

54,237

1,981

43,940

4,048

2,532

1,536

200

64,3317

82,048

418,804

58,361

74,879

7,842

1,383

chap t er 1 7

to no more than ten thousand pounds or so. The historical trend of outstanding taxes during 1730–35 before the inclusion of outstanding loans altered the presentation of that number. It is important to stress that the levies and taxes collected during 1734– 38 took place during a period of sharp devaluation of about 43 percent in the external value of the colony’s currency, from 357 Massachusetts currency to 100 sterling in 1734/35 to a much weaker 508 in 1737/38. The sterling equivalent of total credits and debits was considerably lower in those four years than in the preceding ten years. To summarize, from 1719 through 1738, the Bay colony’s residents enjoyed relatively low taxes. At the end of the era of salutary neglect, dated as Great Britain’s declaration of war on Spain on October 19, 1739, the residents of Massachusetts were lightly taxed at just over 2s. Massachusetts currency a head. In marked contrast, the burden of Britons was on the order of 1 sterling a head, some fifty times higher (1 sterling was then equivalent to 5 Massachusetts currency). Taxation was not much of an issue in Massachusetts during the 1730s, except as a means for the colonists to limit the power of royal governors.

Taxation in Connecticut, 1714–1739

A

g r icultur e r emained the mainstay of Connecticut’s economy, but the decreasing ratio of land to population encouraged a shift in production from self-sufficient farming into commercial agriculture, trading, and urban pursuits. Between 1710 and 1740, average land per family declined by almost half, from 397 to 208 acres. Attention was given to milk and dairy products and livestock for export. Shipbuilding became an important area of economic activity along with crafts, some manufacturing, and gristmills and sawmills. The passage of time shows an increasing number of artisans in the tax lists engaged in tanning, milling, smithing, tailoring, carpentry, and shoemaking. 20 The system of taxation in Connecticut remained unchanged during 1714–39. A grand list of assessments combining poll and property taxes was compiled on an annual basis in fiscal years 1714/15 through 1716/17. Thereafter, assessments were submitted to the legislature on a semi-annual basis, the main list in October and a supplemental list the following May. Each year the legislature imposed a tax rate specifying the number of pence per pound of valuation. The trend of taxation appears in table 17.6. Column 2 reveals a steady growth in the list, not quite tripling in total valuation, between 1714/15 and 1739/40. During the same period, the

20 Bruce C. Daniels, “Economic Development in Colonial and Revolutionary Connecticut: An Overview,” William and Mary Quarterly, 3rd ser., 37, no 3 ( July 1980): 429–50.

[ 474 ]

Taxation of the New England Colonies, 1714–1739 tabl e . Connecticut Direct Taxes, 1714/15–1739/40 (Connecticut Currency) c ol umn 1

col u m n 2

c olum n 3

c olum n 4

c olum n 5

column 6

column 7

column 8

Year

Grand List ()

Tax Rate (d./)

Tax Rate ()

Estimated Taxes

Population

Per Capita Taxes ()

Per Capita Taxes (d.)

1714/15 1715/16 1716/17 1717/18 1718/19 1719/20 1720/21 1721/22 1722/23 1723/24 1724/25 1725/26 1726/27 1727/28 1728/29 1729/30 1730/31 1731/32 1732/33 1733/34 1734/35 1735/36 1736/37 1737/38 1738/39 1739/40

311,214 327,393 351,369 377,468 397,506 416,847 432,991 457,353 470,847 492,621 510,888 542,127 560,936 570,691 605,169 622,135 640,719 670,637 703,859 732,763 694,552 764,877 790,997 797,852 824,045 830,432

2 3 3 2 2 2 2 1 2 0 3 2 3 2 2 2 2 2 2 1.5 1 1 1 1 1 1

0.833 1.25 0.833 1.25 1.25 1.25 1.25 0.4167 1.25 0 0.833 1.25 0.833 1.25 1.25 1.25 1.25 1.25 1.25 0.625 0.4167 0.4167 0.4167 0.4167 0.4167 0.4167

2,592.4 4,092.4 2,926.9 4,718.4 4,968.8 5,210.6 5,412.4 1,905.8 5,885.6 0.0 4,255.7 6,776.6 4,672.6 7,133.6 7,564.6 7,776.7 8,009.0 8,383.0 8,798.2 4,579.8 2,894.2 3,187.2 3,296.1 3,324.6 3,433.8 3,460.4

49,140 51,078 53,016 54,954 56,892 58,830 60,500 62,170 63,840 65,510 67,180 68,850 70,520 72,190 73,860 75,530 76,935 78,340 79,745 81,150 82,555 83,960 85,365 86,770 88,175 89,580

0.053 0.080 0.055 0.086 0.087 0.089 0.089 0.031 0.092 0.000 0.063 0.098 0.066 0.099 0.102 0.103 0.104 0.107 0.110 0.056 0.035 0.038 0.039 0.038 0.039 0.039

12.7 19.2 13.2 20.6 21.0 21.3 21.5 7.4 22.1 0.0 15.2 23.6 15.9 23.7 24.6 24.7 25.0 25.7 26.5 13.5 8.4 9.1 9.3 9.2 9.3 9.3

Sources: Charles J. Hoadly, ed., Th e Public Records of the Colony of Connecticut (Hartford: Case, Lockwood and Brainard, 1894– 1953), vol. 5, From October, 1706, to October, 1716 (1870), 464, 466, 526–28, 578–80; vol. 6, From May, 1717, to October, 1725 (1872), 22, 35, 57–58, 88, 116, 118, 145, 158, 182–83, 220, 223, 236–37, 271–72, 307, 320, 348–49, 362, 370, 433, 468, 389, 497, 550, 570, 577; vol. 7, From May, 1726, to May, 1735 (1873), 45, 56, 59–60, 94, 134–35, 140, 169, 195, 199, 246, 253–54, 284, 300, 304–5, 320–21, 350, 353, 370–71, 405, 407–8, 444–45, 470–71, 476, 497, 532, 535, 552; vol. 8, From October, 1725, to October, 1743 (1874), 6, 13, 41, 57, 69–70, 91–92, 123, 146–47, 174–75, 198–99, 218, 255, 262, 275–76, 311–12.

population increased 80 percent, not quite doubling. The increase in the value of real property outpaced the rise in population. The tax rate fluctuated between 2 and 3d./ between 1714/15 and 1720/21, briefly declined in the next three years, and returned to the previous range for the next nine years through 1732/33. After a one-time reduction to 1.5d. in 1733/34, it was lowered to 1d., at which rate it remain through the end of the decade. Column 4 presents the tax rate in percentage terms. Column 5 lists the estimated taxes that were likely to be collected, assuming full compliance, [ 475 ]

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multiplying the rate by the valuation in the list. 21 Columns 7 and 8 estimate per capita taxation. With the exception of 1730/31, per capita taxation in Connecticut was less than or just barely more than half that in Massachusetts, and only about a third in 1739/40. Between 1715 and 1740, the low tax burden of about 2s. a head fell to less than 1s., a stunningly low level of 9.3d., less than 1 percent than that of Britons. The decline in the 1730s was due partly to an issue of 50,000 in bills of credit in 1733, which permitted the government to finance its expenditures partly with new paper money. Each year the legislature set a level of taxation to be collected by a specific time. For example, a tax of 1,260 levied in October 1717 was to be fully paid by October 31, 1726. Th is pattern of deferred payment was standard throughout the period. Until 1725 payment could be made in bills of Connecticut, of all other New England colonies, or of New York, or in silver. After 1725, bills of Rhode Island and New Hampshire were no longer accepted. The Treasury granted a 12d. advance on payment in Connecticut bills, which made 100 Connecticut currency worth 105 in taxes. Th is premium partly explains the 89 percent fall in the stock of Connecticut bills between 1714 and 1732. Various professions were added to the list for rating and taxation over time: physicians in 1722, attorneys in 1725, and justices of the peace in 1727. 22 Those exempt from taxation included the governor, deputy governor, the rector and tutors of Yale College, schoolmasters and students. After 1720 those aged seventy and over were also exempt. Some indirect taxes were levied. Export duties were put on several timber products in May 1715. In October 1717 the legislature enacted duties of 30s. a pipe of wine and 50s. a hogshead of rum and other distilled liquors for two years. If imported in locally owned vessels, the rates were reduced to 15s. and 20s., respectively. Concern over excessive consumption led to a temporary tax of 15 a hogshead of rum for two years beginning May 1, 1723. Tonnage of 15s. per ton was enacted in 1726. Given the low level of the colony’s trade, receipts from indirect taxes remained small. 23 The colony granted premiums for the production of a variety of silk products in 1734.24 From the beginning, the General Assembly recognized ecclesiastical societies as taxing authorities that were empowered to levy taxes on polls and estates to support ministries. The English Toleration Act of 1689 gradu-

21 Actual receipts of direct taxes are extant in the treasurer’s statements only for the fiscal years 1755/56 through 1765/66. 22 Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut, vol. 5, From October, 1706, to October, 1716 (Hartford: Case, Lockwood and Brainard, 1870), vol. 6, From May, 1717, to October, 1725 (1872), 525, and vol. 7, From May, 1726, to May, 1735 (1873), 143 (hereafter Public Records of Connecticut). 23 Public Records of Connecticut, 5:499, 6:36, 224, 7:9. 24 Public Records of Connecticut, 7:494–95.

[ 476 ]

Taxation of the New England Colonies, 1714–1739

ally pressured the colony to recognize dissenters. In 1727 the legislature extended exemption to Church of England ministers and gave Anglicans the power to tax themselves to support their ministries. Exemption was next extended to Quakers and Baptists in 1729, who were freed from taxes in support of Congregational churches. Numerous residents took advantage of this loophole, becoming Baptists to avoid compulsory Congregational taxes. Congregationalists complained to the legislature that rising Baptist membership was making it difficult for them to meet the expenses of their ministries. This behavior shows that the colony’s residents sought to avoid even minimal parish rates. 25 An act of 1700 required towns exceeding seventy families to support a public school. Each local treasurer was instructed to add a 40s. rate to every 1,000 (0.2 percent) in the Grand List. From 1711 the money was disbursed from the colonial Treasury to ensure uniform treatment among towns. The tax remained unchanged until the rate was reduced to 10s. in 1753. 26 Low taxes and limited printing of paper money can be explained by the modest financial needs of the colonial government. The governor’s salary was only a few hundred pounds. In a response to queries on conditions in Connecticut raised by the Board of Trade in September 1730, the colony’s secretary replied that annual revenues arising from rates and duty was about 4,000 Connecticut currency (1,348 sterling), of which about one-quarter was to support free public schools, some to redeem war debts incurred in the expedition against Canada, and the rest to pay current administrative expenses.27 Presuming his figure was accurate, the estimate of about 8,000 for that year presented in table 17.6 suggests that enforcement and compliance were partial, as well as why the legislature was able to halve the rate several years later. It should be borne in mind that Connecticut’s charter provided a high degree of autonomy. The colony’s residents elected their own governor and members of the Lower and Upper houses. The royal hand was largely absent in internal affairs.

Taxation in Rhode Island, 1714–1739

R

hode isl and prospered during the era of salutary neglect. Farmers increased their production of crops and livestock. Trade with the Caribbean and coastal North America expanded dramatically. Rhode Island became a major participant in the slave trade. Underpinning the colony’s expansion was the virtual absence of taxation. The annual cost of its colonial government was financed almost entirely from interest on bills of credit. The 25

Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979),

110–29. 26 27

Taylor, Colonial Connecticut, 143–46. Public Records of Connecticut, 7:585.

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Rhode Island Bank of 1715, the colony’s first land bank, required that interest income be used to sink 1,000 of the loan annually until all of the old former bills were redeemed, after which the remaining interest was to be applied to the general use of the colony as directed by the General Assembly.28 Subsequent banks, or new loan office issues, included similar provisions. Between 1716 and 1721, the colonial Treasury received 10,000 Rhode Island currency in interest income; receipts from all other sources came to a meager 102 2s. 3d., about 2 percent of the total. During this period, no new taxes were approved by the General Assembly. During the next five years, interest income contributed 10,000 of total receipts of 11,867 2s. 7d. Treasury income for the next four years through 1729 came to 10,306 2s. 10d., again mostly from interest.29 Total expenditures of the colonial government during the ten years 1721–31 came to 32,054 19s. 83 ⁄4d. Of this, 9,111 13s. 5d. represented expenditures on Fort Ann. The balance, the cost of civil government, averaged 2,294 per year, which corresponds with a report sent by the governor to the Board of Trade in 1731. 30 Per capita outlays of Rhode Island’s government exceeded that of Connecticut owing to the interest income received from the much larger issue of Rhode Island bills of credit. From the beginning, redemption of bills lagged the volume receivable, resulting in a steadily rising stock of interest-earning treasury assets. The outstanding balance increased from 51,948 in 1715 to 376,202 in 1739 (see table 17.1). Interest income continued to fi nance the cost of civil administration until the approval of a tax levy in June 1744, the first since May 1713. For thirty-one years, the colony financed its government without any new direct tax measures. 31 John MacInnes estimates that well over 90 percent of interest money was collected despite a lax system of administration, the confusion of records, and considerable arrears in repayment. The few other sources of revenue consisted of duties on Negro slaves and imported sugar, the latter largely a protective measure. The act of 1708, renewed in 1711 and 1715, laid a duty of 3 on each imported Negro slave. The 1715 measure also banned the importation of Indian slaves. Initially approved to pave the streets of Newport and build bridges and other public works, Negro slave duty supplied a small amount of revenue until its suspension in 1732 in response to the lucrative slave trade in Newport and royal preference. 32 Duty on sugar was imposed in 1731 to encourage local sugar refining. 28

MacInnes, “Rhode Island Bills of Public Credit,” 138. MacInnes, “Rhode Island Bills of Public Credit,” 149, 188. 30 MacInnes, “Rhode Island Bills of Public Credit,” 189–90. 31 MacInnes, “Rhode Island Bills of Public Credit,” 383–84. 32 Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 163. 29

[ 478 ]

Taxation of the New England Colonies, 1714–1739

Bounties were commonplace during 1714–39. They were granted on hemp at 8d. and flax at 10d. per pound in 1721 to reduce the need to import cordage. A currency issue of 1731 was used to pay bounties for ten years on hemp at 9d. and flax at 4d. per pound, whale oil at 5s. a barrel, whalebone at 1d. a pound, and 5s. a quintal on codfish so long as the vessels were owned in Rhode Island, departed from a colony port, and were manned by local fishermen.33 To summarize, the inhabitants of Rhode Island lived through the era of salutary neglect virtually free from taxation. As in Connecticut, Rhode Island’s charter granted it a high degree of autonomy. The colony’s residents elected their own representatives and governor. Internal politics did not generate serious disagreements over taxation.

Taxation in New Hampshire, 1714–1739

A

l ong w i t h farming, lumbering, naval stores, and shipbuilding, real estate speculation became increasingly profitable with the arrival of immigrants from the British Isles, especially Scotch-Irish from Ulster, former white indentured servants from the West Indies, and migrants from southern New England.34 New towns were founded as speculative proprietary ventures. The governor and his councillors awarded land grants to themselves and house members, who sold land to new settlers. Each new town was assigned a portion of the provincial tax, thus easing the burden on the residents of the original four towns. With the exception of a confl ict with the Abenaki Indians on the colony’s eastern frontier during 1722–25, known as Drummer’s War after Lieutenant Governor William Drummer of Massachusetts, New Hampshire enjoyed a quarter century of relative peace and prosperity. The colony expanded from its roots as a largely selfsufficient farming community into a more complex trading community. Shipments of pine timber rose eightfold from an annual figure of a quarter million board feet in the 1690s to nearly two million feet in the 1730s. 35 Between 1717 and 1730 John Wentworth, a member of a prominent New Hampshire family, served as lieutenant governor, the chief executive in the absence of the joint governor with Massachusetts. During Wentworth’s tenure, the House of Representatives and the Council enjoyed harmonious relations. Councillors paid no provincial taxes. Wentworth awarded lucrative high militia and judicial appointments to his supporters in the legislature. To retain political support, little recourse was made to new taxes. 33

MacInnes, “Rhode Island Bills of Public Credit,” 196, and James, Colonial Rhode Island, 165. New Hampshire’s colonial records, including the proceedings of the Council and General Assembly, are contained in Nathaniel Bouton, ed., Provincial and State Papers, 10 vols. (Concord, NH: 1867–1919). Vol. 3 covers 1692–1722 (1869); vol. 4 covers 1722–37 (1870). 35 Jere R. Daniell, Colonial New Hampshire: A History (Millwood, NY: KTO Press, 1981), 133–55. 34

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Vague valuations for purposes of assessment were replaced with fi rm guidelines including merchants’ stock.36 Electors required 50 of real estate to vote and candidates for office required 300. 37 Circumstances changed in 1730 with the appointment of Thomas Belcher as governor. Wentworth was replaced with David Dunbar, who remained firmly under Belcher’s thumb. Under instructions from London, with two exceptions, Belcher blocked the issue of new bills of credit, cramping colonial finances during the 1730s. Before Belcher’s arrival, New Hampshire’s House of Representatives emulated its New England counterparts with heavy reliance on bills of credit to finance public expenditures. It routinely reissued bills received in taxes to keep paper money in circulation, extended the repayment of loans issued by the colony’s public land bank, and frequently deferred the collection of taxes to redeem them. As noted in chapter 13, New Hampshire bills received in taxes in 1710, 1711, and 1712 were reissued rather than destroyed to retire the colony’s debt. Bills of 500 received in taxes in 1715 were reissued, followed with a reissue of 1,500 in 1716. Half of the 2,000 due in taxes in 1716 was abated until 1721. Bonds due for repayment in 1717 were extended to 1718. Tax of 1,000 due in 1718 was deferred until 1723. Part of the tax money scheduled for collection to redeem paper bills in 1719, 1720, and 1721 was postponed.38 In 1729 the legislature voted to postpone the payment of interest long overdue on the 15,000 loan of 1717, to be paid in three annual installments beginning that year. At the end of the third year in 1731, between 6,000 and 7,000 was still outstanding, but no attempt was made to institute lawsuits to force the selling of land pledged as collateral for loans. In 1722 the legislature approved emissions of 5,384 and 2,800, the former to exchange all bills issued prior to 1716 from the plates of 1709, the latter to defray provincial debts and current expenses. The bills were to be redeemed by taxes on polls and estates. The first was to be redeemed by a tax payable in five annual installments of 1,076 16s. beginning in 1724, with the latter in two equal installments of 1,400 in 1729 and 1730. A subsequent series of printings were approved, 2,000 in 1724, 2,000 in 1725, 4,000 in 36

Valuations for assessment were lowered in 1728. Polls were reduced from 60 to 25; land remained at 5–6s. an acre; each ox and horse was cut from 4 to 3; each cow cut from 2 10s. to 2; each hog raised from 16s. to 20s.; each Negro, mulatto, or Indian male slave assessed at 20; and houses were set at 1 5s. Each town was assigned its proportional share of every 1,000 in provincial tax. Portsmouth was to collect 187 16s. 4d., Dover 217 15s. 5 1 ⁄2d., and so forth. Bouton, New Hampshire Records, 3:244–45, 304–6, 499–500. 37 Daniell, Colonial New Hampshire, 191–99. 38 Bouton, New Hampshire Records, 3:586–87, 605, 643–44, 685, 735, 835. A summary treatment of these measures appears in William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (New York: Columbia University, 1908), 348–49. Originally a Ph.D. thesis, Columbia University, 1908.

[ 480 ]

Taxation of the New England Colonies, 1714–1739

1727, and 1,700 in 1730. The last release during the era of salutary neglect, 6,500 in 1737, was to be repaid with taxes of 4,000 in 1741 and 2,500 in 1742 in hemp, flax, bar iron, and silver at prices specified in the act. 39 To finance the colony’s participation in Drummer’s War, the legislature approved a tax of 1,000 on polls and estate in October 1722, but suspended its final enactment until spring 1723. The tax was passed on June 1, 1723, with payment due January 1724. Additional taxes of 500 were enacted on June 11, 1724, and May 28, 1725.40 No further measures of provincial taxes on polls and property appear in the legislative records for the remainder of the decade. There are no comprehensive records indicating the amount of direct taxes paid from the annual levies of 1723–25 and the required payments of 1724–30 to redeem the emissions of 1722. If all taxes due were paid, the amount during 1723–30 would sum to 10,184 New Hampshire currency, an annual average of 1,273, of which four-fi fths would redeem bills of credit. The pattern of deferral since 1715, reinforced in a report sent by the colony’s secretary to the Board of Trade in 1730, suggests a lower figure (see below). Governor Belcher halted Wentworth’s liberal regime of emissions and reissue.41 Belcher routinely berated the legislature for its failure to supply the colony’s government with necessary supplies to fi nance its expenditures. To provide funds for his new government, he approved on September 1, 1730, an issue of 1,700 to be redeemed by a tax in 1742; another 700 in bills was reissued pursuant to a previous act of December 19, 1729. Thereafter relations were testy. In 1731 the house and Council failed to agree on an appropriation bill and no tax law was enacted. In 1732, facing an empty treasury, Governor Belcher urged the House of Representatives to approve a new tax. In reply, the house proposed an issue of 1,000 of bills to be retired with a tax on polls and estates in 1744. Belcher informed the house that he could not approve any tax beyond 1742 and dissolved the legislature. For the next five years, Belcher annually summoned a new house, which proposed new issues of paper money in exchange for new taxes. Each year the Council rejected the house measures. In an address to the General Court on May 7, 1735, Belcher began by stating, “This is now the 7th session of a General Assembly of this Province that I have attended in the course of near five

39 Newman, Early Paper Money of America, 221–26. The numbers in the text indicate net new emissions, excluding the volume of bills approved for exchange for worn bills. Bouton, New Hampshire Records, 4:724. 40 Bouton, New Hampshire Records, 4:72, 100, 105, 134, 139, 180, 184, 357–59, 380, 407, 411. 41 Th is paragraph summarizes the treatment in Maurice H. Robinson, A History of Taxation in New Hampshire, Publications of the American Economic Association, 3rd ser., 3, no. 3 (New York: Macmillan, 1902), 14–19, and Fry, New Hampshire, 358–66. The data on the emission of 1730 are from Newman, Early Paper Money of America, 224.

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years & no supply has been made to the Treasury for the payment of the Publick Debts or for the support of the Government.”42 Finally, after a gap of six years, a supply bill was passed and signed in March 1737. The compromise, arising from financial necessity, matched an emission of 6,500 (noted above) with a new tax of 600.43 In October 1737, the legislature authorized the immediate signing and release of 500 in blank bills to pay the commissioners charged with the task of securing firm boundaries with Massachusetts, to be redeemed by a tax due December 25, 1740.44 With the colony’s finances temporarily restored, differences between the house and the governor resurfaced. Belcher dissolved the legislature in 1738 before an appropriation bill could be enacted. Another meeting was summoned in 1739, but was prorogued until January 1740. Apart from the tax voted in 1737 pledged to retire a portion of that year’s issue of bills, the House of Representatives refused to approve any other direct taxes between 1731 and 1739 on the grounds that since redemption of the colony’s paper money was imposing a severe economic and financial burden on its residents, any additional taxes would be intolerable. Indirect taxes constituted another source of revenue. As noted in chapter 13, the legislature extended excises and tonnage in 1711, but discontinued import duties. In May 1714, it reenacted import duties on rum, wine, sugar, molasses, and tobacco, along with an export duty on lumber, but the latter provision was repealed the following summer. The legislature approved the import duties when the governor threatened to draw in provincial bills of credit to retire the colony’s debt. An act of May 1715 extended them until June 10, 1716. In May 1716 the legislature continued the excises but failed to approve any duties until a new act of July 1721, which levied import duties and excises on wine and liquors and export duties on board and fish sent to other colonies. The 1721 act imposed the following charges: 10s. per hogshead on rum imported from its place of growth and 20s. from other places; 10s. per pipe of wine imported directly from the Canary Islands and Madeira and 20s. from other places; 8s. per pipe of Fayal and St. George’s wine directly imported and 15s. from other places; proprietors of taverns and inns 8d. per gallon of rum, wine, or spirits, and 6d. per gallon of cider; export duty of 2s. per thousand board feet; and export duty of 12d. per quintal of fish.45 A retaliatory act of Massachusetts imposing high duties on New Hampshire merchandise prompted suspension of import and export duties later in October, and repeal of the export duty on lumber. All that remained of indirect taxes during 1721–39 was excises, which were routinely renewed

42

Bouton, New Hampshire Records, 4:697. Bouton, New Hampshire Records, 4:720, 724, 731. 44 Bouton, New Hampshire Records, 4:747. 45 Bouton, New Hampshire Records, 3:819–20, 827, 833. 43

[ 482 ]

Taxation of the New England Colonies, 1714–1739

(1718, 1725, and 1732).46 Excises produced only several hundred pounds a year in revenue. Tonnage—a New Hampshire act of 1702 charged a pound of powder per ton—was collected throughout the period except for its suspension between 1717 and 1722. A 1717 act of Parliament prohibited the colonies from imposing any duties or powder money on merchants of Great Britain trading in the colony, but the fees were restored in 1722 on advice from the Board of Trade. It ruled that the 1702 measure had been confirmed by the Crown, and thus the 1717 act could not have made reference to the 1702 act. The powder money was sufficient to supply the colony’s fort with powder in peacetime.47 Fines and fees also remained a part of public financing. In response to queries from the Board of Trade on conditions in New Hampshire, the secretary of the colony replied on January 22, 1730, on the colony’s revenue and expenditure. He reported that ordinary annual peacetime expense was about 1,500 New Hampshire currency (445 sterling). The cost of the establishment in salary for the governor, per diem for councillors and representatives in legislative session, and officers and soldiers at the fort amounted to 600. Extraordinary charges, such as repairs of the fort, were another 500. As to revenue, excises for the past year came to 396, three or four barrels of gunpowder were collected in tonnage, and the remaining revenue (estimated at about 1,600) represented receipts from polls and estates and the transfer of unspent bills of credit to the colonial Treasury.48 In his survey of colonial finances, Maurice Robinson states that taxes generated between 500 and 1,000 annually up to 1742. He cites figures for 1724 in which the Treasury recorded revenue of 2,045: poll and property taxes supplied 1,028; duties, excises, and interest on bills 118; and bills of credit the remaining 899. That year, 1724, was marked by a vote of 2,000 in direct taxes the previous year. Still, almost half the colony’s budget in 1724 was financed by debt to be retired with deferred taxes. Excepting 1737, no new direct taxes were levied in the 1730s. If Robinson’s statement of annual tax receipts is accurate, it suggests that apart from several hundred pounds a year in excises, the towns were collecting some of the taxes levied in the 1720s that had not yet been paid.49 It is not possible to estimate per capita taxes in New Hampshire between 1714 and 1739 with any degree of accuracy. Issue and reissue of bills of credit were a principal means of financing public expenditure. Indirect taxes amounted to no more than a few hundred pounds a year local currency. Direct taxes averaged less than 1,000 a year between 1714 and 1731, and far less through 1739. On these caveats, the roughly twenty-three thousand 46

Fry, New Hampshire, 368–72, and Robinson, Taxation in New Hampshire, 56–63. Robinson, Taxation in New Hampshire, 66. 48 Bouton, New Hampshire Records, 4:533. 49 Robinson, Taxation in New Hampshire, 43. 47

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inhabitants of the colony paid somewhere in the neighborhood of 10d. per person, comparable to the rate in Connecticut. With the arrival of Scotch-Irish immigrants, in 1718 sheep were exempted from the property tax to encourage local wool manufacturing.50 From time to time, the legislature mandated local taxes for the support of ministers.

Summary

T

h e e ra of salutary neglect can also be defined as an era of declining taxation in New England. Per capita taxation in Great Britain was fifty times that in Massachusetts and a hundred times that in Connecticut and New Hampshire. Rhode Island’s resort to paper money left it almost completely free of taxation. Sir Robert Walpole was far more interested in trade with and the prosperity of the king’s colonies than in transferring some of Britain’s debt ser vice and tax burdens to them. Prospects in autumn 1739 appeared extremely promising in New England. Its citizens enjoyed the rights of British subjects without their heavy taxes.

Appendix A Colonial Currencies

T

his appendix presents the cross-rates of English sterling and the colonial currencies in 1739. It should be read in the same manner as table 13.B. The multiplicity of old and new values among the colonial currencies and coins is illustrated in a chronicle of Matthew Patten of Souhegan East, New Hampshire. He wrote, “I got 11 ⁄2 bushell of Indian corn from Geo. Handley. He owed me 3 Old Tenor. . . . If corn is sold at 1 pistareens a bushell, then I am to pay him half a pistareen and if the price is 15 s/ a bushell, then I have got my just due. . . . I got 21 ⁄2 doz. Mohair Coat buttons from James Vose which cleared all he owed me. . . . He paid me 79 Old Tenor and 8 johannes equal to 64 Dollars and 2 Crowns and 2 Dollars and 2 Quarters of a dollar and 5 pistareens, the whole amounting to 82 Dollars and 40/ Bay Old Tenor.”51

50

David E. Van Deventer, The Emergence of Provincial New Hampshire, 1623–1741 (Baltimore and London: Johns Hopkins University Press, 1976), 163, and Bouton, New Hampshire Records, 3:746. 51 Richard M. Ketchum, ed., The American Heritage History of the American Revolution (New York: American Heritage/Bonanza Books, 1971), 53.

[ 484 ]

tabl e .a Cross-Rates of English Sterling and Colonial Currencies in 1739 (Average for Year; One Hundred Pounds of Each Currency Buys How Many Pounds of Any Other Currency)

[ 485 ]

Currency

Sterling

Proclamation Rate

New England

New York

New Jersey

Pennsylvania

Maryland

Virginia

N. Carolina

S. Carolina

Sterling = Proclamation Rate = New England = New York = New Jersey = Pennsylvania = Maryland = Maryland = Virginia = North Carolina = South Carolina =

100.00 75.00 20.00 60.00 59.41 58.93 74.39 47.09 81.63 10.00 12.63

133.33 100.00 26.67 80.00 79.21 78.57 98.46 62.79 108.84 13.33 16.84

500.00 375.01 100.00 299.99 297.04 294.65 369.22 235.47 408.16 50.00 63.14

166.67 125.01 33.33 100.00 99.01 98.22 123.08 78.49 136.06 16.67 21.05

168.33 126.25 33.67 101.00 100.00 99.20 124.30 79.27 137.41 16.83 21.26

169.69 127.27 33.94 101.81 100.81 100.00 125.31 79.91 138.52 16.97 21.43

212.34 159.26 42.47 127.40 126.15 125.13 156.80 100.00 173.34 21.23 26.81

122.50 91.88 24.50 73.50 72.77 72.19 90.46 57.69 100.00 12.25 15.47

1,000.00 750.02 200.00 599.99 59.41 589.31 738.44 470.94 816.33 100.00 126.28

791.91 593.95 158.38 475.14 470.45 466.68 548.78 372.94 646.46 79.19 100.00

Note: The fi rst Maryland entry is for Maryland hard currency, the second for Maryland paper money (explained in chapter 19). Source: John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 141, 164, 172, 185, 202, 210, 217, 223.

chap t er 1 7

Appendix B Massachusetts Treasurer’s Statement

F

r om t h e earliest years of the colony, the treasurer was required to submit a periodic—by the 1690s annual—statement of provincial revenue and expenses to the General Court.52 Early statements were often fragmentary, rarely including all the information that would be required for a comprehensive accounting of annual revenue, expenditure, and public indebtedness. The statements became reasonably comprehensive by the second decade of the eighteenth century. They have survived for most years but are missing for fiscal years 1712/13, 1720/21, 1725/26, 1732/33, 1738/40, 1742/44, 1745/46, 1749/50, 1752/53, and 1770/71. Upon approval by the General Court, usually within a month or two after its presentation to the members of the legislature, the statement was certified and signed by a leading member of the house and Council. The treasurer’s journals and ledgers, which provide additional details, are available from 1753/54 in the Massachusetts State Archives.53 The annual statement took the form of double-entry fiscal accounting practices of the day. It consisted of the treasurer’s debit account, which in the case of Massachusetts was presented on successive pages but which typically appeared on the left side of the statements in other colonies in which treasurers presented annual statements. A debit is defined in accounting terminology as an increase in assets and a decrease in liabilities or fund balances; in short, debits increase assets and decrease liabilities. The debit account was followed by a credit account, which in Massachusetts was presented on successive pages but which typically appeared on the right side of the treasurer’s accounts in the other colonies that required annual statements. A credit is defined as a decrease in asset accounts, or an increase in liabilities or fund balances; in short, credits increase liabilities and decrease assets. The colonial treasurer served as intermediary between the legislature and the taxpayers. The debit account consisted of the funds owed to him. These various funds were authorized by the General Court in laws that apportioned the annual direct tax on property and polls, set rates of duties and excises, approved the issues of loan office bills with timetables of principal 52 During the sixty years between 1632, the fi rst treasurer’s statement, and 1692, when the statements became annual, twenty-four accounts were presented to a committee of the General Court for its approval. 53 A ledger is the basic accounting record of all fi nancial transactions recorded under each revenue, expenditure, and balance sheet account. A journal is the chronological, day-to-day means to record in the accounting records equal debit and credit entries between revenue funds and expenditure budgets. The ledgers and journals recorded receipts of direct taxes, matched against payments, but excluded receipts of indirect taxes.

[ 486 ]

Taxation of the New England Colonies, 1714–1739

repayment and interest rates, and other measures. Debit entries consisted of a mix of overdue receivables on accrual (tax arrears), receivables on accrual for the current fiscal year (current year levies), actual receipts, outstanding loans that were to be repaid, and cash assets. The ultimate source of all the funds paid to the colonial treasurer is the taxpayers and borrowers of loan office bills. Credits from one year were carried forward as debits to the following year to balance the accounts from the end of the year in question to the beginning of the next year. The account of Jeremiah Allen, treasurer and receiver-general of the colony of Massachusetts, showing receipts and disbursements for the fiscal year May 24, 1734, to May 28, 1735, illustrates the accounting practices of Massachusetts’s provincial treasurer in the fourth decade of the eighteenth century. The list of debits included the following: • the annual direct tax levied by the General Court on property and polls apportioned among the counties and towns, which was entered as tax receivables for the current year, 22,685 16s. 4d.; • overdue tax receivables on property and polls from the prior year, 9,196 19s. (brought forward as a credit from 1733/34); • loans outstanding to be repaid to the treasurer, 61,878 8s. 6d. (brought forward as a credit from 1733/34, consisting of the following two debits that are not displayed in separate columns in table 17.4); 1. bills of credit issued as loan office money that remained in his hands (not yet forwarded to the loan office commissioners for lending), 59,075 6s. 1d.; 2. outstanding interest receivables on accrual on the 60,008 loan office bills54 for the accounting year, 2,803 2s. 5d.; • interest received on accrual on the remaining four-fifths of the 60,000 loan, 1,892 9s. 7d. • interest received on the outstanding 100,000 loan, 2,099 12s. 4d.; • principal payments on the 100,000 loan, 10,179 0s. 10d.; 54 Massachusetts issued a succession of loan office bills beginning in 1714. The fi rst was in the amount of 50,000, to be loaned for five years at 5 percent interest. An act of December 4, 1716, authorized the loan of 100,000 for ten years at 5 percent interest. Subsequent issues of 50,000, a ten-year loan at 6 percent, were approved in March 1721 and 60,000 in 1728. Several acts were passed to replace worn notes of prior issues, and reissue prior issues. The final issue of Old Tenor bills was approved on July 7, 1740. The treasurer sometimes cites in his debits and credits the specific date of issue of individual loans in accounting for repayment of principal, receipt of interest, bills in his custody to be sent to the towns for lending, the amount of each loan outstanding, interest arrears, bills received that were burned, and so forth. In some statements he does not. Accounting categories and practices changed over the years.

[ 487 ]

chap t er 1 7

• bills of credit received in taxes, excise, and duties, 8,488 0s. 5d. (brought forward as a credit from 1733/34); • excises, 3,780 10s. 3d.; • import duties, 4,384 6s.; • fines, 8 13s. 4d.; • two items of miscellaneous revenue, 325 13s. 4d.; • transfer from the trustees of a portion of the 50,000 loan, 1,799 10s. 5d.; and • miscellaneous debits, 50 13s. 9d. Total debits in the account for May 1734 to May 1735 came to 126,769 3s. 4d. Double-entry bookkeeping requires that total credits equal total debits. The credit account consisted of the funds that the colonial treasurer, acting as intermediary between taxpayers and borrowers, owed the General Court for its use, for its expenditure or payment of debts. These funds included direct taxes, loans, and interest outstanding of the towns; bills of credit received by the treasurer in direct taxes, duties, excise, loan interest, and principal repayment; and payments approved by the General Court to the colony’s creditors. The category of outstanding taxes of towns was expanded in 1735/36 to include outstanding loans and interest, which explains the eightfold rise over the prior year. In the May 1734–May 1735 account, the list of credits included the following: • Outstanding taxes, loans, and interest, 72,263 3s. 1d. • Bills of credit in the hands of the treasurer received in taxes, duties, excise, and loans, 22,022 1s. • Discharged list of payments (payables) approved by the General Court, 32,483 19s. 3d. Total credits in the account sum to 126,769 3s. 4d. The account of 1734/35 does not permit an exact reconciliation of the various taxes received by the treasurer stated in his credit account with the separate taxes in his debit account. The credit account, what the treasurer owed the General Court, lists 22,022 1s. received in taxes, duties, excise, and loans. Statements prior to 1734/35 did not encompass loans in this category. The debit side, what the taxpayers paid the treasurer, lists taxes, duties, and excise of 16,652 16s. 8d. The statement also includes separate debits for excise and duties that are included in total debits. There is no explanation that reconciles the duties and excise in the joint category with the separate debits for duties and excise. The Acts and Resolves printed the annual apportioned direct taxes, and lumped together the estimated proceeds of excise, duty, tonnage, interest, [ 488 ]

Taxation of the New England Colonies, 1714–1739

and lighthouse money. For 1734/35, the latter amounted to 12,509 8s. The treasurer’s account of 1734/35 does not list tonnage or lighthouse money. Adding together the other three items in his account for 1734/35 yields the sum of 12,155 17s. 11d. actually collected during the fiscal year, which is close to the total in the Acts and Resolves. Beginning in year 1735/36, the treasurer’s account lists separate debit entries for tonnage, used to purchase gunpowder, and lighthouse money.55 For that year, tonnage came to 3,224 and lighthouse money to 201 13s. 1d. Th is ratio was typical in subsequent years. Receipt of direct taxes invariably lagged behind the full collection of the apportioned amount stated in the annual tax bill of the General Court, leading to the accumulation of arrears. This is partly due to the timing of payment and partly to the difficulty in extracting the full tax due. From time to time the General Court commented on the state of arrears (overdue tax receivables). 55

Separate entries for light house money fi rst appear in the 1724/25 statement.

[ 489 ]

c h ap t e r 1 8
Taxation of the Middle Colonies, 1714–1739

S

alutary neg lect served the middle colonies well. Their population more than doubled from 82,989 to 213,189 and their economies continued to grow and diversify.

Money

P

aper mone y played an increasingly important role in supplying a medium of exchange and dictating the scope and composition of taxation during the era of salutary neglect.1 Outside New York, interest on bills of credit became the largest source of revenue in the middle colonies. Paper currency of the middle colonies largely sustained its value, rising sharply against New England and Carolina issues, depreciating only modestly against silver and sterling. (See table 17.A.)

New York

R

e c al l t h e early history of bills of credit in New York. The colony issued 13,000 in 1709 to be redeemed by the close of 1713 with taxes levied on real and personal property. The first 5,000 dated May 31 was to be receivable for taxes without interest. The second installment of 8,000 was dated November 1. It consisted of bills of 4,000 stipulated in New York

1 The treatment of money in the middle colonies draws from Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), 66–99. Exchange rate and currency values are from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). Details of specific paper money issues are from Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). Chapters 3 and 4 in Richard A. Lester, Monetary Experiments: Early American and Recent Scandinavian (New York: A. M. Kelley, 1970), 56–141, describe the paper money experiences in the middle colonies. First published in 1939 by Princeton University Press. Sources unique to the four colonies are cited in the separate subsections.

[ 490 ]

Taxation of the Middle Colonies, 1714–1739

currency and the other of bills worth 4,000 but stated in ounces of plate or Lyon dollars2 receivable for taxes with 21 ⁄2 percent interest.3 Interest was suspended at the next session of the General Assembly. These issues were made legal tender and the taxes to retire them were to be paid in the bills, which were largely redeemed on schedule. To defray the cost of another military expedition, the General Assembly approved 10,000 of bills dated July 20, 1711, stated in plate totaling 25,000 ounces, valid for eight years. The expedition failed. To clear the colony’s debts, the legislature authorized a new issue of 27,680 dated September 4, 1714, shortly after the death of Queen Anne, to be retired by excises on liquor. The second of these issues, denominated both in New York money and plate, was valid until December 31, 1739, thus becoming known as the “First Long Bills.” The notes were put in circulation after the act was approved by the Crown on June 17, 1715, which formally exempted New York from the proclamation rate. Eight subsequent issues were approved between 1715 and 1739: 6,000 in 1715, 16,607 in 1717 (the “Second Long Bills” valid till 1737), 2,000 in 1720, 2,140 in 1723, 6,630 in 1724, 12,000 in 1734, 48,368 in 1737, and 10,000 in 1739. Several other printings of 1724, 1726, and 1730 exchanged new for old, worn, torn, or broken notes, but did not add to the outstanding stock. The issues of 1715 and 1720 were to be retired with the proceeds of duties, that of 1717 from excises, and those of 1723 and 1724 from taxes on real and personal property. Richard Lester states that 79,754 of New York paper money was outstanding in 1740. Of the total sum of 142,407 that was issued between 1709 and 1737, 62,653 had been retired from circulation and canceled.4 In 1737, the growing power of the Assembly, abetted by a collusive governor, Robert Clarke, who acquired 22,500 acres of crown land that year, brought about a change in the appropriations process. Annual votes of supply replaced the prior custom of a five-year grant to the governor.5 By this 2

The Lyon dollar was shorthand for the Leeuwendaalder, the silver ducatoon of Holland, which was not included in the list of coins subject to Queen Anne’s proclamation. Ten thousand ounces of plate, or 14,545 Lyon dollars, equaled 4,000 New York currency. 3 As explained in chapter 13, the General Assembly evaded Queen Anne’s proclamation by levying taxes and appropriating funds in ounces of plate or Lyon dollars, which explains why its issue of bills of credit were stated in those measures, not pieces of eight. One Lyon dollar equaled 5s. 6d. New York money of account, or 13 dwt. 18gr. of silver plate (21 ⁄2 dwt. equaled 1s. and 5 gr. equaled 1d.). Tables 13.A and 13.B show that New York money was rated at 155 against sterling, that is, it took 155 New York currency to buy 100 sterling in 1714. 4 Lester, Monetary Experiments, 120. 5 The Assembly steadily increased its power over the years. It first secured the right to tax, next to collect and retain custody over the funds it voted to raise, then control over the expenditure of provincial revenue, and then nominate officials formerly appointed by the governor. After the compromise of 1737, the Assembly refused to pass an appropriation bill the following year, which meant that the colonial treasurer would not honor any expenditure warrants issued

[ 491 ]

chap t er 1 8

time, the redemption of more than 30,000 in previous bills had reduced the quantity of New York notes in circulation. As part of the 1737 agreement, Clarke approved a public loan office issue of 40,000.6 The large issue was a response to the colony’s desire for an expansion of currency to support commerce and also pay 9,000 of public salaries in arrears. Loans were to be made on the security of real estate and silver plate worth at least double the amount of the loan for twelve years in sums between 25 and 100. Onefourth was to be repaid on the third Tuesday of April 1747, followed by a similar sum in April in the three succeeding years. Interest was to be paid yearly on the third Tuesday of April. Repaid bills were to be canceled. Another 8,350 was issued to meet the expenses of government, financed with interest receipts from the loans.7 The 1737 issue gave New York its first taste of interest financing, which became an important source of revenue, as much as one-third, in subsequent years. Compared with the large decline in the value of New England currency, New York bills were relatively stable against silver and sterling. In terms of New York currency, the price of silver rose from 8s. to about 9s. an ounce between 1716 and 1739, and the price to buy 100 sterling rose from 154.9 to 166.67 New York currency between 1714 and 1739. New York money depreciated a modest 7.6 percent against sterling over a quarter of a century.8

Pennsylvania h e e c onom y of Pennsylvania fell upon hard times in 1720.9 The bursting of the South Sea Bubble caused a credit crunch in England, which contracted investment in and trade with the colony. Shipbuilding came to a halt. The price of the colony’s chief export of flour to the West Indies fell in the face of rising competition. Early ironworks closed. In an

T

by the governor. These developments are discussed in Patricia U. Bonomi, A Factious People: Politics and Society in Colonial New York (New York and London: Columbia University Press, 1971), 82–137, and Michael Kammen, Colonial New York: A History (New York and Oxford: Oxford University Press, 1996), 186, 201–2. First published in 1975 by KTO Press, Millwood, NY. 6 John H. Hickcox, History of the Bills of Credit: or, Paper Money Issued by New York, from 1709 to 1789; with a Description of the Bills, and Catalogue of the Various Issues (1866; repr., New York: Burt Franklin, 1969), 26–27. 7 The Colonial Laws of New York from the Year 1664 to the Revolution (Albany: J. B. Lyon, state printer, 1894), 2:1015–40. 8 McCusker, Money and Exchange, 163–64. 9 A detailed treatment of Pennsylvania’s economy and its loan office appears in Mary M. Schweitzer, Custom and Contract: Household, Government, and the Economy in Colonial Pennsylvania (New York: Columbia University Press, 1987), 115–26. Another treatment of paper money appears in Lester, Monetary Experiments, chapter 3, “Currency Issues to Overcome Depressions in Pennsylvania, 1723 and 1729,” 56–111.

[ 492 ]

Taxation of the Middle Colonies, 1714–1739

attempt to prop up local industry, in 1722 the colony imposed a tax on imports from the neighboring colonies of Maryland and New York, established bounties for the production of hemp, and undertook other protective measures. These were repealed or permitted to expire at the end of the decade after the economy had recovered. The general scarcity of specie, since most silver coins were exported to pay for British imports, the growing use of New York bills as currency in Pennsylvania, and complaints from the countryside about forced liquidations of property to pay debts pushed the issue of paper money to the front burner. After intense deliberation, the Assembly approved the establishment of a loan office in 1723. In March it authorized 15,000 of bills, of which 11,000 was to be loaned on security of land at double the value of the loan, houses at treble, or, in rare instances, on income from rental property or silver plate at 5 percent interest for a period of eight years. Sensing that 15,000 was insufficient, the Assembly approved a second tranche of 30,000 in December, of which 25,500 was to be loaned on security for twelve-and-a-half years. Interest from both was assigned to the Assembly for general government use. The quick recovery of the economy reinforced the beliefs of those who argued the case for paper money as a means to provide domestic liquidity and facilitate commerce.10 By 1726 redemption of bills reduced the supply of paper money by 6,110. In response to this contraction, the Assembly authorized the reloan of bills received in taxes and extended until 1736 repayment of all loans made after 1725. On May 10, 1729, after another heated debate, the legislature approved 30,000 in new bills to be loaned at interest for repayment over sixteen years. Benjamin Franklin, in support of the 1729 issue and the policy of issuing loan office rather than tax-secured bills as in other colonies, wrote that “Bills issued upon Land are in Effect Coined Land.”11 Release of the bills was postponed until September 15 to allow the Crown four months to approve the act. Deputy Governor Patrick Gordon was warned by the Board of Trade in 1726 that any further Pennsylvania acts for paper money after the 1723 emission would be vetoed unless first approved by the Crown. A provision was added to the 1729 act that it should not take effect until approved by the Crown. Concerns over the issue of

10 The 1723 public loan office issue prompted the legislatures of New Jersey and Delaware to follow suit in 1723 and 1724 (see below). 11 Franklin claimed in his autobiography that he printed Pennsylvania’s bills of 1729, but this is erroneous according to Newman, who credits Andrew Bradford (Newman, Early Paper Money of America, 116). Franklin printed Pennsylvania’s bills of 1731 (a reissue), August 10, 1739, August 1, 1744, and numerous later issues from which he profited handsomely (Newman, Early Paper Money of America, 330–39). Franklin received the contract to print 1734 bills of Delaware, and subsequent issues of December 1, 1739, and February 28, 1746.

[ 493 ]

chap t er 1 8

colonial paper money, its depreciation, and potential losses of British merchants had prompted the British government to issue instructions to colonial governors to include a suspending clause in all such legislation. An act of 1726 replaced worn bills of the prior issue and one of 1739 reprinted all outstanding issues, augmented with new bills of 11,110 5s. The stock of bills stood at 38,890 during 1725–28, 68,890 during 1729–39, rising to 80,000 in 1739. Pennsylvania discovered the magic of becoming a creditor government. Interest from public loans soon came to supply half or more of provincial government revenue. On March 15, 1731, Governor William Keith wrote the Board of Trade that “By the Emission of a Paper Currency in this Province, an annual Interest arises thereon amounting to near three Thousand pounds this Currency which with a small Excise on Spirits not amounting to One thousand pounds, yearly raise together a sufficiency to answer all the present Exigencies of this Government.”12 The two sources eliminated any need for provincial-level direct taxes between 1717 and 1755.13 Between 1723, when the colony’s first paper money was issued, and 1739, the external value of Pennsylvania’s currency depreciated 20.9 percent against sterling, from 140.37 Pennsylvania currency to 169.69 to buy 100 sterling.14 In 1739 Pennsylvania money traded at a slight discount of about 1.8 percent against New York.

Delaware

D

el awar e had the same governor and land office as those of Pennsylvania.15 The first Delaware Act of April 1723, one month after that of Pennsylvania, provided for 5,000 in bills of credit to be loaned in amounts ranging from 12 to 60 secured by first mortgages on real estate. Principal was to be repaid in bills of credit with interest of 5 percent in equal installments over eight years. As in Pennsylvania, the act stipulated that interest be used to pay the general expenses of provincial government. Seven months later, shortly after Pennsylvania’s second emission, a second issue of 6,000 was approved under similar terms. By 1726, 2,750 had been paid in and destroyed, prompting the legislature that year to relend the remaining installments of the 1723 loan to keep the currency in circulation. Emulating the 1729 example of Pennsylvania, Delaware issued 12,000 in 12

Quoted in Lester, Monetary Experiments, 92n109. Schweitzer, Custom and Contract, 130, 152, 194–95. 14 McCusker, Money and Exchange, 184–85. 15 Richard S. Rodney, Colonial Finances in Delaware (Wilmington, DE: Wilmington Trust Company, 1928), and Lester, Monetary Experiments, chapter 4, “Prosperity Issues in New York, New Jersey, and Delaware,” 134–41. 13

[ 494 ]

Taxation of the Middle Colonies, 1714–1739

sixteen-year mortgage loans, followed with one further loan issue of 12,000 in 1734, in part to replace 3,750 of the 1729 issue that had been retired. The stock of currency in circulation rose from 8,250 in 1727 (2,750 had been retired of the original 1723 issue) to 17,250 in 1739 (from a peak of 20,250 in 1734). Delaware bills were made legal tender and were readily accepted by Philadelphia’s merchants. Apart from serving as a medium of exchange, interest income coupled with excises on liquor generated sufficient revenue to pay the governor’s salary and erect and maintain public buildings without any need for other explicit forms of taxation. Delaware currency legally was at par with that of Pennsylvania, but generally passed there at a modest discount of 5–10 percent.16

New Jersey

T

o finance an expedition to Canada, New Jersey issued 3,000 in bills of credit in 1709 backed by a specific tax for the same period. The bills were declared legal tender and valid until September 1, 1711. Subsequent issues of 5,000 (12,500 ounces of silver plate) and 4,670 (11,675 ounces of silver plate) were dated July 14, 1711, and January 24, 1717, the latter valid until December 1, 1718.17 Payment of bills in taxes between 1714 and 1723 reduced the outstanding stock to about 1,000. Although New York and Pennsylvania currency circulated in New Jersey, the colonial government refused to accept their notes in payment of taxes, fearing that future issues would erode their value. The shortage of a circulating medium resulted in numerous lawsuits to collect public and private debts, often resulting in sheriffs’ sales of debtors’ property substantially below their true worth. Motivated by the establishment of a loan office system in Pennsylvania in March and a recent issue of New York bills, the legislature met in October 1723 to consider the need for paper money. New Jersey’s loan office was established on November 30, 1723, which would issue bills valid through June 25, 1736. The law authorized 40,000 in legal tender currency dated March 25, 1724, ranging from 1s. to 3 in New Jersey bills, to be loaned to any one individual in amounts between 12 10s. and 100. Each county in New Jersey

16

McCusker, Money and Exchange, 181–82. Donald L. Kemmerer, “The Colonial Loan-Office System in New Jersey,” Journal of Political Economy 48 (December 1939); Kemmerer, “A History of Paper Money in Colonial New Jersey, 1668–1775,” Proceedings of the New Jersey Historical Society 74 (April 1956), http://www .frontierguard.org/ Research/ NJFG2B08.html (June 4, 2003); Lester, Monetary Experiments, 122–34; and Thomas L. Purvis, Proprietors, Patronage, and Paper Money: Legislative Politics in New Jersey, 1703–1776 (New Brunswick, NJ, and London: Rutgers University Press, 1986), chapter 6, “Single-Issue Politics: Paper Money, 1723–1775,” 144–76. 17

[ 495 ]

chap t er 1 8

was given a quota based on its share of the colonial population. A mortgage on lands or lots at least twice the value and on houses at least three times the value of the loan was required as security. Interest was set at 5 percent, well below the market rate of 8 percent. All debts were accorded a moratorium of four months to allow the new currency to be placed in circulation. Within one year after the establishment of the loan office, the number of actions for debt in one county declined from three hundred to about twenty.18 For the first ten years, 8 10s. was to be repaid on each 100 borrowed, with 7 10s. for the last two years. Foreclosure would occur after a thirty-day grace period following failure to repay any installment due. The outstanding loan could be repaid in full any time before the date of final payment, with these funds eligible for relending. A portion of the funds was allocated to the government to pay off New Jersey’s public debt of 4,000, thus reducing taxes collected for that purpose. Although New Jersey’s law required the destruction of bills paid in to retire the notes, the Assembly did not allow the destruction of paper money received as interest, instead applying it to the budget in 1725, well ahead of the schedule stated in the law. This rendered unnecessary the levy of most of the 1,000 in taxes scheduled for the year. By 1728, the Treasury had received 4,953 in interest.19 New Jersey currency was sometimes used to settle balances between Pennsylvania and New York. John Montgomerie, the colony’s common governor with New York, wrote in a letter to the Board of Trade that two-thirds of the colony’s bills circulated outside the province in 1730, a claim that appears to be highly exaggerated.20 The popularity of paper money, and the fact that it had not substantially depreciated, engendered support for another issue. 18 Purvis, Proprietors, Patronage, and Paper Money, 152. The county is unnamed in the original source. 19 Purvis, Proprietors, Patronage, and Paper Money, 152, 156. 20 As noted elsewhere in this book, and cited later in this chapter, correspondence between royal officials in the colonies and their British superiors cannot always be taken at face value. As a general matter, with exceptions for military and other emergencies, the Lords of Trade opposed the issue of paper money in the colonies. For receipt of his salary and good relations with the colony’s legislature, it was in Montgomerie’s interest to exaggerate the shortage of currency in the colony to secure the approval of British authorities for the note issue. Previous governors, such as William Burnet, had solicited merchant testimonials to the same effect to placate the board. Farley Grubb, “The Circulating Medium of Exchange in Colonial Pennsylvania, 1729– 1775: New Estimates of Monetary Composition, Per formance, and Economic Growth,” Explorations in Economic History 41 (2004): 329–60, examined the composition of money in colonial Pennsylvania. He found that paper money supplied 83.1 percent and specie the remaining 16.9 percent of the currencies used to pay rewards for the capture of runaway servants advertised in the Pennsylvania Gazette during 1729–75. All of the rewards offered in paper money were in Pennsylvania pounds; no rewards were offered in New Jersey, Maryland, or Virginia pounds.

[ 496 ]

Taxation of the Middle Colonies, 1714–1739

The “Second Bank” of 20,000 was authorized in 1730, with bills put in circulation dated March 25, 1733, following royal approval on May 4, 1732. The delay was due to the imperial requirement of a suspending clause in any colonial legislation involving paper money. To prevent the loss of his salary, Montgomerie agreed to the issue over the objection of the Board of Trade when the leadership in the Assembly advised him that it would agree to support the government only from interest money. For his part, he persuaded the Assembly to accept the inclusion of a suspending clause. The 1730 law extended the repayment period to sixteen years and provided that the principal paid in during the fi rst eight years could be reloaned. This took account of the fact that the majority of notes issued in 1723 had been retired, resulting in a colony-wide deflation. Payment could be made in gold, silver, wheat, or old bills of credit. The second act specified that interest was to pay the incidental expenses of the provincial government. The fact that New Jersey currency circulated at a slight premium to New York money suggested that additional money could be issued without great risk of depreciation. The stock of paper money, 40,000 in 1724, had fallen to 11,250 in 1732. Under Governor William Cosby, a third loan office bill of 40,000 was enacted on August 13, 1733, subject to royal approval that was granted on May 4, 1735. The formal document of approval was withheld by an obstinate official until he was ordered to deliver it on June 28, 1736, and again on August 24, 1736. The notes of the “Third Bank” were dated March 25, 1737, valid for sixteen years. In exchange for Cosby’s approval, the General Assembly agreed to guarantee supplies for five years in advance. With support in hand, Cosby refused to convene the legislature for the rest of his administration. The issue of 20,000 in 1733 (the act of 1730) briefly reflated the outstanding stock of bills to 28,460, but repayment of loans contracted it to 20,000 in 1736. The emission of 40,000 in 1737 boosted the colony’s bills to 60,000, at which level they remained through 1739. New Jersey bills continued to circulate at a premium to those of neighboring New York. Crown policy, which often clashed with local interests, was for the governor to secure taxes to support colonial administration so that interest payments would retire bills of credit, thus preventing depreciation of the currency, rather than finance government expenditure. The legislature of New Jersey won this struggle as the Board of Trade gave up trying to prevent the use of interest to meet government expenses. The policy of colonial self-support, that Britain would not contribute to the cost of colonial administration, weakened the board’s ability to enforce its instructions.

From this evidence he concludes that claims of the widespread circulation of New Jersey bills in Pennsylvania and New York are inaccurate.

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chap t er 1 8

The cost of operating the colonial government, always modest, rose from 1,000 in 1702 to 1,775 in 1749 (see section below on taxation for precise figures during selected periods in New Jersey). Interest income on the outstanding currency in 1741 was reported as 3,000, almost double that year’s expenses.21 Interest on loans covered the cost of government partly between 1723 and 1732, after which it met the provincial government’s expenses without any tax levies through 1751. Decrying this situation, Lieutenant Governor Jonathan Belcher wrote to the Lords of Trade on April 21, 1749, that “ ’Tis 17 Years since any Tax was raised on the People for Support of Government.”22 New Jersey’s bills were reputedly used to settle balances between New York and Pennsylvania, thus commanding a slight premium over Pennsylvania currency. The rate of exchange of New Jersey on London to buy 100 sterling rose from 142.86 New Jersey currency in 1716 to 155.18 in 1718, to 170.00 in 1737, declining slightly to 168.33 in 1739 (Pennsylvania money traded at 169.60). From the establishment of New Jersey’s loan office in 1723 until 1739, its currency depreciated about 8.5 percent against sterling.

Taxation in New York, 1714–1739

T

h e r oyal province of New York witnessed rivalries between its leading families, Albany and New York City, merchant-traders and landowners, and elected assemblymen and royal governors.23 They fought over who would bear the brunt of the colony’s taxes and control decisions on expenditure. 24 London implored royal governors to secure a permanent salary, which the popularly elected Assembly fiercely resisted. Five men, two of whom were senior members of the Council in between the appointment of governors from Britain, served as governors during the era of salutary neglect. The Assembly steadily strengthened its control over the colony’s politics and finances at the expense of the Crown. Upstate New York was 21

Lester, Monetary Experiments, 132. Quoted in Brock, Currency of the American Colonies, 95. 23 A detailed treatment of provincial taxes in colonial New York appears in Samuel K. Anderson, “Taxation in Colonial New York, 1691–1755” (M.A. thesis, University of Wisconsin, 1953). Anderson concentrates on the period 1737–55, but provides summary information on the composition of taxes in earlier years. Acts of the colony are published in Colonial Laws of New York. Volume 1 covers 1664 to June 25, 1719. Volume 2 encompasses October 13, 1720, through December 16, 1737. The accounts of the provincial treasurer, along with the collectors of excises, tonnage, vendue auctions, and duties are periodically, but incompletely, recorded in Th e Votes of the General Assembly of His Majesty’s Province of New-York in America, the proceedings of the colonial legislature. 24 Bonomi, A Factious People, 82–139. Bonomi states that by 1729 the contest between factions had shifted from largely economic issues to the sheer quest for power. 22

[ 498 ]

Taxation of the Middle Colonies, 1714–1739

the front line against the French and their Indian allies, which meant that governors and London required the support of the local population to sustain British imperial policy. Economic interests were often reflected in specific pieces of tax legislation. For example, coopers benefited from duties levied in 1719, 1728, and 1734 on imported empty casks. 25 Retail merchants were favored with duties on goods sold at public auction during 1713–26 and again after 1737, and the requirement that pedlars pay license fees during 1714–26 and 1729–39. 26

Direct Taxes

H

eavy r eliance on direct taxes on property during Queen Anne’s War was discontinued with its termination and the issue of paper money. No general property tax was enacted during 1711–20. Table 18.1 lists the nine direct taxes on real and personal property passed by the General Assembly during 1721–29. The measures of 1723, 1724, and 1726 were each apportioned for collection over three or four years. That of 1723 stipulated three payments of 713 6s. 8d. of a tax on property and estates due, respectively, May 1, 1724, May 1, 1725, and May 1, 1726. The taxes, totaling 2,140, were to redeem bills of credit issued for military expenses and gifts to Indians. That enacted in 1726 was due in 1729. The small levy of 1729 paid for an agent to represent the colony in London. Thereafter, no property taxes were levied until 1744.27 During 1721–29 total direct taxes amounted to 13,032 0s. 81 ⁄4d. New York currency, and 8,350 ounces of silver plate. With silver valued at 8s. an ounce, 8,350 ounces of silver equaled 3,340, bringing total direct taxes to 16,372 0s. 81 ⁄4d. All but 2,250 3s. 2d. was levied in the four years of 1722, 1723, 1724, and 1726. Nor were these taxes promptly paid. An act of July 17, 1729, provided for the “effectual recovery” of arrears amounting to 2,525 14s. 10d. (16 percent of the total) on the six acts of 1721, 1722 (two that year), 1723, 1724, and the 3,600 levied in 1726. 28

25

Anderson, “Taxation in Colonial New York,” 103. Anderson, “Taxation in Colonial New York,” 104, 107. 27 Anderson, “Taxation in Colonial New York,” 90, and Votes of the General Assembly, June 21, 1723, May 27, 1726, and June 10, 1729. Recall from chapter 14 that New York collected the majority of its provincial revenue during 1689–1708 from indirect taxes supplemented with fi nes and weigh-money. Between 1709 and 1714 direct taxes supplied the majority. Unlike New England, New York did not levy a poll tax. Greater reliance on indirect taxes during 1714–39 restored the earlier pattern. 28 Colonial Laws of New York, 2:523–29, and Votes of the General Assembly, June 10, 1729, which itemizes the arrears by county for each of the six direct tax levies. Previous acts also 26

[ 499 ]

chap t er 1 8 tabl e . New York Direct Tax Levies, 1721–1729 (£.s.d. New York Currency) Month and Year

Amount

June 1721 November 1722

500 820 3s. 2d.

November 1722 July 1723

3,000 ounces silver plate 5,350 ounces silver plate

July 1724 June 1726

6,630 3,600

June 1726

551 17s. 61⁄4d.

September 1728 July 1729

200 730

Purpose

Indian friendship 500 for Indian friendship; 320 3s. 2d. reimburse repair of frontier fortifications redeem bills of credit military expenses: Indian friendship general revenue for salaries general support of government for three years repay debt; complete Fort George repair Fort George send agent to London

Note: The entry of 551 17s. 61 ⁄4d. that appears in the Colonial Laws of New York differs by a pence and a farthing from the figure of 551 17s. 5d. that is recorded in the Votes of the General Assembly on May 27, 1726. Source: The Colonial Laws of New York from the Year 1664 to the Revolution (Albany: J. B. Lyon, state printer, 1894), 2: 53–56, 109–15, 121–25, 137–48, 173–86, 254–72, 273–80, 498–500, 530–35.

For the years encompassed in the table, average annual direct tax levies amounted to about 1,750; for the entire quarter century 1714–39, the annual average was in the neighborhood of 500 a year, about 2s. per person. Apart from the mid-1720s, the colony’s inhabitants paid little to no direct taxes during the era of salutary neglect.

Indirect Taxes

N

e w yor k e rs were keen to reduce their dependence on Boston merchants who were transporting goods and financing trade with Britain. To this end, on July 1, 1713, the General Assembly imposed duties of 121 ⁄2 ounces of plate (5) on every 100 of European goods imported from Boston, and 183 ⁄4 ounces (7 10s.) if from other colonies. 29 These rates were renewed in an act of July 15, 1715, 30 which was replaced with an act of June 17, 1726. The 1726 law, imposing a general charge of 5 percent ad valorem on all European or East Indian goods imported from the British West Indies, provided for the collection of arrears, for example, an act of July 27, 1721, for the two expeditions to Canada. Colonial Laws of New York, 2:41–44. 29 Colonial Laws of New York, 1:779–80. 30 Colonial Laws of New York, 1:847–48.

[ 500 ]

Taxation of the Middle Colonies, 1714–1739

remained in effect until 1755. 31 An act of 1720 that laid duties of 2 percent on all European goods was repealed by the Crown in 1724. The provisions in the 1726 act were allowed to stand. 32

Duties

D

u t i e s, e xc i s e s, and tonnage reverted to the main sources of funds during 1714–39. Apart from European dry goods, the main dutiable items were wine, distilled liquors, cocoa, and Negro slaves. Goods sold at auction from seizures, public vendue, constituted a minor source of revenue. The act of 1715 taxed wine at 71 ⁄2 ounces of silver plate a pipe (3) if imported from its place of production, but double at 15 ounces (6) if imported from any other place. Duties on liquor were correspondingly 15 grains (3d.) and 30 grains (6d.) a gallon. Wines imported from their place of production in wholly owned New York vessels were taxed at a still lower rate of 5 ounces of plate (2) per pipe. The act of November 19, 1720, extended duties and tonnage for another five years until July 1, 1726, coupled with the issue of 5,000 ounces of plate, worth 2,000, in bills of credit.33 The 1720 act included for the first time duties on salt and molasses, which expired in 1725.34 The act of 1720 also extended duties to internally distilled liquors. Until 1726 the rate was the same as the duties on the place of origin; thereafter it was the same charged on all imported liquors. Cocoa was first taxed in 1715, subject to the discriminatory principle of one ounce of plate per hundredweight if from its place of origin and two ounces otherwise. The distinction was replaced in 1720 with a standard charge of 10 dwt. of plate per hundredweight, expressed as 4s., which remained unchanged until 1755. With cocoa selling at 2s. a pound, the tax amounted to 2 percent of its retail value.35 The customs act of 1726 renewed the charges, fi xing the duties on wines at 2 10s. a pipe, and those on rum, brandy, and other spirits at 3d. a gallon, eliminating the previous discrimination. These were reduced to 2 5s. and 21 ⁄2d., respectively, in 1728, with further reductions to 30s. and 2d. in 1737, at which rates they remained until 1753. In 1739 a clause was added that allowed a drawback on wines if reexported within six months of importation. Table 18.2 presents figures on duties, excepting slaves, for the four fiscal years 1722, 1723, 1724, and 1725. Total duties for the four years raised 13,450 7s. 11d., an annual average of 3,362 11s. 113 ⁄4d. 31

Colonial Laws of New York, 2:254–55. Anderson, “Taxation in Colonial New York,” 58–62. 33 Colonial Laws of New York, 2:16–32, 32–34. 34 Anderson, “Taxation in Colonial New York,” 48–51. 35 Anderson, “Taxation in Colonial New York,” 62. 32

[ 501 ]

chap t er 1 8 tabl e . New York Duties, 1722–1725 (£.s.d. New York Currency) Year

1722 1723 1724 1725 Total

Wine

Rum

Molasses

Salt

Cocoa

Dry Goods

Total

496.10.6 1,493.2.0 513.0.0 961.4.0 3,436.16.6

1,165.14.9 1,324.1.9 1,782.11.9 911.8.9 5,183.16.19

649.12.4 711.18.8 456.10.10 728.15.8 2,546.17.6

270.9.0 175.7.0 91.5.6 213.6.0 750.7.6

192.19.6 130.13.9 163.3.0 665.19.0 1,152.15.3

62.2.5 115.2.11 115.2.11 95.12.9 352.14.5

2,837.8.6 3,914.19.6 3,121.13.9 3,576.6.2 13,450.7.11

Notes: 1. O’Callaghan’s table lists duties on dry goods in 1723 at 79 16s. 4d., which differs from the figure of 115 2s. 11d. in the Votes of the General Assembly. Given that the figures for dry goods are identical in 1723 and 1724, it seems plausible that a mistake was made in printing the figures for 1723 and that O’Callaghan’s entry is the correct one. I was unable to find any subsequent figures that corrected the accounts printed in the Votes of October 1, 1725. 2. The treasurer’s arithmetic for 1722 is wrong. He sums the duties to 2,816 8s. 6d. The correct sum is 2,837 8s. 6d., which results in a total for the four years of 13,450 7s. 11d. compared with the treasurer’s total of 13,423 7s. 11d. Using O’Callaghan’s entry of 79 16s. 4d. in place of the fi gure in the Votes does not result in a four-year total of 13,423 7s. 11d. Minor errors of arithmetic occasionally appear in the colonial accounts. 3. The total of 13,423 7s. 11d. recorded in the Votes differs from the addition of the separate duties. Source: Votes of the General Assembly, October 1, 1725. A table that summarizes the figures of duties collected during 1722–25 appears in E. B. O’Callaghan, The Documentary History of the State of New-York (Albany: Weed, Parsons, 1849), 1:703. The fiscal year 1722 runs from June 5, 1721, until June 4, 1722, with the same months and days for 1723–25. O’Callaghan states duties for the five-and-a-half months from April 20 to October 1, 1726, of 3,825 6s. 101 ⁄4d. The bulk of trade took place between spring and autumn, which explains the high number for the slightly less than half-year period. O’Callaghan lists as his source the Journals of the General Assembly.

To put these numbers in perspective, the value of imports into New York for the five years beginning December 25, 1723, amounted to 137,438 19s. 10d., an annual average of 27,487 11s. 11d.36 On these numbers, duties amounted to about one-eighth the value of imports. These numbers underestimate the real value of imports as they exclude smuggled goods and goods whose value was understated, passed by collectors whose palms were greased with bribes. Bribes can be considered a substitute for duties, but there is no way to quantify the amount of bribes, which were certainly less than official duty rates. A few other figures are available. Duties collected between July 1 and August 7, 1728, generated 1,127 0s. 3d. From September 1, 1728, to May 1, 1729, they supplied 3,322 2s. 83 ⁄4d.37 Duties in 1738 (months not specified) yielded 2,913 6s. 8d. 38 Increasing quantities of imported wine enabled the General Assembly to reduce rates in 1728 and again in 1737. Duties supplemented with several thousand pounds of interest on public loans generated more than 5,000 New York currency in revenue in 1738. 36 E. B. O’Callaghan, The Documentary History of the State of New-York (Albany: Weed, Parsons, 1849), 1:706. 37 Votes of the General Assembly, August 8, 1728, and May 20, 1829. 38 O’Callaghan, Documentary History of New-York, 703.

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Duties on strouds and rum transported north and west of the City and County of Albany between November 1, 1731, and August 31, 1737, generated 2,623 17s. 101 ⁄2d., with arrears of 873 0s. 1d. not yet remitted to the treasurer.39 Actual revenue exceeded four hundred pounds a year, no small sum in the context of annual provincial expenses in the neighborhood of five thousand pounds. Seized goods sold at auction were charged duties of 3 percent. Receipts of vendue duties for the two years June 5, 1723, to June 5, 1725, amounted to 59 7s. 113 ⁄4d. net revenue after provision was made for commissions. Another 16 6s. 3d. came from vendue for September 1, 1725, to April 20, 1726.40

Negro Duties he customs act of 1714 imposed duties of 71 ⁄2 ounces of plate (3) on slaves imported directly from Africa, and ten ounces (4) from other places, largely directed at the West Indies. In 1715 the ratio was changed to 5 (2) and 121 ⁄2 ounces (5), respectively, but the latter figure was reduced to 10 ounces (4) in 1716. This rate remained in place throughout most of the colonial period. Preferential treatment of the lower rate on slaves imported in New York-owned vessels in the laws of 1714 and 1715 was removed in 1720. The rates were repeated in the 1726 duty act. During the 1720s and 1730s the price of Negro slaves in New York ranged from 40 to 50, which made the tax rate 5 or 10 percent depending on origin.41 A supplemental act of November 28, 1734, authorized a tax of 1s. a head for males and females aged fourteen to fifty on owners of slaves.42 E. B. O’Callaghan reproduces customhouse figures reported by the collector, Archibald Kennedy, for imported Negroes during 1701–26. Annual imports were uneven, from a low of 17 to a high of 447 for those from the West Indies, and a range of 28 to 266 from Africa, with none from either for selected years. In all, the number of Negroes imported from the West Indies during 1714–26 totaled 1,248, an annual average of 96; those from Africa 593, or 46 a year. The former would have yielded 5,009 in duties, the latter 1,186, a total of 6,195 for an annual average of 477. During the four years 1722–25, Negro duties would have generated 424, 328, 244, and 216, respectively, adding less than 10 percent to the totals shown in table 18.2.43

T

39

Votes of the General Assembly, October 1, 1737. Votes of the General Assembly, October 12, 1725, and April 29, 1726. 41 Anderson, “Taxation in Colonial New York,” 53–58. O’Callaghan’s data on duties do not include a separate entry for Negro slaves. 42 Colonial Laws of New York, 2:876–84. 43 O’Callaghan, Documentary History of New-York, 707. Revenue figures are estimates derived from multiplying the duty rate by the numbers of imported Negroes presented in 40

[ 503 ]

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One account of Negro duties appears in the proceedings of the General Assembly. Between September 1, 1725, and April 20, 1726, duties including tonnage (see below) yielded 390 19s. 3d.44

Tonnage

A

f t er fal l ing dormant for a year on the conclusion of Queen Anne’s War, tonnage of 71 ⁄2dwt., or 3s., a ton was resumed in 1714. Tonnage yielded 280 10s. 9d. in 1724.45 Tonnage lapsed during 1726–33, but was renewed in 1734 at 3s., collected without change until 1760. The law of 1714 exempted coasting sloops owned in Massachusetts, Rhode Island, Connecticut, and New Jersey. That of 1726 extended the range from Cape Henlopen, Delaware, to New Hampshire, and included vessels engaged in whaling. Ships arriving from Great Britain were exempt during 1714–16 and 1720–26, but not in the renewed act of 1734. Estimates of annual tonnage during 1714–16 were put at around 100 a year. Vessels built in New York had always been free of tonnage, but after September 1, 1716, those built outside the colony, even if owned by New York residents, became subject to tonnage. A renewed tonnage act in 1724 exempted all ships built and owned in New York, extending even to ownership of one-fourth of any vessel no matter where it was built or where the owners of the other three-fourths resided.46 The 1734 act increased tonnage to 3s. on foreign-built and foreign-registered vessels, extending the previous exemptions on locally built and locally and British-owned vessels, those in the coastal trade from Cape Henlopen to New Hampshire, and all whaling vessels.47 An act later in November extended the charge from 1740 to 1744 to coincide with the validity of bills of credit issued in 1734.48

Excises

E

xc ise s on liquor were continuously collected in New York from 1691 until the Revolution. The May 1691 act set the rate at 12d. a gallon on wine retailed in amounts of less than five gallons, 12d. a gallon on brandy, rum, and other distilled liquors under fifteen gallons, and 6s. a barrel on

O’Callaghan’s table. No adjustment is made for the lower duty on Negroes imported in New York-owned vessels prior to 1720 as the figures on imported Negroes do not distinguish ownership of vessels. 44 Votes of the General Assembly, April 28, 1726. 45 Votes of the General Assembly, June 6, 1724. 46 Anderson, “Taxation in Colonial New York,” 65–70. The lapsed period of 1726–34 was attributable to the Assembly’s belief that the free port of Perth Amboy in New Jersey was attracting trade away from New York. 47 Colonial Laws of New York, 2:843–47. 48 Colonial Laws of New York, 2:867–68.

[ 504 ]

Taxation of the Middle Colonies, 1714–1739

beer and cider.49 An act of October 15, 1713, increased the rates to one-eighth of an ounce of silver plate on strong liquor and three-quarters of an ounce per barrel of beer and cider, equivalent to 1s. and 6s., at which they remained until the Revolution.50 A few figures appear in the Votes of the General Assembly. For the twelve months beginning November 1, 1723, excises amounted to 486 16s. 3d. For the year from November 1, 1727, revenue came to 684 8s. 4d. Between June 30, 1728, and May 20, 1729, excises contributed 510 13s. 9d.51 Remittances from the collectors of excises to the provincial treasurer were typically in arrears. Amounts due were estimated at around a thousand pounds for the years beginning November 1, 1728, 1732, and 1733.52 The problem of timely remittance was noted in the Votes on June 10, 1729, listing excises collected for the eight years encompassing November 1, 1720, through November 1, 1728, of about 7,080 with remittances of 5,860, putting arrears at about 1,220, one-sixth of that collected. Excises were much less important than duties as a source of annual revenue. Two minor taxes appear once in the legislative record. One is a tax on hawkers and pedlars that yielded 50 and another on wigs supplying 261 3s. 2d. between August 17, 1732, and March 1, 1734.53

Quitrents e t w een 1 7 1 4 and 1 7 39 , quitrents supplied little revenue.54 Annual receipts for the three years 1707–9 averaged less than a hundred pounds. On his arrival in 1710, Governor Robert Hunter tried to improve collection. Through legal threats to call in land titles, he achieved some early success in reducing arrears. However, in 1718 he wrote to the Board of Trade that arrears had become scarcely worth the cost of collection. Moreover, payment in poor quality commodities resulted in losses from legal rates. Governor

B

49

Colonial Laws of New York, 1:248–50. Colonial Laws of New York, 2:105–9. Liquor excises were farmed, which means that individuals bid for the right to collect the tax. The colonial treasurer received the amount of the winning bid and the winner was allowed to keep whatever he collected over and above his bid. Anderson states that excises were not very productive of revenue owing to this unsatisfactory method of collection. “Taxation in Colonial New York,” 220. 51 Votes of the General Assembly, October 1, 1725, August 8, 1728, and May 20, 1729. 52 Votes of the General Assembly, May 20, 1729, and May 6, 1734. 53 Votes of the General Assembly, May 16, 1734. 54 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 266–70. The accounts of quitrents between 1728 and 1779 in the New York State Library are closed to research due to severe burn damage. See http://nysl.nysed.gov/uhtbin/cgisirsi/ LwMKc1JJy3/ 4210012/9 (August 4, 2006). 50

[ 505 ]

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William Burnet (1720–28) temporarily improved the collection of quitrents, but the outcry over his legal maneuvers was so loud that his successors, John Montgomerie (1728–31), Rip Van Dam (1731–32), William Cosby (1732–36), and Robert Clarke (1736–43), largely ceased their efforts. Resistance to quitrents was partly due to the acquisition of large blocks of land by governors, councillors, secretaries, and other colonial officials who came from leading families. Land speculation was a path to fortune, especially for royal appointees seeking a way out of debts incurred at home. Officially land grants had to be obtained from the governor in session with members of the Council. A patentee of land had to secure a warrant to purchase land from the Indians, a warrant to survey it, a warrant for the patent itself, and then letters of exemplification (copies). British instructions limited grants to any individual to two thousand acres, reduced to one thousand in 1753, but this restriction was evaded by resorting to fictitious names, proxies, or trustees. New York’s governors, councillors, secretaries, and surveyors-general were able to acquire land at virtually no cost as their share of land purchases was paid by the fees they received from their partners in granting lands to them. George Clarke’s actions exemplified how these acquisitions could be made. Clarke, a young English country gentlemen, came to New York in July 1703 to serve as provincial secretary and deputy auditor. He steadily rose in positions of power and influence. He married Anne Hyde, daughter of Governor Edward Hyde of North Carolina, who was a distant relative of Queen Anne. Clarke served as secretary to the Council and then as a member during 1716–36. As senior member, he was appointed to the position of lieutenant governor in 1736 on Cosby’s death, serving in that capacity until the appointment of George Clinton as governor in 1743 ended Clarke’s career as an official and land speculator. Between 1704 and 1742 Clarke acquired 117,6623 ⁄4 acres of land in twenty-seven separate patents, excluding his properties in and around New York City and his shares in iron and other mines. When he became lieutenant governor, he appointed his first son secretary to the Council, while his second son served as Indian commissioner, which facilitated the purchase of land from the Indians. Clarke’s predecessor, Cosby, had secured huge grants, two notable examples being Cosby Manor (42,000 acres) and Warrensburg (14,000 acres). Many leading families acquired large blocks of land using similar hidden procedures. One reason that Clarke was willing to concede greater power of the purse to the Assembly and support a massive new issue of bills of credit in 1737 was his personal acquisition of 22,500 acres that year.55 55

Details of Clarke’s land acquisitions, and those of other officials and leading families, appear in Edith M. Fox, Land Speculation in the Mohawk Country (Ithaca, NY: Cornell University Press, 1949).

[ 506 ]

Taxation of the Middle Colonies, 1714–1739

New York City

N

e w yor k City was governed under its charters of 1708 and 1730, which declared it a “Free City,” a term borrowed from European municipalities. Its powers were closely regulated by the General Assembly, which had to approve the levy of town taxes. The governor appointed the mayor and recorder, although the city elected its own councilmen. The city was, in effect, a closed corporation whose members could carry on business and enjoy other municipal privileges. Admission as a freeman required either birth from a freeman, a long apprenticeship, or a money payment. The city’s chief sources of revenue included the Brooklyn ferry, ownership of all market houses extending to all docks and wharves, all unappropriated lands on the island to the low-water mark, and all land underwater four hundred feet about the island. If revenues were inadequate, some of the corporation’s land could be sold. Individuals were required to provide labor to perform such ser vices as lighting and street cleaning. Assessments for street improvements in the Dutch period gave way to requiring tasks to be performed by adjoining owners. In 1740 gross revenue of the city was a mere 747.56 During the era of salutary neglect, annual average taxes in New York amounted to about 6,045 New York currency, or 29.1d. per capita. The approximate figures for each separate tax appear in table 18.3. The numbers were calculated as follows. Annual average tax is derived by dividing the number of years into total estimated taxes for each tax for the years in which the taxes were levied during 1714–39. Data are missing for several of the taxes for some of the years. The assumption is made that receipts for the missing years resemble those for which data exist, adjusted for population and the growth of imports. The average of 4,000 in duties is an interpolation for the entire period that reflects the steady growth of imports subject to duty. Per capita figures are based on an average population of 50,000 for the quarter century derived from the figures for census years 1720, 1730, and 1740.57 The rate of New York on London to buy 100 sterling rose from 154.9 New York currency in 1714 to 166.67 in 1739. With the exception of 1730, it was unchanged at 165 between 1723 and 1738. Using this rate, per capita taxes of 26.2d. New York currency, the high end of the likely real burden,

56 Edward Dana Durand, The Finances of New York City (New York and London: Macmillan, 1898), 14–24. 57 It is necessary to distinguish the incidence of taxation, who pays the tax, from the burden of taxation, on whom it falls. Sailors, merchants, and other visitors consumed some of the wine, spirits, beer, and other imported goods. Consumers of imported and retail goods subject to duties and excises, not importers and retailers, largely pay the tax. A reasonable assumption is that 10–20 percent of these levies were borne by non-residents. Tonnage is borne by nonresident shipowners and the consumers of imported goods. Adjusting the figures for these factors reduces the per capita tax burden of New York colonists to a lower range of 23.3–26.2d.

[ 507 ]

chap t er 1 8 tabl e . New York Summary of Taxes, 1714–1739 (New York Currency) Tax

Direct tax Duties Slave duty Tonnage Excise Quitrents New York City Total

Annual Average ()

500 4,000 477 68 500 100 400 6,045

Per Capita Tax (d.)

2.4 19.2 2.3 0.3 2.4 0.5 2.0 29.1

converts to just under 16d. sterling. With per capita taxes in Britain in 1739 at about 1 sterling, the burden of taxes on Britons was fi fteen times greater than that on New Yorkers. Despite New York’s relatively low burden, its residents complained that they were highly taxed compared to residents in New England and the other middle colonies.

Taxation in Pennsylvania, 1714–1739

T

he pr opr ie tor appointed the provincial treasurer until 1714. In 1715 the House of Representatives, also called the Assembly, acted to provide a treasurer responsible to itself and secured full control of the office by the end of the period. Through the creation of a land bank, it steadily gained authority over provincial government spending. Since all treasury drafts had to be signed by the speaker and the treasurer, the house could withhold the salary of the deputy governor if he refused to sign its bills. The house came to set fees and salaries of all public officials in the colony. It appointed county commissioners who exercised responsibility for collecting taxes; in 1722 it made the office elective, and many commissioners later sat in the house. The speaker of the house became as, if not more, powerful as the deputy governor in matters of public finance.58 The public loan office was a crucial element in this evolution. Of the 45,000 approved in bills of credit in 1723, 36,500 was earmarked for loans at 5 percent interest. The act stipulated that the interest of 1,825 arising from loans would support government spending, which the house increasingly directed. Interest quickly became the largest source of provincial revenue, supplying, as Governor Keith noted, over three-quarters of provincial revenue in 1731 (see table 18.4). Until the passage of new legislation in 1755 58 Joseph E. Illick, Colonial Pennsylvania: A History (New York: Charles Scribner’s Sons, 1976), 99–104.

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Taxation of the Middle Colonies, 1714–1739

at the onset of the French and Indian War, interest supplied a substantial majority of all provincial revenue. On May 28, 1715, the Assembly enacted a direct tax of 1d./ on property and a poll of 4s. a head. An identical tax was levied on August 24, 1717.59 Little revenue was collected from either law. Collectors refused to collect taxes in their districts despite legislation making them personally liable for the tax. Direct provincial taxes were not renewed until 1755. Apart from interest, the other principal sources of provincial revenue were duties and excises on liquor.60 Although the provincial government did not collect direct taxes, the counties collected local property taxes almost every year. The basic rate was levied at 1–3d./ of assessed wealth of improved land and livestock, a rate of 0.4–1.25 percent.61 The effective rate was considerably lower since assessments of real estate holdings recorded in Chester and other counties were well short of the known value of residents’ holdings.62

59 A complete list of all colonial legislation that expired, was repealed, or became obsolete appears in the introductory section of Laws of the Commonwealth of Pennsylvania, from the Fourteenth Day of October, One Thousand Seven Hundred, to the Twentieth Day of March, One Th ousand Eight Hundred and Ten, vol. 1 (Philadelphia: John Bioren, 1810). The law in question appears in Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, August 22, 1717. 60 Specific acts are listed for each year in Laws of Pennsylvania. 61 Schweitzer, Custom and Contract, 195. 62 Schweitzer, Custom and Contract, 84–85, 155. Schweitzer writes that the assessed value of real estate holdings as recorded by the county fell so short of the known value of real estate holdings that tax receipts cannot be used to estimate the actual value of physical holdings of wealth. Records of 3,111 loans issued between 1724 and 1756, about four-fi fths of the total, reveal the average loan amounted to 65 13s. Each loan required that property and houses mortgaged as security be worth, respectively, double and triple the amount of the loan. On this basis, the minimum average valuation of personal estate would be at least 131 6s., and somewhat more depending on what portion of the loan was secured by a mortgage on a house. The average tax payments of loan recipients in Chester County were 7s. 6d. in 1729 and 4s. 7d. in 1754. The tax rate was set at 3d. in 1729 and 2d. in 1754 (155–56). A charge of 3d./ on 131 13s. amounts to 1 7s. 10d., which is nearly four times the average tax that loan recipients paid in 1729; a rate of 2d. amounts to 1 1s. 3d., about three times the average paid in 1754. On these calculations, the effective rate of tax in 1729 was 0.75d./, or 0.31 percent; that in 1754 was 0.66d./, or 0.28 percent. Schweitzer calculates that on the basis of the average tax paid by loan recipients, real estate holdings would have amounted to about 30 in 1729 and 27 10s. in 1754 if the full county rate was collected (240). Th is is less than half the average loan of 65 13s., which required collateral at least double that amount. In 1729, carpenters received a daily wage of 3s. These rates were typical during the years of salutary neglect. A freeman’s tax in 1729 was 9s. per head, reduced to 6s. in 1754. It took three days of wages, or roughly 1 percent of the year, to meet the freeman’s poll or head tax in 1729, and only two days, or two-thirds of 1 percent, in 1754. Nor can it be assumed that the full tax was collected, given the undervaluation of real property (52, 155–56). Direct county taxes were light, less than a fraction of a percent on assessed valuation and on the order of 1 percent or less on skilled labor.

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On May 28, 1715, the General Assembly proposed to raise 800 by duties of 25s./pipe, half that on vessels traveling direct from Madeira, on all wines, 2d./gallon on rum, brandy, and spirits, 3s./barrel on cider, and 3d./pound on hops, and 5 on Negroes.63 On February 22, 1718, the Assembly reenacted the duties on alcoholic beverages at slightly higher rates and the same rate on Negroes. Duties were extended to horses, cattle, sheep, swine, beef, pork, butter, cheese, hops, flax, molasses, immigrants, convicts, and vessels. Excises were laid on rum, wine, and spirits sold in the province. Goods imported in vessels owned by residents of the colony were exempt.64 The Crown disallowed the act as it taxed Negroes and vessels. In 1718, Pennsylvania imposed reciprocal 10 percent duties on goods imported from New York and Maryland that remained in force until its neighboring colonies removed their charges. On April 25, 1719, the General Assembly reenacted duties on all alcoholic imports, including flax. On February 24, 1721, all duties were continued until May 14, 1722. On May 15, 1722, duties were levied on imported alcoholic beverages and reimposed on Negroes. No further legislation imposing duties on alcoholic beverages was passed, but excises were renewed in 1723, 1727, 1730, 1734, and 1738. Negro duties were reenacted and raised to 10 in 1726, and in 1729 the charge was reduced to 2 but included foreigners and Irish servants. County rates were authorized in laws of 1724 and 1732. Poor relief entered Pennsylvania law in 1735.65 In 1717 the Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania states that a committee of the Assembly was formed to receive and examine the public accounts of the provincial treasurer and collector of duties.66 Receipts of duties and excises were thereafter printed in the legislative record. With the issue of bills of credit on loan in 1723, the accounts also included the transactions of the General Loan Office. Reports of the audit committee were irregular in timing until 1731, when they began to appear, with minor exception, every August. They were also irregular in their comprehensiveness, sometimes only including receipts from excises received by the provincial treasurer, but not the separate accounts of each collector of excises, or just interest, and only infrequently included payments of the governor’s salary and other incidental provincial

63

Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania (also titled Votes of the Assembly), January 19, 1715. 64 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, January 11, 1718. The act was signed into law by the governor on February 22. 65 Laws of Pennsylvania. Details on Negro duties appear in W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1969), 22–23, 210–13. 66 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, August 21, 1717.

[ 510 ]

Taxation of the Middle Colonies, 1714–1739

expenses. The death of a provincial treasurer and appointment of his replacement required two accounts for the period surrounding the event. Table 18.4 displays revenue from excises, duties (including tonnage), and interest between 1718 and 1739, outstanding interest (arrears), and annual payments made by the provincial treasurer authorized by the house to the extent that the figures appear in the legislative record. The General Loan Office paid its trustees from its interest receipts before transferring funds to the provincial treasurer and occasionally paid a share of the governor’s salary. Table 18.4 shows that interest supplied about 80 percent or more of provincial revenue between 1726 and 1739, save 1727. Excises were substantially increased in fiscal year 1738/39 as the colony prepared for the advent of war with Spain and France. Outstanding interest began to rise sharply in fiscal year 1731/32, not quite doubling actual interest income in 1738/39. The colony did not pressure mortgagees to pay promptly as it was receiving more than sufficient revenue from excises and interest to make all approved payments and accumulate a reserve. The loan office system of public finance was so successful that Pennsylvanians were almost entirely free of provincial taxes during the entire period. Moreover, a portion of the excises was borne by visitors to the colony, not residents. A separate audit of the General Loan Office for the six fiscal years 1724–29 inclusive, with each fiscal year beginning March 25 continuing to the following March 24, disclosed interest income of 546 3s., 1,802 13s. 111 ⁄2d., 1,730 16s., 1,682 15s. 51 ⁄4d., 1,675 7s., and 1,1132 15s. 11d. Outstanding interest during the six years rose from 222 12s. 6d. in 1724 to about 500 annually in the next five years save 1728, when it declined to just under 300. From these proceeds, beginning in 1725 the trustees of the General Loan Office transferred over 1,000 to the provincial treasurer each year save a smaller 500 in 1729.67 On January 21, 1731, the House of Representatives charged William Fishbourn, one of the trustees of the General Loan Office, of malfeasance in office, mainly diverting funds to his private use. The managers of the prosecution stated that his account to the General Assembly of April 4, 1728, showed a balance due the province of 68 18s. 13 ⁄4d. versus an amount of 852 10s. 4d. in his hands for which he should have credited the province, a difference of 783 12s. 21 ⁄4d. The managers charged Fishbourn with understating the amount due the province of 3,185 19s. 71 ⁄2d. in his account of August 22, 1729, and 3,999 1s. 01 ⁄4d. on December 17, 1729. The total comes to just under eight thousand pounds over the course of twenty months. On the morning of January 21, Fishbourn presented a lengthy defense against each charge. The house summarily rejected his defense and

67 Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, February 4, 1730.

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chap t er 1 8 tabl e . Pennsylvania Excises, Duties, Interest, and Provincial Payments, 1718–1739 (£.s.d. Pennsylvania Currency) Date of Entry in Records

12/20/1718 1/9/1720 2/11/1721 8/18/1721 1/2/1722 8/2/1722 11/23/1723 5/7/1724 2/4/1725 3/5/1726

Excises

461.5.9 1,194.8.1112⁄ 486.10.112⁄ 229.1.2 343.17.512⁄

Rum, Wine, Negro Duties

2,353.12.9 600.7.2 810.0.034⁄ 205.10.3 283.0.0 150.6.7 393.0.1114⁄ 659.7.612⁄

664.4.2

Interest Received

Interest Outstanding

Approved Payments

Incl. in below 1,935.6.1012⁄ 1,045.18.0 768.6.4 1,102.0.0 1,638.10.0 1,038.10.0

Notes: 1. The figure for duties recorded on December 20, 1718, includes 127.8. 1. in tonnage. Duties are for the period June 13, 1715, to August 3, 1718. That of tonnage is for May 22, 1718, to November 7, 1718. The figures in the table represent the amounts received by the collectors of excises and duties, not the amount forwarded to the provincial treasurer. The collectors were invariably in arrears to the treasurer, which occasioned periodic complaints and inquires by the Assembly. The record of December 20, 1718, states the following: “We cannot make a full Report of the State of the Excise, the Difficulty of collecting and settling with the Persons having rendered the Officer unable to settle that Account.” The committee estimated that the collector had 300 in his custody that he had not transmitted to the treasurer. As a result, the accounts each year carried forward the outstanding balance of the collectors due the treasurer from the prior account, and the outstanding balance of the treasurer due the province due to the arrears of the collectors, against which approved payments were made or to be made. The colony had one collector of duties but separate collectors of excises in each of the counties. 2. The figure for duties recorded for January 9, 1720, consists of 499.18.61 ⁄4 for duties to August 7, 1719, and 134.18.1 for tonnage (November 21, 1718, to November 22, 1719). To illustrate the comment in the above note, the account of the collector of duties and excises carried forward a balance of 472.8.5 from the prior year, leaving a balance due the provincial trea surer of 438.5.8 for the next year after his remittance of 1,129.15.2 during the year in question. The audit notes that the duties on liquors and Negroes since the preceding September 8 were not provided to the committee, and that the committee was waiting for the full accounts of the collector’s deputies for several of the counties. 3. The figure for duties recorded for February 11, 1721, includes tonnage of 144.17.6. Duties are for the period to October 6, 1720, tonnage to October 14, 1720, and excises from May 14, 1719, to November 14, 1720. 4. The figure for duties for August 18, 1721, includes tonnage of 50.14.1. The reporting period for the different sources of revenue is to April 12, 1721 (duties), June 26, 1721 (tonnage), and to November 14, 1721 (excises). The record notes that duties, tonnage, and excises have not been fully accounted for. However, the committee states that when arrears are paid in, there will be sufficient funds to pay the colony’s debt of 1,220.1.2 based on its approved payments of 1,935.6.10 1 ⁄2 for the fiscal year 1720/21. 5. The figure for duties for January 2, 1722, includes tonnage of 74.6.8. Balance due from the collector amounts to 865.5.7 1 ⁄2 along with an unstated amount of arrears of tonnage and excise.

moved that afternoon to secure repayment from him of the amount tabulated in the charges and disbarred Fishbourn from any office or public trust or profit in the colony.68 68

Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, January 25, 1731. A careful reading of Fishbourn’s written statement appears plausible, but there is no way to determine from reading the charges and defense whether the house

[ 512 ]

Taxation of the Middle Colonies, 1714–1739 tabl e . (continued) Pennsylvania Excises, Duties, Interest, and Provincial Payments, 1718–1739 (£.s.d. Pennsylvania Currency) Date of Entry in Records

8/6/1726 3/30/1727 8/5/1727 1/24/1728 4/4/1728 12/19/1728 8/23/1729 2/4/1730 8/10/1731 8/9/1732 8/13/1734 8/12/1738 10/20/1738 8/7/1739

Excises

658.18.8 861.12.412⁄ 425.19.2 459.0.834⁄ 594.18.1012⁄ 456.12.434⁄ 407.19.11 532.3.4 555.13.4 166.7.0 318.2.11 1,600.3.7

Rum, Wine, Negro Duties

88.15.0 45.0.0 46.5.0

283.15.1012⁄ 47.7.6 153.10.0 109.0.6 51.15.0

Interest Received

Interest Outstanding

Approved Payments

2,336.4.912⁄ 1,654.2.6

284.11.6

1,977.4.414⁄

122.15.9

2,829.18.8

721.8.034⁄

1,061.100

2,679.9.112⁄ 2,629.9.012⁄ 2,636.15.512⁄ 2,728.18.1 87.8.6 2,897.13.0

799.5.134⁄ 1,477.15.734⁄ 2,786.16.11 4,601.16.112⁄

1,133.1.7 1,397.17.7

5,365.13.234⁄

3,202.6.10

581.19.2

6. The figure for duties for August 2, 1722, includes 43.18.2 in tonnage. Payments are for the period January 1, 1722, to August 1722. 7. Tonnage is not included in the figure for May 7, 1724. Duty is for the period May 8, 1723, to February 1, 1724. 8. Duty ceases after 1724 until it was reimposed on Negroes in 1727. Duty entries from 1727 are only for Negroes. Excise figures from 1724 include the amount of the collector’s commission, which he deducted from total collection before his remittance to the provincial trea surer. 9. Approved payments listed in the table included 600 for the governor’s salary in 1725, 400 in 1726, 500 in 1729, 400 in 1734, 600 in 1738, and 1,600 in 1739, the latter to make up for the modest compensation of previous years. Payments in 1734 also included 150 sterling for the colony’s agent in London, which is not part of the total in the table. 10. The entry for August 12, 1738, of interest income was for the brief period August 12, 1738, to October 20, 1738. It was included in a separate set of accounts for the construction of a state house. 11. Excises in the entry of February 4, 1725, are for the period unknown at its beginning to September 4, 1724. Thereafter the reporting periods are as follows: on August 6, 1726 for excises collected from November 14, 1725, to May 14, 1726; March 30, 1727 (to August 4, 1726); August 5, 1727 (February 14, 1726, to May 14, 1727); January 24, 1728 (May 14, 1727, to November 14, 1727); December 19, 1728 (November 11, 1727, to November 14, 1728); August 23, 1729 (November 14, 1728, to May 14, 1729); February 4, 1730 (May 14, 1729, to November 14, 1729); August 10, 1731 (May 14, 1730, to May 14, 1731); thereafter annually from May of one year to May of the next year. The small entry recorded on August 13, 1734, noted that 435.7.2. in excises were outstanding and had not been remitted to the provincial trea surer. 12. Once the audits became routinely annual in 1731, based on extant records of the Votes and Proceedings, the figures for interest typically ran from August to August. Source: Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania. There are gaps in the extant records for 1732/33, and for the three years 1734/35 through 1736/37.

Penn’s land office, staffed by the secretary of the province, the surveyorgeneral, and three to five commissioners of property, sold land at 5 per was correct in its rendition of his accounts or if it was engaged in a political vendetta against him.

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hundred acres with 1s. quitrent to 1713.69 The price rose to 10 and 2s. quitrent until 1732, then to 15 10s. with a quitrent of 1 ⁄2 d. sterling. With the purchase of a large block of land from the Indians, sales rose to about 10,000 a year during 1732–39, even as quitrents fell further into arrears. Thomas Penn reserved for himself 150,000 acres during his stay in the colony from 1734 to 1741, a rare period of proprietary residence, which became a bone of contention among colonists who wanted to speculate in land for sale to immigrants, as well as a source of conflict over the taxation of the proprietary estates.70 Quitrents did not burden the colonists during the era of salutary neglect.

Taxation in Delaware, 1714–1739

T

axe s in Delaware in 1714 consisted a property levy of 1d./ assessed valuation. No new taxes were levied for provincial purposes until 1727, when the Assembly placed a tax on pedlars to suppress their activities, not to raise revenue. Those who traveled on horseback were charged an annual tax of 25s., while those on foot paid 15s. As in Pennsylvania, counties could levy direct taxes as they deemed appropriate, but these were light. Receipt of interest on public loans quickly eliminated the need for county levies.71 The issue of bills of credit in 1723 put Delaware’s public finances almost entirely on an interest basis. Interest initially went to the provincial Treasury but later also supplied funds for county treasurers. By 1729 when the prospective retirement of the 1723 issue led to a new emission, the loan office had only foreclosed on two small plantations, indicating the strength of the security pledged as collateral.72

Taxation in New Jersey, 1714–1739

T

he era of salutary neglect coincides with the last quarter century of the “union period,” during which New Jersey shared a common governor with New York.73 The period ended in 1738. In February that year King George II approved Lewis Morris’s commission as governor and later in July 69 William R. Shepherd, History of Proprietary Government in Pennsylvania, Studies in History, Economics, and Public Law, vol. 6 (New York: Columbia University, 1896), 436–40. 70 Illick, Colonial Pennsylvania, 175–76. 71 M. M. Daugherty, Early Colonial Taxation in Delaware (Wilmington: Delaware Tercentenary Commission, 1938), 43, and John A. Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978), 211. 72 Munroe, Colonial Delaware, 213. 73 Edwin P. Tanner, “The Province of New Jersey, 1664–1738” (Ph.D. thesis, Columbia University, 1908), 506–19, 522–39, and William A. Whitehead, ed., Documents Relating to the Colonial History of the State of New Jersey, vol. 4, 1709–1720 (Newark, NJ: Daily Advertiser Printing House, 1882), and vol. 5, 1720–1737. The series of documents is known as the fi rst series (hereafter New Jersey Archives).

[ 514 ]

Taxation of the Middle Colonies, 1714–1739

issued him royal instructions. Morris officially took up his post in August 1738 as the first sole royal governor of New Jersey.74 The administration of Robert Hunter (June 1710–July 1719) marked the first time in New Jersey’s history that the General Assembly routinely granted the colonial government financial support. In January 1711, Hunter’s administration received two years’ support at 1,000 New Jersey currency per annum. The legislature specified his salary (500), his incidental expenses (100), the salaries of other officials and per diem allowances for each member of the assembly in session (about another 400). The General Assembly reenacted a two-year grant of supply in January 1714, increased it to three years in January 1717, and in January 1719 extended the 1717 act for two more years. Each largely continued the financial provisions of the 1711 act.75 The accounts of Thomas Gordon, the receiver-general of New Jersey, from June 23, 1710, to June 23, 1712, show appropriations of 2,591 12s. 8d. Proclamation Money. Of this 1,888 was for salaries of government officials and 103 12s. 8d. was for the charges and expenses of assessing and collecting taxes. In his accounts Gordon stated that arrears in unpaid taxes stood at 772 18s. 10d. but that he had been able to meet expenses equivalent to appropriations out of bills of credit in his possession.76 Gordon later submitted accounts covering January 23, 1710, to March 26, 1719. Receipts of county tax collectors were reported to him in 1718. Amounts received in 1711 and 1712 were 1,847 18s. 3d., in 1714 and 1715, 2,136 9s. 8d., and in 1716, 1717, and 1718, 3,107 16s. 10d. Total provincial funds at the disposal of the receiver-general amounted to 12,404 14s. 2d., with the balance consisting of 999 13s. 3d. in 1713 in bills of credit raised for the expedition to Canada that were not spent, and 4,002 17s. 2d. of bills issued in 1717. In two of the years, bills of credit made it unnecessary for the General Assembly to vote taxes, a means of financing later legislatures would employ. For the seven years in Gordon’s accounts showing tax receipts, the numbers sum to 7,092 4s. 9d., an annual average of 1,013 3s. 6d., which is just over the promised annual grant of 1,000.77 Hunter’s successor, Governor William Burnet (October 1720–April 1728), first met with the Assembly in February 1721, asking for an increase in revenue.78 The Assembly offered 1,020 for two years and 700 per diem for members of the Assembly and Council sitting in session. The Council 74

Morris’s life is chronicled in Eugene R. Sheridan, Lewis Morris, 1671–1746: A Study in Early American Politics (Syracuse, NY: Syracuse University Press, 1981). 75 Tanner, “Province of New Jersey,” 505–8. Details of the 1711 act are in New Jersey Archives, 4:19–22. The act specified values in Proclamation Money, that is, 133.33 New Jersey money equals 100 sterling. 76 New Jersey Archives, 4:185. There are no extant comprehensive treasurer’s accounts in New Jersey prior to 1776. Existing records as those cited in the text are sporadic. 77 New Jersey Archives, 4:368–72. 78 Burnet’s tenure is covered in Tanner, “Province of New Jersey,” 508–13.

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amended the bill to run for one year longer than the life of King George I. The bill failed when the Assembly rejected the right of the Council to amend money bills. A year later, in March 1721, the Assembly approved a five-year grant of supplies, but at the level given Hunter. The issue of loan office bills of credit in 1723 altered the previous reliance on taxes as the principal means of public finance. Of the 40,000 in issued bills, 4,000 was to sink old bills and pay salaries. The legislature agreed in principle to raise 1,000 a year in taxes to support the government as during the prior decade. Burnet argued forcefully for royal approval of the issue despite the fact that he had been warned by the Lords of Trade in September to be certain that a suspending clause was included in all future issues of bills of credit.79 When the Assembly met in 1725, it voted the promised 1,000 in taxes for that year, but also appropriated 1,321 that had accumulated in interest. In 1727 it appropriated 1,725 in interest money for the support of government.80 Burnet accepted the act despite opposition from imperial authorities, defending his action with the inclusion of certificates from New York signed by twenty-one leading merchants and from Perth Amboy signed by fourteen stating that New Jersey bills had risen in value.81 John Montgomerie (April 1728–July 1731), who succeeded Burnet, wrote the Lords of Trade in support of the act. They advised him to move the Assembly to repeal the appropriation of interest charges or else they would have the act disallowed. He protested this order, but misunderstanding between him and the Assembly led to its dissolution without an appropriation act in 1729. Receipts and expenditures of the provincial government passed through the separate treasurers of West and East New Jersey, a legacy of the colonies’ historical division. Accounts of West Jersey for the five years September 1720–September 1725 show receipts collected in the several counties of 3,717 8s. 53 ⁄4d.; of this, 1,000 was received from the loan commissioners in 1723 and 596 5s. 6d. in 1725, leaving a balance of 2,121 2s. 113 ⁄4d. from taxes. The account of money received by the treasurer of East New Jersey covers the 79 The text of Burnet’s support for the 1723 emission appears in New Jersey Archives, 5:86–96. An important point was that the scarcity of specie was making payment of taxes difficult for the colony’s residents; the “people were forced to cut their Spanish Gold into small bits and sometimes their rings & Ear-rings” (5:87). Burnet also argued that his royal instructions required raising sufficient taxes to pay the costs of colonial administration, and that bills of credit would make full support feasible. He cited the example of New York, which collected 4,000 a year as against 1,000 in New Jersey. The Lords of Trade let the act “lye by probationary,” but never recommended formal approval to the Crown. They urged him to insist on annual appropriations of taxes, not to let the Assembly rely on interest financing lest the colony’s currency depreciate as it had in New England and the Carolinas. 80 John E. Pomfret put this condition in wonderful language: “The assembly made the felicitous discovery that by using the interest from the land office loans for the support of government, it had solved the revenue problem.” Colonial New Jersey: A History (New York: Charles Scribner’s Sons, 1973), 132. 81 New Jersey Archives, 5:153–56.

[ 516 ]

Taxation of the Middle Colonies, 1714–1739

period December 1723–October 1726. For the three years, respectively, the sums of 815 18s. 6d., 471 0s. 10d., and 386 13s. were collected in taxes, none from bills of credit.82 Combining accounts of East and West New Jersey for the same years results in annual tax receipts of about 800 a year. In 1730 the Assembly withdrew a preliminary bill to grant supplies for five years, replacing it with an appropriation of money to be raised by the unexpired act of 1723 and adding support for one further year. It also passed a bill to enforce the payment of non-salary incidental charges of the colonial government out of interest income. Montgomerie passively accepted the new legislation, and corresponded with the Lords of Trade in support of using interest.83 Taken together, the two measures provided 1,000 in support for five years. Despite previous threats, British authorities did not disallow the acts. Governor William Cosby (August 1732–March 1736), Montgomerie’s successor, only summoned one session of the legislature. The act of 1733 voted 1,000 a year for the support of the government for the three years 1736–38, providing for the salaries of all government officials as specified in the 1730 law. The General Assembly stipulated the use of interest money for meeting government charges but agreed to a suspending clause; the act was subsequently confirmed. From the beginning to the end of the union period, the legislature exercised great economy in government, cutting the annual appropriation of 2,000 granted Lord Cornbury (August 1703–December 1708) to 1,300 a year under John Lovelace (December 1708–March 1709), thereafter 1,000 a year. Grants of supply from 1725 made increasing use of interest, thus steadily lowering the tax burden. Apart from salaries, which were occasionally reduced out of pique with certain officials, these small sums paid for little else other than the construction and repair of courthouses and jails, roads, and bounties on wild animals.84 A combination of interest from loan office bills combined with limited expenditure enabled low provincial taxation. Some small sporadic taxes that were assessed and collected included direct levies on polls and property, very modest county taxes, brief resort to protectionist tariffs on goods from neighboring colonies, import and export duties, and excises on liquor.85 82

New Jersey Archives, 5:132–52. The text of his correspondence is in New Jersey Archives, 5:249–60. In a lengthy report dated January 27, 1729, to the Lords of Trade on conditions in the colony, Montgomerie stated that the availability of cheap land, which made every man a landlord, left them reluctant to tax themselves except for the absolute necessities of court houses, bridges, roads, and other expenses. He wrote that the colonists feared that a rich public treasury would tempt their representatives to divide up the “spoil” and betray them (5:226–27). In the same report appears a harbinger of the tax disputes leading up to the Revolution. In a segment titled “Of a Revenue in America,” he suggests duties of stamps on parchments and paper as in England extended by an act of Parliament to all the American colonies to provide sufficient support for colonial administration (5:229). 84 Tanner, “Province of New Jersey,” 514–18. 85 Tanner, “Province of New Jersey,” 519–39. 83

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The system of taxation that was in effect in 1714 began with the 1704 act under royal rule. Freemen were assessed 6s. unless their property tax amounted to that sum; operators of ferries paid 20s.; retail liquor licensees and mill owners paid 1–3, Indian traders 1–4; and owners of property were assessed on their lands, cattle, horses, sheep, and slaves. Lists were compiled for each county and the assessors met at Perth Amboy each April 1 to apportion the required tax. Subsequent acts made slight adjustments in the rates. In 1722, the 6s. tax on freemen was reduced to 4s., but keepers of public houses now paid a higher 5–15. In 1714 under Hunter export duties were levied on pipe staves at 30s. per thousand, and 20s. per thousand on hogshead staves shipped from the eastern division to neighboring colonies. Duties of 10 were imposed on imported Negro, Indian, and mulatto slaves; its object, Hunter stated, was to encourage the importation of white servants. The export duty on staves was repealed in 1716. Export duties were reimposed in 1725, adding 1s. a bushel on wheat of East Jersey; its purpose was to encourage local grinding and bolting before export. Excises on retail strong liquor were established in 1716 at 12d. per gallon on rum, brandy, wine, and other spirits in amounts under two gallons, 4s. 6d. a barrel of cider, and different rates for other alcoholic beverages. The act was limited to five years and not renewed. Collection was farmed out for 300 yearly. From 1732, the General Assembly legislated neither direct taxes on polls and property nor indirect taxes on exports and imports. Apart from modest county levies, interest and excises on alcoholic beverages were sufficient to meet the cost of colonial administration. The average per capita tax probably amounted to some 6d. New Jersey money (31 ⁄2d. sterling) between 1714 and 1732, or 1.5 percent that of the average Briton.86 After 1732, the tax burden fell to almost nothing at all.

Summary

T

he story of the middle colonies is loan office interest. It paid a third of New York’s provincial budget and the lion’s share of that of the other three colonies. The residents of Pennsylvania, Delaware, and New Jersey in 1739 lived almost tax free, the precursors of modern-day tax havens. The era of salutary neglect was one of population growth, economic expansion, growing local political control over taxation and spending, stable money, and low taxes. Walpole must have envied his compatriots on the other side of the Atlantic and wished that British public finances could permit the low levels of taxation enjoyed in the colonies.

86 Th is estimate assumes an average population of 32,000 and 800 a year in tax levies during 1714–32.

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c h ap t e r 1 9
Taxation of the Southern Plantation Colonies, 1714–1739

T

h e s o u t he r n plantation colonies, increased to five with the founding of Georgia in 1732, developed along a completely different track from that of New England and the middle colonies—that of increasing reliance on slave labor. Between 1714 and 1739, the total population rose from 163,000 to 387,177. By 1739 the Negro population constituted about a third of this number. The growth of plantations is reflected in the export of tobacco and rice. Tobacco exports of 29,248,000 pounds in 1714 from Virginia and Maryland to England fell sharply to 17,783,000 in 1715, recovered to 28,305,000 in 1716, and thereafter rose to nearly 50 million pounds in 1737. The annual average for the twenty-six years encompassing 1714 through 1739 was about 34,500,000 pounds.1 Rice exported from the ports of Charleston, Beaufort, and Georgetown, South Carolina, increased more than tenfold, from 3,139,000 to 32,168,000 pounds.2 Naval stores and other agricultural products fi lled out the remaining commodities on which the southern economies were based. 3

1 Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg1038–45: “Tobacco Imported into England, by Origin: 1697 to 1775,” S-752–54. 2 Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1160–65: “Rice Exported from South Carolina and Georgia: 1698–1790,” S–763–66. 3 Elimination of bounties on pitch and tar in 1725 reduced exports from their peak year of 1725 by 40 percent in 1727, falling further to 10 percent of the 1725 level in 1728. A gradual recovery followed in 1729 to one–fi fth the 1725 level on parliamentary passage of a new, comprehensive naval stores act, but with substantially lower bounties than in the 1705 law. Rosin was dropped from the list of subsidies, pitch was given one–quarter its previous bounty, and turpentine was cut in half. Turpentine was the only naval store to enjoy a rapid increase in exports in the 1730s. Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1171–73: “Pitch, Tar and Turpentine Exported from Charleston: 1712–1787,” S–768–69.

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Money one y and taxes were closely intertwined during 1714–39.4 Many of the tax measures enacted during the period were dedicated to retiring public bills of credit. The plantation currencies differed widely among themselves. Virginia did not issue its own paper money until 1755, relying on specie, tobacco, and British bills of exchange. Maryland issued its fi rst paper money in 1734, giving itself two currencies, one hard based on tobacco and coin and the other of soft, lower-valued money. North and South Carolina issued large sums of paper money, some backed with future taxes and others as public loan offices; in both cases their currencies rapidly depreciated against sterling and those of other colonies. Between 1732, when Georgia was chartered, and 1739, it relied on coin and paper notes issued by the trustees.

M

4

The treatment of money in the middle colonies draws from Leslie V. Brock, Th e Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), 66–99. Exchange rate and currency values are from John J. McCusker, Money and Exchange in Eu rope and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). Details of specific paper money issues are from Eric P. Newman, Th e Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). Further information on Virginia is found in John M. Hemphill II, Virginia and the English Commercial System, 1689–1733: Studies in the Development and Fluctuations of a Colonial Economy under Imperial Control (New York and London: Garland, 1985), 98–148 (originally a Ph.D. thesis, Princeton University, 1964), and Mrs. Philip Wallace Hiden, “The Money of Colonial Virginia,” Virginia Magazine of History and Biography 51, no. 1 (January 1943): 36–54. For Maryland, see Clarence P. Gould, Money and Transportation in Maryland, 1720–1765, Johns Hopkins University Studies in Historical and Political Science, ser. 33, no. 1 (Baltimore: Johns Hopkins Press, 1915), and Kathryn L. Behrens, Paper Money in Maryland, 1727– 1789, Johns Hopkins University Studies in Historical and Political Science, ser. 41, no. 1 (Baltimore: Johns Hopkins Press, 1923). For South Carolina, see Richard M. Jellison, “Paper Currency in Colonial South Carolina, 1703–1764” (Ph.D. thesis, Indiana University, 1952); Jellison, “Antecedents of the South Carolina Acts of 1736 and 1746,” William and Mary Quarterly, 3rd ser., 16, no. 4 (October 1959): 556–67; Jellison, “Paper Currency in Colonial South Carolina: A Reappraisal,” South Carolina Historical Magazine 62 (July 1961): 134–47; Converse D. Clowse, Economic Beginnings in Colonial South Carolina, 1670–1730 (Columbia: University of South Carolina Press, 1971), 184–250; Maurice A. Crouse, Th e Public Trea sury of Colonial South Carolina (Columbia: University of South Carolina Press, 1977), 25–42; and M. Eugene Sirmans, Colonial South Carolina: A Political History, 1663–1763 (Chapel Hill: University of North Carolina Press, 1966). For Georgia, see William Estill Heath, “The Early Colonial Money System of Georgia,” Georgia Historical Quarterly 19, no. 2 (June 1935): 145–60, and Milton LaVerne Ready, “An Economic History of Colonial Georgia, 1732–1754” (Ph.D. thesis, University of Georgia, 1970), 307–22. A summary discussion for all the southern royal colonies appears in Jack P. Greene, Th e Quest for Power: Th e Lower Houses of Assembly in the Southern Royal Colonies, 1689–1776 (New York: W. W. Norton, 1972), 108–25. First published in 1963 by the University of North Carolina Press.

[ 520 ]

Taxation of the Southern Plantation Colonies, 1714–1739

Virginia

D

ur i ng 1 7 1 4– 39, Virginia currency remained relatively stable against sterling. Its value was set in an act of 1710, which the Board of Trade allowed to stand. The act rated full-weight pieces of eight at 5s. 51 ⁄2d. and underweight pieces at 5s.; on this rating, silver was valued at 33 ⁄4d. per dwt., or 75d. an ounce. The par rate of full-weight pieces of eight was 121.55 Virginia currency to 100 sterling, but force of custom kept it at 115.5 The 1720s were a period of some distress in the tobacco economy. The price of sterling bills of exchange rose in terms of Virginia currency. A low premium of even 5 percent in sterling bills exceeded the cost of shipping coins, including freight and insurance, to pay overseas debts. In an attempt to retain specie in the colony, in 1728 the General Assembly raised the legal value of silver to 4d. per dwt., or 6s. 8d. per ounce, which depreciated Virginia currency by 6.67 percent. The new par rate was 125 Virginia currency to buy 100 sterling, which remained until the Revolution.6 Tobacco was the effectual money of Virginia. An inspection act of 1730 established public warehouses, appointed inspectors, and required planters to transport their tobacco to a warehouse for inspection.7 This law reenacted and expanded a similar act of 1713 that the Crown disallowed in 1717. After examining each hogshead of tobacco, inspectors issued tobacco notes to the

5 The difference between the par and customary rates is that while the official value of English sterling was 62d. an ounce of silver, the market price was closer to 65d. At 65d., the par value would have been 115.38, very close to the customary rate. The 1710 act failed to value gold coins. Gold coins exceeded the value of silver specie circulating in Virginia. An act of 1714 remedied the problem, rating gold coins at 5s. per dwt., raising English silver coins 2d. on the shilling. The 1714 act rated Virginia silver money 15 percent higher than sterling and Virginia gold money 25 percent higher, based on the ratio between the price of gold and silver. Purchase of sterling bills with gold coins thus required a higher price expressed in Virginia currency than when purchased with silver coins. The disproportionately high value of gold coins in Virginia encouraged the exportation of undervalued silver coins in exchange for overvalued gold. As the supply of silver declined in the colony and that of gold increased, the rate of exchange of Virginia currency on London rose toward 125. The depreciation of Virginia currency from its previously stronger silver rating prompted the legislature to pass a new coin-rating act in 1728 to bring the value of silver into closer approximation to that of gold. Foreign silver coins were raised to 4d. a dwt. and English coins to 6s. 3d. a milled crown. This upward adjustment in the price of silver lowered the ratio between the values of gold and silver in Virginia from 16:1 to 15:1. The purpose of the 1728 act was to retard the export of silver coins, to keep them in the colony as a circulating medium. Also, the act prohibited cutting coins into pieces, which reduced the convenience of higher-valued gold coins. Hemphill, Virginia and the English Commercial System, 139–47. 6 Based on the standard rate of 62d. for an ounce of silver, the par rate should have been 129. 7 Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore and London: Johns Hopkins University Press and the Maryland State Archives, 1984), 134–41. Originally published in 1953 by the Mariners’ Museum in Newport News, VA.

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owner that specified the weight and kind of tobacco. Despite some British mercantile opposition, the Board of Trade recommended that the act be allowed “to lye by probationary” until its effects could be judged. The “crop note” issued to a planter listed hogsheads by mark and number, recorded the gross, net, and tare of the tobacco, and specified whether it was sweetscented or oronoco, stemmed or leaf.8 A planter could consign his crop to a British merchant, arrange transportation, and give the note to the master of a ship. In turn, the master would present the note to the warehouse where he received the hogsheads and loaded them on his ship. Alternatively, the owner could sell his note to a fellow colonist who might later collect or resell the hogsheads. If the planter deposited his tobacco in loose form, he received “transfer notes,” which specified a certain number of pounds of loose tobacco drawn at random from the stock of loose merchandise, but did not entitle its holder to specific leaf. Both crop and transfer notes were transferable. They circulated without endorsement, thus supplementing or supplanting coins, when they were scarce, and bills of exchange that, being of larger denominations, were difficult to use in small daily transactions. The absence of paper money was inconvenient. Payment in specie often required testing with money scales and lots of expensive paper to convert so many pennyweight of gold or ounces of silver of varying degrees of purity into Virginia currency and sterling. Tobacco notes helped ease that problem, becoming another form of paper money circulating in Virginia and other colonies. Tobacco paper provided a brief advance of credit from the time tobacco was deposited and claimed, much as official paper money supplied credit until taxes were collected or loans repaid for its redemption. Virginia enjoyed a trade surplus with Eu rope and did not need to issue bills of credit until it encountered the fi nancial demands of the French and Indian War in 1755.9 In years of high output and high prices in Eu ropean markets, planters earned handsome returns, giving them access to bills of exchange drawn on their balances with British merchants. Planter credits generally fi nanced imports without resort to specie. When tobacco prices were high, specie tended to supplant tobacco as an internal medium of payment. Tobacco was too valuable abroad to be used as local currency. Bills of exchange could also be used to settle internal accounts.

8 An illustration of a tobacco note appears in Hiden, “Money of Colonial Virginia,” 41. The note listed the gross weight of a hogshead, the tare, which is the weight of the container, and the neat, the weight of the tobacco minus the tare. Hiden cites record books that put the price of tobacco at 10s. for six hundred pounds, which is 0.2d. per pound in 1741 (43). She also provides several illustrations of the complex calculations required to convert marks, groats, and pounds into sterling and vice versa, a process termed “vulgar arithmetick” in the education of a Virginia merchant (52–53). 9 Hemphill, Virginia and the English Commercial System, 102–4.

[ 522 ]

Taxation of the Southern Plantation Colonies, 1714–1739

Maryland

T

obacco bec ame a medium of exchange early in Maryland’s history, remaining the principal medium even after the issue of paper money in 1734. Tobacco payments were made largely as book entries between buyers and sellers but also passed in bulk form as country pay. In 1727, the House of Delegates broached the subject of paper money, recommending an issue of 24,000 Maryland currency. One reason for doing so was that grain agriculture began to supplant tobacco in some areas, burdening wheat farmers with the need to purchase tobacco to pay public and private debts, a problem that paper money would alleviate. The issue continually resurfaced until differences between the delegates, councillors, and the proprietor were resolved with passage of a paper money bill in 1733.10 The act authorized 90,000 currency in accordance with Queen Anne’s proclamation of 1704, rating 133.33 Maryland currency at 100 sterling.11 It stipulated several uses of the paper: outright gifts to the colony’s taxables, a public loan office, investment in infrastructure, and paying some expenses of government. To ensure the speedy circulation of paper money, 30s. was given outright to every taxable individual, or to the master of a taxable servant or slave, 47,923 10s. in total. In return, each taxable head of household was to burn one hundred fifty pounds of his “trash” tobacco annually, a policy designed to maintain the quality and price of Maryland tobacco. The policy met with partial success: paper money supplied an additional medium of exchange but failed to remove trash from the market. A second use was for a public loan office. Commissioners gave loans at 4 percent interest for a term not to exceed seven years on the security of silver plate, leaseholds, or real estate.12 Interest was paid annually. During the first ten months, 7,374 Maryland currency (proclamation rate) was loaned out. A third use included 3,000 for a house for the governor, 500 to repair public buildings in Annapolis, and 500 to each county to construct jails. In the first year following the act, about 56,000 was put in circulation. 10 The political disagreements that stalled passage of a paper money bill from 1727 to 1733 are described in Gould, Money and Transportation in Maryland, 79–82, and Behrens, Paper Money in Maryland, 12–17. They entailed the legal tender status of paper money in payment of fees, public levies, and sterling debts, the proprietor’s right of disallowance, and whether the House of Delegates or the governor had the right to appoint loan office commissioners. Over the years, the recommended emission steadily increased, reaching 90,000 in the act of 1733, more than triple the original recommendation of 1727. 11 Gould, Money and Transportation in Maryland, 78–121. The text of the act is found in Bernard Christian Steiner, ed., Archives of Maryland: Proceedings and Acts of the General Assembly of Maryland, 1733–1736 (Baltimore: Maryland Historical Society, 1919), 92–113. 12 Gould states that several auditing committees of the loan office did not report any losses up to 1748. Money and Transportation in Maryland, 93.

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To put unused loan office funds in circulation, the legislature instructed the commissioners to pay the general expenses of the provincial government in 1735, 1736, and 1737. These three acts put another 9,403 in circulation.13 In May 1737, the accounts showed 20,131 in paper money sitting idle. The issue and reissue of funds only raised total funds on loan to 19,728 in 1739. In contrast with New England and the middle colonies, it was difficult and unnecessary to put all the paper into circulation. Security for the redemption of Maryland bills was specified in the act. Between September 29, 1748, and March 29, 1749, all persons with paper notes in their possession good for fi fteen years, 30,000 of the original issue, were to redeem them at the office of the commissioners and receive back one-third of their value in sterling bills of exchange at the proclamation rate, regardless of the market rate between Maryland notes and sterling, and two-thirds of their value in new Maryland bills. Any devaluation of Maryland paper would profit those receiving sterling bills at the time of redemption. Between the same days of 1764 and 1765, the two-thirds of the bills remaining in circulation were to be similarly redeemed. 13 The specific measure in 1735 was “An Act for Defraying the Publick Charges of this province.” It states that public charges due of 5,157 15s. 8d. should be paid by having the commissioners of paper money pay as follows: “1,347 14s. 11d. to Samuel Young, the treasurer of the Western Shore; 844 12s. 7d. to James Holliday, the treasurer of the Eastern Shore; to Benjamin Tasker, 1,358 6s. 8d. And the commissioners or trustees, for emitting the paper money, 1,607 1s. 6d. All payments shall discharge these people of all demands whatsoever for such money as they respectively pay.” Benjamin Tasker, senior councillor, was the brother-in-law of Governor Samuel Ogle, who served during 1752–53. The four payments sum to the total. Steiner, Archives of Maryland, 307–8. The measure of 1736, “An Act for the Payment of the Publick Levy,” does not list any specific payments. Steiner, Archives, 498–99. The measure of 1737, “An Act for taking out of the Office of the Commissioners or Trustees for Emitting the Bills of the Credit the several Sums herein mentioned and for repaying the same into the said office by the Several Treasurers of this Province,” does not state specific amounts or payees. It instructs the payment of public charges to those persons presenting demands for payment as stated in the Journal of Accounts of the present and last sessions of the Assembly. Commissioners are to pay bills of credit in their custody or those they receive for duties, imposts, or customs owing to acts of the Assembly. The commissioners are to receive 2.5 percent for their trouble. Steiner, Archives of Maryland, 1737–1740 (1921), 141–42. The acts of 1735 and 1737 directed the treasurers to repay the commissioners out of bills received for duties and imposts, but no such provision was made in 1736. Behrens, Paper Money in Maryland, 30. The last of the money borrowed by the act of 1737 was repaid in 1747 (42). The total of 9,403 is cited in Gould, Money and Transportation in Maryland, 86–87. In principle, the transfer of funds from the commissioners to the treasurers to pay public expenses was to be reimbursed from taxes collected by the sheriffs and paid over to the commissioners. During 1735–37, repayment fell short by 3,388. On these numbers, receipts from duties, imposts, and customs during the three years amounted to 6,015, an annual average of 2,005 (95).

[ 524 ]

Taxation of the Southern Plantation Colonies, 1714–1739

f ig ur e 19.1. Exterior view, Yorktown Customs House.

The funds to purchase sterling bills for redeeming Maryland paper came from a duty of 15d. sterling on each hogshead or four hundred pounds of tobacco exported for a period of thirty-one years ending September 29, 1764. Commissioners were to purchase Bank of England stock and make other well-secured private loans in England. Between 1734 and 1749, Maryland sent sterling bills of exchange to its agents in London for 28,907, which they invested in bank stock. Semi-annual dividends from Bank of England stock added another 7,697 sterling to the colony’s reserve funds. These overseas funds were more than sufficient to redeem the required onethird of the notes in 1748–49. Legal tender restrictions in the act resulted in two Maryland currencies. The bills were to be legal tender for future contracts made in current money and for public and county levies if tendered before April 10 of the year in which they were due; for fines, forfeitures, rewards, and allowances; for duties except those due the proprietor; for lawyers’ fees if paid before the end of court in which a case was completed; and for the 15d. sterling duty on exported tobacco. Officers’ fees, clergymen’s salaries, and all special assessments for the building or repairing of churches remained payable

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f ig ur e 19.2. Interior view, Yorktown Customs House.

in tobacco. When lawful payments were made in paper, the bills were valued at 20s. for one hundred pounds of tobacco, about 2.4d. a pound. Th is valuation differed from the market rate of about 16s. 10d. per hundredweight in 1733, making paper currency one-sixth less valuable than tobacco as a medium of payment.14 Dual currencies created problems. Sheriffs profited in the collection of taxes, keeping the difference between the two in remitting money to county treasurers. Tobacco had the advantage of use in all payments whereas paper was limited. Paper money immediately depreciated in London, from 140 Maryland currency to 100 sterling in 1735, to 230 in 1736, recovering to 212.34 in 1739. In contrast, Maryland proclamation rate hard currency, in effect specie, declined insignificantly from 133.33 to 135.42 to 100 sterling between 1733 and 1739. Dual currencies made it necessary to keep multiple accounts in sterling, Maryland proclamation rate, and Maryland bills, dis-

14

Hemphill, Virginia and the English Commercial System, 314. Th ree transactions in 1733 cited in appendix B, “Tobacco Prices in Virginia, 1700–1733,” were 16s. 10d., 15s. 1d. to 16s. 9d., and 16s. 8d.

[ 526 ]

Taxation of the Southern Plantation Colonies, 1714–1739

f ig ur e 19.3. Interior view, Yorktown Customs House.

tinguishing between “Maryland current silver,” “Maryland current gold,” and Maryland paper money.15

North Carolina

R

e c al l t h at North Carolina issued 12,000 in bills of credit in 1712 and 1713 to finance its war against the Tuscarora Indians. During the next quarter century, the colony expanded its stock of paper money with 15

McCusker, Money and Exchange, 190–91, 197–99, 202.

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issues in 1715, 1722, 1729, and 1735, totaling 86,500 North Carolina currency. In 1715, the legislature rated 150 North Carolina at 100 sterling. The 1729 emission took the form of a loan office. Of the 40,000 authorized, 30,000 was to be loaned on landed security for fifteen years at annual interest of 6.33 percent, with principal to be paid in annual installments. An accounting of the act in 1734 found that only about a tenth of the money due was repaid. With quitrents in arrears and specie in short supply, in 1735 the legislature approved relending payments received on the principal of the loan through 1744, thereby suspending redemption of the bills. The 1729 act approved 2,500 in taxes to pay provincial debts and the cost of relending. Depreciation was rapid, to a par rate on London of 500 by 1722 to 650 in 1732, falling to 1,000 in 1739. One problem was that bills were not redeemed on schedule. The 12,000 issued in 1712 and 1713 remained in circulation. To remedy this situation, the General Assembly approved an annual tax of 2,000 in 1715 for as long as would be necessary to retire all outstanding bills. About half was retired by 1722, but the act of 1722 that exchanged new for old bills required no further redemptions. None of the loan office bills was retired. Apart from the 24,000 issued in 1715, no provision was made for redemption of the remaining 62,500 and the half of the 24,000 issued in 1715 that remained in circulation. Until 1748, when taxes had to be paid in gold, silver, or bills of credit, payment of taxes could be made in rated commodities. As for other legally rated commodities, payment was frequently made in inferior stock, which reduced the real value of government income. The legal tender status of commodities in private transactions reduced the demand for paper bills, thus limiting their use and value. Paper money, according to Leslie Brock, was superfluous, thus falling in value.

South Carolina

S

o u t h c ar ol i n a developed as a plantation economy of rice and naval stores.16 Reflecting the importance of rice, an act of 1719 provided for its use in payment of taxes.

16 British bounties on naval stores encouraged the rapid increase in production of tar and pitch, from 6,617 barrels in a twelve-month span in 1712–13 to 52,215 in 1718. The market became glutted in 1719, with exports falling to 42,984 barrels and the price per barrel of tar halved from 19s. sterling in 1715 to 91 ⁄2s. in 1719–20. Despite colonial lobbying to save the bounties on tar and pitch, the Board of Trade and Parliament decided in 1724 to let bounties lapse on the grounds of South Carolina’s high labor and transportation costs and that the colonists could not manufacture tar competitively against the superior Swedish product. The loss of income to South Carolina at that time exacerbated local economic difficulties. Planters only slightly switched to ship turpentine and rosin as bounties remained on those products. Clowse, Colonial South Carolina, 208–17.

[ 528 ]

Taxation of the Southern Plantation Colonies, 1714–1739

South Carolina rarely retired its bills of credit on schedule. Taxes voted in 1703 to retire its inaugural issue were spent for other purposes. New bills were exchanged for old ones in 1707, and again the taxes voted to redeem them were put to other uses. In 1712 South Carolina established the fi rst loan office in the American colonies, putting 32,000 South Carolina currency out to loan. For the next three years, repayments of principal and interest retired about 4,000 annually. Redemption was disrupted with the outbreak of the Yamasee War in 1715, which prompted additional printings of 30,000 in 1715 and 20,000 in 1716. In 1719 and 1720 another 25,000 was printed. This sum was to be redeemed through a tax, payable in rice at the option of the assessed, with the tax price of rice set at 30s. per hundredweight in 1719, 25s. in 1720, and 20s. in 1721.17 The outstanding stock of bills surpassed 100,000 in 1720, and the exchange rate on London rapidly declined from 150 to 500 between 1714 and 1720. An act of 1722 provided for reissue of some of the “rice bills” to pay some of that year’s government expenses. A follow-up act in 1723 reprinted all the old outstanding bills and added 40,000 in new paper, bringing the total stock to 120,000 South Carolina currency. The Crown disallowed both acts in response to the objections of merchants trading in the colony, but the currency had already been put into circulation. The legislature responded with an act in 1724 to call in and retire 55,000, with the remainder of the stock to circulate until provision could be made to redeem it. About 13,500 was retired by 1727, when confl icts with Indians and Spaniards and the need to deal with pirates forced a cessation of redemptions. An act of 1731 ordering the reprinting of 106,500 in outstanding bills made them legal tender in all payments but did not provide for their redemption. This sum remained in circulation throughout the colonial period. The issues of 1722 and 1723 brought a marked decline in the currency, from a par rate of 500 in 1719 to 580 in 1722, 675 in 1723, and 700 in 1726, where it remained until 1736. It reached a low value of 795.95 in terms of sterling in 1740, but recovered to the seven-to-one rating in 1743, where it largely remained until the Revolution. The Crown blocked the issue of additional bills of credit. It disallowed an attempt to issue more bills in 1736 on two grounds: fi rst, that the clause permitting the treasurer to allow a 10 percent discount on import duties paid in gold or silver was repugnant to the act of 1707, and second, that there was no provision in the act for the retirement of the bills to be issued. Political conflict between Governor Arthur Middleton and the Commons House of Assembly prevented the enactment of any new tax bills between March 1727 and August 1731. To pay accumulated debts exceeding

17 The rates returned a profit to the colonial government, with the world price of rice increasing from 35s. per hundredweight in 1716 to 40–45s. in 1732.

[ 529 ]

chap t er 19

100,000 on the arrival of a new popular governor, the colony printed substitute paper money in 1731 termed “public orders” amounting to 104,775. Orders were paid to public creditors and made receivable in taxes. Although not declared legal tender, their use in paying taxes allowed their circulation as the equivalent of bills of credit. The first round of orders was declared current for seven years, bore interest of 5 percent, and was made payable for Negro and other duties that were to provide the funds for redemption. The addition of public orders to bills of credit temporarily placed total paper currency in circulation at 212,275. The stock of both rose and fell with redemptions and an additional public order of 35,000 in 1736 for defensive fortifications. Retirement of public orders was generally on schedule with taxes voted for that purpose. By the end of 1741, 81,844 of orders was redeemed. The addition of public orders to the stock of paper currency contributed to a brief period of depreciation of South Carolina currency during 1736–42.18 A final comment on the colony’s currency. A group of twenty-four merchants and planters founded the unauthorized Traders and Plantation Bank in 1730, which issued 50,000 in circulating promissory notes bearing 10 percent interest. The bank’s paid-in capital consisted of 10,000 in official bills of credit. A report prepared by a Commons House committee in support of a proposed new issue of bills of credit in 1736 included an account of the private notes, stating that they gained immediate local acceptance but that their uncertain acceptance outside the colony rendered them a poor substitute for official currency. It should be noted that the bank’s promissory notes added another 40,000 to the stock of South Carolina’s currency.

Georgia

T

h e e ar ly monetary system of Georgia was unique among the thirteen colonies. Conceived as a debtors’ colony, the settlers had no money to bring with them. The cost of transportation, tools, seeds, and other necessities was borne by philanthropic funds and parliamentary appropriations. The 3,724 sterling raised for the colony’s fi rst fiscal year beginning on the charter date of June 9, 1732, came from private contributions. The money 18

The fi rst issue of public orders did not go smoothly. A committee of the Commons House appointed to investigate the public accounts in January 1735 out of concern that the public orders were not being properly canceled uncovered enough information to warrant a full-scale investigation into Alexander Parris’s conduct of office as public treasurer. A new committee in March returned an indictment. Over four years, Parris had reissued 32,780 in public orders instead of canceling them by law. Nor had Parris kept records of the reissued records and interest paid on them. After three more years of investigation, Parris’s estate was declared liable for 54,789 14s. 5 3 ⁄4d., later reduced to 27,171 4s. 51 ⁄4d. Repayment was finally settled in 1752. Crouse, Public Treasury of Colonial South Carolina, 32–34.

[ 530 ]

Taxation of the Southern Plantation Colonies, 1714–1739

was deposited in the Bank of England and amounts were withdrawn as required to meet expenditures. Persecuted foreign Protestants and freeholders followed the first wave of indigent persons. Their transportation was paid from funds drawn in London, but provision of supplies to the settlers could be purchased more cheaply in the colonies. Th is task was met with funds advanced to merchants in South Carolina, who welcomed settlers on their southern border to provide a barrier from Spaniards and Indians in Florida. The trustees’ store in Georgia issued needed goods weekly to settlers. Certain officers who traveled to Georgia with the colonists were authorized to draw bills of exchange on the trustees when needed to pay a company or an individual. This system proved unmanageable for a colony three thousand miles and two months in time away. A first step was to send a ton and a half of copper half pence for use in the colony in 1734, amounting to 322 sterling in value, which was later augmented with another two tons, bringing the total value to 752 by 1743. The need for hard “sterling” money in the colony prompted the trustees to buy 189 12s. worth of Spanish and Portuguese gold and silver coins that were shipped to the colony between 1734 and 1738. Drawing of bills of exchange by unauthorized individuals led the trustees to decide on July 24, 1735, to print sola bills in denominations of 1, 2, 5, 10, and 50 amounting to 4,000, valued at parity with sterling, for use in Georgia.19 This was accompanied by a resolution to also send 1,000 of silver coins, but there is no firm evidence to substantiate its arrival in the colony. The first sola bills were followed with issues of 3,150 on August 4, 1736, and 4,850 on August 10, 1737. 20 Sola bills were sent quarterly as needed. They were not declared legal tender, but circulated freely inside the colony. Other sources of money included “military money notes” issued by James Oglethorpe during 1734–45 to supplement sola bills and supply small change currency. 21 The partnership of Francis Harris and James Habersham

19

The term “sola bills” was used because the bills were intended solely for internal circulation as paper money, in contrast with bills of exchange, written in sets in case one or more copies were lost at sea, used to pay overseas debts. 20 Newman states that a total of 32,250 was issued by March 27, 1750, just before the trusteeship period ended and the royal period began (Early Paper Money of America, 128). Ready gives a higher figure of 47,163, listing annual issues based on entries in the Colonial Records of Georgia (“Economic History of Colonial Georgia,” 311, 316). The difference might be attributable to some of the issues replacing older notes. All sola bills were called in for redemption by December 31, 1755. 21 Newman states that Oglethorpe’s notes were printed in denominations of 1s., 4s., 5s., and 1, totaling 9,289 (Early Paper Money of America, 128). Ready states that his notes were printed in denominations of 6d., 1s., 2s., 4s., and 5s., totaling 66,109 13s. 10d., constituting the largest source of currency within the colony, maintaining parity with sterling until their recall

[ 531 ]

chap t er 19

in Savannah issued private script in denominations of 6d., 18d., 2s. 6d., 4s., and 10s. payable to the bearer for use as small change during 1743–52.22 Other scrip was issued by some Germans at Ebenezer to give as change in their business. South Carolina paper bills passed freely throughout Georgia at the par rate of seven to one against sterling.

Taxation in Virginia, 1714–1739

T

h e s y st e m of taxation in Virginia remained largely unchanged during 1714–39. 23 It consisted of imperial taxes of British duty on tobacco, royal quitrents, and the 1d. tax on intercolonial shipments, and domestic export duty on tobacco, poll taxes, import duties, and tonnage.

Imperial Taxes: British Import Duty, Quitrents, and 1d. Tax on Intercolonial Shipments r it is h d u t y on imported colonial tobacco stood at 71 ⁄ 8d. a pound during 1714–39. All but 1 ⁄2d. was rebated on reexportation from Britain during 1714–23 and the entire duty was refunded after 1723. Between twothirds and three-quarters of the tobacco imported into Britain were subsequently reexported, which meant that light duty in Britain fell on a minority of imported leaf.24 Although British exporters of colonial tobacco to European and other foreign markets faced an array of duties in selling their tobacco, these same charges would have confronted direct colonial shipments even if the trade acts had not first required transport to Britain. Any costs imposed on colonial planters by these restrictions were offset in large measure, especially during periods of piracy, conflict, and war, with the benefits of a British network of agents, shippers, and markets for Virginia tobacco, and especially the protection of the Royal Navy. Tobacco imported from Vir-

B

by Parliament (“Economic History of Colonial Georgia,” 312). I cannot resolve the enormous difference. 22 The information is from Newman, Early Paper Money of America, 129. Ready states that Habersham on his own began issuing notes in 1749, in denominations of 6d., 2s., 2s. 6d., 3s. 6d., 4s., and 5s. “Economic History of Colonial Georgia,” 312. 23 Specific legislation during 1714–39 appears in William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (Richmond, VA: Samuel Pleasants, 1809–23). Volume 4, published in 1820, covers 1711–36. Volume 5, published in 1819, covers 1738–48. Virginia’s copies of most colonial government documents did not survive wars, weather, fi res, age, and poor archival practices. A few documents are held in the archives of the Public Record Office in Kew, England, but their holdings do not include copies of the colonial treasurer’s annual accounts. The destruction and loss of records preclude exact figures for many years during the colonial era. 24 Middleton, Tobacco Coast, 124.

[ 532 ]

Taxation of the Southern Plantation Colonies, 1714–1739

ginia and Maryland, which was lumped together in official British statistics with estimates of two-thirds from Virginia and one-third from Maryland, rose from an annual average of about thirty million pounds in the second decade of the eighteenth century to about forty million during 1731–35 and forty-five million during 1736–39.25 British and other foreign duties evidently did not seriously hamper consumption. To the official statistics can be added an unknown quantity that was smuggled overseas or back into Britain after merchants obtained drawbacks on presumably reexported tobacco. 26 Customs duties supplied 1,398,000 of total British government revenue of 5,820,000 in 1739. Of this, tobacco generated several hundred thousand pounds. Walpole’s failed attempt to convert duty on wine and tobacco to retail excise was intended to increase revenue by suppressing smuggling; a committee of the House of Commons of 1732 estimated that half of all British wine imports escaped duties and widespread fraud plagued tobacco. Even so, British tobacco duty dwarfed the value of all internal revenue collected in the thirteen colonies.27 A second source of imperial taxes was royal quitrents. The administration of Governor Alexander Spotswood greatly improved the system of land registration and collection of quitrents; the sum increased from 1,306 2s. 4 1 ⁄2d. in 1714 to 2,298 17s. 91 ⁄4d. in 1715. Although the British government had occasionally left some of this money in Virginia to supplement other sources of internal revenue, from 1720 onward quitrents were removed from any authority of the colonial legislature. 28 Quitrents were remitted to London and used at the direction of the Crown. Table 19.1 shows quitrents collected in Virginia between 1715 and 1722. From the early 1720s, quitrents came to be collected on a regular, businesslike basis. Annual average net receipts during the 1730s were 25

Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1038–45: “Tobacco Imported into England, by Origin: 1697 to 1775,” S-752–54. The appendix to part IV shows the sterling equivalent of all internal taxes in the thirteen colonies in 1739 at 28,708 12s. Of this, somewhere in the neighborhood of 7,500 sterling drained abroad as quitrents to the Crown or Lord Baltimore, or to underwrite the redemption of Maryland paper money, reducing total internal taxes to about 21,200 sterling. 26 William J. Ashworth, Customs and Excise: Trade, Production, and Consumption in England, 1640–1845 (Oxford: Oxford University Press, 2003), 170–76. Details of the schemes used to avoid payment of duty and other frauds are described in chapter 16, fn. 3. 27 B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance I: Net Receipts of the Public Income—Great Britain, 1688–1801,” 575–76. 28 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 235–51. Bond itemizes some uses of quitrents in Virginia. From 1720 to 1775, the commissary and attorney general in the colony annually received, respectively, 100 and 70. On rare occasions, the governor, members of the Council, and other officials received allowances from the quitrents. Other uses of quitrents included the cost of adjusting boundaries between Virginia and North Carolina.

[ 533 ]

chap t er 19 tabl e . Virginia Quitrents, 1715–1722 (£.s.d. Sterling) Year

Receipts

1715 1716 1717 1718 1720 1721 1722

2,540.2.614⁄ 2,457.2.1114⁄ 2,861.9.212⁄ 2,805.8.3 2,106.13.212⁄ 2,275.6.4 2,092.15.3

Source: Leonidas Dodson, Alexander Spotswood: Governor of Colonial Virginia, 1710–1722 (Philadelphia: University of Pennsylvania Press, and London: Humphrey Milford and Oxford University Press, 1932), appendix 3, 309. Dodson could not locate the accounts for 1719. The difference in the table from the preceding text for 1715 reflects the fact that Dodson does not include arrears of prior years received during the year in question. Dodson did not copy the figures directly from the accounts, but compiled them from records that changed several times during the period in the table.

3,500–4,000 sterling. The exact figure for 1739 was 3,604 4s. 5 1 ⁄2d. British Treasury papers show that the Crown received 22,500 during 1731–45, of which the bulk was sent to London. Arrears amounted to about a third of collections. A small external tax of 1d. a pound on tobacco on intercolonial shipments imposed by Parliament in 1673 was used to support the College of William and Mary from 1692. In 1734, noting that widespread evasion of this 1d. duty resulted in a deficit of 150 in the income of the college, the General Assembly enacted tougher rules and penalties for violations. 29

Domestic Taxes

T

he main sources of provincial and local taxes in the colony were poll taxes, duties, and tonnage. The largest was the 2s. hogshead export duty on tobacco. Table 19.2 displays combined annual revenue from the 6d. poll tax, the 2s. export duty, and the 15d. tonnage for the period 1714–22. 29

Hening, Virginia Statutes, 4:429–33. Although the duty was imposed by the 1673 act of Parliament, the lost revenue was at the expense of the president, faculty, and fellows of the college.

[ 534 ]

Taxation of the Southern Plantation Colonies, 1714–1739 tabl e . Virginia Poll Tax, Export Duties, and Tonnage, 1714–1722 (£.s.d. Virginia Currency) Period

Total

Year ending April 1715 Year ending April 1716 April–October 1716 Year ending October 1717 Year ending October 1718 Year ending October 1719 Year ending October 1720 Year ending October 1721 Year ending October 1722

3,028.13.334⁄ 2,519.1.812⁄ n.a. 3,681.14.1 4,150.4.614⁄ 4,325.6.1114⁄ n.a. 4,453.19.6 4,657.2.1114⁄

Source: Leonidas Dodson, Alexander Spotswood: Governor of Colonial Virginia, 1710–1722 (Philadelphia: University of Pennsylvania Press, and London: Humphrey Milford and Oxford University Press, 1932) appendix 2, 308. The table does not include revenue from fi nes and forfeitures. Figures are gross receipts before the fees of naval officers, the receiver-general, and the deputy auditor, amounting to several hundred pounds, were deducted. A fi gure of 3,766 1s. 4d. for April 25, 1716–April 25, 1717, appears in Percy Scott Flippin, Th e Royal Government in Virginia, 1624–1775, Studies in History, Economics, and Public Law, vol. 84, no. 1 (New York: Columbia University, 1919), 234.

Poll taxes were extremely light during 1714–39. Spotswood claimed in 1718 that total poll taxes over the previous eleven years amounted to eighty pounds of tobacco, or just over seven pounds a year. Thereafter, the General Assembly levied poll taxes as follows: 1727 to 1730, 101 ⁄2 pounds; 1730–32, 9 pounds; 1732–34, 8 pounds; 1734–36, 71 ⁄2 pounds; 1736–38, 11 pounds; and, 1738–40, 6 pounds. 30 The average levy for county expenses was about 31 ⁄2 pounds. Tobacco prices fluctuated between 10s. (120d.) and 161 ⁄2s. (198d.) per hundred weight during 1731–33, a range of 1.2–2d. a pound. If fully collected, annual combined provincial and poll taxes should have come to about 7–8d. 31 Actual collections fell short of that sum. The number of tithables was estimated at 45,857 in 1726, likely in the neighborhood of 60,000 in 1739. 32 Estimated revenue from poll tax was 633 in 1722 and 790 in 30

Hening, Virginia Statutes, 4:300, 369–70, 436–38, 513–14, 5:110–11. Hening lists public levies for 1715, 1718, 1720, 1722, 1723, 1726, and early 1727 with no information on the amount of tax (4:58, 76, 94, 116, 138, 180, 239). 31 William Z. Ripley, The Financial History of Virginia, 1609–1776, Studies in History, Economics, and Public Law, vol. 4, no. 1 (New York: Columbia College, 1893), 34–35. 32 Percy Scott Flippin, The Royal Government in Virginia, 1624–1775, Studies in History, Economics, and Public Law, vol. 84, no. 1 (New York: Columbia University, 1919), 244.

[ 535 ]

chap t er 19

1742. 33 Using the 1742 figure, the per tithable poll amounted to 3.2d., less than half the presumed assessment. The lion’s share of internal revenue derived from the 2s. export duty on hogsheads of tobacco. Duty on the annual average of thirty thousand hogsheads exported during the last three decades of the seventeenth century had yielded 2,000–3,000 annually; ten hogsheads generated one pound. The rise in export volume during the first four decades of the eighteenth century did not yield a proportional rise in revenue as Virginia-owned vessels were exempt from the duty. In 1734, the duty was reported at 3,200, in 1740, with Virginia vessels carry ing a rising share of the trade, a lower 3,000. Fees and expenses of collection remained large. 34 The duties on liquor and slaves that expired in 1707 were not renewed until the General Assembly session of December 5, 1722. Its first act was the imposition of duties on liquor. The rates were 3d. a gallon on liquor and 1d. a gallon for ale and beer. In 1736 duties were extended to overland importation of liquor from other colonies.35 Estimates of annual revenue are under a hundred pounds. A duty of 5 was levied on slaves in 1710 to reduce the volume of the slave trade. It expired in 1718. Legislation in May 1723 imposing duty on slaves was repealed by royal proclamation on October 27, 1724. In May 1732 the legislature levied a new duty of 5 percent ad valorem for four years, which was continued and slightly amended by acts of 1734, 1736, and 1738. 36 With slaves costing less than 100, the ad valorem charge reduced the previously higher import tax. Duty was to be paid by the purchaser, not the importer, which met the objections of the African Company. The rate remained in force at 5 percent until 1740, when it was doubled to help fi nance the Spanish war. The export tax on hides generated little revenue, and its proceeds were devoted exclusively to the Col33

Ripley, Financial History of Virginia, 104. Ripley, Financial History of Virginia, 62–64, 104. 35 In 1722, duties of 3d. a gallon on rum, brandy, spirits, and wine were enacted for five years beginning June 10, 1723. An additional penny a gallon was to run for twenty-one years. Duties of 1d. a gallon were placed on cider, beer, and ale for five years. Drawback of duties was granted if imported liquor was reexported within six months. No duties were placed on alcoholic beverages imported from Great Britain, and a discount of 15 percent was given for payment in specie. Subsequent legislation renewed the duties through 1739. Virtually every act justified the imposition of liquor duties to “lessening the poll tax” or “not subjecting the people to a poll tax.” Renewal in 1736 included an exemption for ten pipes of Madeira for the governor, lieutenant governor, and the commander in chief of the province. Hening, Virginia Statutes, 4:143–50, 276–77, 310–11, 393–94, 469–74, 5:26–28. 36 W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1969), 205, 213–14. First published in 1896 by Russell and Russell, Inc. Specific acts are chronicled in Hening, Virginia Statutes, 4:182, 317–22, 394, 469–74, 5:28–31, 92–94. 34

[ 536 ]

Taxation of the Southern Plantation Colonies, 1714–1739

lege of William and Mary. Tonnage yielded only a few hundred pounds a year. 37 During his tenure Governor Spotswood had to deal with security on the colony’s frontier. To reduce the cost of defense, Spotswood encouraged the settlement of a colony of Germans in northwest Virginia. To this end, he secured the consent of the legislature for an act that excused German settlers from internal taxes for seven years.38 In 1738, to encourage the settlement of the colony’s southern boundary, those taking up land in the specified area were exempted for ten years from the date of the act from public, county, and parish levies, after which fees and levies paid in current money were set at 3 ⁄4d. per pound of tobacco. 39 In 1722 the legislature approved a premium of 1,200 for the exportation of tar and hemp. Premiums for the production of linen cloth were granted in 1730, at two pounds of tobacco per ell and four pounds for threequarters of a yard, to be paid from a county poll tax valid for five years.40 Between 1714 and 1739, internal revenues rose from about 4,000 to 5,000 Virginia currency (about 4,100 sterling). This revenue was generally sufficient in peacetime to support the cost of colonial administration. To this burden must be added annual quitrents of 3,500–4,000 sterling and a small sum for intercolonial duty. Reported revenues of 7,800 sterling in 1738 were itemized as follows: quitrents, 3,500; the 2s. tobacco duty, estimated at thirty-two thousand hogsheads, 3,200; tonnage, 1s. sterling per ton on ten thousand tons of shipping, 500; and, miscellaneous fees for documents, entering and clearing ships, and so forth, 600.41 Estimated taxes paid by Virginians in 1739 were in the range of 8,000–9,000 Virginia currency. Per capita taxation comes to about 12d. a head, well above that in the other twelve colonies. Adjusted for the exchange rate with sterling, at 9.8d. a head, Virginians paid about one-twentieth that of Britons. Moreover, half of the colonists’ burden stemmed from quitrents, which went to the Crown for its discretionary use. It was the several hundred thousand pounds received from British import duty, along with the shipping and business generated in the tobacco trade, that solidified Virginia’s importance in the imperial system. 37

Ripley, Financial History of Virginia, 70–81. William Havighurst, Alexander Spotswood: Portrait of a Governor (Williamsburg, VA: Colonial Williamsburg, 1967), 49. 39 Hening, Virginia Statutes, 5:57–58. 40 Hening, Virginia Statutes, 4:96–99, 293. 41 David Macpherson, Annals of Commerce, Manufactures, Fisheries, and Navigation, with Brief Notices of the Arts and Sciences Connected with Them. Containing the Commercial Transactions of the British Empire and Other Countries, from the Earliest Accounts to the Meeting of the Union Parliament in January, 1801; and Comprehending the Most Valuable Part of the Late Mr. Anderson’s History of Commerce with a Large Appendix (London: Nichols, 1805), 3:216–17. 38

[ 537 ]

chap t er 19

Taxation in Maryland, 1714–1739

T

axat ion i n Maryland under renewed proprietary rule in 1715 continued as before.42 The collection of quitrents in the form of the export duty on tobacco, combined with an additional duty for the general support of the colonial administration, remained unchanged until 1733, when quitrents were separated from export duties. Other proprietary revenues included land sales, fines for alienation of land, port charges, and ferry licenses. Other colonial government revenues included poll tax, liquor duties, county and church taxes, and forfeitures. The effect of British import duty on Maryland tobacco on the colony’s incomes and tax burdens was similar to that in Virginia.

Quitrents

R

ec al l t hat after the Crown took over the government in Maryland in 1691, the General Assembly voted a 2s. export duty, half for the royal administration and half to the proprietor in return for his accepting quitrents at 2d. per pound of tobacco, roughly double its market value. At this rate, quitrents had been barely worth the cost of collection. For the fi rst fifteen years of the eighteenth century, the 1s. hogshead export duty effectively substituted for actual collection of quitrents. Following restoration, the House of Delegates in 1715 offered to increase the compensatory duty to 18d. given the increased size of a hogshead, with quitrents remaining payable at 2d. per pound.43 Charles, Lord Baltimore, died before the terms proposed in the 1715 act reached Britain. Lord Guilford, guardian of Lord Baltimore’s minor heir, accepted the 18d. duty and 2d. quitrents. After considerable discussion between the house, Council of State, governor, and guardian, an act was passed in spring 1717 for a total duty of 3s. 3d. Of this, 2s. would compensate the proprietor for all quitrents and alienation fees, 3d. to maintain forts and armories, and the remaining 1s. for the support of the colonial administration. These terms were periodically renewed until 1730. The 2d. per pound of tobacco quitrents was a bargain for landowners. An estimate of the value of the 67,000 pounds of tobacco received from a proposed lease of the quitrents in 1716, at the prevailing price of tobacco at 42

Internal revenues in Maryland are discussed and tabulated in John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University, 1955; Ann Arbor, MI: University Microfi lms). For quitrents, see Bond, Quit-Rent System in the American Colonies, 179–218. 43 In 1715 the General Assembly revised an act of 1711, which increased the dimensions of a hogshead to forty-eight by thirty-two inches, up from forty-four by thirty-three inches in 1692. An act of 1704 that had earlier proposed the dimensions of 1715 was disallowed, with the royal governor instructed to have Maryland hogsheads conform with those of Virginia at forty-eight by thirty inches. Middleton, Tobacco Coast, 131.

[ 538 ]

Taxation of the Southern Plantation Colonies, 1714–1739 tabl e . Maryland Assessments Levied on Taxables, 1716–1734 (£.s.d. Maryland Currency) Year

Total Pounds of Tobacco Levied

Total Money Levied

Further Pounds of Tobacco

Further Charges Pounds Sterling

Further Maryland Currency

1716 1717 1718 1719 1720

356,446 177,936 214,676 300,427 194,912

100,000 100,000 150,000 200,000 200,000

350 300 600 110 200

or MC value or MC value or MC value 1,000 1,000

1721 1723

227,770 500,031 597,324 387,984 548,212 266,035 223,450 298,425

296.10.6 25.18.6 80.0.2 80.0.9 81.0.0 47.19.2 (ster.) 217.10.0 186.18.6 494.14.1 539.7.10 643.15.4 56.2.101 ⁄2 86.6.6 86.5.0 5,157.15.8 5,157.15.8 n.a.

150,000

100

1724 1725 1726 1730 1731 1733 1734 1736

n.a.

600,000 200,000 200,000

500

500 500 200

Note: The figure of 47.19.2 levied between 1720 and 1721 is in sterling. No fi gures were available for 1736 except that a levy was passed to be paid from the paper money office. Source: John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University, 1955; Ann Arbor, MI: University Microfi lms), 492. Kinnaman advises that the numbers should be treated with caution due to difficulties in compilation.

1d. sterling a pound, was 279 3s. 4d. sterling. The lessee would have to pay 300 annually for the right to collect quitrents, bringing the proprietor’s net receipts to 579 3s. 4d. if he were not to suffer a loss. These figures suggest the likely value of quitrents to the proprietor at that time.44 During the 1720s, the fi fth Lord Baltimore began to believe that quitrents would exceed the compensatory duty, especially as the General Assembly was trying to restrict the quantity of tobacco grown. When a restricting act was passed in 1730, the proprietor was compensated with an additional 3d. per hogshead, but this supplement was terminated in 1732. In 1733, the 2s. compensatory duty was allowed to lapse and the quitrent system was transformed into a regime of direct collection. The House of Delegates tried on several occasions to continue the system of commutation of quitrents, fi rst offering a fl at sum of 4,000, then 5,000, then an export duty of 2s. 6d. to run for seven years. Baltimore rejected each offer, believing direct collection of quitrents would be more lucrative. 44

Bond, Quit-Rent System in the American Colonies, 183n1.

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For the nine years up to 1730, the combined 3s. export duty yielded an average of 4,283 8s. One-third was allocated to meet the expenses of provincial government; the other two-thirds was given to the proprietor in commutation of all quitrents and alienation fees. The 2s. duty averaged 2,855 for the seven years preceding 1730. Assuming a regime of comprehensive direct collection of quitrents based on the contractual terms on which land was sold, according to Lord Baltimore’s Account Books and Rent Rolls he would have collected the much higher annual figure of 5,225 13s. during the three years 1722–24.45 After 1733, Baltimore’s officials set about organizing an effective system of collecting quitrents. This followed a brief period during 1732–33 in which the proprietor visited the colony, the first such visit since 1684. Initially quitrents were collected by private persons, farmers, who received 20–25 percent of the proceeds, later reduced to 10 percent in 1755 when collection was transferred to sheriffs. In the early history of quitrents, the proprietor permitted payment in tobacco. On the expiration of the 2s. export duty, after 1733 quitrents and alienation fees became payable in specie, remaining so until the Revolution. Payment of quitrents was set at 3 17s. 6d. an ounce of gold and 5s. 3d. for silver.46 An attempt to allow payment in paper money in 1739 failed to materialize.47 Baltimore profited from quitrents to the extent that his lands were settled. To encourage settlement on the edge of the province, he granted threeto five-year exemptions from quitrents in 1732 and 1735 for settlers on the frontier, a policy that was occasionally adopted after 1740.

Internal Revenues

T

he g eneral assembly usually set the public levy each year for provincial expenses as a mixture of tobacco and money. The levy of 1716

45

Bond, Quit-Rent System in the American Colonies, 186n2, 187n2, 216n2. Britain was on an unofficial gold standard from the proclamation of December 22, 1717, which proscribed the value of a golden guinea at twenty-one shillings. Beginning with an act of 1819, following a brief suspension of gold payments for paper money during the Napoleonic Wars, the Bank of England paid out gold for its paper notes at the rate of 3 17s. 10 1 ⁄2d. per ounce and purchased gold at 3 17s. 9d. These rates are nearly identical to those set for quitrents in Maryland. Details appear in Alvin Rabushka, From Adam Smith to the Wealth of America (New Brunswick, NJ, and Oxford: Transaction Books, 1985), 82–83. 47 These developments are also chronicled in Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 152–53. On the founding of Maryland, the proprietor offered land at a quitrent of 1s. sterling for fi fty acres, 1 ⁄4d. an acre, the smallest holding. In 1658 the rate was doubled, to 4s. a hundred acres (1 ⁄2d. an acre). In 1738, the rate was raised from 40s. to 5 a hundred acres on unimproved land. Lewis Mayer, Ground Rents in Maryland: With an Introduction Concerning the Tenure of Land under the Proprietary (Baltimore: Cushings and Bailey, 1883), 18–19. 46

[ 540 ]

Taxation of the Southern Plantation Colonies, 1714–1739

made retroactive to and including 1715 was set at 366,446 pounds of tobacco and 296 10s. 6d. Maryland currency to defray public charges; it also covered unforeseen expenses with an another 100,000 pounds of tobacco and 150 in money that could be collected as required.48 The levy for 1717 was similar in form, a charge of 177,936 pounds of tobacco and 25 18s. 6d. in currency. This pattern persisted until 1733 when taxation was levied solely in currency after the advent of the paper money act. Between 1717 and 1733, export duty also encompassed the proprietor’s quitrents. Occasional changes in the arrangement were enacted, for example, if the proprietor was absent from the colony, 3d. of his 15d. quitrents was to be used to purchase arms. Table 19.3 summarizes internal taxes in tobacco and money, separate from quitrents, levied on taxable persons in Maryland for selected years during 1714–39. In general, annual taxes were levied in tobacco and currency. In some years, the legislature authorized further levies in tobacco, sterling, and/ or Maryland currency. In others, assessments were solely in currency. The levy of 1723 was somewhat complicated, providing for payment and assessment of the public charge for that year and confirmation of the Journal of Accounts of 1722. It authorized payments for 1723 and for creditors from 1722. For the nine years up to 1730, the one-third of the annual average export duty of 4,283 8s. allocated to meet the expenses of provincial government amounted to 1,428 1s. The extra 3d. for forts and armaments amounts to another 357 0s. 3d. To this can be added a small sum of other revenues from import duties. The basic act of October 1704 imposed import duties of 3d. a gallon on rum, wine, brandy, and spirits, and 20s. on Negroes and Irish servants; duties were renewed in June 1715. An act of June 1717 charged an additional 20s. on Catholic Irish servants, Negroes, and other slaves to support public schools, continued by an act in 1728.49 Additional duties imposed in 1723 were 6d. per hundred pounds of pork, 12d. a barrel of pitch, and 6d. a barrel of tar. With the purchase price of young healthy slaves reaching 35 and more, the combined tax of 40s. was a rate of about 6 percent, not sufficient to deter importation but helpful in supporting public education.50 Export duty on tobacco enabled the colonial legislature to support both quitrents and internal taxation at a higher level than any other colony apart from South Carolina and New York. Annual taxes in the 1720s and 1730s up to the change in the quitrent regime were in the neighborhood of 5,000 Maryland currency. To this must be added the 15d. sterling export tax to support the redemption of the paper money issue of 1733, which amounted to another 2,400 Maryland hard currency. Th is brought the 48

Kinnaman, “Internal Revenues of Colonial Maryland,” 390. Du Bois, African Slave-Trade, 204, 210. 50 Land, Colonial Maryland, 165. Catholics were disenfranchised in 1718, thereby ending the toleration first established by Cecilius Calvert in 1634 and embodied in Maryland law in 1649. 49

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total to somewhere in the neighborhood of 7,500, although the efficiency gains of paper money compensate for some of the additional tax, and holders of paper money could profit from any devaluation of the colony’s currency against the proclamation rate at the time of redemption. Of total taxes paid by the inhabitants of Maryland, the share spent locally was probably around a quarter. With a population of more than 115,000 in 1739, per capita taxes amounted to about 15.5d. a head in Maryland hard money, or 11.4d. sterling. Provincial government ser vices were provided at the low cost of about 4.1d. a head Maryland hard currency.

Taxation in North Carolina, 1714–1739

T

he col ony of North Carolina struggled through the remaining years of proprietary status until the purchase of the colony by the Crown and the imposition of royal administration in 1729 gave a measure of political and economic stability to its residents. In 1715, the Lords Proprietors seeking to accelerate the settlement of the colony offered newcomers an exemption from quitrents for one year, but this abatement only temporarily eased settlers’ concerns about future liabilities. Meanwhile, the General Assembly had decided to use quitrents to pay local salaries, but arrears in collection left the colonial administration short of money.51

Imperial Taxes: Quitrents and the Intercolonial Tax

T

h e acq ui s i t ion of both Carolinas by the Crown in 1729 found the quitrent regime in a state of disorder. To fi x the system, the Crown offered to cancel all arrears in North Carolina in exchange for a law that would establish a system of land registration and payment of quitrents in specie. Disputes over who would control the allocation of quitrents, the House of Commons or the royal governor, blocked passage of any laws in the house. A compromise was finally reached in 1739 that satisfied all parties, but the Crown disallowed the law as it contained a provision that permitted a committee consisting of the governor, the receiver-general, members of the Council, and the House of Commons to determine the value of paper money for payment of quitrents.52 Inability to collect quitrents impoverished the provincial administration as this source of revenue was the only means of paying the salaries of the chief proprietary officials. Making a comprehensive rent roll to facilitate 51 Coralie Parker, The History of Taxation in North Carolina during the Colonial Period, 1663– 1776 (New York: Columbia University Press, 1928), 50–51. 52 Parker, Taxation in North Carolina, 52–55. Satisfactory quitrent laws were fi nally enacted and approved in 1748 and subsequent years.

[ 542 ]

Taxation of the Southern Plantation Colonies, 1714–1739

an efficient system of collection was complicated by the absence of a state capital and the dispersal of records in various towns whenever and wherever a governor called a meeting of the legislature. In the absence of an effective administration, large land grants were made to favored individuals, violating the proprietors’ orders restricting the amount of acreage that any individual or group could patent. When the colony was transferred to royal rule in 1729, payment of quitrents was largely in commodities despite the preference for hard money. During the five years 1735–39, colonial records show receipts of quitrents in sterling amounts of 1,182 1s. 1 ⁄4d., 3,333 11s. 2d., 1,097 1s. 61 ⁄4d., 540 15s. 103 ⁄4d., and, 343 14s. 6d. The large numbers for 1736 and 1737 included a reduction in arrears, after which receipts precipitously declined.53 George Burrington, who served as governor from January 1724 to July 1725, and again from 1731 to 1734 as the colony’s first royal governor, was never paid his salary from quitrents. His successor, Gabriel Johnston, had not been paid for thirteen years at the time of his death. The view of the Commons House was that if the king wanted to fi x a salary of 1,000 sterling on the governor, he could do so from his own funds.54 Those sitting in the Commons House modeled their behavior on the British House of Commons. The 1d. duty on intercolonial shipment of tobacco applied to North Carolina as it did to Virginia and Maryland. Coralie Parker has noted that the law was rarely if ever enforced throughout the entire colonial period given the constant outpouring of reports stating widespread fraud and legal efforts at its reduction. In any case, there are no records indicating the amount of revenue obtained from this tax.55

Internal Revenues

I

n ade q uac y of quitrents required recourse to other sources of revenue, specifically duties and poll tax. During the remaining years of the proprietary period, import duties on liquor were either nonexistent or negligible. Concerned “to make a poll-tax on the poorer inhabitants more easy,” in 1734 the General Assembly levied a tax on imported liquor. The rate is unknown 53 Bond, Quit-Rent System in the American Colonies, 291, 300n4. Governor Gabriel Johnston proposed to the British Treasury that the establishment of an official list of royal officers that would be paid from quitrents, amounting to 1,455 sterling a year, would facilitate more efficient collection of quitrents to that end. Apart from the reduction in arrears in 1736 and 1737, quitrents fell dismally short of this goal; indeed, total quitrents for the fourteen years 1735 to 1748 inclusive averaged about 954 a year. William L. Saunders, The Colonial Records of North Carolina, vol. 5 (1752 to 1759) (Raleigh, NC: Josephus Daniels, state printer, 1887), 19–21. 54 Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 127. 55 Parker, Taxation in North Carolina, 84–85.

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with only the title of the bill remaining in the colonial records. There is no record of further duties on liquor until 1747.56 Tonnage was approved in 1723 and thereafter periodically renewed. Rates were specific to individual ports and generated little revenue.57 The poll tax became the colony’s principal source of internal revenue.58 The General Assembly levied its fi rst direct tax in 1715 on polls and land. The poll tax was levied equally on all taxable persons—the gentry, the yeomanry, white servants, and slaves. Payment was generally in commodities— the law of 1715 approved payment in sixteen different staples—until 1748, when proclamation rate hard currency was declared the only money accepted for taxes. From time to time, the list of commodities was amended, with tar, rice, and turpentine added in 1731. The poll tax was earmarked to pay the expenses of the colonial judiciary, as quitrents had been allocated to the governor and import duty on liquor to the treasurer and other minor officials. A poll tax of 15s. was initially levied to generate 2,000 North Carolina currency a year to retire bills of credit issued to finance the Tuscarora War, reducing the outstanding stock from 24,000 in 1714 to 16,000 in 1717. The 15s. rate remained in place for five years, reduced to 10s. during 1720–21 and lowered to 5s. in 1722, as the bills of credit were reduced to 12,000. Thereafter, the poll tax was diverted to other uses. Few poll taxes were enacted by the General Assembly between 1723 and 1734, even though the preamble to the 1734 duty act suggests that voters were unhappy with the poll tax of the previous few years. The issue of 30,000 North Carolina currency in 1729 applied 10,000 to redeem earlier bills of credit and 20,000 was transferred to the various regions for personal loans against landed security at 6 percent interest. Paper money temporarily sufficed for the lack of poll taxes. A new tax of 5s. per taxable was recorded in 1738, which included provisions for a proper census of taxpayers. Because the era of salutary neglect corresponded with a general condition of peace, especially from royal accession in 1729, pressure on the poll tax remained modest. The tax of 5s. North Carolina currency in 1739 was the equivalent of 6d. sterling, hardly a burdensome load. As noted above, the General Assembly briefly resorted to a tax on land. Its act of 1715 laid a tax of 2s. 6d. per hundred acres, which remained in place for five years. With the decline in public debt from the 1715 act, the rate was lowered to 1s. 8d. in 1721 and 1722, after which there is no mention of a land tax in subsequent legislation.59 56

Parker, Taxation in North Carolina, 89–90. Parker, Taxation in North Carolina, 94. 58 Parker, Taxation in North Carolina, 97–111. 59 Parker, Taxation in North Carolina, 126–27. 57

[ 544 ]

Taxation of the Southern Plantation Colonies, 1714–1739

Other minor measures included a license tax on taverns of 1715, extended to other trades in later years, and local taxes up to a maximum of 5s. per poll could be levied for a short period of time for the purchase of land and construction of courthouses, imposed as new precincts or counties came into being. Ordinarily the rate was a few pence or shillings for periods of two years. The establishment of municipalities could also bring a brief poll tax for the erection of courthouses. Vestries were empowered to levy a temporary poll tax for support of the church and the poor, again not to exceed 5s. North Carolina currency. Local poll taxes were occasionally levied to underwrite premiums for the production of wool and flax.60 Exemptions from taxes and militia ser vice were given in exchange for the operation of mills for grinding grain and for sawmills.61 The forty thousand white inhabitants of North Carolina in 1739 had not borne much in the way of direct or indirect taxes during the era of salutary neglect. Quitrents, although external royal revenues, were used for local salaries and were negligible save for the two years of 1736 and 1737. Duties and tonnage were insignificant. The poll tax, the main source of revenue, was suspended between 1723 and 1730, and was rarely heavy throughout the period. All other internal taxes were light and sporadic. Interest on public loans supplied some revenue. The average annual tax burden was less than 10,000 North Carolina currency, or 1,000 sterling, and much less in some years. Per capita annual taxes were somewhere in the neighborhood of several dozen pence local currency, or a few pence sterling.

Taxation in South Carolina, 1714–1739

A

lt ho u g h s o u t h c ar ol i n a was less populated than its northern neighbor, its plantation economy was far larger and more important, especially in the British imperial scheme.62 Charleston became the most 60

Parker, Taxation in North Carolina, 125–51. Lefler and Powell, Colonial North Carolina, 155. The authors contend that residents of North Carolina had a “general aversion to taxes” arising from the sparseness of population, the lack of capital, and the proximity of the population to waterways, which lessened the need for highways and other public infrastructure (168). 62 The South Carolina Department of Archives and History in Columbia holds three journals covering the period 1735–76, three ledgers for 1725–30 and 1735–76, and a record of general tax receipts and payments for 1761–71. Copies of microfi lms of these documents were kindly supplied by the department. The journals and ledgers do not permit the determination of annual provincial taxes prior to 1736. The Journal of the Common House of Assembly, part of the microfi lm collection of Early State Records, includes periodic fi nancial accounts of the expenditures on forts and other military activities and a list of approved payments for civil administration, but almost no information on revenues. The period 1722–30 includes only one year’s 61

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prosperous town in the colonies, and the inhabitants of South Carolina were reckoned to be the wealthiest in the British Empire in 1739. Rice, the colony’s principal staple enumerated in 1705, was subject to the trade acts. The secondary staple of naval stores benefited from royal bounties until their elimination on tar and pitch in 1725. From a political standpoint, the replacement of proprietary with Crown rule stabilized the colony, providing order and administrative continuity. South Carolinians were subject to British import duty on rice, quitrents due the proprietors and then the Crown, the 1d. intercolonial duty (collections were insignificant and can be disregarded), internal duties on imports and exports, and an annual direct assessment on land, slaves, and merchants. The colony’s provincial revenues differed from the other twelve in their heavy reliance on slave duty, which came to supply over half of the provincial tax revenue. In the first year of the Restoration in 1660, well before the rice industry developed in South Carolina, rice imported into England paid duty of 1 6s. 8d. per hundredweight containing 112 pounds, or nearly 3d. sterling a pound.63 In 1692 the duty was augmented with a 5 percent ad valorem rate. Most of the duty was rebated on reexportation. These provisions were extended in 1710, and thereafter on expiration.64 Attempts to remove the duty finally succeeded in 1767. Until 1730 all rice exported from South Carolina had to be first brought to England and subjected to payment of duty before reexportation. After numerous memorials, Parliament provided that after September 29, 1730, South Carolina rice could be exported to any part of Europe south of Cape Finisterre.65 As noted in chapter 16, duty on rice from shipments to southern Europe and direct to Britain was estimated to yield about 6,000 sterling to his majesty’s government.66 A follow-up act in 1731 required vessels receipt of revenue for 1722, along with an estimate of anticipated revenue in 1723, recorded in the Journal on January 31, 1723. 63 A historical treatment of the commercial regulation of rice in South Carolina appears in Lewis Cecil Grey, History of Agriculture in the Southern United States to 1860 (Gloucester, MA: Peter Smith, 1958), 1:284–90. First published in 1932 by the Carnegie Institution of Washington. 64 T. E. Tomlins and John Raithby, eds., The Statutes at Large of England and of Great Britain: From the Magna Carta [9 Henry III, 1224] to the Union of the Kingdoms of Great Britain and Ireland [41 George III, 1800] (London: G. Eyre and A. Strahan, 1811), vol. 4, 9 Anne, c. 21, 104–5. 65 Statutes of Great Britain, vol. 5, 3 George II, c. 28, 94. 66 The House of Commons Sessional Papers include Accounts and Papers from 1731 to the present day, but the collection is not complete. Data on rice duties were tabulated in two Accounts and Papers. The fi rst, which is pertinent to this chapter, was presented to the House of Commons on March 15, 1741, titled “Net Produce of Duties on Rice since the Accession of George II.” The document was not reproduced in the Journal of the House of Commons or ordered to be printed.

[ 546 ]

Taxation of the Southern Plantation Colonies, 1714–1739

carry ing rice directly to southern Europe to return home via Great Britain in order for the bonds required under the trade acts to be canceled. The benefits of the 1730 act were extended to Georgia in 1735 and North Carolina in 1737.67 Rice exports to Great Britain increased tenfold between 1714 and 1739, although individual years experienced marked fluctuations in the upward trend depending on market conditions. During the ten years 1730–39 inclusive, South Carolina exported 456,471 barrels of rice, each weighing 450 pounds. The price of rice during the decade ranged from a low of 5.32s. per hundredweight (cwt.) in 1731 to a high of 9.6s./cwt. in 1738. Adjusting for inflation in South Carolina, during 1730–39 rice exporters earned a total of 1,053,001 sterling in constant value, an annual average of 105,300. Earnings were considerably less before 1730, in the neighborhood of 7,500 annually during 1714–19, and about 37,000 annually during the 1720s. After 1723, about four-fifths of rice exports went to Great Britain. From 1732, about one-fifth was shipped directly to southern Europe. Before then, the remaining fifth had been shipped to other American colonies and the West Indies.68 The estimated 6,000 in annual British duty amounts to a 6 percent tax, part of which was borne by colonial planters and part by consumers. Given the tenfold increase in rice exports to Britain during the era of salutary neglect, the tax had evidently little, if any, effect, on output and shipments. The enumeration of rice in 1705 was intended more to give British merchants a monopoly over the trade than to protect a source of royal revenue. The annual yield of about 6,000 sterling during 1730–37, if accurate, although large compared with the cost of colonial administration in several of the colonies, paled against the annual receipts of several hundred thousand pounds from tobacco duty.

The only copy that existed is the original document laid before the house. Virtually all of the original records of the House of Commons were destroyed in the fi re that burned down the old Houses of Parliament in 1834, and this document would have been destroyed then. The surviving records of the house were the manuscript journals and minutes and printed journals of the house. Inasmuch as a copy of the rice duties was not presented to the House of Lords, there are no surviving records. Mari Takayanagi, archivist, House of Lords Record Office, London, correspondence with the author, January 17, 2006. 67 Statutes of Great Britain, vol. 5, 8 George II, c. 19, 205. 68 Stephen G. Hardy, “Colonial South Carolina’s Rice Industry and the Atlantic Economy: Periods of Trade, Shipping, and Growth, 1715–1775,” in Jack P. Greene, Rosemary BranaShute, and Randy J. Sparks, eds., Money, Trade, and Power: The Evolution of Colonial South Carolina’s Plantation Society (Columbia: University of South Carolina Press, 2001), table 5.1: “Quantity and Constant Value of South Carolina Rice Exports, 1715–1774,” 125–28.

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Quitrents

A

s i n nort h c ar ol i n a , the system of quitrents during the proprietary regime was disorganized and ineffective, generating little revenue for the proprietors or the colonial administration.69 Between 1714 and 1719, the year in which the colonists led a successful revolt against the proprietors, annual quitrents generated a meager 500 sterling.70 The proprietary failed to collect quitrents in the 1720s. Annual arrears of quitrents for the ten years preceding 1719 averaged 600, rising to 800 during the nine years 1719–28, bringing total arrears to about 13,200 in 1728. The Crown’s formal purchase of the proprietors’ rights to the two Carolinas in 1729 included 2,500 sterling to each of seven proprietors, another 5,000 sterling in lieu of quitrent arrears, and the assumption of 4,824 7s. 1d. sterling in debts still due the proprietary officials. The eighth proprietor, Lord Granville, retained his land, the Granville tract situated in North Carolina, amounting to one-eighth of the land area of the two Carolinas. The Crown moved quickly to rationalize the quitrent system. In 1731 a new office of inspector and controller of quitrents was established to assist the receiver-general, who had been responsible for collection in both colonies, an area that was too large for one man to handle. Quitrents were important as they paid local salaries, especially that of the governor. The first royal governor, Robert Johnson (1729–35), sought a quitrent act of the General Assembly that would require registration of all land grants in exchange for the payment of quitrents in Proclamation Money. To sweeten the deal, arrears would be remitted. A suspending clause was inserted in the act in keeping with Johnson’s royal instructions of September 17, 1730. The terms of the 1731 legislation required registration of grants within eighteen months, validation of all land titles including those of questionable legal status that were not subject to quitrents, and payment in Proclamation Money in place of previous commodity payments. Land on which quitrents were not paid for five years would revert to the Crown. Johnson himself had a stake in the law as he held a patent for twenty-four thousand acres issued in 1686 to his father. The Board of Trade recommended disallowance of the act on the ground that validating dubious land titles would seriously reduce the

69 Bond, Quit-Rent System in the American Colonies, 318–49; Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): 183–211; and Robert K. Ackerman, South Carolina Colonial Land Policies (Columbia: University of South Carolina Press, 1977), 94–117. The availability and limitations of hard data on the various sources of taxation in colonial South Carolina are described in Crouse, Public Treasury of Colonial South Carolina, bibliographical notes, 132–35. 70 Watson, “Quitrent System in Royal South Carolina,” 186, and Bond, Quit-Rent System in the American Colonies, 125n4.

[ 548 ]

Taxation of the Southern Plantation Colonies, 1714–1739

rent rolls and annual quitrents by 1,200 Proclamation Money. Nonetheless, the Privy Council took no action and the law became the legal basis of the quitrent system. All land was charged with quitrents of 1s. per hundred acres rather than the board’s recommendation of 4s. To entice immigrants, the governor’s royal instructions retained the policy of the headright of fifty acres per capita. To encourage settlement in the townships, the Crown exempted township headright grants from quitrents for ten years, a policy that proved successful.71 The white population of the colony nearly doubled during the first decade of royal governance. Most of the land granted during the 1730s consisted of small tracts averaging five hundred to eight hundred acres. Slaves were included in numbering for headrights. Among other purposes, the establishment of townships was seen as a means to help defend the colony. The attempt to set up a court of exchequer to enforce the collection of quitrents failed in the face of vigorous opposition from the Commons House of Assembly. In addition, many insisted on paying quitrents in South Carolina currency, valued at seven-to-one against sterling, rather than in Proclamation Money. Still, royal administrators gradually improved collection. Only after 1739 was the colony able to accumulate a modest surplus that could be used to provide allowances for other royal officials whose duties made them unpopular in the colony. Table 19.4 displays the amount of quitrents collected in Proclamation Money from the beginning of royal administration in 1729 through the 1739/40 fiscal year. From a meager collection of about 130 Proclamation Money a year during the first three years of Johnson’s tenure, annual quitrents tripled during the next three years, and then averaged some 1,200 during the next five years. The rise in quitrents took place despite the ten-year exemption on township grants. Whereas quitrents began a steady decline in North Carolina in 1737 after arrears had been substantially reduced, they held steady in South Carolina during the latter half of the 1730s. Still, the collection of quitrents fell short of the full rent rolls.72 The decline in quitrents and total tax revenues in 1738/39 was due to an epidemic of smallpox that discouraged the conduct of business in Charleston

71

Watson, “Quitrent System in Royal South Carolina,” 188. Watson disputes Bond’s claim and those of other contemporaries and scholars that the quitrent system in South Carolina was becoming more effective from 1735 onward. Although the sums collected rose and held steady in the latter half of the 1730s, Watson states that an increasingly larger share of land on which quitrents was due never resulted in payments. The percentage of acreage reported from quitrents, which ranged from 32 to 41 percent during 1734–39, fell steadily over the next few decades to the mid-teens by 1760. These numbers are reported in chapter 23. Watson, “Quitrent System in Royal South Carolina,” 201. 72

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and the payment of quitrents. Apart from the anomaly of that year, quitrents generated between 15 and 22 percent of total provincial revenue during 1736–39.

Internal Revenue

T

he r e volt against the proprietors in 1719 transformed the fiscal system of South Carolina.73 Beginning in 1721, tax acts were lengthy and revenues were earmarked for specific purposes. Each act stated the amount of tax, time of payment, and method of collection. Another important change took place after 1733. Revenue acts were passed to pay for charges already incurred rather than for anticipated expenses. Creditors of the government turned in accounts to the legislature, which examined them for validity and accuracy, and allowable payments were placed in a schedule attached to the tax act. The public treasurer then issued certificates of indebtedness to the creditors in those amounts, which were receivable in payment of taxes and duties and canceled on return to the Treasury.74

Import and Export Duties

W

i t h q ui t r e n t s providing royal salaries, duties on imports and exports were directed to paying such recurring expenses as support of ministers, construction of churches, and construction and maintenance of fortifications. Duty on slaves was earmarked to retire public orders or subsidize white immigrants. Duties were levied principally on the five categories of alcoholic beverages, foodstuffs, wood products, animal skins, and slaves, but within these categories were as many as eighty separate items. Some were taxed at a specific rate, while others were charged ad valorem.75 An act of 1717, which 73 A brief survey of taxation in colonial South Carolina is found in Edson L. Whitney, Government of the Colony of South Carolina, Johns Hopkins University Studies in Historical and Political Science, 13th ser., nos. 1–2 (Baltimore: Johns Hopkins Press, 1895), 97–109. A more detailed survey appears in Crouse, Public Treasury of Colonial South Carolina. Negro slave duties supplied the largest source of revenue in the colony; this is chronicled in W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967). 74 Crouse, Public Treasury of Colonial South Carolina, 7–8. It was common in several of the colonies that the public treasurer could loan money in his custody not required for immediate use at interest, and treat the interest as his personal income (15). 75 A list of twenty-six acts from 1691 through 1771 levying import and export duties in South Carolina appears in Crouse, Public Treasury of Colonial South Carolina, table 1, 45–47. Not every duty was encompassed in each act. A comparison of twenty-nine separate duties imposed in the acts of 1703, 1723, and 1751 appears in table 2, 50–51. Examples in 1723 include Madeira and other wines at 6–10 South Carolina currency per pipe, foodstuff s at several shillings per hun-

[ 550 ]

Taxation of the Southern Plantation Colonies, 1714–1739

authorized wholly owned and locally built vessels in the province full exemption from import duties, was disallowed in 1719 but subsequently reenacted with reduced benefits. Those locally built were granted a 50 percent reduction and wholly owned vessels built elsewhere 75 percent. From 1719 goods admitted from Great Britain were free of duties. From time to time, additional or extra duties were levied on the same articles to meet such extraordinary expenses as the Indian wars or other specific purposes. General duties yielded about 8,000 South Carolina currency a year, rising to about 12,000 by the early 1750s. For the year ending February 15, 1725, duties yielded 14,991 4s. 3d.76 Revenue accounts were not comprehensive, with separate records kept for the additional duties during certain years. In 1735– 45, the annual additional duty on rum generated between 1,700 and 3,000, with other extra duties on wine, rum, molasses, flour, and sugar yielding between 3,800 and 7,000. Tonnage of one half-pound of powder per ton supplied a small amount of revenue.

Slave Duty

D

ut y on slaves produced more revenue than all other categories combined.77 The first Negro duty was levied on May 6, 1703. That law, and another of 1722, with extensions and renewals, were the basis of slave duty throughout the period. Proceeds of the 1703 act, effective until 1714, were earmarked to redeem paper money. An additional act of 1714 placed a supplemental duty of 2 on all slaves twelve years old or older to increase the ratio of white to Negro inhabitants by discouraging their importation. In February 1715, the General Assembly passed a bill to raise 2,000, which included an additional duty on certain Negroes. In this law, the 2 tax applied only to Negro slaves brought in from other parts of America. A new law of June 30, 1716, effective for a minimum of three years and then until the end of the next session of the General Assembly, renewed the 20s. duty on Indian slaves exported from the province. The depreciation of the colony’s currency from the time the previous law was passed reduced the real tax to one-sixth its former value. Slaves under ten years of age were

dredweight, timber at an effective rate of 20 percent, and Indian slaves at 50 each. The general sums raised in this paragraph are from Crouse unless otherwise specifically cited. 76 W. Roy Smith, South Carolina as a Royal Province, 1719–1776 (New York and London: Macmillan, 1903), 287. 77 A description of slave duties from the fi rst act of May 6, 1703, to the last of March 4, 1775, before the Revolution appears in Higgins, “South Carolina Negro Duty Law,” 39–69. A full list of laws pertaining to duties and impositions on Negroes and other slaves appears in appendix A, 126–37. The amount of duty paid between 1735 and 1775 and drawbacks on reexportation appear in appendix G, 259–63. Higgins states that no data are available on importations for the periods 1670–1721 and 1726–34.

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chap t er 19 tabl e . South Carolina Quitrent Revenue and Provincial Tax Revenue, 1729–1740 (£.s.d. Proclamation Money) Years

Quitrent Revenue

Provincial Tax Revenue

July 25, 1729, to March 15, 1732 March 26, 1732, to March 25, 1735 March 25, 1735, to March 25, 1736 March 25, 1736, to March 25, 1737 March 25, 1737, to March 25, 1738 March 25, 1738, to March 25, 1739 March 25, 1739, to March 25, 1740

389 5s. 1d. 973 2s. 634⁄ d. 1,184 13s. 11d. 940 11s. 614⁄ d. 1,367 12s. 10d. 902 19s. 12⁄ d. 1,584 15s. 0d.

6,077 8s. 9d. 6,821 15s. 4d. 1,671 8s. 6d. 7,166 13s. 5d.

Sources: Quitrent revenues are from Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), and Robert K. Ackerman, South Carolina Colonial Land Policies (Columbia: University of South Carolina Press, 1977), 99. Provincial tax revenues, and identical quitrents from 1736, are from Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): 192, table 1. Since records of actual provincial tax receipts are available only for the years 1761–69, the figures in the right-hand column in the table are based on the revenues to be raised by the annual tax bills as an approximation of actual receipts. Watson converted South Carolina currency into proclamation rate at a ratio of five to one (206).

admitted free, with those coming from Africa or other areas where they resided for less than five months taxed at 3 South Carolina currency, the same real value as the 1703 tax assessed in currency and coin. The general view in the colony was that slaves imported from other colonies were troublesome, and their importation was discouraged with a prohibitive duty of 30. Persons planning settlement in the colony were exempt from duty on slaves brought with them.78 The act of 1716 provided for a drawback of three-quarters of the duty if slaves were exported within six months of their arrival. An act of 1717, to take effect in June 1719 for two-and-a-half years or to the end of the next General Assembly, placed an additional prohibitive duty of 40, without exceptions, on all Negroes to stem the rapid rise of the Negro population. A law of 1719, granting preferential rates for Negroes imported in colonial-built or colonial-owned vessels, was disallowed by the proprietors. A replacement act was passed in 1721, which halved the privileged treatment of locally owned and locally built ships. However, coastal vessels were granted the privilege of paying duty only twice during a year, with exemption on all cargoes imported during the remainder of that year. The law was annulled five months later with a new act that imposed duty on all but suckling children slaves, and, to prevent the importation of troublesome Indian

78 Chapter 15 cited two promotional pamphlets published in 1710 and 1712 that described the economic benefits of slavery for prospective Eu ropean immigrants.

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Taxation of the Southern Plantation Colonies, 1714–1739

slaves, a duty of 50 was levied on all Indians, virtually eliminating Indian slavery. African imports were taxed at 10, with children under ten at 5 regardless of their place of origin. To prevent the importation of slaves from other English colonies and the Spanish dominions, prohibitive duties were levied, respectively, at 50 and 150 a head. Disputes between Arthur Middleton, appointed as governor from his position as president of the Council, the Commons House, and the Upper House (the Council acting in its legislative capacity) prevented the passage of an annual direct tax bill between 1727 and 1731, which resulted in the large public debt that prompted the issue of 104,775 in public orders previously described. An act of 1731 revived Negro and other duties for seven years largely to retire public orders. In 1735 the General Assembly earmarked Negro duty to assist new white Protestant arrivals in the province for which it had voted 5,000 in the annual appropriation act. In response to British merchant complaints, in 1730 the Board of Trade instructed the colony’s governor to secure passage of an act that placed slave duty on purchasers, not importers. Ten years later the legislature complied. During the five years 1735–39, slave duty amounted, respectively, to 28,265, 31,035, 10,310, 22,645, and 18,605 South Carolina currency. Rebates in 1735–36 totaled 2,645, less than 3 percent of receipts during 1735–39. Converting these sums into Proclamation Money with the par value of South Carolina currency on London for the five years at 700, 743.33, 753.10, 775, and 791.91 sterling, yields proclamation values of 4,875, 5,546, 1,821, 3,886, and 3,125. Comparing these sums against quitrents and total provincial tax revenues in table 19.4, slave duty clearly generated the lion’s share of provincial taxes.

Other Provincial Taxes

T

he g eneral assembly passed an annual direct tax bill, apart from the years 1728–30, that appropriated specific sums and charged them to par ticular levies.79 The law authorized taxation of “estates, stocks and abilities” of the province’s inhabitants. Inquirers would prepare lists of taxable property and turn them over to the assessors, who would determine the amount of tax each person would have to pay to produce the target revenue. The public receiver would then notify each person of his liability, posting the tax lists in some public place for inspection. Appeals and adjustments could be made as warranted. Beginning with the act of June 30, 1716, Charleston was assigned the definite quota of one-sixth of the total tax, which remained in effect until 1758.

79

The process of taxation is from Crouse, Public Treasury of Colonial South Carolina, 73–79.

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The act of February 15, 1724, applied definite rates of 5s. per hundred acres and 15s. per slave in place of the previous cumbersome system of assessment. Each taxpayer was required to deliver a sworn statement to a new official called the collector or receiver and pay the amount liable, thus eliminating the trip to Charleston. A brief return to the former system of assessment in 1731 in which slaves were taxed at 20s. with land charged for the balance was tried for two years, but the provisions in the 1724 act were then restored. In 1733 tax appropriations were changed to provide payment for the previous year’s expenditures, rather than the next fiscal year. Because the acts provided for specific payments, specific moneys to be raised could be included in the annual legislation. Beginning in 1735, new settlers in the province did not have to pay taxes on their land for the first ten years. From time to time, other tax measures were enacted.80 Country storekeepers were required to pay the same rates as those in Charleston in 1719, becoming a specific rate in 1734, 2 for every 100 in stock and cash. The province attempted a poll tax on white males at the rate of 1 during 1734–37, but it was abandoned and never again tried. During the 1720s, the General Assembly sought to raise annually 20,000–30,000 South Carolina currency (about 5,700 Proclamation Money) in the latter half of the decade in direct taxation. The colonists paid heavy taxes due to the Yamasee War. The act of 1715 levied 35,000 South Carolina money, or 15,517 Proclamation Money, followed with levies of 30,000 (13,300 proclamation) in each of the next two years. These taxes amounted to per capita levies of 21 ⁄2 to 31 ⁄2 sterling. Estimated expenditures in 1721 were put at 32,243 19s. 6d., to be financed with duties of 7,995 19s. from exports and imports, 7,000 in “rice bills” remaining in the hands of commissioners, and the balance from a tax on land and Negro slaves;81 the act was disallowed in August 1723. The accounts of the treasurer for the period March 1722 to January 1, 1723, appear in the Journal of the Common House of Assembly on January 31, 1723. The entries show revenue of 8,723 12s. 53 ⁄4d. South Carolina currency (1,722 15s. Proclamation Money) from the following sources: tavern licenses, 36; export duty on skins between March 2, 1722, and January 1, 1723, 648 0s. 101 ⁄2d.; export duty on hides and leather for the same period, 133 9s. 21 ⁄2d.; duty on sundry imports for the same period, 2,207 16s. 11 1 ⁄2d.; duty on imported Negroes between March 20, 1722, and January 1, 1723, 1,867 10s.; cash for licenses for the Indian trade, 1,020; miscellaneous cash received, 1,000; and fines for three bastards, 15.82 The figures in table 19.4 80

Crouse, Public Treasury of Colonial South Carolina, 79–82. Edward McCrady, The History of South Carolina under the Royal Government, 1719–1776 (New York and London: Macmillan, 1899), 38–39. 82 Journal of the Common House of Assembly, January 31, 1723. 81

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Taxation of the Southern Plantation Colonies, 1714–1739

show the provincial tax revenue of the last four years of the era of benign neglect. All sources of internal taxation in 1739, including quitrents, amounted to per capita taxation of 2s. 4d. sterling, one-thirtieth the burden of 1715.

Taxation in Georgia, 1732–1739

T

h e s e t t l e m e n t and management of the trusteeship of Georgia was funded entirely from philanthropic and parliamentary sources. No internal taxes were levied on the colonists during 1732–39. Indeed, tax exemptions from quitrents were offered to prospective immigrants to help populate the colony.

Summary

S

o ut h c ar ol i n a , as the wealthiest of the thirteen colonies, was the most heavily taxed. Apart from New York, the second most heavily taxed in 1739, Maryland and Virginia followed in third and fourth place. In the case of Maryland, a large majority of internal revenue belonged to the proprietor or was used as backing for its paper money; little was spent internally. North Carolina was little taxed and Georgia not at all. Even in the case of South Carolina, its per capita tax burden was still only on the order of one-eighth that of Britons. The political transformation of the southern colonies during the era of salutary neglect increasingly secured into the hands of the lower houses the authority to tax and the control over public funds. Control became almost absolute in South Carolina, but expanded everywhere save Georgia. As the era came to a close, the lower houses of the several general assemblies had settled into regimes of relatively light taxation, effectively resisting royal or proprietary governors and their councils.

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appendix
Taxes in the American Colonies, 1739

T

axe s w e r e extremely light in the thirteen colonies during the era of salutary neglect. In per capita terms, they were considerably lower than they were during the war time reigns of William and Anne and, as part V reveals, during the War with Spain (Right of Search) and the War of the Austrian Succession, 1739–46, and the Seven Years’ War (French and Indian War), 1754–63. The trend of internal colonial taxation continued from 1688 and 1714. Table A displays the level of taxes in the thirteen colonies in 1739 and compares them with that of Great Britain. Column 2 lists total internal taxes in each colony, based on the compilations and calculations presented in chapters 17, 18, and 19. Column 3 converts colonial currency into sterling based on the exchange rate (column 4) of each of the colonial currencies on London from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook.1 Column 5 displays the population in each colony, which is used in columns 6 and 7 to derive per capita taxes in pence colonial currency and their equivalent in pence sterling. The calculations include the slave populations in each colony. The figures would be considerably higher in the southern colonies if the calculations were based only on the white populations. Column 8 compares the ratio of per capita taxes in Great Britain with that of each colony. 2 Per capita taxes in Great Britain include the population of England and Wales, but exclude that of Scotland, in that Scots contributed a minuscule scale of total tax receipts to the British Treasury.3 1 John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 141, 164, 172, 185, 198, 210, 217, 223. The rate for Maryland is for 1738 as McCusker’s series does not include an entry for 1739. 2 The estimates of internal taxes in the colonies are approximate rather than precise. A fi gure of zero was entered for Rhode Island given its total reliance on paper money that was not redeemed with any taxes in 1739. 3 The collection of taxes in Scotland remained problematic for all revenue departments of Great Britain throughout 1707–1815. The inclusion of Scotland into Great Britain in 1707 added just over 1,000,000 people to the roughly 5,900,000 of England and Wales. The Scots constituted about 15 percent of the population of Great Britain, but paid only a few percentage points

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iv.a Per Capita Taxes in the American Colonies, 1739

[ 557 ]

col u m n 1

c olum n 2

c olu mn 3

column 4

Colony

Colonial Taxes in Colonial Currency ()

Colonial Taxes Sterling ()

 100 Sterling Exchange Rate

16,933 3,460 0 1,000 6,545 1,000 300 800 9,000 7,500 10,000 42,577 0 99,115

3,386.6 692.0 0.0 200.0 3,926.9 589.3 176.8 475.3 7,346.9 5,538.3 1,000.0 5,376.5 0.0 28,708.6

500 500 500 500 166.67 169.69 169.69 168.33 122.5 135.42 1000 791.91 100

Massachusetts Connecticut Rhode Island New Hampshire New York Pennsylvania Delaware New Jersey Virginia Maryland North Carolina South Carolina Georgia

column 5

column 6

colu m n 7

c ol u m n 8

Population 1739

Per Capita Taxes (d. Colonial Currency)

Per Capita Colonial Taxes (d. Sterling )

Ratio of Per Capita Taxes in Britain to the Colonies

5.5 1.9 0.0 2.2 15.2 1.7 2.3 2.3 10.1 11.7 4.8 29.7 0.0 7.8

43.7 127.4 n.a. 110.0 9.2 139.6 106.3 105.2 23.7 20.5 49.6 8.1 n.a. 30.6

147,863 88,175 24,398 22,006 62,158 82,244 18,800 49,987 173,796 113,595 49,584 43,500 2,021 878,127

Notes: 1. Per capita British taxes in 1739 amounted to about 1 sterling. 2. The figures exclude British import duties on colonial products. 3. The exchange rate for Maryland is hard currency tobacco or specie. 4. The empty cells in column 8 for Rhode Island and Georgia reflects the absence of taxes in those two colonies. 5. The figures at the bottom of columns 2, 3, and 5 are totals; those at the bottom of columns 7 and 8 are averages.

27.5 9.4 0.0 10.9 25.3 2.9 3.8 3.8 12.4 15.8 48.4 234.9 0.0

appendix to part fo ur

The sterling value of all internal colonial taxes is summed at the bottom of column 3. It amounts to 28,708 12s. Of this, about 7,500 drained abroad from Virginia as quitrents to the Crown and from Maryland to Lord Baltimore, and to underwrite the purchase of Bank of England stock to retire and reissue Maryland paper money. Per capita taxes in the colonies in sterling amounted to 7.8d. in 1739. British taxes amounted to 5,820,000 in 1739, about 1 a head. In per capita terms, Britons paid 30.6 times as much tax as did their colonial counterparts (column 8, last entry). Including funds drained abroad, internal colonial taxes paled against those in Great Britain. If the British government had wanted to exercise greater control over its American colonies, it could have done so at relatively little cost by supplying governors and other royal officials with salaries from British funds. An outlay of about one-third of 1 percent of British revenue would have avoided the chronic disputes that plagued governors who, following royal instructions, struggled with elected colonial assemblies to secure a permanent local revenue, especially their salaries. Column 7 shows relatively higher tax burdens in South Carolina and New York, followed by Maryland and Virginia, compared with the other colonies. The remaining colonies were, in the context of British burdens, virtually untaxed. As the three preceding chapters have shown, low taxation derived from limiting government expenditures and resorting to public loan office interest as a source of revenue. The relatively high burden in South Carolina should be seen in the context of the colony’s greater affluence, which enabled its inhabitants to pay quitrents with little fuss and difficulty. The relatively high burden in Maryland is attributable to quitrents and the export duty to back the issue of the colony’s paper money; only a small portion of Maryland’s internal taxes financed the colony’s administration. of the enlarged country’s total taxes. The figures for the ratio of per capita taxes in Britain to the colonies in column 8 exclude the Scots, since their inclusion would disproportionately result in a lower number for British tax burdens. Patrick K. O’Brien, “The Political Economy of British Taxation, 1660–1815,” Economic History Review, 2nd ser., 41, no. 1 (February 1988): 3, table 2.

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pa r t f i v e
War, Debt, Money, and Taxes: Prelude to Imperial Intervention, 1739–1763

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A

n era of peace came to an end in October 1739 when Great Britain declared war on Spain over Spanish claims to the “right of search” of British merchant vessels on the high seas to stop British smuggling in the Spanish American empire. The War of the Right of Search died down in 1742 but merged into the long-running War of the Austrian Succession, which began in 1740 and became official in 1744 with a formal declaration of war against France. The second war ended in 1748. After a brief respite of six years, Britain and France were again at war in 1754 on the American frontier in the early phases of the Seven Years’ War, which concluded with the Treaty of Paris in 1763. War means mobilization of men and supplies, higher taxes, more debt, and economic disruption. It also creates opportunities for privateers, financiers, and suppliers of military provisions. The colonists supplied men, money, and material, but the brunt of the effort was borne by British troops and British taxpayers. The trade acts that defined the system of imperial economic governance were augmented with two new restrictions on the colonists. In 1750 Parliament passed the iron statute that provided for duty-free importation of bar iron to the port of London and pig iron to any part of England, but forbade the colonial erection of furnaces for making steel, or a mill or other engine for rolling or slitting iron or plating forge. Next it approved the Currency Act of 1751. It forbade the issue of new bills of credit in New England, thus ending the system of financing public expenditure with paper money and restoring the hard-money specie standard. Britain needed the cooperation of the colonists to defeat the French in North America. To that end, the government of Prime Minister William Pitt continued Sir Robert Walpole’s policy of allowing the colonies a large measure of self-government. Apart from the iron and currency acts, the lower houses in the colonies gained greater control over taxes and public expenditure. The French threat to America ended on September 13, 1759, when British forces defeated the French on the Plains of Abraham in Quebec. Thereafter the battlefield of the Seven Years’ War lay in Europe. The accumulation of a large public debt in Britain and the stationing of a permanent British garrison in the colonies to enforce the provisions of the Treaty of Paris, which banned colonial expansion past the Appalachian Mountains to ensure the rights guaranteed to Indians, set the stage for Parliament’s quest to extract some revenue from the colonists to share in these burdens. The disputes between colonial assemblies and royal officials were steadily transformed into a clash of legislatures, colonial versus Parliament.

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c h ap t e r 2 0
Imperial Governance and the Colonial Constitution, 1739–1763

A

q uart e r century of peace and salutary neglect came to an end on October 23, 1739, when Prime Minister Robert Walpole declared war on Spain. Twenty-four years later, decades of war with France were temporarily suspended with the signing of the Treaty of Paris on February 10, 1763. War preoccupied the last two decades of the reign of King George II (1727–60) and the first three years of George III (1760–1820). During this period, British monarchs lost what remaining power they had enjoyed—that of picking their ministers—to Whig personalities who could command a majority in the House of Commons. Kings and Lords were reduced to a supporting cast.1 From 1763 onward the Commons would supplant the Crown in the management of colonial affairs.

War

T

h e def i n i ng characteristic of mid-eighteenth-century Britain was war, first with Spain then with France and its allies. These wars had their colonial counterparts. Indeed, the first great world war, the Seven Years’ War, began on the American frontier, the opening salvo in the French and Indian War, two years before its official declaration in Europe.

War of the Right of Search

T

h e e ra of peace was shattered on October 23 when Walpole declared war against Spain. 2 The roots of the confl ict derive from the 1729 Treaty of Seville. European confl icts involving Russia, Spain, and Germany, the latter of concern to Hanoverian George, involved the Royal Navy 1 Wars and the interrelated political fortunes of Whig politicians are discussed in R. W. Harris, England in the Eighteenth Century, 1689–1793: A Balanced Constitution and New Horizons (London: Blandford Press, 1963), 94–105, 111–20. 2 Two brief summaries of the War of Jenkins’ Ear are found in “USA History: Wars—War of Jenkins’ Ear, 1739–1742,” http://www.usahistory.com/wars/jenkins.htm (June 22, 2005), and “War of Jenkins’ Ear,” http://en.wikipedia.org/wiki/ War_of _Jenkins’_Ear (June 22, 2005).

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in the disputes. The Treaty of Seville temporarily settled the territorial claims of the contending powers. Among the terms of the treaty, Britain agreed not to trade with the Spanish colonies in America. Spain was accorded the right to board British vessels in Spanish waters to verify British compliance. Neither Britain nor Spain faithfully honored the terms of the treaty. British ships routinely smuggled goods into the Spanish territories, while Spain invoked the right of search to prey on lawful, as well as unlawful, commerce. Open confl ict was temporarily forestalled in 1739 in the Convention of El Pardo in which Spain agreed to pay 95,000 compensation to British shippers for unlawful seizures, but the issue of fundamental rights of trade in the area was left unsettled. Both sides stewed over the issue, finding the agreement unsatisfactory. In June 1739 Spain suspended the Asiento, under which Britain was allowed to send 4,800 Negroes a year to the Spanish Empire and canceled its offer of 95,000. Walpole could not accept the suspension of the Asiento and Spain’s right of search. Robert Jenkins, captain of the British ship Rebecca, claimed that a Spanish coast guard had boarded his ship in 1731 and severed his ear. In 1738 he displayed his ear before the House of Commons, thus giving name to the War of Jenkins’ Ear. Parliament wholeheartedly endorsed the war. The War of Jenkins’ Ear saw victories and defeats on both sides. A British fleet under the command of Admiral Edward Vernon captured the silver exporting town of Puerto Bello in Panama on November 21, 1739, resulting in a great celebration in London and the naming of Portobello Road. Seventeen months later, six Spanish ships and 3,000 men, defending the city of Cartagena de Indias, inflicted heavy losses on Vernon’s fleet of 186 ships and 23,600 men. Colonial participation included the provision of men in the failed assault on Cartagena and the invasion of Florida under James Oglethorpe’s command. Oglethorpe had to break off his attack on St. Augustine to repulse a Spanish counterattack on Fort Frederica on St. Simons Island, Georgia. Apart from casualties and debts, neither side gained any territory from the other. The War of Jenkins’ Ear was a brief preliminary to the War of the Austrian Succession.

The War of the Austrian Succession

T

h e war of the Austrian Succession (1740–48) involved the claims of Maria Theresa of Austria, who succeeded her father, Charles VI, Holy Roman Emperor in his Habsburg dominions in 1740, to Hungary, Bohemia, Parma, Piacensa, and Guastalla. 3 She was challenged in these claims by

3 “War of the Austrian Succession,” http://en.wikipedia.org/wiki/ War_of _Austrian _ Succession (June 22, 2005).

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Imperial Governance and the Colonial Constitution, 1739–1763

other princes, such as Charles Albert of Bavaria. Claims to these territories brought the Netherlands, Italy, France, Prussia, Sardinia, Saxony, and Great Britain into the confl ict. One campaign followed another, with Britain and France formally declaring war on each other in 1744. In 1745 the French encouraged an attempt by the Old Pretender, the son of the deposed James II, to invade Britain, the final Jacobite uprising that was ruthlessly crushed but that occupied British forces at home. A series of campaigns throughout 1745–48 continued the war on land and sea, with several clear British naval victories. The Treaty of Aix-la-Chapelle signed on October 18, 1748, halted military operations but failed to settle the great issues of the war, the rivalries among the great European powers, and the simmering colonial disputes in the New World.

King George’s War

C

ol onial part ic ipat ion in the war, known as King George’s War (1744–48) in the colonies, began with a French attack on a British position at Canso, Nova Scotia, after which the French transported prisoners to their stronghold of Louisburg.4 Louisburg was a massive French fort on Cape Breton Island, which took twenty years to complete with walls of solid masonry. It was topped by a hundred cannon on a point of land that controlled the chief entrance to the St. Lawrence River, providing a base for French privateers. Governor William Shirley of Massachusetts assigned William Pepperell, a wealthy Maine merchant, the task of taking Louisburg. Hatred of the French in New England and New York enabled Pepperell to assemble four thousand farmers and fishermen and a small fleet of little fighting strength with which to assault the fort. The battle commenced on May 1, 1745, ending with the French surrender of the fort and batteries on June 17, a most improbable victory for the colonists. In late 1745 the battlefield shifted to the western frontier, with a series of strikes and counterstrikes around Lake Champlain, and no clear victor emerging from the fighting. A French offensive to retake Louisburg was disrupted by a major storm that scattered the French fleet. To the dismay of the colonists, the Treaty of Aix-la-Chapelle ending the War of the Austrian Succession restored to each power what it had possessed before the war. American anger over the return of Louisburg to France was partly mollified when Parliament reimbursed the colonial governments for funds spent on Pepperell’s campaign. However, Louisburg’s restoration to France conveyed the clear message that colonial interests were second to the broader aims of the British Empire. 4

“King George’s War (1744–1748),” http://www.usahistory.info/colonial-wars/ KingGeorges-War.html (June 22, 2005), and “King George’s War, 1744–1748,” http://www.u-s-history .com/pages/ h847.html (June 22, 2005).

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Seven Years’ War (French and Indian War)

F

r enc h pl ans to build a string of forts along the Ohio River were seen in London as an attempt to contain the American colonies along a narrow coast and secure the benefits of North America for France.5 British troops under General Edward Braddock were dispatched in 1755 to clear the French from the Ohio, and an English admiral, Edward Boscawen, attacked a French convoy bound for the St. Lawrence. Braddock suffered the greatest defeat in the history of the British Empire up to that point. Britain formally declared war on France on May 18, 1756, reciprocated by France on June 9. Braddock’s disaster was followed by a succession of defeats until William Pitt took over the direction of the war from Lord Newcastle, and poured men, money, and material into the confl ict. The tide turned in 1759. British and colonial forces won several victories, culminating in the defeat of French forces on the Plains of Abraham in Quebec on September 13, 1759. Almost a year later, on September 8, 1760, all remaining French forces in Canada surrendered to the British commander in chief, Jeffrey Amherst. The colonists were finally free from the French threat of Catholicism, autocracy, and heavy French taxes. The Seven Years’ War continued in Europe and the Ca ribbean, finally coming to an end on February 10, 1763. North America was at the center of the Treaty of Paris. France surrendered all its possessions in North America east of the Mississippi River save the two small islands of St. Pierre and Miquelon located a few miles off the south coast of Newfoundland. Cape Breton Island was now in British hands, eliminating the danger of French privateers to colonial shippers. Britain obtained East and West Florida from Spain, which became the fourteenth and fi fteenth American colonies, but they were returned to Spain upon the conclusion of the American Revolution in 1783. Guadeloupe and Martinique remained in French hands, but Britain secured several other islands, including Grenada, the Grenadines, St. Vincent, Dominica, and Tobago, thus giving it command of the sea lanes in the West Indies. Britain kept an important possession on the African coast that enabled it to dominate the slave trade, and emerged as 5 Hundreds of books and articles have been written in English and French on the Seven Years’ War. A fast-paced military treatment appears in William M. Fowler, Jr., Empires at War: The French and Indian War and the Struggle for North America, 1754–1763 (New York: Walker and Company, 2005). Fowler defi nes the Seven Years’ War as the fi rst world war, with major battles involving fleets and armies in Eu rope, North America, the West Indies, Asia, India, and Africa. Fowler asserts that the most decisive battles were fought in North America among the Indians, French, Canadians, British, and the colonists, upon which the larger war ultimately swung. Reversing a string of numerous defeats at the hands of the French, the seizure of Quebec put an end to French threats in the American colonies, giving Britain control of the North Atlantic and enabling its emergence as the world’s dominant economic and military power.

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the dominant colonial power in India. No one triumphed in Europe. Its rivalries would not be settled until Wellington defeated Napoleon at the Battle of Waterloo on June 18, 1815.

War, Politics, and Personalities

S

i nc e t h e coronation of George I in 1714, matters of war, economic policy, and colonial governance had increasingly become the prerogative and responsibility of the king’s ministers, not the king himself. Until his resignation in January 1742, which followed seven defeats in the House of Commons, Robert Walpole was the undisputed head of the British government. He was the first British prime minister to resign following political defeats in the Commons, not by losing the confidence of the king. The new British administration was made up of the Pelhams, all followers of Walpole. The key ministers were their leader, Thomas Pelham-Holles, Duke of Newcastle, who dispensed patronage to maintain support in Parliament, his brother Henry Pelham, a brilliant financier who kept taxes low and had the support of the City of London, and their brother-in-law Lord Hardwicke, a prominent lawyer who provided advice to Newcastle. They governed in harmony with a fourth, Lord Carteret, a favorite of the king, until the foreign situation turned against Britain in 1744 in the War of the Austrian Succession. The Pelhams demanded that the king remove Lord Carteret from government, blaming him for the strategy that led to military reverses on the continent. Carteret resigned in November 1744. Freed of him, the Pelhams broadened their ruling coalition with opposing Whig members from the Commons, along with some Tories. A notable omission was William Pitt, who had earned the enmity of the king. George II was contemptuous of his Whig ministers, fearing that they would reduce him to a figurehead. After 1743, his ministers would not allow him to command British troops in the field. Meanwhile, the excluded Pitt mounted a steady succession of forceful attacks on the government in the Commons. In January 1746 the Pelhams insisted that Pitt be allowed to join them in the government. George resisted. The Pelhams resigned in February, but the king failed to assemble a government that enjoyed the support of the Commons. George caved to the Pelhams, a defining moment in British constitutional history signifying that the Crown had lost the power of choosing its own ministers. The executive arm of the British government was no longer the king in charge, served by able ministers. Its control had become a contest among rival personalities, the winners determined by their ability to secure and retain majorities in the House of Commons. The death of Henry Pelham in 1754 paved the way for Pitt’s ascension to power. With the Seven Years’ War underway in full force and Britain suffering a string of major defeats, a new coalition between Pitt and Thomas [ 567 ]

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Pelham-Holles took office in 1757. Pitt took over management of the war, producing the great victory that rendered France impotent in North America and gave Britain mastery of the seas. The death of George II, followed by the coronation of George III, the first British-born Hanoverian, brought rapid turnover in the key ministries of government. George III’s tutor, the Earl of Bute, was appointed secretary of state. Newcastle and Pitt both loathed Bute, but they also detested each other. Pitt was forced to resign in October 1761 over disagreement in the cabinet about the conduct of the waning years of the long war. Seven months later, in May 1762, Newcastle resigned, leaving Bute as First Lord of the Treasury. Peace terms in the Seven Years’ War were concluded in October 1762, leaving the very unpopular Bute, who had proposed an excise on cider, to himself resign in March 1763, a month after the signing of the Treaty of Paris. George Grenville, a favorite of Bute, succeeded as head of the government. Whigs continued to hold the reigns of government throughout the long period of warfare. The Georges were increasingly becoming heads of state, not heads of government. Commissions, instructions, regulations, warrants, and orders were still issued in the name of the Crown, but the judgments and decisions were those of ministers, not the king. The legal supremacy of Parliament, established in the Glorious Revolution, had evolved into the practical supremacy of Whig personalities who enjoyed the confidence of the Commons. The Commons became the keystone of the British government, with the Lords and Crown the supporting cast.

Taxes and Debt

A

seq uenc e of wars resulted in rising taxation and national debt in Great Britain.6 At the start of the era in 1739, the national debt amounted to about 46.4 million, a reduction from 52.1 million on December 31, 1727. The higher debt had resulted from a brief war with Spain in 1718–21. Thereafter the national debt grew rapidly. At the end of 1748, following the wars of the Right of Search and the Austrian Succession, it amounted to 78.3 million. The brief six-year respite from war permitted the government to reduce it to 72.5 million. The Seven Years’ War more than doubled that figure to 146.7 million. The wars of the Right of Search and Austrian Succession cost 43.7 million, adding 29.2 million to the national debt. The Seven Years’ War 6 Stephen Dowell, A History of Taxation and Taxes in England: From the Earliest Times to the Year 1885, vol. 2, Taxation from the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 453, and Sir John Sinclair, The History of the Public Revenue of the British Empire (New York: A. M. Kelley, 1966), 1:439, 447, 460, 465 (fi rst printed in London in 1803 by A. Strahan, Printers-Street). Taxes and debt arising from the wars in the colonies are treated in chapters 21–23.

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cost 82.6 million, adding 59.6 million to the debt. Stephen Dowell computed the cost of each war by deducting the total amount of average annual peacetime appropriations for the navy, army, and ordnance services from the total expenditure for those ser vices during the entire period of the war.7 The wars incurred both additional debt and higher taxes. Annual net receipts of the public income of Great Britain of 5.8 million in 1739 rose to 7.2 million in 1758, fell during the interwar respite to 6.8 million in 1754, but increased substantially to a peak of 9.6 million in 1761.8 A portion of the higher taxes and borrowing was used to pay interest, which rose from just over 2 million in 1739 to 2.8 million in 1748 and 4.7 million in 1763.9 The British government intensified its enforcement of the Molasses Act during the French and Indian War, largely to stop trade with the enemy. Only 5,686 sterling was collected in duties between 1734 and 1755, an annual average of 259. In the next seven years through 1762, 4,375 was collected, a much higher annual average of 625. In the two years 1760 and 1761, special efforts to enforce the act yielded 1,170 and 1,189, respectively.10 The revenue from the Molasses Act was trivial in the context of rising British spending and debt. Its principal effect was to crimp the West Indian trade of merchants in New York and Massachusetts. The Sugar Act of 1764 substantially reduced the relatively heavy rate of duty to the level of customary bribes of smugglers to royal officials. The act had the twofold beneficial effects of stimulating trade and increasing the annual revenue from the duty on molasses. The enormous British national debt and heavy taxes levied on Britons prompted Parliament to ask if a revenue might be found in the colonies to help pay for the cost of the long war that freed British colonials from any further French threat. Debate on this issue and acts of Parliament began in earnest in 1764.

New Regulations

F

e w addi t ion s were made to Britain’s commercial policy. In 1750 Parliament passed the Iron Act. The act’s stated purpose was to encourage the production of pig and bar iron in the colonies for use in the 7

Dowell, A History of Taxation and Taxes in England, 2:535. B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance I: Net Receipts of the Public Income—Great Britain, 1688–1801,” 576. 9 Mitchell, British Historical Statistics, table: “Public Finance 2: Net Public Expenditure— Great Britain 1688–1801,” 579. 10 George Louis Beer, British Colonial Policy, 1754–1765 (Gloucester, MA: Peter Smith, 1958), 115–17. First published in 1907 by Macmillan. 8

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manufactures of the mother country. It permitted duty-free import of pig and bar iron into Britain and forbade the erection of rolling, slitting, and plating mills and of steel furnaces for the making of secondary iron products. In 1750, exports of pig iron from the colonies to Britain amounted to 2,924 tons of 2,240 pounds. During 1751–60, total exports of colonial pig iron to Britain came to 29,901 tons, an annual average of 2,990 tons, no perceptible increase over that of 1750. Indeed, during 1741–50, the decade preceding the Iron Act, colonial exports of pig iron to Britain totaled 23,512 tons, an annual average of 2,351. During 1761–63, annual pig iron exports were 2,371 tons.11 The act clearly did not produce the desired results. It should be noted that similar prohibitions were not imposed on shipbuilding or on the manufacture of shoes, paper, glass, or other similar objects of colonial industry.12 A second measure was the Currency Act of 1751.13 For many years, the British government had been concerned about the rising stock of paper money issued in New England with its concomitant depreciation against silver and sterling. It instructed governors to include suspending measures in all colonial currency laws, but without the force of parliamentary law, the Crown was unable to curtail the printing of paper money in several of the colonies, especially in Rhode Island as its laws were not subject to royal disallowance. With the conclusion of King George’s War, a hard-money faction in Massachusetts pushed to use parliamentary reimbursement of war expenses to retire the colony’s paper currency, but this required restrictions on the

11 Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg811–15: “Pig Iron Imported into England from British North America, by Colony: 1723–1776,” S-737–38. 12 Charles McLean Andrews, The Colonial Period of American History, vol. 4, England’s Commercial and Colonial Policy (New Haven and London: Yale University Press, 1964), 349n4, and Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 47–48. (First printed by the University of Pennsylvania Press in 1951.) Both authors cite the work of Arthur Cecil Bining, British Regulation of the Colonial Iron Industry (Philadelphia: University of Pennsylvania Press, 1933), on the fact that there were more furnaces in operation in America than in Britain at the onset of the Revolution, that total output of iron products in America exceeded that of Britain and Wales, and that most of the pots, pans, and other ironware in use in the colonies were fabricated in America. Bining did not report a single case of an ironwork that was discontinued or of a slitting mill or steel furnace destroyed, or even an attempted prosecution of an ironworks operator. Dickerson could not fi nd a single case of prosecution in violation of the Iron Act in the trea sury papers in the British Public Record Office. 13 Joseph Albert Ernst, Money and Politics in America, 1755–1775: A Study in the Currency Act of 1764 and the Political Economy of Revolution (Chapel Hill: University of North Carolina Press, 1973), 37–43, and “The Currency Act of 1751,” http://www.etext.lib.virginia.edu/users/ brock/ curract1751.htm (May 1, 2001). The effect of the act on New England appears in chapter 21.

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acceptability of paper bills of other colonies, especially those of Rhode Island. Much of the cash received from Parliament drained into other colonies or into hiding, while the paper currency of Rhode Island and other colonies flowed into Massachusetts. Banning all outside paper currency from circulation in Massachusetts required parliamentary intervention. The final straw was a loan office issue of 50,000 in 1750 by Rhode Island. Old merchant aristocrats of Rhode Island, who favored limited, wellbacked issues of currency, joined hard-money merchants in Massachusetts and British merchants in urging action in London. The latter had long sought stable colonial money to ensure the real value of sterling debts payable in America in colonial currency. Parliament responded with the Currency Act of 1751. It covered the regional trade area affected by Rhode Island’s paper bills. The act stipulated that bills of credit could henceforth be issued only to fund military aid in time of war and invasion or in “current ser vice” of government. Paragraph 3 of the act required that any new paper bills issued to fund the current ser vice of the four New England colonies had to be secured with revenues to call in and retire them within a “short reasonable Time not exceeding the Space of two Years” from the date of the respective acts whereby the bills were created and issued. Paragraph 4 required that bills issued to meet the sudden and extraordinary emergencies of war and invasion were to be retired within five years. New bills were not to be legal tender in payment of private obligations. Existing paper bills could not be extended beyond their original redemption periods. An act of Parliament bound Rhode Island where royal instructions could not. The act did not apply to the middle or southern colonies, whose currencies were relatively stable against sterling. Several minor amendments were made to the Navigation Acts. These included direct colonial importation of salt from Europe for the fisheries of Pennsylvania and New York in 1727 and 1730, respectively, and indigo from America was exempted from direct shipment to Britain in 1734 (similar to that accorded rice).14

The Colonial Constitution

T

h e on e important constitutional change in the thirteen colonies during 1739–63 was the transformation from trusteeship to royal governance in Georgia.15 By the terms of the charter, the political powers of the trustees were set to expire on June 9, 1753. However, they had become weary 14 Lawrence A. Harper, The English Navigation Laws: A Seventeenth-Century Experiment in Social Engineering (New York: Columbia University Press, 1939), 392, 401. 15 Kenneth Coleman, Colonial Georgia: A History (New York: Charles Scribner’s Sons, 1976), 174–79.

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of their responsibilities several years before the deadline, with their interest markedly declining after Parliament refused a request for funds to sustain their administration in 1751. The trustees surrendered their charter rights to the Crown on June 23, 1752, a year before the deadline. It took the British government two years to dispatch royal appointees to the colony, who took up their duties on October 31, 1754. Royal government followed the well-established pattern of other royal colonies with an appointed governor exercising executive powers of administration, vice-admiral authority over maritime cases, and commander of the colony’s militia. He was assisted in his administration by a royally appointed council, which also served as the upper house in the colonial legislature. The system was completed with the establishment of an elected twenty-five-member Commons House of Assembly.

The Rise of Local Assemblies

T

he era of salutary neglect had given the elected lower houses of the colonial legislatures the opportunity to increase their power over a broad range of matters. These included such matters as issuing paper bills, examining public accounts, stipulating public expenditures, initiating appropriations, setting the salaries of public officials and fees for commercial services, determining the membership and internal proceedings of their houses, appointing colonial agents in London, overseeing military and Indian affairs, establishing courts and appointing judges, and controlling church offices. In some colonies, governors had begun to feel like the handmaidens of elected assemblies, with council members often siding with elected delegates. Only in a few cases had a tax been authorized to provide a permanent salary for governors, which left them dependent on good relations with elected assemblymen. Many governors eager to acquire land in the colonies often connived with local elites to support colonial initiatives against royal instructions. The era of chronic warfare required colonial cooperation in Britain’s wars with Spain, France, and their Indian allies. British conduct of the wars in North America and the Caribbean depended partly on colonial supplies, manpower, and some financing of local expenditures. London could scarcely make demands on independent-minded colonial assemblies if it wished their full, or even halfhearted, support. Much as the king lost his prerogative in appointing his ministers, so too royal governors lost their ability to issue royal orders without first securing the concurrence of their councils and elected assemblies. Lower houses in the colonies mimicked the House of Commons in assertion of their rights, with governors fighting a rearguard action in defense of royal prerogative. Even acts of Parliament, which carried the greater force of law over royal orders, were unable to secure the enforcement of such measures as the earlier Molasses Act and the Iron Act. [ 572 ]

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Voter Qualifications and Turnout

A

part f r om Connecticut and Rhode Island, where governors and members of the upper house were also chosen by ballot, the lower houses of all thirteen colonies were selected by voters who met a property qualification. In 1763 this consisted of the 40s. freehold that reflected ownership of property assessed at 40 in Massachusetts, Connecticut, Rhode Island, Delaware, and Maryland, a slightly higher 50 freehold in New Hampshire, New Jersey, and Pennsylvania, or fifty acres of land in the Carolinas and Georgia, with a smaller twenty-five acres of developed or one hundred acres of undeveloped land in Virginia. Some colonies permitted either a specific assessment or acreage. Urban residents often had to meet such special qualifications as freeman status in New York, or tenant in other towns. Those generally excluded from the franchise included women, men under the age of twenty-one, Catholics and Jews, most free blacks and Indians, white servants, aliens or foreigners, and non-residents.16 Estimates of eligibility to vote during 1739–63 varied among the colonies. Some 50–60 percent of adult white males met voter requirements in New England, about half in New York and Pennsylvania, somewhat less than half in Maryland, as much as 80 percent in Virginia, and a majority in the Carolinas and Georgia, with two-thirds eligible in Charleston. Eligibility substantially increased in New England with the abolition of church membership following the Glorious Revolution. Eligibility to vote in the colonies far exceeded that in Great Britain. No more than one in twelve adult males was eligible to vote in Britain during the eighteenth century, a fraction that was not increased to one in seven until the Reform Act of 1832. Much broader land ownership in the colonies enabled half or more of the male population to meet voter requirements, proportionally six times higher than the eligibility rate in Britain. Colonial legislators had cause to believe that their assemblies were as legitimate, if not more so, than Parliament itself, which represented a far narrower class of privileged voters in Britain. Turnout among eligible voters varied widely. During four elections held between 1758 and 1763 in Rhode Island, it averaged around 45 percent, but a much lower 20–25 percent in Connecticut in three elections of 1740, 1748, and 1755. In five elections in New York for which specific county data exist, turnout in New York County ranged from low of 10.7 percent in 1745 to a high of 56.1 percent in 1763. Turnout varied between 14.4 and 37.1 percent in New Jersey in four elections between 1738 and 1761, and rarely exceeded 30

16 Robert J. Dinkin, Voting in Provincial America: A Study of Elections in the Thirteen Colonies, 1689–1776 (Westport, CT, and London: Greenwood Press, 1977), 28–40.

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percent in annual elections in Pennsylvania. Virginia enjoyed relatively higher average turnout of 37.4 to 48.8 percent in four contested elections of 1748, 1752, 1755, and 1758.17

Summary

T

he r e pl ac ement of a quarter century of peace with nearly the same of war produced much greater change in Britain than in the colonies. Taxes, borrowing, and debt dramatically increased in Britain. The burden of defeating Spain and France, which ended the French threat to the colonists, was borne largely by British forces and taxpayers. Indeed, many colonists prospered by supplying British forces and seizing enemy vessels. All the while, the colonists continued to build their provincial political institutions, with lower houses becoming miniature houses of commons. 17

Dinkin, Voting in Provincial America, 144–81.

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c h ap t e r 2 1
Taxation of the New England Colonies, 1739–1763

T

h e p opul at ion of New England continued its rapid growth. Having doubled during the era of salutary neglect, it grew another 64 percent between 1739 and 1763, from 282,442 to 462,678. Rising population put increased pressure on the limited land available for settlement and farming in Massachusetts, Connecticut, and Rhode Island. Available acreage per family in Connecticut had steadily declined from 486 acres in 1680 to 208 in 1740. It fell further to 131 by 1760.1 The relative shortage of land resulted in a shift from land-extensive grain farming to more land-intensive meat and dairy production. By 1750 all of Connecticut’s lands were settled, with Massachusetts and Rhode Island similarly affected. Production for domestic consumption in a largely self-sufficient economy was transformed into one oriented for exports. After 1760, the sons of Connecticut farmers left the colony in search of land in northern New York, New Hampshire, and what became Vermont to establish freeholds of their own. The era of chronic warfare during 1739–63 featured two tax systems in New England. The fi rst was dominated by easy money. Bills of credit backed with deferred taxes or that generated interest underwrote a large share of colonial administration, especially in Rhode Island, during 1739–51. The second was the restoration of a largely tax-fi nanced system of public expenditure during 1754–63, with new paper money limited to war time exigencies, and reestablishment of the hard-money, pre-bills, specie standard. The colonies received substantial reimbursement for the cost of their participation in King George’s War and the French and Indian War, the fi rst underwriting the redemption of paper money and its substitution with silver in Massachusetts, followed later in the other three colonies. The composition of taxation remained largely unchanged, but reached historically high levels during the French and Indian War, 1 Bruce C. Daniels, “Economic Development in Colonial and Revolutionary Connecticut: An Overview,” William and Mary Quarterly, 3rd ser., 37, no. 3 (July 1980): 432. See also Albert Laverne Olson, Agricultural Economy and the Population in Eighteenth-Century Connecticut (New Haven: Yale University for the Tercentenary Commission of the State of Connecticut, 1935).

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approaching a third of British per capita levels in Massachusetts and Connecticut and a sixth in Rhode Island and New Hampshire. Recourse to new taxation was tried in a few instances. Well before British attempts to impose a stamp tax on the colonies in 1765, Massachusetts enacted a stamp tax beginning March 30, 1755, but it was widely disregarded, raised less than a thousand pounds Massachusetts currency, and allowed to lapse after two years.

Money

T

a b l e 1 7. 1 shows that the stock of Massachusetts paper bills stabilized in the 300,000 range in the 1730s, fluctuating with the pace of redemption and reissue. 2 Small loan office issues of 1714, 1716, 1721, and 1728 totaling 260,000 were sunk by 1741/42. Participation in King George’s War brought about a mountainous rise in new paper, to 447,564 in 1743, 818,143 in 1745, and peaking at 2,456,678 in 1749 (see table 21.1). Parliament’s reimbursement of the colony’s expenses during the war was used to redeem almost all of this paper, leaving only 160,144 in circulation in 1751. Connecticut’s stock of bills had stabilized in the 50,000 range in the 1730s. It, too, rose markedly during war time, more than tripling from 50,883 in 1739 to 168,137 in 1740, peaking at 511,943 in 1746. Thereafter it began a gradual decline, falling to 379,844 in 1751, with Connecticut lagging behind Massachusetts in the establishment of a specie standard. Rhode Island and New Hampshire exhibited different patterns. Rhode Island’s government, with a locally elected governor who did not take instructions from the Crown, continued to expand its emissions of paper money. Its stock of 376,202 in 1739 rose steadily through most of the 1740s to 736,047 in 1748. After a brief decline to 579,891 in 1750, new issues raised the total to 795,811 in 1751. This growth, which continued as Massachusetts 2

The treatment of money in this chapter draws from Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975); John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978); Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997); Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld .com/colonial _currency.htm (June 3, 2003); Joseph B. Felt, Historical Account of Massachusetts Currency (New York: Burt Franklin American Classics in History and Social Science, 1968) (fi rst published in Boston in 1839); Roger W. Weiss, “The Colonial Monetary Standard of Massachusetts,” Economic History Review, new ser., 27, no. 4 (November 1974): 577–92; and John Blanchard MacInnes, “Rhode Island Bills of Public Credit, 1710–1755” (Ph.D. thesis, Brown University, 1952).

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Taxation of the New England Colonies, 1739–1763 tabl e . New England Bills of Credit Outstanding ( Old Tenor), Silver Price per Ounce, and Sterling Exchange, 1739–1751

Year

Mass.

R.I.

Conn.

N.H.

Total

1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750 1751

365,237 326,412 359,919 383,118 447,564 456,427 818,143 1,581,910 2,142,725 2,323,225 2,456,678 2,304,394 160,144

376,202 370,035 466,061 455,435 454,797 609,082 642,258 684,295 723,053 736,047 620,600 579,891 795,811

50,883 168,137 153,098 149,450 146,381 204,405 322,623 511,943 507,917 500,128 480,855 476,672 379,844

22,985 23,677 23,677 38,760 43,880 142,277 250,277 488,879 480,439 475,480 475,480 475,480 475,480

815,307 888,261 1,022,755 1,026,763 1,094,365 1,412,191 2,033,301 3,267,027 3,854,134 4,034,880 4,033,613 3,836,437 1,811,279

Total Including Merchants Notes

892,307 932,261 1,046,755 1,070,763 1,138,365

Silver Price per Ounce

29s. 2d. 28s. 7d. 28s. 3d. 28s. 3d. 31s. 33s. 36s. 43s. 56s. 10d. 65s. 5d. 58s. 53s. 9d. 50s.

Sterling Rate

500.00 525.00 548.44 550.28 550.70 588.61 644.79 642.50 925.00 912.50 1,033.33

Sources: Leslie V. Brock, Th e Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), table 2 (revised), part B, 591–92, table 3, interspersed between pages 31 and 32; corrected fi gures for 1736 and 1739 inserted by Ron Michener of the Department of Economics of the University of Virginia in Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld.com/colonial _currency.htm (June 3, 2003), and John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), table 3.1, 140–41.

converted to a specie standard, prompted Britain’s passage of the Currency Act of 1751. New Hampshire, on the frontier of the war with Canada, experienced a more than twentyfold expansion in bills. They rose from a meager 22,985 in 1739 to 488,879 in 1746, falling slightly to 475,480 two years later, where they remained through 1751. Table 21.1 displays the annual stock of outstanding New England bills of credit, the price of silver per ounce of New England Old Tenor (OT) currency, and its sterling exchange rate. The currencies of the four colonies traded at par during 1739–49, during which they can be treated as a single monetary unit. The stock nearly quintupled between 1739 and 1749, from 815,307 to 4,033,613 OT. Beginning in 1750, Massachusetts diverged from the other three colonies, replacing its paper bills with specie, with a corresponding appreciation in its exchange rate from 1,033.33 Massachusetts currency to 100 sterling in 1749 to 137.33 in 1750 and 133.33, the proclamation rate, in 1751. The silver standard at the proclamation rate was called Massachusetts Lawful Money. [ 577 ]

chap t er 21

Before converting to specie, Massachusetts issued three differently valued bills of credit.3 Bills that became known as Old Tenor had been issued since 1690. The act of February 9, 1737, authorized the issue of 9,000 in New Tenor (NT) bills, or threefold Old Tenor (3 OT for 1 NT), receivable at the Treasury for 6s. 8d. per ounce of silver. These bills were subsequently known as Middle Tenor (MT). The provincial treasurer kept accounts in both OT and MT from 1740/41 to January 1, 1753, when all outstanding balances were converted to Lawful Money (LM). A new denomination, Second New Tenor bills, later referred to simply as New Tenor, was issued on January 15, 1742, in the amount of 30,000. Second New Tenor bills were set equal to Old Tenor at a rate of 1 to 4. Second New Tenor bills were occasionally called New New Tenor. Amounts in Second New Tenor were entered as Last Emission (LE) currency in the treasurer’s statements from 1744/45 to January 1, 1753 (see table 21.5). The numbers in table 21.1 are Old Tenor and the exchange rate against sterling is expressed in Old Tenor, even though most of the paper issued after 1739 was in Middle and Second New Tenor (LE).4 Connecticut and Rhode Island began to issue bills in New Tenor in 1740, with New Hampshire following suit in 1742. The General Court set the legal value of coined silver, generally fullweight Spanish pieces of eight used for tax payments through 1741/42 in Massachusetts, at 6s. 8d. (80d.) Massachusetts currency per ounce of silver content, the coins themselves worth 6s. (72d.), with gold coins at 4 18s. per ounce of gold. For bills issued between 1744 and 1749, the legal value of a piece of eight was devalued against silver to 6s. 8d. (80d.), which valued silver at 7s. 6d. (90d.) per troy ounce, a depreciation of one-ninth Massachusetts currency against silver during 1744–49. Gold coins were proportionally devalued to 5 10s. 3d. per ounce of gold. While these values were assigned to gold and silver for tax payments, most taxes were paid in paper bills. Specie had long since diverged in price from its legal value. The price of an ounce of silver in 1739 was 29s. 2d. Massachusetts OT. It continued to rise, reaching 65s. 5d. in 1748, a more than 50 percent further depreciation of the colony’s OT bills. The legally stated value of the colony’s bills in gold and silver never remotely approximated their market price. Effective March 31, 1750, the General Court revalued an ounce of silver to 6s. 8d. (80d.) and a piece of eight to 6s. (72d.), which

3

Newman, Early Paper Money of America, 193–202. Old habits die hard. Even though bills were issued in Second New Tenor (LE) in Massachusetts from January 1742 and entered in that denomination in the treasurer’s statements (the statements are missing for 1742/44), most people continued to keep their accounts in Old Tenor, which was an exchange of slightly more than 1,000 Massachusetts OT currency to 100 sterling by 1749. Quotations of exchange in Middle and New Tenor for commercial purposes largely disappeared. 4

[ 578 ]

Taxation of the New England Colonies, 1739–1763

established Queen Anne’s proclamation rate of 133.33 against the sterling value of a piece of eight at 4s. 6d. (54d.) From its revaluation until the Revolution, Massachusetts Lawful Money remained stable. The redemption and replacement of bills of credit with silver coin and the revaluation of specie were based on Massachusetts’s Currency Reform Act of 1749.5 For their participation in King George’s War in taking and securing Cape Breton and a planned expedition to Canada, Parliament granted the four New England colonies reimbursement of 235,749 sterling in 1748 and 398,818 in 1750, a total of 634,567. Massachusetts received 78 percent of the first tranche, 183,649 2s. 71 ⁄2d., which it used to redeem all outstanding bills of credit within one year after March 31, 1750. The colony exchanged one full weight Spanish dollar for 45s. (540d.) Old Tenor and 11s. 3d. (135d.) Middle Tenor and Second New Tenor notes.6 In 1750 the price of an ounce of silver in Boston was 53s. 9d. (645d.) OT, which put the value of a Spanish dollar at 580d. Those who immediately exchanged paper bills for Spanish dollars received about 7 percent more in the silver content of Spanish coins than they would have in buying silver in Boston at the then market price. On March 31, 1751, all right of redemption or exchange of silver for paper bills ceased. By that date the price of an ounce of silver fell to 50s. (600d.), which valued the silver content of a Spanish dollar at 540d., exactly the Lawful Money exchange rate in the act. Massachusetts bills in the hands of inhabitants of the three neighboring New England colonies could be exchanged by their governments. Massachusetts used its 65 percent share of the second tranche of 1750, about 259,230, to relieve its residents of a direct tax levy in 1750/51. Under the 1749 Massachusetts currency reform, all debts and contracts from March 31, 1750, onward would be payable only in silver coin, and any court judgments brought for the recovery of debts would be converted into silver coin at the specified exchange rate for the different tenors. A tax of 75,000 to be levied in 1749/50, payable in bills of credit, was intended to retire the bulk of any remaining outstanding bills. If 5 The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Albert J. Wright, 1878), 3:430–41, and “Massachusetts’ Currency Reform Act (1749),” http:// etext.lib.virginia.edu/users/ brock/webdoc11.html (August 27, 2004). 6 Rapid depreciation of Massachusetts currency prompted the General Court to issue highervalued bills. As noted in the text, Middle and New Tenor notes were issued, respectively, at rates of three and four Old Tenor. The circulation of three different tenors required three different exchange rates for silver depending on the tenor of the bills redeemed in keeping with the Currency Reform Act of 1749, and three different sets of values in the treasurer’s statements from 1742 to 1753. Newman, Early Paper Money of America, 193–200. Details of British reimbursement for the cost of New England’s participation in the wars with France appear in Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 38–75.

[ 579 ]

chap t er 21

necessary, two further taxes totaling 90,000 in 1750/51 would be assessed to sink the last outstanding bills. The second tranche of reimbursement eliminated that requirement. To prevent the circulation of Connecticut, Rhode Island, and New Hampshire bills in Massachusetts, the 1749 act imposed a fine of 50 payable in silver coin on Massachusetts residents found guilty of discharging any contract or bargain in taking or paying bills of credit of those three colonies; this clause would lapse if their governments drew in all their bills before March 31, 1754. As noted, British reimbursement to New England totaled 634,567 sterling, worth 6,557,322 New England OT currency.7 Massachusetts used its entire allotment of 1748 to convert to specie, while the other three New England colonies did not. With Massachusetts on a silver standard, the era of a single-valued New England currency temporarily came to an end. Connecticut delayed its conversion until November 1, 1756, while Rhode Island and New Hampshire continued to use inflated paper bills until 1763.8 In 1749, the exchange rate of the three non-specie colonies’ bills against sterling ranged between 1,103.23 for Connecticut and 1,161.29 for Rhode Island. The currency of Connecticut continued to depreciate, falling to 1,645.16 in 1755, before its revaluation to the proclamation rate in 1756. New Hampshire and Rhode Island both fell to 3,111.29 in 1763, with Rhode Island converting to the proclamation rate in 1764 and New Hampshire in 1765. In 1765 New England again became a common currency unit.9 The conversion of paper to silver in Massachusetts initially transformed its system of deferred collection of taxes to sink paper bills to one that relied on more timely collection, although arrears were a chronic problem. The peak years of the French and Indian War in the late 1750s brought a return to deferred taxes to ensure the redemption of a new form of paper, treasurer’s certificates (discussed below). The other three colonies continued to issue bills of credit backed with deferred taxes. The Massachusetts currency reform largely achieved its objective. Most bills were redeemed by June 12, 1751, with the stragglers drawn in by 1754. However, a planned expedition to Canada in 1750 and the eruption of war in 1754 required more funds than could be collected in current taxes. To remedy 7

Leo F. Stock, ed., Proceedings and Debates of the British Parliaments Respecting North America, vol. 5 (1739–1754) (Washington, DC: Carnegie Institution, 1941), 240, 254, 264, 267, 300, 414–18, cited in Brock, “Colonial Currency, Prices, and Exchange Rates,” table interspersed between pages 9 and 10. The OT value of the sterling reimbursement was based on a rate of exchange of 1,033.33 New England currency to 100 sterling in London in 1749. 8 Details of the currency policies of Connecticut, Rhode Island, and New Hampshire after 1749 are in McCusker, Money and Exchange, 135–36, 153–55. 9 The British Currency Act of 1764 that required uniform adherence to the proclamation rate for all the colonies is discussed in chapter 24.

[ 580 ]

Taxation of the New England Colonies, 1739–1763

the shortfall, the treasurer was authorized to borrow whatever additional funds were required to finance ordinary expenditure and the war effort. Between 1750 and 1764 the treasurer sold certificates bearing interest of 6 percent to those who loaned specie to the government. The certificates circulated in business but were not accorded legal tender status.10 Payment of interest and timely redemption ensured their credibility. Amounts borrowed ranged from a low of 956 Massachusetts Lawful Money in 1753 to a high of 211,346 in 1760. The outstanding stock peaked at 505,265 in 1761.11 Cancellation through burning exceeded new sums borrowed in 1757/58 and 1761/62. After its return to the specie standard, the money supply in Massachusetts consisted of silver and gold coins, treasurer’s certificates, and such other circulating media as bills of exchange. The maintenance of treasurer’s certificates at the proclamation rate differentiated them from the preceding bills of credit that underwent marked depreciation. Annual grants from Parliament to reimburse colonial expenses during the war provided the equivalent of partial sterling backing for the certificates, making them indirectly equivalent to Bank of England notes or British government debt. Reimbursement was considered in Britain as early as December 1755. It was followed by an announcement from the Crown on January 28, 1756, that Parliament intended a gift of 115,000 sterling to the colonies to encourage their participation in the war. Of this, Massachusetts received 68,744, Connecticut 25,000, Rhode Island 6,684, with the remainder divided up among New Hampshire, New York, and New Jersey. Later another 50,000 was allotted to Virginia, North Carolina, and South Carolina. To reimburse the colonies for the 1756 campaign, Parliament voted 91,108 sterling, with Massachusetts receiving 27,380, Connecticut, 13,736, Virginia, 32,269, and the two Carolinas 17,723.12 During the three years 1758–60, Parliament granted 200,000 sterling, a total of 600,000. Rhode Island received none for 1757 and 1758. None was allocated to Maryland, North Carolina, or South Carolina. In the latter two years, Massachusetts received about a third, 65,724 and 60,000, respectively. A final grant of 133,333 sterling was appropriated in 1761, of which Massachusetts received 42,774, Connecticut, 30,782, Rhode Island, 6,082, New Hampshire, 6,749, and the balance to New York, New Jersey, Virginia, and North Carolina, with none for Maryland, Pennsylvania, or South Carolina (see chapters 22 and 23). Altogether, between 1756 and 1762, Parliament voted 1,072,784 sterling (1,430,343 Lawful or Proclamation Money). The treasurer 10

Felt, Massachusetts Currency, 131. Brock, Currency of the American Colonies, 596. The outstanding stock of treasurer’s certificates rapidly fell from 490,181 Lawful Money in 1762/63 to 387,009 in 1763/64, 211,000 in 1766/67, 100,281 in 1769/70, and 56,170 in 1773/74. 12 Gipson, The Triumphant Empire, 38–75. 11

[ 581 ]

chap t er 21

of Massachusetts entered the amount of Lawful Money received from bills of exchange drawn on the sterling grants in his statements (see column 10 in table 21.6). The grants combined with timely taxation liquidated most of New England’s public debt by 1765.

Taxation in Massachusetts, 1739–1763

U

n t i l 1 749 , taxation in Massachusetts paralleled that of the preceding era. Each year the General Court stipulated the amount of taxes it would take to redeem bills of credit that became due. It continued the same mix of direct taxes on polls and estates and indirect taxes of excises, duties, and tonnage, with a two-year experiment of a stamp tax in the mid-1750s. After the colony’s conversion to specie, taxes were assessed to redeem the interest-bearing loans secured through treasurer’s certificates. To illustrate this process, the authorization on November 25, 1741, to issue 30,000 NT in bills of credit was matched with a tax levy of 7,500 on polls and estates in 1742, and 6,666 13s. 4d. in each of 1744, 1745, and 1746.13 The intent was to draw in and burn the 30,000 in bills with taxes paid in them. Bills issued in 1742 were matched with four annual installments of taxes in 1742–45; an issue of 1744 carried deferments into 1746. Mounting war expenses required larger issues, with taxes increasingly deferred. Taxes for an issue of 70,000 in May 1745 were deferred through 1752. Three further issues in 1745 were matched with deferrals through 1756.14 These obligations eased with British grants in 1748 and 1750. From 1751 through 1755, revenue consisted of routine renewal of indirect taxes along with an annual tax on polls and estates. Rates of tax were adjusted up or down depending on the amount of money required to redeem treasurer’s certificates that came due. In the early years of issuing certificates, the tax on polls and estates was due within one or two years. In every case the levies were somewhat larger than the size of the public loans to ensure confidence among creditors in the new paper. As war expenses mounted in 1758, taxes for redeeming certificates were deferred for three years to 1751. 13

To equate the quantity of bills of credit issued in New Tenor with the rise in the outstanding stock of OT bills in Massachusetts in table 21.1, it is necessary to multiply each issue in column 11 by four to convert New Tenor to Old Tenor. 14 Acts and Resolves of Massachusetts Bay (Boston: Wright and Potter, state printer, 1874), 2:1077–83, 3:8–10, 29–31, 112–14, 148–50, 191–92, 204–5, 244–46, 249–50, 260–61. A summary statistical treatment of direct tax levies in Massachusetts, but not the actual proceeds of direct taxes, appears in Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3 (Boston: T. R. Marvin, 1847), 221–581. Data for 1739–63 are on pages 342 and 410. Some of Felt’s numbers differ from those reported in Acts and Resolves of Massachusetts Bay. These are noted in the text. The volume of levies routinely exceeded actual receipts, the difference consisting of arrears.

[ 582 ]

Taxation of the New England Colonies, 1739–1763

In 1760 they were deferred for four years through 1764, but British grants made it possible to reduce the lag to two years. From 1761, pressure on the provincial budget eased. Peak issue of 178,214 of certificates in 1760 fell to 49,100 in 1761, rebounded to 77,951 in 1762 and 93,650 in 1763. In each case they were redeemed within two years.15

Direct Taxes

T

able 21.2 summarizes direct tax levies during 1739–63. Taxes were generally enacted in a session of the General Court beginning the last week in May and were scheduled to run from mid-year through the next mid-year, with multiple levies enacted in some years. Except for 1750/51, in which the grant of 1750 eliminated that year’s need for a levy, the court apportioned direct taxes to the counties and towns for collection and remittance. Assessors were to collect specific sums in provincial tax, pro-rata fractions of the tax for representatives’ pay, fines for no-shows to sessions of the court, and, in several later years, taxes on Quakers for soldiers in lieu of their ser vice. Direct taxes were levied on polls and property. The poll on males aged sixteen years and over ranged from a low of 18d. (21d. including representative’s pay) in 1753/54 to a high of 19s. 6d. (20s. 5d. including representative’s pay) in 1748/49. Between 1739 and 1758, the rate on property was set at 1d./ assessed valuation, with values on specific items of property set in law. In 1753/54, the rate was reduced to 1 ⁄2d. Due to rising war time expenditures, the rate was increased to 1s./ from 1758/59 through the balance of the period.16 Assessors were instructed to adjust the property rate up or down as required to make up the difference between the specified target revenue and sums collected in polls. Harvard College personnel, ministers, and grammar-school teachers continued to be exempt from taxation. Table 21.2 shows the variations in annual levies, the poll rate, and the estimated per capita direct taxes assuming full compliance. The table links levels and rates of tax with the volume of bills issued and net new annual issues (new issues minus cancellations) of treasurer’s certificates. The heaviest levies were voted in the peak war years of 1748/49 and 1758/63. In three of 15 Acts and Resolves of Massachusetts Bay, 3:513–15, 531–32, 606–7, 717–19, 732–33, 790–91, 800–801, 812–13, 861–63, 873–74, 883–84, 893–96, 898–900, 930–32, 979–81, 994, 1022–23, 1048– 49; Acts and Resolves of Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 4:160–62, 199–200, 215–17, 270–71, 335, 371, 375–77, 460–61, 467–70, 491–92, 538–39, 578–80, 602–3, 623. 16 Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” 9, reports continued rates of 1d./ instead of the higher rate of 12d./ that appears in table 21.2 beginning with fiscal year 1758/59, which are recorded in the colonial records. Felt states poll and property tax of 28,000 in 1743/44, whereas I found the figure of 20,000 in the Acts and Resolves of Massachusetts Bay. Felt does not include in his tables the additional pro-rata poll rate required to collect taxes for reimbursing representatives’ pay.

[ 583 ]

chap t er 21 tabl e . Massachusetts Apportioned Direct Taxes, 1739/40–1762/63 (Massachusetts Currency) c ol u m n 1

Year

1739/40 1740/41 1741/42 1742/43 1743/44 1744/45 1745/46 1746/47 1747/48 1748/49 1749/50 1750/51 1751/52 1752/53 1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

colum n 2

c olum n 3

c olumn 4

column 5

column 6

Poll and Property Tax (.s.d.)

Representatives Pay (.s.d.)

No-Show Fine (.s.d.)

Tax for Soldiers in Lieu of Quakers

Males 16+ Poll Rate

18,000.0.0 24,000.0.0 9,000.0.0 20,000.0.0 20,000.0.0 25,000.0.0 30,000.0.0 28,499.7.6 39,103.13.7 91,000.0.0 75,000.0.0 n.a. 30,394,8.8 25,000.0.0 9,000.0.0 18,000.0.0 54,000.0.0 54,000.0.0 81,000.0.0 82,190.6.8 94,780.3.2 94,877.11.0 75,031.1.7 75,000.0.0

1,674.17.4 1,674.17.4

130.0.0 136.13.4

1,638.0.3 3,738.4.10 2,001.14.8 2,656.8.6 2,569.13.6 2,878.11.6 4,418.5.0

127.10 90.0.0

5,290.11.4 1,742.4.0 1,523.6.0 2,423.1.0 3,115.14.0 3,193.18.0 3,571.15.0 5,134.11.0 2,379.4.0 2,235.0.0 3,264.15.0

1,506.13.4 386.13.4 177.0.0 300.0.0 69.0.0 151.13.0

3,715.5.10 19.18.0

3s. 3d 6s. 2s. 3d. 4s. 2d. 4s. 2d. 5s. 3d. 6s. 3d. 6s. 3d. 8s. 4d. 19s. 6d. 16s. 1d. n.a. 5s. 4s. 2d. 1s. 6d. 3s. 9s. 9s. 13s. 6d. 13s. 6d. 15s. 8d. 15s. 8d. 10s. 10s.

Notes: 1. Bills of credit and taxes were assessed in Massachusetts OT until 1741/42. 2. Bills of credit issued in Massachusetts NT from 1741/42. 3. Treasurer’s certificates and taxes were assessed in LM from 1749/50. 4. An additional levy of 1,876 14s. to repair a town house and collect arrears in 1753/54. Sources: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Wright and Potter, state printer, 1874), 929–34, 952–61, 1024–33; Acts and Resolves of Massachusetts Bay (Boston: Albert J. Wright, 1878), 50–61, 86–98, 156–66, 223–33, 280–88, 345–54, 433–41, 582–92, 625–33, 684–93, 764–74, 848–57,

those six years levied per capita direct taxes surpassed one hundred pence, about a half-pound Massachusetts currency, exceeding eighty pence in five other years. If a reasonable estimate of per capita annual income was in the neighborhood of ten pounds, direct taxes would consume around 4–5 percent in the heavy years, but only 2–3 percent in the others. Arrears—back

[ 584 ]

Taxation of the New England Colonies, 1739–1763

c ol u m n 7 Rounded in Prop Additional Poll Rate

4d. 5d. 4d. 9d. 5d. 6d. 7d. 7d. 11d.

10d. 3d. 3d. 5d. 6d. 6d. 7d. 10d. 5d. 3d. 5d.

c ol u m n 8

c olum n 9

Total Poll Rate

Prop. Tax (d./)

3s. 7d. 6s. 5d. 2s. 3d. 4s. 6d. 4s. 11d. 5s. 8d. 6s. 9d. 6s. 10d. 8s. 11d. 20s. 5d. 16s. 1d.

1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 1d. n.a. 1d. 1d. 1d. 1d. 1d. 1d. 1d. 12d. 12d. 12d. 12d. 12d.

5s. 10d. 4s. 5d. 1s. 9d. 3s. 5d. 9s. 6d. 9s. 6d. 14s. 1d. 13s. 6d. 16s. 6d 16s. 1d. 10s. 3d. 10s. 5d.

c olum n 10

column 1 1

column 1 2

Per Cap. Direct Tax Mass. (d.)

Bills of Credit Issued to Be Redeemed in Future Taxes (.s.d.)

Net New Issues of Treasurer’s Certificates ()

31.4 39.9 13.5 32.0 34.3 38.2 45.2 42.1 55.8 124.3 95.7 43.9 32.4 14.7 23.9 65.7 66.4 94.5 90.2 112.1 104.4 82.4 83.2

3,538.10.3 80,000 30,000 37,000 20,000 86,037.10.0 210,000 185,400 67,000 100,000 18,500 9,000 18,614 (23,872) (4,614) 31,327 107,118 70,060 (13,543) 72,552 166,464 53,759 (23,933) 8,849

875–79, 967–75; Acts and Resolves of Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 6–15, 2–21, 76–77, 145–54, 247–61, 381–96, 472–83, 583–96, 645–58; and Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3 (Boston: T. R. Marvin, 1847) 342, 410. Net new issues of treasurer’s certificates are derived from Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, table interspersed between pages 13 and 14, http://www.studyworld.com/colonial _currency.htm (June 3, 2003).

taxes owed the treasurer (itemized in column 2 in both tables 21.5 and 21.6)—plagued tax collectors throughout the period. Between 1739/40 and 1741/42, taxes on polls and property could be paid in OT bills at a rate of three OT to one NT, NT bills, silver and gold coins, or hemp at 4d. and flax at 6d. a pound. Beginning in 1742/43, the list of

[ 585 ]

chap t er 21 tabl e . Massachusetts Duties and Tonnage, 1739/40–1762/63 (Massachusetts Currency) col u m n 1

col u mn 2

c olum n 3

c olum n 4

Year

Pipe West Indies Wine

Pipe Canary Malaga

10s. 6d. 10s. 6d. 8s. 8s. 8s. 8s. 8s. 20s. 20s. 20s. 20s. 10s. 8d. 18s. 18s. 24s. 15s. 15s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

16s. 16s. 12s. 12s. 12s. 9s. 6d. 9s. 6d. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 25s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

1739/40 1740/41 1741/42 1742/43 1743/44 1744/45 1745/46 1746/47 1747/48 1748/49 1749/50 1750/51 1751/52 1752/53 1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

c olumn 5

column 6

column 7

Pipe Madeira Passado

Pipe Others

Hogshead Rum 100 Gallons

Other Non-English Goods

12s. 8d. 12s. 8d. 9s. 6d. 9s. 6d. 9s. 6d. 9s. 6d. 9s. 6d. 25s. 25s. 25s. 25s. 12s. 18s. 18s. 24s. 15s. 15s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

12s. 8d. 12s. 8d. 9s. 6d. 9s. 6d. 9s. 6d. 9s. 6d. 9s. 6d. 25s. 25s. 25s. 25s. 12s. 18s. 18s. 24s. 15s. 15s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

10s. 6d. 10s. 6d. 8s. 8s. 8s. 8s. 8s. 20s. 20s. 20s. 20s. 9s. 15s. 15s. 20s. 13s. 4d. 13s. 4d. 13s. 4d. 8s. 8s. 8s. 8s. 8s. 8s.

4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s.

Sources: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Wright and Potter, state printer, 1874), 998–1001, 1044–50, 1097–1105; Acts and Resolves of Massachusetts Bay (Boston: Albert J. Wright, 1878), 81, 184, 281, 363–64, 403, 467–68, 518–19, 576–77, 618–19, 696–98, 757–59, 841–42, 932–33, 1002–3; Acts and Resolves of Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 79–84, 182–87, 298– 303, 407–12, 506–11, 608–14.

commodities acceptable in payment was greatly augmented with codfish, several iron products, corn, wheat, barley, several varieties of cloth, whalebone, oils, wax, wool, and leather at fi xed prices. Even after the currency reform of 1749, commodities remained acceptable for payment through 1756/57, but taxpayers had to bear the cost of transporting commodities to local tax collectors. The General Court applied grants from Parliament (column 10 in table 21.6) to abate taxes on polls and estates. Four acts authorized the colonial treasurer to use grants to relieve 40,000 of tax in 1755/56 and repay 22,000 in treasurer’s certificates that year and again in the next. Based on the timely [ 586 ]

Taxation of the New England Colonies, 1739–1763

c ol u m n 8

c olum n 9

c olum n 10

c olum n 1 1

column 1 2

column 1 3

Hogshead Sugar

Hogshead Molasses

Hogshead Tobacco

Ton Logwood

Tonnage Per Ton

American Tea (per Pound)

9d. 9d. 7d. 7d. 7d. 7d. 7d. 7d. 6d. 6d. 6d. 3d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d.

6d. 6d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 2d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d. 4d.

12s. 8d. 12s. 8d. 12s. 8d. 12s. 8d. 4s. 6d. 4s. 6d. 4s. 6d. 4s. 6d. 10s. 10s. 10s. 5s. 6d. 6s. 6s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

1s. 1s. 9d. 9d. 9d. 9d. 9d. 9d. 9d. 9d. 9d. 9d. 4d. 4d. 4d. 4d.

6d. 6d. 6d. 6d. 6d. 6d.

1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr.

1s. 1s. 1s. 1s. 1s. 4d. 4d.

arrival of grants, taxes totaling 336,000 Lawful Money due between June 29, 1759, and June 20, 1763, were nullified. The sum of 115,000 sterling was applied to the redemption of treasurer’s certificates during 1761/63 (and another 91,000 17s. 6d. sterling of British grants the following three years was similarly employed). Altogether, Massachusetts was reimbursed 328,000 sterling, 40 percent of the colony’s wartime outlays, during 1756–62.

Indirect Taxes

R

at e s of indirect tax during 1739–63 appear in tables 21.3 and 21.4. Table 21.3 shows that rates of duties on wines, liquors, and rum fluctuated within a relatively narrow range. Duties on alcoholic beverages were lower during the costly years of the French and Indian War than before war was officially declared in 1756. Duties on sugar and logwood were lower after 1751 than during 1739–50. Those on molasses and tobacco were relatively

[ 587 ]

chap t er 21

constant throughout the entire period. No charges on logwood appear after 1754/55. A heavy duty of 1s. per pound of weight was placed on tea imported from other American colonies from 1756/57 until it was slashed by twothirds in 1761/62. Double duties were imposed on goods that were not imported from their port of production or did not belong to the inhabitants of Massachusetts and a select list of neighboring colonies. Goods from Britain were exempt. Tonnage was levied from 1744/45 through 1750/51, and again after 1757/58, depending on the need for powder, and an unspecified rate was imposed in 1751/52 for maintenance of a lighthouse in Boston. From 1750/51 duties were paid in Massachusetts Lawful Money or bills of credit at rates equivalent to Lawful Money. It seems surprising that rates of duties were reduced during the peak years of the war when funds were most needed. An explanation appears in column 6 in table 21.6, which shows a tripling of excise revenue in 1758/59 over that of the previous year. One reason for this increase is that troops were provided with daily rations of rum subject to excise. Smuggling remained a problem throughout the war, but the excises on rum and liquor could be enforced whether they were legally or illegally imported into the province. British grants and healthy excise revenue induced the General Court to reduce duties on sugar, molasses, tobacco, logwood, and tea. Column 7 in table 21.6 quantifies the relative unimportance of duties during the war. Table 21.4 lists rates of excise of the few commodities that were charged. Excises were applied to spirits, wine, and tropical fruit. The rate on lemons and oranges, the latter included with lemons from 1745/46, was nearly triple that of limes. Rates were initially set for three years through 1751/52, after which they became annual. From 1759/60 they were set for two and, on expiration, three years. Low rates on alcoholic beverages in 1742/43 were doubled in 1748/49, reduced by a third in 1751/52 on brandy, rum, and distilled spirits, but not wine, and doubled on both kinds of beverages in 1757/58, at which level they remained throughout the rest of the war. Rates on lemons and limes were reduced by three-quarters from 1742/43, more than doubled in 1748/49, fell slightly in 1751/52, and then doubled from 1757/58. Excises were paid by licensed retailers. A law signed by Governor William Shirley on December 19, 1754, extended excises to private persons without retail licenses who imported or manufactured beverages beginning in 1755/56.17

17

The extension of the excise fostered a heated political controversy akin to that which defeated Walpole’s attempt to extend it in Britain in 1733. Opponents of the extension in Massachusetts presented the same charges of invasion of privacy and loss of liberty in their pamphlets that defeated Walpole two decades earlier. The governor refused to sign the fi rst extension approved by the house and Council in June 1754, but, recognizing that all additional sources of revenue would prove helpful in the war with France, signed a similar measure six months later. After a hearing in London on June 17, 1755, the Board of Trade declared the law acceptable. Paul

[ 588 ]

Taxation of the New England Colonies, 1739–1763 tabl e . Massachusetts Excises, 1739/40–1762/63 (Massachusetts Currency) c ol u mn 1

Year

1739/40 1740/41 1741/42 1742/43 1743/44 1744/45 1745/46 1746/47 1747/48 1748/49 1749/50 1750/51 1751/52 1752/53 1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

c ol u m n 2

c olum n 3

c olum n 4

column 5

Brandy, Rum, Spirits Per Gallon

All Wine of Every Sort Per Gallon

Per Hundred Lemons

Per Hundred Limes

12d. 12d. 12d. 3d. 3d. 3d. 3d. 3d. 3d. 6d. 6d. 6d. 4d. 4d. 4d. 4d. 4d. 4d. 8d. 8d. 8d. 8d. 8d. 8d.

12d. 12d. 12d. 3d. 3d. 3d. 3d. 3d. 3d. 6d. 6d. 6d. 6d. 6d. 6d. 6d. 6d. 6d. 12d. 12d. 12d. 12d. 12d. 12d.

8s. 4d. 8s. 4d. 8s. 4d. 2s. 1d. 2s. 1d. 2s. 1d. 2s. 1d. 2s. 1d. 2s. 1d. 5s. 5s. 5s. 4s. 4s. 4s. 4s. 4s. 4s. 8s. 8s. 8s. 8s. 8s. 8s.

3s. 3s. 3s. 9d. 9d. 9d. 9d. 9d. 9d. 2s. 2s. 2s. 1s. 6d. 1s. 6d. 1s. 6d. 1s. 6d. 1s. 6d. 1s. 6d. 3s. 3s. 3s. 3s. 3s. 3s.

column 6

Duration

From 6/29/40 for 2 years From 6/29/42 for 3 years

From 6/29/45 for 3 years

From 6/29/48 for 3 years

From 6/29/51 for 1 year From 6/29/52 for 1 year From 7/1/53 to 6/30/54 From 12/26/54 From 3/26/56 From 3/26/57 to 3/26/58 From 3/25/58 to 3/26/59 From 3/25/59 to 3/26/60 From 3/25/60 for 2 years From 2/25/62 for 2 years

Sources: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Wright and Potter, state printer, 1874), 2:849, 1016; Acts and Resolves of Massachusetts Bay (Boston: Albert J. Wright, 1878), 3:18–19, 236, 258, 411–12, 568, 610, 673–74, 783–84, 903, 1010; Acts and Resolves of Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 4:55, 201, 305, 493–94.

Annual Treasurer’s Statements

T

he ann ual treasurer’s statements illustrate the complexity of the multiple currency environment in which the public finances were conducted during 1739–52 (table 21.5).18 S. Boyer, “Borrowed Rhetoric: The Massachusetts Excise Controversy of 1754,” William and Mary Quarterly, 3rd ser., 21, no. 3 (July 1964): 328–51. 18 Using the figures for 1734/35, appendix B to chapter 17 explains the debit and credit system of accounting used by the colonial treasurer, with an illustration. The appendix explains the several concepts in the headings of each column in tables 21.5 and 21.6.

[ 589 ]

chap t er 21 tabl e . Massachusetts Treasurer’s Statements, 1734/35–1753 (.s.d. Massachusetts Old Tenor, Middle Tenor, Last Emission) Debits c ol u m n 1

c olum n 2

c olum n 3

column 4

column 5

Year

Beginning F Y Old Tenor Outstanding Taxes, Loans, Int. of Towns

Beginning of F Y NT (MT) Outstanding Taxes, Loans, Int. of Towns

Beginning of F Y LE (NNT) Outstanding Taxes, Loans, Int. of Towns

Outstanding Taxes of the Towns Lawful Money

18,888.3.4 36,666.8.6 6,648.7.10 2,720.14.7 2,131.10.6 2,095.7.0 1,774.0.9 1,744.18.3 1,722.14.11

35,001.6.6 48,720.3.3 49,729.2.6 58,165.16.0 114,255.18.8 35,080.14.10 18,679.12.1

12,231.18.3

1734/35 1735/36 5–6/1736 1736/37 1737/38 1740/41 1741/42 1744/45 1746/47 1747/48 1748/49 1750/51 1751/52 1–1/1753

9,196.19.0 73,679.12.4 69,306.4.8 79,424.9.11 34,314.6.0 25,921.2.4 7,951.17.0 6,009.1.11 5,115.16.9 4,480.13.3 3,316.5.7 2,952.3.7 2,678.19.5

Credits c ol u m n 1

Year

1734/35 1735/36 5–6/1736 1736/37 1737/38 1740/41 1741/42 1744/45 1746/47 1747/48 1748/49 1750/51 1751/52 1–1/1753

c olum n 3 3

c olum n 3 4

column 35

column 36

OT Outstanding Taxes, Loans, Interest

NT Outstanding Taxes, Loans, Interest

LE Outstanding Taxes, Loans, Interest

Bills Received in Taxes, Duties Excises, and Loans

72,263.3.1 73,323.13.2

22,022.1.0 24,455.18.3 2,603.9.1 43,939.13.5 49,383.0.8

79,424.9.11 88,428.12.10 16,273.19.6

33,496.6.2

4,580.10.8

2,095.7.0

2,952.3.7

1,744.18.3

[ 590 ]

58,650.9.11 108,909.0.5 35,080.11.9 22,892.12.4

Taxation of the New England Colonies, 1739–1763

col u m n 6

c olum n 7

c olum n 8

c olum n 9

column 1 0

column 1 1

OT Current Tax Year Levy

NT Current Tax Year Levy

LE Current Tax Year Levy

OT Outstanding Interest Money

OT Interest Money Received

OT Bills Received in Taxes, Excise, Duty, Loans

4,695.12.0

2,099.12.4 215.0.10

22,685.16.4 32,933.8.3 33,228.12.6 48,920.9.3

149.19.5 1,981.8.6 1,888.16.2

25,811.10.8 9,000.0.0 27,001.14.8 31,069.1.0 41,982.5.1 95,508.5.0

8,488.0.5

43,939.13.5 19,281.13.1 1,921.8.10 3,863.13.11 4,756.19.1 5,292.5.7 939.16.8

35,685.0.0

c ol u m n 3 7

OT Approved Payments

colum n 3 8

LE Approved Payments

c olum n 39

c olum n 40

OT Burned Bills of Credit

NT Burned Bills of Credit

32,483.3.4 40,488.0.6 1,4033.8 30,214.10.5 21,421.9.1

90,385.12.2

3,387.11.5

22,596.18.0

15,692.3.7

3,302.10.0 2,416.0.0

1,188.12.4 612.10.0

177,221.19.6 84,754.15.5 88,110.6.0

[ 591 ]

column 4 1

column 42

LE Burned Bills of Credit

OT Bills Remaining in Treasurer Hands

17,590.11.0 3,210.15.0 3,177.7.4 5,320.10.2 50,598.6.8 70,193.3.11

5,115.16.9 5,292.5.7 324.8.11 354.2.0

chap t er 21 tabl e . (continued) Massachusetts Treasurer’s Statements, 1734/35–1753 (.s.d. Massachusetts Old Tenor, Middle Tenor, Last Emission) Debits (continued) c ol u m n 1

c olum n 12

c olum n 13

c olum n 1 4

column 15

column 1 6

Year

NT Bills Received in Taxes, Excise, Duty, Loans

LE Bills Received in Taxes, Excise, Duty, Loans

OT Excises

LE Excises

OT Import Duties

1734/35 1735/36 5–6/1736 1736/37 1737/38 1740/41 1741/42 1744/45 1746/47 1747/48 1748/49 1750/51 1751/52 1–1/1753

21,767.4.9 14,097.15.9 18,025.9.0 18,614.13.1 9,889.5.1 119.12.3

3,780.10.3 3,828.18.4

4,384.6.0 4,409.15.5

3,230.11.3 4,048.0.7 6,339.8.5 5,238.11.5

5,347.8.6 2,532.7.3 3,747.10.5 3,93411.9

8,470.8.5 10,216.2.2 12,877.1.2

1,318.11.8 1,818.4.2 2,622.10.7 2,081.14.2 5,511.3.4 532.3.10

31,766.18.10

Credits (Continued) c ol u m n 1

Year

1734/35 1735/36 5–6/1736 1736/37 1737/38 1740/41 1741/42 1744/45 1746/47 1747/48 1748/49 1750/51 1751/52 1–1/1753

c olum n 4 3

c olumn 4 4

column 45

NT Bills Remaining in Treasurer Hands

LE Bills Remaining in Treasurer Hands

Balance of Silver in Hand

49,729.2.6

2,652.15.8

3,945.19.7 72,276.7.7

2,586.2.4

23,269.6.7 2,131.10.6 18,650.16.7 201.14.0 29.2.6

[ 592 ]

Taxation of the New England Colonies, 1739–1763

c ol u m n 1 7

c olum n 1 8

c olum n 19

c olum n 20

column 21

column 22

LE Import Duties

OT Lighthouse Money

OT Tonnage Gunpowder

LE Tonnage Gunpowder

OT Fines

LE Fines

201.13.1

3,224.0.0

8.13.4 15.5.0

200.3.1 172.3.9 130.11.2 48.18.8

1,536.0.0 6,409.0.0 315.4.0 18.9.0

47.5.10 66.8.3 21.3.0

1,113.13.4 1,744.16.3 1,748.2.7 3,478.3.7 1,486.4.7

566.0.0 834.1.6 1,523.2.8 905.2.10 469.0.7

2.10.0 56.9.9 23.3.9 202.18.9 14.5.1

c ol u m n 46

c olum n 47

c olumn 48

column 49

LE Tonnage Outstanding

OT Total Credits

NT Total Credits

LE Total Credits

126,769.3.4 138,267.12.1 4,033.11.8 153,571.13.9 250,738.9.4 37,702.1.1

72,457.16.4

9,872.15.10

20,746.3.7

312.3.7 162.3.4 43.12.0

[ 593 ]

245,063.3.1 147,799.2.0 206,597.13.9 158,294.14.0 110,410.16.8

chap t er 21 tabl e . (continued) Massachusetts Treasurer’s Statements, 1734/35–1753 (.s.d. Massachusetts Old Tenor, Middle Tenor, Last Emission) Debits (continued) c ol u m n 1

Year

1734/35 1735/36 5–6/1736 1736/37 1737/38 1740/41 1741/42 1744/45 1746/47 1747/48 1748/49 1750/51 1751/52 1–1/1753

c olum n 23

c olum n 24

c olum n 25

column 26

column 27

Old Tenor Principal Repayment

OT Bills Transferred to Treasurer

LE Bills Transferred to Treasurer

OT Misc. Debits

NT Misc. Debits

10,179.0.10 1,453.17.1

59,075.6.6

2,125.3.9 98.4.0

1,370.17.9 2,371.0.4 1,139.1.2 1,481.4.1

946.0.3 67,107.19.11 30,000.0.0 22,588.6.8

30,241.19.5 336.4.10 18.19.0

2,867.10.0

148,911.17.0 28,290.0.0 31,450.0.0 2,940.0.0 195.0.0

Notes: 1. The treasurer’s statements are missing for 1738/39, 1739/40, 1742/43, 1743/44, 1749/50, and 1752/53. 2. A debit was received from the preceding trea surer in 1736/37. 3. Missing entries in 1744/45 are unreadable. 4. The treasurer began to convert Old and Middle Tenor into Last Emission values in 1747/48. 5. The treasurer was authorized to borrow 9,000 Last Emission currency in 1750/51.

Table 21.5 includes several fiscal years from the preceding era of benign neglect to illustrate the transition from the single Old Tenor currency to the multiple currencies that circulated during 1742–52. Treasurer’s statements are missing for the two fiscal years 1738/40. The four preceding years show entries in Massachusetts OT. Debits include the current year’s tax levy, outstanding interest on loan office money, interest received, an entry that combines direct taxes, excises, duties, and repayment of loan principal, separate debits for excises, duties, lighthouse money, tonnage gunpowder, fines, principal repayment, new bills transferred to the treasurer, and miscellaneous debits. Credits itemize outstanding taxes, loans, and interest, bills of credit received in taxes, duties, excises, and principal repayments, approved payments made by the treasurer, and bills of credit burned (redeemed). Total debits equal total credits as required in double-entry bookkeeping. Beginning in 1740/41 the statements show entries in Old and Middle Tenor, with New New Tenor (NNT), or Last Emission (LE), as the category [ 594 ]

Taxation of the New England Colonies, 1739–1763

c ol u m n 2 8

c olum n 29

c olum n 30

column 31

column 32

LE Misc. Debits

Gold and Silver

OT Total Debits

NT Total Debits

LE Total Debits

126,769.3.4 138,267.12.1 4,033.11.8 153,571.13.9 250,738.9.4

1,679.7.11 2,427.10.0 3,506.11.3 299.10.7

2,652.15.8 2,619.9.0 335.11.4

37,202.1.11

72,457.16.4

9,872.15.10 9,872.15.0

20,746.3.7 20,746.3.7

187,365.14.11 245,063.3.1 147,799.2.0 206,597.13.9 158,294.14.0

6. The 1751/52 statement includes conversions of outstanding taxes in OT and MT to LE, but the statement is muddled. 7. The treasurer converted all three tenors to Lawful Money on January 1, 1753. Source: Massachusetts treasurer’s statements, microfi lms, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950, and Massachusetts State Archives.

is recorded in the accounts, from 1744/45.19 Since taxes and fines could be paid in any of the three currencies, and since the treasurer received and burned bills denominated in the three currencies at different times during 1739–52, establishing the exact fiscal condition of the colony is an arithmetic nightmare. To determine arrears of taxation requires converting Old and Middle Tenor to Last Emission, which the treasurer began to do on a limited, but not comprehensive, basis in 1747/48. The statement of January 1, 1753, converted outstanding taxes into Lawful Money. Beginning 1753/54, the accounts were kept in Lawful Money, which makes the colony’s revenues and expenditures more transparent. Several patterns in table 21.5 merit comment. Outstanding taxes and current year levies appear in all three currencies as MT and LE bills entered 19 Creating a spreadsheet of debits and credits in three currencies requires forty-nine columns.

[ 595 ]

chap t er 21 tabl e . Massachusetts Treasurer’s Statements and House of Representatives Audit Committee Reports, 1753/54–1762/63 (.s.d. Lawful Money) Debits c ol u m n 1

Year

1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

c olum n 2

c olum n 3

column 4

column 5

Beginning F Y Outstanding Taxes

Current Tax Year Levy

Balance Due from Last Account

Amount Borrowed

3,806.1.1 12,831.3.10 12,621.7.8 32,944.17.1 31,735.14.0 43,084.2.7 38,861.1.10 61,971.6.1 66,372.1.3 76,557.15.4

12,400.0.0 20,423.1.0 57,115.14.0 58,700.11.4 84,958.8.4 82,100.6.8 103,930.0.0 97,345.13.0 77,265.16.1 78,447.9.7

10,446.14.10 17,472.19.2 22,565.9.0 92,033.2.2 38,019.8.6 27,679.5.0 98,525.15.7 73,916.11.3 100,534.1.7

36,509.6.1 121,193.19.9 85,181.4.11 118,643.15.7 150,185.19.7 211,346.7.3 210,596.19.10 209,865.12.6 276,091.0.0

Credits c ol u m n 1

c olum n 16

c olumn 1 7

column 1 8

Year

Outstanding Taxes

Approved Payments

Burned Bills of Credit

1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

12,621.7.8 32,944.17.4 31,735.14.4 43,084.2.7 38,861.12.10 61,971.6.1 66,372.1.3 76,557.15.4 95,375.16.6

11,456.7.8 47,573.12.7 146,941.4.2 137,711.2.0 117,313.7.10 182,698,17.8 215,790.14.5 244,864.18.10 112,159.6.9 95,145.17.0

14,780.13.4 8,529.18.5 7,228.19.8 25,172.8.3 137,463.1.0 82,604.15.11 47,875.18.3 168,014.9.1 277,704.4.7 306,756.13.0

circulation. Since all the public loans were in Old Tenor, all receipt of interest (column 10) is recorded in that currency. It is difficult to calculate the amount of direct taxes received by the treasurer. To do so would require subtracting receipt of excises (columns 14 and 15), duties (columns 16 and 17), and repayment of principal (column 23) from the entry of total taxes and repayment of loans (columns 11–13). It is not clear if lighthouse money and tonnage are included in the summary category of taxes and loans. Total taxes and repayment of loans (columns 11–13) are entered in three currencies, but excises, duties, lighthouse money, tonnage, fines, and bills transferred to the trea-

[ 596 ]

Taxation of the New England Colonies, 1739–1763

c ol u m n 6

c olum n 7

c olum n 8

Excises

Import Duties

Tax on Tea and Coffee and Chinaware

4,948.1.10 3,126.12.4 5,973.6.10 6,918.13.6 6,082.19.11 18,590.4.0 15,303.4.6 17,305.0.4 17,430.13.2 16,262.6.10

1,400.0.0 1,429.2.0 2,031.8.3 2,241.11.0 2,800.15.10

column 9

column 1 0

Stamps

Bills Drawn Parliament Grant

51.15.3 896.18.1 467.3.5

68,744.7.6

889.4.9 207.2.10

3,293.14.0 3,903.12.2 3,320.12.0 2,700.6.8

1,351.11.6

27,574.0.0 73,860.13.6 81,600.00 75,900.0.0

1,446.5.7

c ol u m n 1 9

c olum n 20

c olumn 21

column 22

Interest Paid

Balance in Hand to Account for

Misc. Credits

Total Credits

1,136.1.11 2,553.11.3 2,762.19.10 3,820.15.8 7,464.15.5 11,821.13.0 8,705.4.7 7,979.15.11

17,472.19.2 22,565.9.0 92,033.2.2 38,019.8.6 27,679.5.0 98,525.15.11 73,916.11.3 100,534.1.7 123,928.15.8

47.13.6 1,879.7.1 1,200.0.0 661.14.6 971.8.0 337.16.3

30,989.7.4 86,197.17.10 218,642.7.9 289,359.12.0 340,522.6.10 336,865.7.1 431,629.11.0 565,651.7.11 576,631.19.10 629,524.15.0

surer are posted in one currency, OT, through 1741/42, and thereafter LE (columns 14–25). The debits itemize principal repayment of loan office bills in OT through 1741/42. Loans in columns 11–13 during the 1740s consist of outstanding bills of credit, but there are no separate entries of this item in the three tenors. Most credit entries appear in three currencies, but some only in two. The balancing of the statements, total debits and total credits, appears in all three currencies during 1744/48, thereafter only in LE. As previously noted, British grants in 1748 and 1750 financed the exchange of paper bills for silver. Bills of credit were almost entirely extinguished in

[ 597 ]

chap t er 21 tabl e . (continued) Massachusetts Treasurer’s Statements and House of Representatives Audit Committee Reports, 1753/54–1762/63 (.s.d. Lawful Money) Debits (continued) c ol u m n 1

Year

1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

c ol u m n 1 1

c olum n 12

c olum n 13

column 1 4

column 15

Tonnage Gunpowder

Tax on Coasting Vessels

Fines

Misc. Debits

Total Debits

364.8.3 44.15.4 36.16.6

1,800.18.0 1,055.18.4 1,299.17.6 1,596.12.5 3,090.3.9 4,637.18.11 2,052.6.4 1,834.9.5 46,768.5.3 1,522.2.3

30,989.7.4 86,197.17.10 218,642.7.9 289,359.12.0 340,522.6.10 336,865.7.1 431,629.11.0 565,651.7.11 576,631.19.10 629,524.15.0

295.15.6 126.12.0 116.10.6 12.14.0 6.15.0

7.6.6 30.17.0 109.6.2 182.6.6 79.14.4 156.14.0

Notes: The amount of burned bills in the treasurer’s statement differs from the figures in table 21.1, column 3, due to the separate treatment of those “redeemed and in Treasury” in table 1, column 5. The large entry for miscellaneous debits in 1761/62 includes an exchange of old form notes for new form notes amounting to  43,833. Source: Massachusetts treasurer’s statements, microfi lms, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950, and Massachusetts State Archives.

1751. The levies that were enacted to redeem the bills that remained outstanding were almost entirely abated. On January 1, 1753, the value of all outstanding taxes and loans fell to a little over 12,000 Lawful Money. Seen in the three tenors, the relevant decline is from 114,255 18s. 8d. in 1750/51 to less than 19,000 LE, with the outstanding stock of OT and MT of little consequence. Accordingly, the levies enacted in the 1740s and the actual estimated per capita burden were much lower than the numbers listed in column 9 in table 21.2. Those taxes that can be accurately quantified include excises, duties, and other minor charges. These were modest, only a few thousand pounds OT and LE, amounting to no more than a few pence a head, less when the consumption of visitors to the colony is subtracted from the totals. Columns 39–41 list the value of bills of credit burned as they were received in taxes. Note the large amounts burned in 1750/52 following passage of the 1749 Currency Reform Act. The treasurer’s statements do not include a separate debit for annual receipt of poll and property tax, but they do for excises, duties, and other revenues. It is not easy from the accounts to con-

[ 598 ]

Taxation of the New England Colonies, 1739–1763

struct a comparison of actual payment of direct taxes with the schedule of payments prescribed in law. A rise in outstanding taxes, arrears, and loans appears as a combined entry in columns 2–4 until British grants financed the redemption of the colony’s war debts. How much of this is taxes cannot be determined in the statements. A few other observations from table 21.5 are in order. Interest ceased in 1740/41 followed by principal repayment in 1741/42 as the last of the loan office bills were sunk. Excises and duties were roughly on the same order of magnitude, jointly supplying the colony with 7,000–10,000 OT between 1734/35 to 1741/42, and 2,500–7,000 LE (four times the value of OT) between 1744/45 and 1750/51. The accounts became more transparent with the shift to Lawful Money (table 21.6). Column 5 reveals the heavy recourse to borrowing. Borrowing exceeded the total of funds raised from direct and indirect taxes during 1754–63. As previously noted, excises provided considerably more revenue than duties, the tax on tea and coffee, and stamp duty, especially during the peak war years. Although the treasurer entered a credit for burned bills of credit, these were formally the new treasurer’s certificates. The amounts borrowed each year were well in excess of those burned. Column 19 is the interest paid by the treasurer to those who purchased certificates, providing a nice source of income for those with cash to lend the government. Column 2 lists the outstanding taxes of each fiscal year. The number shows a marked rise over the period, reaching 76,557 15s. 4d. in 1762/63. It should be noted that tax arrears were just two thousand pounds short of that year’s levy. Put another way, the collection of arrears would have obviated any need for a levy in 1762/63. It was already clear to representatives in the General Court that the colony was in a strong fiscal condition at the end of the war. Legislators could tread easily on taxpayers. The brief experiment with the stamp duty is an interesting story. In the session begun on October 17, 1754, the General Court approved stamp duty on vellum, parchment, and paper for two years, to take effect on April 30, 1755. A sheet of vellum, parchment, or paper was taxed at 1 ⁄2d. for newspapers and at 2d., 3d., or 4d. depending on its use for a decree, vessel registration, deed, mortgage, warrant, notary public, summons, or other purpose.20 Total receipts 20 Acts and Resolves of Massachusetts Bay, 3:793–96. There appears to have been little criticism of the stamp tax in Massachusetts. Many residents of Boston preferred it to liquor excises. The stamp tax was easier to collect and, in contrast to liquor excises, did not permit collectors to invade citizens’ homes in search of contraband wine or liquor. The act was discontinued in part because the tax failed to generate much additional revenue and met with opposition from several newspaper printers, who bore the brunt of the tax, claiming that it put one of their number

[ 599 ]

chap t er 21

came to less than 1,623. The law was widely disregarded, prompting the legislature to declare in an act of April 18, 1758, that all deeds, mortgages, and bonds were valid as if they had been stamped.21 No further mention is made of stamp duty.

Lotteries

A

n act of Parliament in 1709 prohibited all private lotteries in Great Britain, but it did not apply to the colonies. 22 The search for additional revenue to finance the defense of the frontier, beyond the general reliance on direct taxation of polls and estates, led the General Court to enact a lottery to raise 7,500 NT in January 1745. The purchase of lottery tickets could be made in OT, NT, or bills of credit of other colonies not prohibited by law. Subsequent acts authorized certain towns and precincts and the provincial government to set up lotteries to build or repair bridges, docks, and roads, to remove obstacles to navigation, and for other purposes. Table 21.7 lists the lotteries approved between 1744/45 and 1762/63. Altogether, the several town and county lotteries, sixteen in all including the supplementary lotteries to complete projects underway, raised 23,448 13s. 4d. LM, an average of 1,465 (after converting the one OT lottery to NT, equal to LM). This was less than the provincial lottery of 30,000 in 1757/58 to finance a military expedition to Canada, which included a tax of 34,000 to be collected in 1760 as collateral security for payment of prizes and redeeming public borrowing in the amount that the lottery failed to raise. Two other large-scale provincial lotteries were attempted. The first sought to raise 26,700 milled Spanish dollars for the Treasury to meet its obligations. Approved on January 10, 1751, it met with some difficulty as it was clear that the required number of tickets would not be sold within the time frame set in law, even though a tax of 8,010 was enacted to guarantee the payment of prizes and 3 percent interest to be added to unpaid prizes. Th is required an extension of time, which was enacted the following March 27,

out of business, that another had moved to New Hampshire, and that the remaining two had lost business. The commissioner of stamps, James Russell, reported to the House of Representatives that the little revenue collected was consumed by his salary, the purchase of a stamp machine, and other expenses. Mack Thompson, “Massachusetts and New York Stamp Acts,” William and Mary Quarterly, 3rd ser., 26, no. 2 (April 1969): 253–58. 21 Acts and Resolves of Massachusetts Bay, 4:86. 22 The experience of Massachusetts with lotteries is summarized in Charles H. J. Douglas, The Financial History of Massachusetts: From the Organization of the Massachusetts Bay Company to the American Revolution, Studies in History, Economics, and Public Law, vol. 1, no. 4 (New York: Columbia College, 1892), 96–105.

[ 600 ]

Taxation of the New England Colonies, 1739–1763 tabl e . Massachusetts Lotteries, 1744/45–1762/63 Fiscal Year

Amount

Purpose

1744/45 1749/50 1750/51 1750/51 1755/56 1755/56 1756/57 1757/58 1757/58 1758/59 1758/59 1759/60 1759/60 1759/60 1759/60 1760/61 1760/61 1760/61 1762/63

7,500 NT 25,000 OT $26,700 1,200 NT 290 LM 3,000 1,215 30,000 1,200 1,000 1,666 13s. 4d. 827 1,200 350 1,800 750 400 2,000 300

General revenue for Treasury Bridge in town of Swanzey Repay public debt (raised in Spanish milled dollars) Bridge over Parker River in town of Newbury Bridge over Teticut River in county of Plymouth Road leading outside Boston Settle Germans to manufacture glass in town of Braintree General revenue for military expedition to Canada Bridges over Saco and Pesumpscot rivers in York County Extra funds for road leading outside Boston Highway toward town of Dedham Causeway and bridge over Sudbury River Extra funds for bridge over Parker River Remove shoals from Taunton Great River Pave highway in Charlestown Extra for highway toward Dedham Extra for causeway and bridge over Sudbury River Repair Faneuil Hall in Boston Extra for bridge over Parker River

Sources: The Acts and Resolves of the Province of the Massachusetts Bay (Boston: Albert J. Wright, 1878), 3:195–99, 482–83, 538–39, 539–44, 548–49, 861, 888–91, 1053–54, and Acts and Resolves of Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 4:46, 88–90, 222–23, 223–26, 272–75, 326–27, 327–29, 329–33, 401–2, 420– 21, 425–26, 615–16, 834–35.

raising interest to 6 percent on prizes in the event that the Treasury was short of funds when the time came for payment. For drawing in the outstanding notes of the “Manufactory Bills or Land Bank,” issued September 9, 1740, a lottery of 3,500 sterling with 12 percent set aside for prizes was planned. The date of the latter was repeatedly postponed, with the commissioners appointed to wind up the affairs of the bank forced to assess its shareholders and collect what they could. The failure of the last lottery led to its abandonment as a revenue policy until after the Revolution, with the exception of 3,200 sterling in 1765 to rebuild a dormitory of Harvard College.

Taxation in Connecticut, 1739–1763

T

axat ion i n Connecticut during 1739–63 continued as before. The overwhelming bulk of provincial revenue was collected from a tax on polls and estates, supplemented with occasional duties, tonnage, and excises. Interest income was added to the assessment in the Grand List in 1757 to general additional revenue during the French and Indian War. Table 21.1

[ 601 ]

chap t er 21

shows the outstanding stock of bills of credit through 1751, which began to decline from 1748 after the first British reimbursement. In contrast with Massachusetts, which switched to treasurer’s certificates, Connecticut continued to issue bills of credit after 1751, but in denominations of Lawful or Proclamation Money, not in the former Connecticut OT or NT.23 Bills were scheduled for redemption with deferred taxes. Issues in January (7,500), March (12,500), August (30,000), and October (12,000) in 1755 were scheduled for redemption with taxes for the fi rst due in May 1758, the second in May 1759, and the last two by August 1760. One of 1758 (30,000) was scheduled for retirement in May 1762, three of 1759 (70,000) by March 1764, 1760 (70,000) in March 1765, 1761 (45,000) in March 1766, and the last of the war issues of 1762 (65,000) in March 1767. 24 Stretching redemption over five years was intended to ease the colonists’ annual tax burdens. 23

Bills issued in 1740 to finance King George’s War were called New Tenor (NT), with previous issues becoming Old Tenor. NT bills were designated at 2.5 times the value of OT notes. Four years later, one NT note was worth four OT. The relationship was stabilized at 3.5 to 1 in fi scal year 1745/46. From 1749, the General Assembly established all fees in law in Proclamation (or Lawful) Money, defined as 6s. 8d. per troy ounce of silver (6s. for a full-weight piece of eight). At that time, OT notes had depreciated to a ratio of 8 to 1 Lawful Money (LM). In 1752, 50 LM was worth 114 4s. 9d. NT, a ratio of 2.28 NT to 1 LM, although the original legal ratio was 4 to 3.3. To protect the value of its bills, in 1747 Connecticut declared the bills of neighboring colonies unacceptable. In 1752, it outlawed the use of Rhode Island bills for payment of any kind unless stipulated in contracts. Th ree years later it completely forbade bills of both Rhode Island and New Hampshire, which had not yet converted to LM. Prior to the outbreak of the French and Indian War in 1754, Connecticut sought to redeem its OT and NT bills in gold and silver at the rate of 58s. 8d. OT per ounce of silver and 2.5 times that value for NT. The war required further recourse to bills of credit. The issue of LM bills to fi nance the war carried 5 percent interest, but was issued with pledges of taxation and expectations of reimbursement from Parliament to ensure the retention of the proclamation rate. The fi rst issue of January 1755 was payable in LM equal to 9d. sterling per shilling. The bills were not legal tender under the terms of the 1751 act of Parliament and could not be redeemed for specie before maturity, but they could be used to pay taxes and thus readily circulated as cash for business transactions. A subsequent issue of March 1755 set the value of OT bills remaining in circulation at 7 1 ⁄3 to 1 LM, with NT bills at 2 for 1. The exchange remained at 58s. 8d. OT per ounce of coined silver and 42 OT per ounce of gold. All issues through 1763 carried similar terms. Connecticut pressed its claim for parliamentary grants in Lawful Money even though its bills circulated at a discount prior to redemption. It would note an expenditure in Lawful Money, even though its real value was lower. It received the sterling equivalent of claimed Lawful Money expenditures, thereby profiting on the exchange, to the extent that Parliament honored its request. Changes in monetary values are discussed in Robert J. Taylor, Colonial Connecticut: A History (Millwood, NY: KTO Press, 1979), 101–7, and Newman, Early Paper Money of America, 99–103. 24 A committee of the General Assembly of Connecticut prepared a report for the Board of Trade accounting for the sums emitted in paper bills between January 1755 and March 1764, expressed in Connecticut Lawful Money and sterling, with taxes appropriated and when due. The

[ 602 ]

Taxation of the New England Colonies, 1739–1763

From the beginning of 1755 to the end of 1762, Connecticut issued bills totaling 342,000 Lawful Money (another 17,000 was issued in May 1763 and March 1764 for a total of 359,000), which, with interest added, exceeded 400,000. 25 The colony sought reimbursement of 346,500 LM for direct war expenses. Between 1756 and 1767, Connecticut drew on grants from Parliament amounting to 316,788 LM (237,591 sterling) to retire a considerable portion of its debt.26 During calendar years 1755–64, Connecticut collected total taxes of 459,177 LM. 27 By the end of 1763, taxes and grants slashed total provincial indebtedness to no more than 82,000 LM. By November 17, 1764, according to a report of Governor Thomas Fitch, all the bills preceding the issue of March 1762, save a small remaining amount of 1761, had been redeemed. report was intended to show that funds received from Parliament were used to sink and discharge the emissions, and were augmented with local taxes dedicated to the same purpose. The committee noted that a tax rate of 1d./ raises about 5,000 Connecticut Lawful Money, although actual records show a figure nearer to 6,000. Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut, vol. 12, From May, 1762, to October, 1767, Inclusive (Hartford: Case, Lockwood and Brainard, 1881), 339 (hereafter Public Records of Connecticut). A list of bills of credit issued during 1755–64 appears in table 4.6 in Harold E. Selesky, War and Society in Colonial Connecticut (New Haven and London: Yale University Press, 1990), 133, with the amount raised by the per penny rate in table 4.5, 132. The committee’s list of annual tax rates and tax revenue (the numbers presented in both Gipson and Selesky) are based on the calendar year. Table 21.8 presents tax rates applied to fiscal years encompassing Grand List entries submitted to the legislature in October followed by supplementary figures the following May. I apply the rates in table 21.8 to the Grand List to estimate how much in taxes would be collected with full compliance, whereas the purpose of the committee’s report is to link issues of bills of credit with deferred taxes to show their ensured redemption. Payment by December in every year is technically in the fiscal year following the complete submission of lists by the preceding May, but these taxes are based on the fiscal year ending with the submission of the supplementary list in the May session. 25 The exchange rate between Lawful Money and New Tenor was 2 10s. NT to 1 LM, and 1 LM to 15s. sterling. After May 1753 taxes were calculated in Lawful Money at a rate of 1s. LM to 2s. 5d. NT. (3 sterling = 4 LM = 10 NT). 26 Chapter 26 shows that the tax rate dropped to 1d./ in 1765/66, and that no rates were levied between 1766 and 1770, when a rate of 2d. was imposed. For its outlays during 1755–62, Connecticut requested total reimbursement of 527,550 LM. Selesky, War and Society in Colonial Connecticut, table 4.7, 139. It received a large fraction, but not all, of its request. 27 The liquidation of colonial war debt in Connecticut with provincial taxes and grants of Parliament is documented in Gipson, The Triumphant Empire, 46–62, 72–75. Selesky, War and Society in Colonial Connecticut, calculates that taxes based on rates yielded a total of 514,468 LM for the years encompassing 1755 through 1765, of which 1,796 and 1,912 was later abated for 1762 and 1763. Direct taxes yielded only 6,401 in 1765, a marked decline from 50,895 the previous year. Altogether, 110 rates were scheduled to be paid during 1755–63, but only 75 3 ⁄4 were actually paid. Almost 100 percent of levied rates were actually paid for 1755–59, falling to about 50 percent for 1760–63 (actually only 38 percent in 1763). British grants enabled the abatement of half or more of the levied rates beginning in 1760. See Selesky, War and Society in Colonial Connecticut, table 4.3, 132.

[ 603 ]

chap t er 21

Table 21.8 summarizes direct taxes in Connecticut during 1739–63. Column 2 reveals that the list increased about two-thirds in valuation, roughly in keeping with population growth. The rate of growth of valuation during 1740–63, about two-thirds, was on the order of half that during the era of salutary neglect, reflecting continued decline in the size of the average landholding. The one-time fall in assessed valuation in 1741/42 is due to the omission of a figure reported for New London in the records. If its assessment of about 27,500 the following year was included, the figure would surpass 902,000, close to the values of the preceding and succeeding years. In marked contrast with 1714–39 (see table 17.6), the tax rate fluctuated dramatically (column 3), from a minuscule 1 ⁄2d. OT in 1740/41 to a high of 14 1 ⁄2d. LM for 1758/59, a peak war time expenditure year. Even during the two heaviest years, 1758/59 and 1760/61, Connecticut’s per capita tax was less than half that borne by British residents. 28 Column 4 presents the tax rate in percentage terms. It presents the actual rates that were levied in each fiscal year, not the originally legislated deferred rate(s) that accompanied the issue of bills in previous years. For example, rates of 3d. NT in each of 1751/52 and 1752/53 were reduced to 1d. after receipt of British reimbursement for the colony’s participation in King George’s War. A similar abatement of 3d. LM in 1761/62 reduced the rate from 71 ⁄4d. to 4 1 ⁄4d. Column 5 calculates likely taxes based on actual fiscal year rates. Columns 7 and 8 list the level of per capita taxes in Connecticut fractional pounds and then pence, in OT, NT, and LM, respectively, for the years as indicated. The shift to the next denomination signified an increase in the effective rate of tax. For purposes of comparison, column 9 displays actual compilations of figures taken from the account book of Treasurer Joseph Talcott in the Connecticut State Library, which states the amount raised from taxes levied in Lawful Money during 1756–63 on a calendar year basis.29 28 Gipson, The Triumphant Empire, 75. The figure of 148.9d. in column 8 in table 21.8 for 1758/59 converts to 111.7d. sterling, less than half a pound, compared with 1 1 ⁄2d. for British taxpayers. For several of the years during the French and Indian War, the per capita tax burden in Connecticut was on the order of one-sixth that in Britain. 29 Account Books of the State Treasurer Joseph Talcott, Treasurer, 1755–1770 (Hartford: Connecticut State Library, 1922), microfilm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950. Although the account books are dated 1755–70, Talcott was dismissed in 1769, replaced by Captain John Lawrence. Lawrence served as treasurer from 1769 to 1781. The account books of Talcott’s predecessor, Daniel Edwards (1743–55), and Talcott’s successor, John Lawrence (1769–81), do not record actual receipts of direct taxes. The account book of Edwards, housed in the Connecticut State Library, was put together by William R. Pomroy in January 1759 for Mrs. Edwards. He wrote on the cover, “not perfected.” On the fi rst page he wrote a long introductory statement to the account book, stating that “the following account cannot be rendered at present with certainty.” He stated that it included “deficiencies” that required “searching for the accounts of sundry sheriffs and their deputies who received executions

[ 604 ]

tabl e . Connecticut Direct Taxes, 1740/41–1762/63 col u m n 1

Year

[ 605 ]

1740/41 1741/42 1742/43 1743/44 1744/45 1745/46 1746/47 1747/48 1748/49 1749/50 1750/51 1751/52 1752/53 1753/54 1754/55 1755/56 1756/57 1757/58 1758/59 1759/60 1760/61 1761/62 1762/63

c olum n 2

c olum n 3

column 4

column 5

column 6

column 7

Grand List ()

Tax Rate (d./)

Tax Rate ()

Estimated Taxes ()

Population

Per Capita Taxes ()

910,822 874,098 912,536 947,567 934,837 1,013,840 1,049,332 1,125,798 1,142,628 1,201,122 1,267,416 1,251,067 1,344,422 1,311,240 1,350,511 1,317,561 1,435,696 1,432,003 1,430,527 1,460,147 1,472,998 1,505,889 1,541,872

0.5 OT 1 OT 1 OT 2 OT 2 OT 1.5 NT 2 NT 2 NT 2 NT 0 3 NT 1 NT 1 NT 0.5 LM 9.75 LM 5 LM 7.5 LM 3.5 LM 14.5 LM 10 LM 14 LM 4.25 LM 6 LM

0.2083 0.4167 0.4167 0.833 0.833 0.625 0.833 0.833 0.833 0 1.25 0.4167 0.4167 0.2083 4.0625 2.0833 3.125 1.4583 6.04167 4.1667 5.833 1.771 2.5

1,897.2 3.642.4 3,802.5 7,893.2 7,787.2 6,336.5 8,740.9 9,377.9 9,518.1 0.0 15,842.7 5,213.2 5,602.2 2,731.3 54,864.5 27,448.7 44,865.5 20,882.9 86,427.7 60,839.9 85,920.0 26,669.3 38,546.8

91,750 93,920 96,090 98,260 100,430 102,600 104,770 106,940 109,110 111,280 114,399 117,518 120,637 123,756 126,875 129,994 133,113 136,232 139,351 142,470 146,611 150,752 154,893

0.021 0.039 0.040 0.080 0.078 0.062 0.083 0.088 0.087 0.000 0.138 0.044 0.046 0.022 0.432 0.211 0.337 0.153 0.620 0.427 0.586 0.177 0.249

colu m n 8

c olu m n 9

Per Capita Taxes (d.)

Treasurer’s Account Books Taxes

5.0 9.3 9.5 19.3 18.6 14.8 20.0 21.0 20.9 0.0 33.2 10.6 11.1 5.3 103.8 50.7 80.9 36.8 148.9 102.5 140.6 42.5 59.7

22,324.2 29,567.9 56,501.9 76,895.4 77,082.6 59,495.0 61,043.0 35,921.5

Sources: Charles J. Hoadley, ed., The Public Records of the Colony of Connecticut, vol. 8, From October, 1735, to October 1743, Inclusive (Hartford: Case, Lockwood and Brainard, 1874), 296, 319, 327, 339, 362, 373–74, 429, 443, 467, 507–8, 509, 528–29, 563–64, 577; vol. 9, From May, 1744, to November 1750, Inclusive (1876), 16–17, 77–78, 80, 133–34, 167, 174–75, 220, 244, 256, 293–94, 330, 346, 357–58, 386–87, 409, 410, 427–28, 491, 532–33, 563; vol. 10, From May, 1751, to February, 1757, Inclusive (1877), 23–24, 47, 64–65, 95–96, 127–29, 145, 148, 157–59, 192–93, 197, 229, 233, 272–73, 318, 323, 330, 339, 342, 387–88, 417, 419, 440–41, 477, 531–33, 536, 568–69, 594; vol. 11, From May, 1757, to March, 1762, Inclusive (1880), 9, 14–16, 63, 65–66, 134–35, 180–81, 236, 255, 260–62, 334, 340, 351–52, 385–86, 434, 441–42, 483, 566–67, 573, 616; vol. 12, From May, 1762, to October, 1767, Inclusive (1881), 61–63, 79, 81–82, 135, 187–88. Account Books of the State Treasurer Joseph Talcott, Treasurer, 1755–1770 (Hartford: Connecticut State Library, 1922), microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and complied under the direction of William Summer Jenkins, 1950.

chap t er 21

The colony’s tax burdens were handled with some ease owing to the prosperity achieved in supplying British forces during the war. 30 For the four fiscal years 1740/41 through 1743/44, taxes were payable in Connecticut OT bills at a 5 percent advance or premium. In 1744/45, taxes could be paid in OT, or good bills of Massachusetts and New York, or silver at the rate it passed as current money. In 1745/46 the legislature switched accounting to NT, setting 3s. 6d. OT equivalent to 1s. NT, a ratio of 3.5 to 1. One NT was set equal to good silver at 8s. per ounce troy weight silver or gold in proportion. The same provisions for payment of taxes were retained the next two fiscal years, but no mention of specie is mentioned for 1748/49. British reimbursement eliminated the need to levy a rate in 1749/50. The tax levied for 1750/51 set the value of a Spanish milled dollar or full-weight piece of eight at 13s. 9d. NT, maintaining that value for the next two fiscal years. From 1752/53 through 1755/56 NT bills were slightly devalued to 14s. 7d., the reason being that bills were convertible into silver at that rate. Thereafter the phrase “lawful silver money” appears in the acts, supplemented with payment in LM bills. On occasion, the acts state that taxpayers can sell commodities at stipulated rates for silver to meet tax obligations. Annual tax levies contain no mention of exemption from the poll tax for the governor, deputy governor, rector and tutors of Yale College, or schoolmasters and students during 1739–63 that had been granted in previous years. Ministers and their families and church elders continued to be exempt. Officers and soldiers sent to fight at Crown Point in the French and Indian War were also exempt. A few indirect taxes were enacted during 1739–63. In May 1747 the General Assembly approved from January 1, 1748, duties of 5 percent on the importation of any goods, wares, or merchandise by water or overland from residents of other New England colonies, New York, New Jersey, or Pennsylvania exceeding 15 NT in value. Goods imported from those colonies by (warrants) to collect and have never collected or accounted for the same.” The letter also mentions deaths and insolvencies for which accounts have not been rendered. The book consists of forty-nine pages. Twenty pages itemize principal and interest payments due from various borrowers between 1742 and 1748 on the second emission of mortgage loans, a redating of the July 10, 1733, loan issue that was originally scheduled for redemption by May 1, 1741. Most of the other pages list payments and interest for sundry Old and New Tenor bonds of various years. The book contains no records of the treasurer’s receipt of provincial rates and only one entry for duties of 234 1s. 7d. OT received by December 30, 1752, presumably for that year. 30 Estimates of taxes in arrears in 1765 were put at around 80,000 LM, a sum in the neighborhood of one-sixth of direct taxes levied during 1755–65. By December 1768, the figure was down to about 48,000, of which about three-quarters was for the four years encompassing 1761–64. Little effort was made to collect these back taxes, some of which were paid as late as 1780, because the legislature did not want to remove bills of credit from circulation in the economy. Selesky, War and Society in Colonial Connecticut, 141, table 4.10, 142.

[ 606 ]

Taxation of the New England Colonies, 1739–1763

non-residents paid a tax of 71 ⁄2 percent. Exempt items included cast, bar, and slit iron, nails, salt, steel, beaver, leather, deerskins, dry and pickled fish, train oil, whalebone, rice, tar, turpentine, window glass, lumber, and all goods of Great Britain and Ireland. The act was to continue in force for five years from June 1, 1747, but was in fact repealed in October 1748, to take effect again on January 1, 1749. 31 A complementary act was passed to encourage the development of local shipbuilding and related timber industries. Export duties were placed on lumber exports from October 1, 1747: 15s. per thousand barrel staves, 20s. per thousand hogshead staves, 30s. per pipe or butt staves, 30s. per thousand hogshead heading, 15s. per thousand barrel heading, 20s. per ton of ship timber, 5s. per hundred foot of plank, 2s. 6d. per hundred foot of boards, and 20s. for every cord of bark.32 No duration or expiration was placed on the act. Treasurer Joseph Talcott’s accounts for 1755–70 show receipt of 13 6s. 10d. in lumber duty for 1756–59. The cost of the French and Indian War prompted the legislature to enact excises on liquor in October 1755. Every licensed tavern keeper and retailer was required to pay 4d. per gallon of rum, brandy, and other spirits sold by retail in quantities less than thirty gallons. Those joining together to purchase more than thirty gallons for subsequent subdivision and sale to avoid the tax would pay the same penalty as those selling liquor without a license.33 Talcott’s accounts show revenue of 7,184 5s. 111 ⁄4d. from excises in 1757. No other entries appear in his statements for 1755–70 or in those of Talcott’s predecessor. In February 1757, to raise much-needed additional revenue to equip troops for ser vice in the war, the legislature authorized a one-time lottery to raise 8,000 LM. 34 An act the following May placed a duty of 6d. per pound of tea beginning July 1, 1757. General duties of 5 percent were also levied on imported goods as in the act of 1747, with similar exemptions. No date of expiration was placed on the act. 35 For the support of a lighthouse near the port of New London, a tax was levied on all shipping clearing out at any port in the colony for any place between Philadelphia and Portsmouth, excepting vessels bound from New London to New Haven. The charges were 1s. 6d. for vessels of 10–30 tons, 2s. for 30–50 tons, 2s. 6d. for 50–70 tons, and in proportion for larger vessels.

31

Public Records of Connecticut, vol. 9, From May, 1744, to November 1750, Inclusive (1876), 283–86, and vol. 10, From May, 1751, to February, 1757, Inclusive (1877), 393–95. 32 Public Records of Connecticut, 9:183–86. 33 Public Records of Connecticut, 10:408–9. 34 Public Records of Connecticut, 10:605. 35 Public Records of Connecticut, vol. 11, From May, 1757, to March, 1762, Inclusive (1880), 10–13.

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Higher fees were placed on vessels for any port or place more remote: 4s. 6d. for 20–50 tons, 6s. for 50–100 tons, and in proportion for larger vessels.36 Talcott’s account book combined receipts from duties and tonnage for 1756 through 1768. 37 Funds received in 2,165 9s. OT for 1756–60 were converted to 254 15s. 2d. LM. Thereafter annual receipts in LM were recorded as follows: • • • • • • • •

1756, 22 17s. 9d. 1757, 44 15s. 13 ⁄4d 1758, 264 5s. 11d. 1759, 300 8s. 6d. 1760, 329 13s. 21 ⁄2d 1761, 132 5s. 3d. 1762, 164 0s. 5d. 1763, 195 7s. 3d.

For the years 1756–63, total receipts came to just over 1,700 LM, an annual average of about 210. This was an insignificant source of revenue compared with the tens of thousands of pounds collected from the Grand List. It is likely that the cost of collection equaled or exceeded the revenue. In 1700 the General Assembly required that there be a public grammar school in towns with at least seventy families for the full year, and a half year of schooling for towns with fewer families. Each local treasurer was to add a 40s. rate to every 1,000 in the town listing. The law of 1700 remained the basis of support for local schools throughout the colonial era. Beginning in 1711, the money generated by the tax was paid from the colonial Treasury because the towns had been derelict in paying. The rate was reduced to 10s. in 1753.38 A charge of 10s./1,000 amounts to a rate of 0.08 percent, an inconsequential addition to the rate imposed on the Grand List. 39 In a report on conditions in the colony from Governor Thomas Fitch to the Board of Trade dated April 15, 1756, a requirement that was periodically imposed on colonial governors, he wrote that the ordinary expense of government in peacetime was about 3,500 sterling, but that the debt contracted to finance the expedition to Crown Point in the summer of 1757 amounted to more than 60,000 sterling. Fitch noted that most of the colony’s revenue 36

Public Records of Connecticut, 11:469. Receipts of duty and tonnage after 1763 appear in chapter 26. Footnote 29 above indicates receipt of duties of 234 1s. 7d. by December 30, 1752. No other receipts of duties are recorded in Daniel Edwards’s account book for 1743–55. 38 The rate was raised to 20s. in 1766 and restored to 40s. in 1767. The reduction in 1753 was due to the change to Lawful Money, whereas the previous 40s. rate was in bills of credit. Taylor, Colonial Connecticut, 143–44. 39 The vestry tax imposed on parishioners is more in the form of a fee for religious ser vices than a general tax for universal government ser vices. 37

[ 608 ]

Taxation of the New England Colonies, 1739–1763

arose from the tax on polls, lands, and personal estate, with duties supplying inconsiderable funds. In addition to general provincial expenditure of 3,500 sterling was another 490 appropriated for public education, bringing the total to just about 4,000 sterling (5,320 LM).40

Taxation in Rhode Island, 1739–1763

B

e t w e e n m ay 1713 and the approval of a levy in June 1744, Rhode Island did not enact any new direct taxes.41 Loan office interest, augmented with a small amount of revenue from occasional duties on slaves and sugar, was generally sufficient to finance provincial administration. King George’s War required a fresh source of revenue. In June 1744, the legislature voted a tax of 10,000 Rhode Island OT on polls and estates. In September it allocated the tax among eighteen towns in the same proportion as the plan of distribution for 40,000 NT in loan office money known as the Eighth Bank.42 A series of taxes were approved in 1745 to redeem bills of credit. Bills in the amount of 3,750 NT (4 OT to 1 NT) approved for issue in May 1745 were scheduled for redemption by a tax on polls and estates, due in each of 1750, 1751, and 1752. Four months later, another 5,000 NT in bills was backed with taxes, half due in 1747 and one quarter in each of 1748 and 1749. An issue of 11,250 NT approved in June 1746 was to be redeemed by a tax, but no details of its collection are mentioned. News from Britain in 1748 that it would reimburse the expenses of the Cape Breton expedition prompted the legislature to cancel collection of the 1745 levies. Reimbursement of 7,800 sterling for Rhode Island’s participation in the campaign against Cape Breton Island financed the calling in and burning of 88,725 OT bills (at a rate of 1,161.29 Rhode Island OT currency to 100 sterling, 7,800 sterling was worth about 90,000 Rhode Island OT).43 Only the tax of 1744 40

Public Records of Connecticut, 10:620–26. The report estimated the value of British imports at 50,000 sterling and Connecticut’s exports at about 130,000 sterling. Fitch stated that the colony strove to prevent illegal trade in careful conformity with the trade acts of Parliament. Its militia numbered 20,666. Inhabitants of the colony owned 75 vessels and ships, manned with 415 crew, weighing 3,102 tons. 41 The official records of the colony appear in John R. Bartlett, Records of the Colony of Rhode Island and Providence Plantations in New England, 10 vols. (New York: AMS Press, 1968). First published in Providence by Knowles, Anthony and Company. Vol. 4 covers 1707–40, vol. 5, 1741–56, vol. 6, 1757–69. 42 A comprehensive treatment of Rhode Island bills appears in MacInnes, “Rhode Island Bills of Public Credit.” Th is discussion of bills and that in the succeeding paragraph are from 383–84. For the tax, see Bartlett, Rhode Island Records, 5:95. 43 Bartlett, Rhode Island Records, 5:115, 130, 173, 263. On February 27, 1749, the colony submitted to the secretary of state, the Duke of Bedford, a record of issues and burnings from May 1710 through 1748 (5:285).

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was enforced and most of the 10,000 in bills printed that year were retired over the next three years. The 1740s was a decade of negligible taxation. The Currency Act of 1751 precluded the issue of new loan office bills in Rhode Island, only permitting the issue of bills, revenue anticipation notes, secured with tax levies to meet the costs of war or administration. Nonetheless the existing stock continued to depreciate. This followed Massachusetts’s conversion to specie in 1750, which banned the acceptance of Rhode Island bills except for those explicitly written into contracts (and Connecticut’s later conversion in 1756, which also banned Rhode Island bills). In 1749 the price of silver in Rhode Island OT currency stood at 60s., and its rate of exchange against sterling at the standard price was 1,161.29 to 100 sterling. In 1754, the price of silver reached 86.12s. and the sterling rate 1,666.84, a depreciation of about 44 percent.44 By the middle of 1754, with interest income from its loan offices still in the form of receivables and not yet remitted, the colony faced insolvency. The French and Indian War brought the long era of interest-based public financing to a close. Taxes were required to finance the colony’s preparation for an imminent war. The first of a series of tax measures was enacted in June 1754 when the House of Deputies voted a rate of 20,000 OT on polls and estates. The Council refused its concurrence. Several months later, in August, both houses agreed to two taxes: one of 6d./ton on shipping and an additional 5s. added to the 10s. charge on coasting vessels to remain in effect until March 1, 1755 (renewed on May 10, 1755). The legislature also raised the 20,000 to 25,000 to redeem bills issued to underwrite military expenses, adding another 5,000 to repair Fort George. After some delay over its collection, the rate was finally apportioned in October 1754.45 Despite the necessity for funds, the tax was still not fully collected by May 1755, reflecting the inhabitants’ historical aversion to taxes. The colony was on the verge of bankruptcy, as its treasurer was able to borrow only 2,400 of a planned loan of 4,000.46 The French and Indian War opened the floodgates to a flurry of new issues, which were legally permitted under the Currency Act of 1751. In marked contrast to earlier loan office bills, the new paper was accompanied by tax levies to secure its redemption within five years for war expenses and two years for current expenses of government. To support the Crown Point expedition, a total of 240,000 OT was issued in five separate votes in 1755, with provisions made for taxes to redeem the bills over the next two to three years.47 The bills were printed in eight 44

McCusker, Money and Exchange, 153. Bartlett, Rhode Island Records, 5:392–93, 398–99. 46 MacInnes, “Rhode Island Bills of Public Credit,” 537–41. 47 Bartlett, Rhode Island Records, 5:420–21, 443–34, 441, 452, 465, 471, and Newman, Early Paper Money of America, 386. 45

[ 610 ]

Taxation of the New England Colonies, 1739–1763 tabl e . Rhode Island Bills of Credit, Dates Due for Redemption, and Tax Levies for Their Redemption, 1754–1763 Year

1754 1755 1755 1755 1755 1755 1756 1756 1757 1758 1758 1759 1759 1759 1760 1760 1761 1762 1762 1762 1762 1763

OT Bills ()

LM Bills ()

Interest

Due for Redemption

OT Taxes ()

LM Taxes ()

30,000 1

⁄2 Mar. 1756, 1⁄2 Mar. 1757 same 1 ⁄2 Aug. 1756, 1⁄2 Aug. 17517 1 ⁄2 Sept. 1756, 1⁄2 Sept. 1757 1 ⁄2 Dec. 1756, 1⁄2 Dec. 1757 Feb. 27, 1758 August 1758

60,000 40,000 20,000 60,000 60,000 8,000 6,000 10,000 10,909 12,000 4,000 4,000 16,000 11,000

5 6 5 5 5 5 5

May 18, 1763 Dec. 23, 1763 Mar. 15, 1764 Apr. 4, 1764 June 23, 1764 May 10, 1765 May 12, 1765

5,000 2,000 2,000 2,000

5 5 5 5

Mar. 20, 1767 Apr. 10, 1767 May 8, 1767 Nov. 1, 1767

70,000 53,000

4,000

250,000

4,000

110,000

6,000

11,000 15,747 16,000

8,000 12,000

Note: The exact sum of 10,909 1s. 6d. LM was also stated as 200,000 OT or 36,363 1 ⁄2 Spanish dollars. Sources: Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 67–72, John R. Bartlett, Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968), 5:392–93, 398–99, 420–21, 433–34, 441, 452, 465, 471, 481–82, 497, 507, 508, 545–47, 552–53, 6:25, 62–63, 96–97, 105, 131, 177, 186, 262, 275, 276, 328–30, 337, 407–10, Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997), 386–88.

silver denominations, totaling 75,000 ounces of sterling alloy, in amounts ranging from 15 gr. (2s. OT) to 5 oz. (16 OT). By 1755, depreciation had raised the price of one ounce of silver to 85s. OT. In February and August 1756 three issues totaling 14,000 LM (10,500 sterling) were approved, set equal to Massachusetts and Connecticut currency at 6s. 8d. per ounce of silver. These were accompanied by levies of 53,000 OT and 4,000 LM (repealing the previous June enactment of 100,000 OT, the reduction made possible with the first tranche of British reimbursement of 6,684 sterling) to sink them at the end of two years. The August issues banned the circulation of New Hampshire bills.48 48

Bartlett, Rhode Island Records, 5:497, 505, 507–8, 545–47.

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In November 1756, a report submitted to the legislature stated that 66,162 4s. 1d. of the 70,000 OT levy approved in 1755 and due in 1756 had been paid in, with only 3,837 15s. 11d. in arrears. Wartime finally transformed the population from aversion to compliance. Table 21.9 summarizes the issues of bills in OT and LM, the due dates of their redemption, and their associated tax levies. In the tax on polls and estates, the poll rate was generally put at 6d./1,000 of assessed property. Altogether, the colony issued 92,909 1s. 6d. LM between 1756 and 1762. On October 30, 1764, a committee of the General Assembly submitted to the main body a report on the condition of the colony’s currency prepared at the request of the Board of Trade. It stated that 40,000 LM (30,000 sterling) remained in circulation. Of this, two-thirds would be redeemed within a year and the remaining 13,000 LM, along with a small sum of outstanding OT bills, would be fully retired in 1767.49 In its report of January 29, 1766, the Board of Trade informed the House of Commons that British reimbursement to Rhode Island totaled 41,666 sterling (55,441 LM), which facilitated the calling in and burning of more than half the colony’s debt that was issued to finance its expenditure of 80,981 sterling during the war time years, of which a small portion was for purely local costs of administration and civil improvements. Even though Rhode Island was retiring its debt on schedule, its paper bills continued to depreciate. The price of silver in 1756 at 120.56 Rhode Island shillings rose to 160.75 shillings in 1763, with the rate of exchange of its bills on London falling from 2,333.42 to 3,119.29 for 100 sterling over the same period.50 In June 1763 the legislature acted to clarify an ambiguity in the previous law of 1756 regarding the definition of Lawful Money, stating that only silver and gold coins were to be taken and understood as Lawful Money of the colony. In 1764, having paid off a large fraction of its debts, Rhode Island converted to the proclamation rate of 133.33 LM to 100 sterling, at which it remained until the Revolution.

Lotteries

A

s in massach use t t s, Rhode Island resorted to lotteries to raise some extra revenue and finance some local improvements. The fi rst in August 1756 in the amount of 10,000 LM was to continue the construction of Fort George. Thereafter a raft of lotteries was approved, listed in table 21.10. 49 50

Bartlett, Rhode Island Records, 6:407–10, and Gipson, The Triumphant Empire, 70. McCusker, Money and Exchange, 153–54.

[ 612 ]

Taxation of the New England Colonies, 1739–1763 tabl e . Rhode Island Lotteries, 1759–1762 June 1759: June 1759: February 1760: February 1760: June 1760: February 1761: February 1761: October 1761: October 1761: October 1761: March 1762: March 1762: March 1762: March 1762: March 1762: March 1762: May 1762: June 1762: June 1762:

$2,400 (Spanish dollars, valued at 6s. LM) for a public hall in Newport $2,000 for a courthouse and library in Providence $12,000 for a library in Providence, of which $1,200 was to restock the burned library 24,000 OT for a market house in Newport $1,000 for land for a courthouse in Providence 6,000 LM to pave streets in Providence 20,000 OT to create a pond Unspecified sum for a meetinghouse in the town of Johnston 1,500 OT to protect fish in the Seekonk River 1,000 OT to rebuild Weybosset Bridge $1,000 to repair St. John’s Church in Providence and build a steeple 2,200 LM for paving the north part of Providence and $4,500 to replace the burned merchandise of William and Henry Wall 4,000 LM for a road in Gloucester 2,000 OT to rebuild a bridge at Woonsocket Falls 4,500 OT to compensate Samuel Dunn for the capture of his sloop Joseph by a French privateer and the loss of his vessel and cargo by shipwreck Unspecified sum for a harbor on Block Island Unspecified sum for Nathaniel Helme to sell land and buildings used as a jail 10,000 LM to compensate Captain Edward Wells, Jr., for war losses 10,000 LM for military expenditures

Source: John R. Bartlett, Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968), 5:505, 6:105, 209, 215, 236, 237–38, 254, 262, 269, 271, 287, 290, 292–94, 304–5, 307–8, 316, 321. All sums were listed either as Spanish milled dollars, Connecticut OT, or Connecticut pounds. My presumption is that the two sums in pounds without the OT designation were in Lawful Money.

Miscellaneous

I

n may 1732 Rhode Island repealed its slave duty act of 1712. No mention of slave duties appears in the colonial records during 1739–63.

A Unique Tax Exemption

R

hode isl and was home to the wealthiest Jewish trader in the colonies, Aaron Lopez.51 Lopez enjoyed the status of a naturalized British subject when Parliament passed an act in 1740 granting the right of naturalization to every foreign-born Protestant or Jew who had resided in the American colonies for at least seven years. Jewish applicants were exempt 51 Stanley F. Chyet, Lopez of Newport: Colonial American Merchant Prince (Detroit: Wayne State University Press, 1970).

[ 613 ]

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from the requirements of receiving Anglican communion and taking the oath of allegiance “upon the true faith of a Christian.” Parliament took this measure less for the cause of tolerance and more for the purpose of strengthening the empire. Thirteen years later in 1753, when Parliament passed an act to naturalize foreign-born Jews resident in Britain itself, a public clamor arose in opposition that forced repeal of the “Jew Bill” within the year. The 1740 act aroused no such opposition in the colonies. Since the Navigation Acts prevented foreigners from engaging in trade as merchant-shippers, the prospect of naturalization attracted Jews such as Aaron Lopez and others to the American colonies.52 Lopez was one of the few residents of Rhode Island who could read Spanish and Portuguese. A special act of the colonial legislature exempted him from civil duties and personal taxes in 1750 for the ser vice he rendered the colonial administration by translating Spanish documents for it.53

Taxation in New Hampshire, 1739–1763

J

on at han bel c her, the colony’s co-governor with Massachusetts, never got on well with New Hampshire’s House of Representatives.54 It refused to vote any direct taxes between 1731 and 1739 on the grounds that redemption of the colony’s bills, by reducing the amount of currency in circulation, was imposing a deflationary hardship on the colony’s residents. With confl ict on the horizon, on February 20, 1740, the house consented to a tax of 550 OT to purchase powder for the Fort of William and Mary and supplies for the frontier. In response to the governor’s request for a larger sum, three days later it approved 850 on polls and estates.55 The General Assembly reconvened in February 1741. Belcher advised the delegates that royal instructions forbade his agreement to any further issues of bills of credit—the last two were printed in 1737 and 1740, the former

52

Newport was home to about a dozen Jewish families, some sixty persons, in the early 1760s. Chyet, Lopez of Newport, 52. Aaron Lopez was the largest taxpayer in Newport on the eve of the Revolution, paying double the next largest taxpayer. 53 Chyet, Lopez of Newport, 21. 54 A summary treatment of monetary and fiscal measures of New Hampshire appears in William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (New York: Columbia University, 1908), 366–415. Acts of the General Assembly during 1739–63 appear in two volumes. Albert S. Batchellor et al., eds., Provincial Papers of New Hampshire, Including the Records of the President and Council, vol. 5, From 1738 to 1749 (Nashua, NH: Orren C. Moore, 1871), and vol. 6, From 1749 to 1763 (1872) (hereafter New Hampshire Provincial Papers). Details of paper money issues are from Newman, Early Paper Money of America, 227–35. 55 New Hampshire Provincial Papers, 5:23, 27.

[ 614 ]

Taxation of the New England Colonies, 1739–1763

for 10,000 OT (6,500 plus a 500 reserve and 3,000 to replace old worn bills) and the latter for 2,700 for bounties for soldiers of the Cuban expedition—without the insertion of a saving clause in the legislation reserving the right of disapprobation to the Crown. To the relief of the colonists Belcher was recalled to Britain and replaced with New Hampshire native Benning Wentworth. His appointment as the first governor of the colony ended the system of sharing a common governor with Massachusetts, with a deputy appointed as chief executive of New Hampshire. Wentworth called the General Assembly into session in January 1742. The small stock of outstanding bills (see table 21.1), some 23,000, was due to expire in 1742. The Crown granted Wentworth permission for a new issue up to 6,000 NT (4 OT to 1 NT), provided that it did not damage British trade. The house urged Wentworth to approve the full 6,000, which would pay off the colony’s debts of 4,720 and provide a surplus of 1,280 that could be placed in the Treasury for future use. Wentworth agreed only to the 4,720, backed by a tax on polls and estates to be collected in five installments beginning in 1744. Following Massachusetts, the act set the value of an ounce of coined silver at 6s. 8d. New Hampshire currency for purposes of payment. Assessments were set at 18 NT per poll, land at 10s. per acre, a single-story house of one room at 10s., a two-story house at 40s., and specific rates for horses, oxen, cows, and swine.56 In April 1743, subject to the royally mandated saving clause, later approved by the Crown on the outbreak of King George’s War, Wentworth concurred in a new loan office issue of 25,000 NT, which required no supporting redemption in taxes. Interest income was to be used to pay the governor’s salary, repair and erect forts, build a statehouse, lay roads, establish a lighthouse, and pay other public charges. Following Britain’s formal declaration of war against France in 1744, royal restrictions on new bills of credit were put on hold. New Hampshire’s outstanding stock rapidly rose from 43,880 OT in 1743 to 142,277 in 1744, 250,277 in 1745, peaking at 488,879 in 1746.57 Concurrent votes of taxes for their redemption accompanied the issues. The first in July 1744 was for 1,000 NT on polls and estates due October 10, 1744. The second, in late August 1744, was for 5,500 NT, payable in four equal annual installments of 1,375 due February 1751 through February 1754. A third in September 1745, to redeem 12,000 in bills, was payable in twelve installments beginning Christmas 1760. Wentworth rejected it as too drawn out. In retaliation, the house reduced it to 6,000, but the Council opposed that figure as too small. Finally, on October 5, 1745, the governor signed into law a tax of

56 57

New Hampshire Provincial Papers, 5:157, 165. All bills in table 21.1 are stated in Old Tenor.

[ 615 ]

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8,000 NT to be collected over four years beginning Christmas 1762.58 Massive issues of bills in 1746 included language that British reimbursement of the colony’s military expenditures would be applied toward redemption, with any remaining deficiency to be cleared with a tax on polls and estates. Provincial records show that bills of credit received in taxes were routinely burned before the General Assembly on becoming due. A list of dates and amounts burned, but which were less than the amounts due in those specific years, follows.59 December 4, 1742: 269 12s. 7d. OT for tax year 1741. July 25, 1744: 1,122 6s. 1d. OT, tax year not mentioned. August 8, 1747: 2,045 4s. 3d. NT for tax years 1744–46. August 9, 1747: 64 8s. NT for tax years 1744–46, and 473 11s. 6d. OT for tax year 1742. June 1, 1748: 209 15s. 6d. NT for tax years 1743–46, and 713 10s. NT for tax year 1747. July 1, 1748: 278 14s. 3d. OT for tax year 1742. Amounts burned came to 1,419 8s. 8d. OT in 1741, 752 5s. 9d. OT in 1742, 2,319 7s. 9d. NT during 1743–46, and 713 10s. NT in 1747. To give but one example, the act of 1742 required tax payments of 944 NT and that of July 1744 1,000 NT in 1744, a total of 1,944, well beyond that burned in 1744. (The act of 1742 required payment of 944 in each year of 1744 through 1748; adding amounts due in 1745 and 1746 to that burned during 1743–46 is several fold reported burnings.) Old habits die hard. Despite wartime needs for full compliance, in December 1747 the General Assembly instructed the treasurer to collect outstanding tax arrears for 1742–46. As its share of parliamentary reimbursements of 1748 and 1750, New Hampshire received 16,355 13s. 4d. sterling for its role in seizing and occupying Louisburg and another 21,446 10s. 101 ⁄2d. in sending assistance to Nova Scotia. After deducting fees, charges, and debts of the colony’s agent, New Hampshire collected almost 29,000 sterling net. However, no steps were immediately taken to use these funds to redeem paper bills and, as in Massachusetts, transform the colony’s currency to a specie standard. One reason was that the legislative session convened in January 1749 was never organized to conduct business. The House of Representatives disagreed with the governor’s right to reject its choice of speaker and to summon representatives from whatever towns he chose. No legislative business was conducted over the next three years and the General Assembly was dissolved as required under the Triennial Act. 58 59

New Hampshire Provincial Papers, 5:249, 251–52, 376, 380, 383–84, 386. New Hampshire Provincial Papers, 5:525–26, 549, 596, 645, 720, 912.

[ 616 ]

Taxation of the New England Colonies, 1739–1763

Wentworth called new elections in the fall of 1752. Once seated, the legislature instructed the colony’s agent in London to invest its sterling funds in secure, interest-earning securities. In early 1753 he purchased annuities and loaned out funds at 3 percent interest. However, he did not receive formal power of attorney from the legislature to accept the money and interest on its behalf until April 1754. The result of this delay was the continued circulation of New Hampshire bills. Their value held relatively steady against silver and sterling during 1747–53, ranging from a low of 1,003.16 (strongest) in 1750 to a high of 1,266.77 (weakest) against 100 sterling in London in 1753. The colony’s sterling assets, in effect, backed the value of its outstanding bills. The failure of the legislature to conduct business between January 1749 and late 1752 resulted in the accumulation of unpaid debts over three years. The resumption of legislative business permitted the settlement of financial claims against the government and a decision on March 13, 1753, to retire previously issued bills with a tax of 12,500 NT on polls and estates payable in five annual installments, the fi rst due by December 31, 1753.60 New Hampshire’s participation in the French and Indian War required massive new issues of paper money and higher taxes.61 New Hampshire differed from its neighbors in that it possessed sterling assets in London, a unique source of war finance. On May 2, 1754, the House of Representatives voted to transfer 500 sterling from the colony’s agent in Britain for uses ordered by the General Assembly.62 Tapping the colony’s sterling assets became standard practice for the duration of the war. The General Assembly voted to draw 500 sterling of interest in May 1755, another 300 in August, 200 in March 1756, and 2,000 in February 1758, drawing down principal when interest was depleted.63 The colony’s sterling assets partially substituted for taxes to secure redemption of its bills. New Hampshire participated in the expedition against Crown Point with a first issue of 30,000 NT bills receivable for taxes with 1 percent interest. Including that and subsequent printings, a total of 123,060 NT in new paper was issued between April 1755 and March 1758. The dates of each issue represent the dates printed on the bills, with the authorizing acts following in parentheses. April 3, 1755: 30,000 NT (April 11, 1755). January 1, 1756: 15,000 NT (September 5, 1755) April 1, 1756: 7,560 NT (April 1, 1756) 60

New Hampshire Provincial Papers, 6:189. Gipson, The Triumphant Empire, 62–65. 62 New Hampshire Provincial Papers, 6:285. 63 New Hampshire Provincial Papers, 6:385, 419, 486, 543–44, 645. 61

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June 1, 1756: 30,000 (April 1, 1756) June 1, 1756: 20,000 (February 25, 1757) June 1, 1756: 20,500 (March 31, 1758) Redemption of the issues was to be ensured with a mix of taxes, drawing on sterling assets in London, and anticipated British reimbursement of local war expenses. The list of taxes enacted in New Tenor includes the following.64 January 15, 1755: tax of 1d. per acre for two years (no amount stated) November 28, 1755: tax of 1d. per acre for two years (no amount stated) April 1, 1756: tax of 10,000 NT on polls and estates due Christmas 1759; another of 20,000 due Christmas 1761 February 17, 1757: tax of 8,000 NT due Christmas 1761; another of 12,000 due Christmas 1762 February 7, 1758: tax of 12,500 NT due Christmas 1758 In March 1758 New Hampshire approved the issue of 9,000 sterling in bills, a shift from previous issues denominated in New Tenor, in support of the expedition to Canada. The bills were to be liquidated by the following December in anticipation of 8,000 sterling from Parliament. That and subsequent grants of sterling were used to redeem locally issued sterling bills. Payments to soldiers were stated in sterling, with each private to receive 22s. 6d. sterling per month. All subsequent bills were denominated in sterling. May 23, 1759: 5,000 November 1, 1759: 8,000 (2,000 not issued of total 15,000 approved)65 March 1, 1760: 8,000 issued of 15,000 authorized with 21 ⁄2 percent interest due December 25, 1764 January 1, 1761: 7,000 issued, the balance of above; similar terms May 1, 1761: 20,000 approved for issued, 21 ⁄2 percent interest due December 25, 1765; only 8,000 issued July 1, 1762: 10,000 issued, half of 20,000 approved by June 25, 1762 act; similar provisions January 1, 1763: 10,000 issued, remaining half of above, due December 25, 1767, with 21 ⁄2 percent interest 64

New Hampshire Provincial Papers, 6:341, 448, 507, 564, 569–70, 645. The nominal value of silver in the act was set at 17s. 6d. per ounce, but its trading value depreciated to 30s. With the issue of sterling bills, OT, NT, and sterling currency circulated with three different standards of value. Sterling notes, with values set at 25 OT and 6.25 NT to 1, were initially hoarded. 65

[ 618 ]

Taxation of the New England Colonies, 1739–1763 tabl e . New Hampshire Taxes to Redeem Bills of Credit, 1753–1763 1753: 1754: 1755: 1756: 1757: 1758: 1759: 1760: 1761: 1762: 1763:

2,500 NT (1753) 2,500 NT (1753) 2,500 NT (1753); 6,000 NT (1755); 8,500 NT total 2,500 NT (1753); 6,000 NT (1755); 8,500 NT total 2,500 NT (1753); 6,000 NT (1755); 8,500 NT total 6,000 NT (1755); 12,500 NT (1758); 18,500 NT total 6,000 NT (1755); 10,000 NT (1756); 16,000 NT total 15,000 NT (1755) 20,000 NT (1756); 8,000 NT (1756); 28,000 NT total 12,000 NT (1756) 15,000 Sterling (1760)

New taxes were enacted to match the due dates for redemption of the sterling bills. On February 27, 1760, the General Assembly approved a tax of 15,000 sterling payable in 1763.66 Not all the sterling bills approved by the General Assembly were put into circulation. For example, a tax of 5,000 sterling due in 1762 was reduced to 1,000 in that 4,000 of bills secured by the tax were not released into circulation.67 The taxes enacted during 1753–60 to retire the New Tenor and sterling bills issued during those years sum to the totals displayed in table 21.11. These amounts would be the maximum tax due in each year if fully collected. To ease the burden of payment, the legislature authorized a wide variety of commodities acceptable for taxes with fi xed values to silver. For example, the act of April 9, 1756, approved hemp, flax, codfish, bar iron, rye, wheat, barley, peas, corn, port, beef, wooden joists, white pine, white oak, beeswax, pitch, tar, turpentine, and tanned sole leather. Hemp was valued at 5 12s. per hundred pounds, flax at 1s. a pound, and so forth.68 Similar legislation was passed with slightly varying rates in each succeeding year through 1763.69

Indirect Taxes: Excises and Duties

A

lt ho ug h d u t i e s on imports and exports were discontinued in 1721, excises on spirits remained in place, generally renewed on each expiration for a period of years. The method of collection was tax farming, in which 66

New Hampshire Provincial Papers, 6:745. New Hampshire Provincial Papers, 6:774. 68 New Hampshire Provincial Papers, 6:516–17. 69 New Hampshire Provincial Papers, 6:591, 669, 712, 751, 792, 827, 869–70. 67

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the right to collect excises was sold at auction to the highest bidder. Excises for liquor were farmed in 1738 for three years, thereafter for two years in 1742 (retroactive to 1741), and two years in 1743, 1745, and 1747. The expiration of a renewal of May 1748 through 1751 brought renewal for ten years in May 1752. In 1756 the government appointed collectors in place of tax farmers to collect excises, but reestablished the system of farming the following year.70 Rates carried over from the era of salutary neglect. On March 17, 1741, they were increased by an additional 4d. per gallon on wine, rum, and spirits (6d. for outdoor retailers), and 12d. per barrel on perry (a fermented beverage made from pears) and cider sold by tavern keepers and innkeepers.71 Figures on receipts from tax farming are sporadic. In 1743 the auction brought 922 OT per year (230 10s. NT) for two years; no amounts are recorded for 1742, 1745, or 1747.72 From 1753 onward excises were paid in New Tenor. Seeking additional revenue, the General Assembly in January 1755 raised excises to 10d. per gallon of wine, rum, and spirits and 2s. per barrel of perry and cider on innkeepers, tavern keepers, and outdoor retailers.73 The following year brought a further rise along with the imposition of import duties after a lapse of thirty-five years. An additional 8d. excise was added to each gallon of wine, rum, and spirits, 1s. per barrel of perry and cider, and a new charge of 2s. 6d. per pound on green and Boha tea. Import duties were set at 20s. per hogshead of rum and 20s. per pipe of all wines. In 1760 excises were transformed from New Tenor to 6d. sterling per gallon on liquor, and import duties were put at 10s. sterling per hundred gallons of rum, wine, brandy, and spirits.74 There are some figures of receipts of excises in the Provincial Papers. For the three years 1755–57, receipts amounted to 3,515 12s. 6d. NT. For the fi rst two of those years, receipts were 1,875 NT, which partly explains the switch back from direct collection in 1756 to tax farming in 1757, as the latter year equaled the proceeds of the previous two years.75 Indirect taxes yielded on the order of 1,000 NT or less a year in the 1750s and early 1760s, which was minuscule compared with direct taxes and British reimbursement. New Hampshire made little use of lotteries, authorizing Portsmouth to raise 600 sterling in 1760 to pave its streets.76 70

New Hampshire Provincial Papers, 5:7, 145, 153, 186, 358, 518, 6:139–40. New Hampshire Provincial Papers, 5:153. 72 New Hampshire Provincial Papers, 5:208. 73 New Hampshire Provincial Papers, 6:345–46. 74 New Hampshire Provincial Papers, 6:473, 733. 75 New Hampshire Provincial Papers, 6:589, 652. 76 New Hampshire Provincial Papers, 6:725, 727, 741. Britain’s defeat of the French on the Plains of Abraham in Quebec on September 13, 1759, restored normal politics to the colony. The governor pressed the house for a fi xed salary for the chief justice and other judges. When 71

[ 620 ]

Taxation of the New England Colonies, 1739–1763

Altogether the colony issued 123,060 NT bills and 67,000 sterling in treasurer’s certificates between 1754 and 1763. Most was redeemed by 1764. (Full redemption by 1768 is treated in chapter 25.) British reimbursement of about two-fifths of war expenses minimized the collection of the sterling taxes voted for the redemption of the colony’s sterling bills. Although bills were issued in sterling from March 1758 and taxes were assessed to meet their redemption in sterling, the delay in receiving reimbursement and the schedule of deferred taxation resulted in a steady fall in the silver and sterling value of the colony’s NT bills. Silver rose from 86.12s. an ounce in 1754 to a peak of 160.75s. in 1763, with the rate of exchange on sterling depreciating from 1,333.36 to 3,111.29 over the period. In 1765 New Hampshire converted to Lawful Money at 133.33 to 100 sterling, equating silver with the standard in the other New England colonies.77 It is not easy to estimate the colony’s annual tax burdens in that records do not reveal the total amount of taxes collected, especially the division between sterling reimbursement and sterling taxes levied to redeem the sterling bills issued from 1758. If every pence due between 1753 and 1762 to redeem all the NT bills was collected, the total would amount to 122,000 NT (488,000 OT), an annual average of 12,200 NT (48,800 OT), which would have retired 99.1 percent of all NT bills. With the colony’s population averaging about 38,000 over this period, per capita direct taxes would have amounted to about 77d. NT. The average exchange rate against London was around 2,600 NT to 100 sterling, which converts 77d. NT (308d. OT) to about 12d. sterling (16d. LM). Further assume that three-fifths of the sterling debt issues were redeemed with locally imposed sterling taxes. That would add another 40,000 sterling to the total tax burden stretched over 1760 through 1768. Th is would mean a relatively heavier tax burden of as much as 6,000–8,000 sterling a year in the last few years of the war, an annual per capita sum in the neighborhood of 52d. sterling (69d. LM). Even if the burden was as high as 60d. sterling, it was well below that of Massachusetts and Connecticut, and about one-sixth that of Britain, but only during the period of the French and Indian War.

Summary

B

e t w e e n 1 7 5 4 and 1762, Massachusetts issued the equivalent of 926,000 sterling in Lawful Money debts to finance its public

the house refused, the governor prorogued the legislature for three months. The original vote for the lottery was held on October 30, 1759, but the fi nal third reading required under the colony’s parliamentary system was not completed until February 21, 1760, after the General Assembly reconvened. 77 McCusker, Money and Exchange, 153–54.

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expenditures. Of this, war-related expenses came to 818,000 with another 108,000 spent on general administration. By the end of 1765 (two years after the period encompassed in this chapter), all but 160,000 had been liquidated. Table 21.2 highlights the heavy per capita tax burdens that were levied during King George’s and the French and Indian wars compared with the preceding era of salutary neglect. A good portion was abated with British grants and some were never paid, entered as arrears in the public accounts. Actual direct taxes were likely less than half those enacted in law. Indirect taxes came to a few pence a head, of which some portion was borne by British purchasing agents, merchants, and visitors to the ports and towns of the colony. During the French and Indian War, British tax burdens amounted to about 1 10s. a year. In contrast, during the year of peak wartime taxation, the levied per capita burden in Massachusetts was about one-quarter that of Britain, and about one-fifth during the less heavily taxed war years, with actual payments perhaps only half those levels.78 To further extend the comparison, Britain ended the Seven Years’ War having added 59.6 million to its public debt, whereas Massachusetts was well on its way to eliminating all but a small portion of its public debt. Apart from the war years, taxes in Connecticut were extremely low during 1739–63, especially up to 1744 and the early 1750s. Reimbursement from Parliament permitted the redemption of a considerable quantity of bills of credit from 1749, and eliminated any need for a rate in 1749/50. The annual tax burden fell by more than half in 1761/62, with hostilities having largely ended in North America, but the relatively high rate for that year and the next was required to redeem the colony’s public debt. Apart from the war years of the mid- to late 1750s, Connecticut’s inhabitants paid a small fraction of what their British counterparts paid. Moreover, the colony was virtually out of debt a few years after the war, unlike Britain, which suffered the annual cost of financing the interest payments on its heavy public debt. Residents of Rhode Island enjoyed significantly lower tax burdens than did their counterparts in Massachusetts and Connecticut. They paid taxes in only one year of King George’s War. As tabulated in table 21.9, the total amount of taxes levied during the ten years inclusive of 1754–63 came to about 77,000 LM and 513,000 OT.79 The total sums to 99,511 LM, an average of about 10,000 LM (7,500 sterling) a year. These numbers are close 78 The comparison with British tax burdens requires converting Massachusetts Lawful Money to sterling. 79 Between 1754 and 1763, Rhode Island OT steadily depreciated from 1,666.84 to 3,111.29 against 100 sterling in London. The roughly 513,000 OT assessed in taxes amounted to 22,189 sterling, or 29,511 LM based on the standard exchange rate in London for each relevant year. McCusker, Money and Exchange, 153–54.

[ 622 ]

Taxation of the New England Colonies, 1739–1763

to the figure of 80,981 sterling reported for spending on war time and all other activities over the period. With an average population of about 45,000 during the French and Indian War, per capita taxes in Rhode Island amounted to about 43d. sterling (53d. LM), roughly one-eighth those of Britons. And, as in the case of Massachusetts and Connecticut, the colony was well on its way to liquidating all its debts. New Hampshire’s taxes were heavy in wartime, as much as 6,000– 8,000 sterling a year in the last few years of the war, an annual per capita sum in the neighborhood of 52d. sterling (69d. LM). They were light in other years. Nonetheless, its colonists paid lower taxes than their counterparts in Massachusetts and Connecticut did, and much less than Britons paid. Absent British reimbursement, taxes would have been two to two-anda-half times higher, pushing tax burdens in Massachusetts and Connecticut close to those in Britain and putting those of Rhode Island and New Hampshire to nearly half those in Britain. Instead, the policy of reimbursement of Prime Minister Pitt to maximize support from the American colonies in the great war against France greatly eased colonial tax burdens. Not only were war time taxes lower, but postwar taxes fell to minuscule levels, with direct taxes abated completely for several years in some of the New England colonies. Moreover, the colonies were almost completely free of debt within a few years after the conclusion of war in marked contrast with Great Britain, which was saddled with enormous annual debt ser vice. The British government promised to protect the Indians from further colonial encroachment on their lands over the Appalachian Mountains, which required continued British presence and expenditure in North America. The rumblings in the halls of Parliament of British taxes on its American colonies to help reimburse these costs and burdens can be understood in this context.

[ 623 ]

c h ap t e r 22
Taxation of the Middle Colonies, 1739–1763

T

h e opp ort uni t y to acquire land in Pennsylvania and New York resulted in a faster rise in population of those colonies compared with New England’s more densely populated limited land area. During 1739–63 the inhabitants of the middle colonies, including New Jersey and Delaware, increased 118.7 percent, from 213,189 to 466,304. Pennsylvania led the way, reaching 200,000. Philadelphia became the leading center of commerce and finance in the colonies, growing from 13,000 in 1743 to 23,750 in 1760, becoming the third largest commercial city in the British Empire surpassed only by London and Bristol, with New York City expanding from 11,000 to 18,000.1 By 1760 both surpassed Boston in size.

Money

T

he cur r enc ie s of the middle colonies remained relatively stable against silver and sterling during 1739–63. 2 They were not subject to the

1

Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg60–64: “Population of Cities—Boston, Newport, New York, Philadelphia, and Charleston: 1630–1790,” S-655. 2 The treatment of money in the middle colonies draws from Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), 66–99, and Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld.com/colonial _currency.htm (June 3, 2003). Exchange rate and currency values are from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). Details of specific paper money issues are from Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). Chapters 3 and 4 in Richard A. Lester, Monetary Experiments: Early American and Recent Scandinavian (New York: A. M. Kelley, 1970), 56–141, describe the paper money experiences in the middle colonies. (First published in 1939 by Princeton University Press.) Statistics on British reimbursement of colonial war debts in the middle colonies appear in Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 38–52, 76–90. For New York, see John H. Hickcox, History of the

[ 624 ]

Taxation of the Middle Colonies, 1739–1763

Currency Act of 1751 that restricted the issue of bills in New England. 3 The rate of New York currency per 100 sterling depreciated from 166.67 to 186.73 between 1739 and 1763, but most of the depreciation occurred after 1760 when it traded at 167.20. The decline after 1760 reflected an economic slowdown in New York following a boom from supplying British and colonial forces during the peak years of the French and Indian War. The currencies of Pennsylvania and Delaware were nearly identical at the beginning and end of the period, with New Jersey’s closely tracking that of Pennsylvania.4

Bills of Credit: or, Paper Money Issued by New York, from 1709 to 1789; with a Description of the Bills, and Catalogue of the Various Issues (1866; repr., New York: Burt Franklin, 1969). For Pennsylvania up to 1755, see Mary M. Schweitzer, Custom and Contract: Household, Government, and the Economy in Colonial Pennsylvania (New York: Columbia University Press, 1987). For New Jersey, see Thomas L. Purvis, Proprietors, Patronage, and Paper Money: Legislative Politics in New Jersey, 1703–1776 (New Brunswick, NJ, and London: Rutgers University Press, 1986); Donald L. Kemmerer, “A History of Paper Money in Colonial New Jersey, 1688–1775,” Proceedings of the New Jersey Historical Society 74 (April 1956), http://www.frontierguard.org/ Research/ NJFG2B08 .html (June 4, 2003); and William W. Bradbeer, “New Jersey Paper Currency, 1709–1786,” http://www.frontierguard.org/ Research/ NJFG2B09.html (June 4, 2003). For Delaware, see Richard S. Rodney, Colonial Finances in Delaware (Wilmington, DE: Wilmington Trust Company, 1928). 3 It is important to distinguish between the force of an act of Parliament and royal instructions to governors. Acts of Parliament superseded any acts of colonial legislatures. In contrast, governors could not compel colonial legislatures to act, only refuse assent to local acts. The legislatures of New England were strictly bound to the Currency Act of 1751, while royal governors who tried to impose similar restrictions on other colonies, to ensure that bills had to be redeemed with taxes in specific periods of two to five years, met with less success. The later Currency Act of 1764 (see chapter 24) sought to apply the force of law on currency issues to all the colonies. 4 Strictly speaking, there was no exact par rate of exchange in London. The price of colonial bills was set at par rates against sterling in London but depended on the value of sterling itself based on the actual price of silver at any point in time. The legal value of a Spanish milled dollar based on its silver content was at 4s. 6d. (54d.), with the price of an ounce of silver at 62d. However, the price of silver fluctuated with its demand as a commodity. When a colonial merchant shipped silver to London to pay his debts, his broker sold the silver at the best price obtainable, which might have been higher or lower than the standard par rate of exchange. The London silver price along with the cost of shipping silver, including freight, insurance, and the broker’s commission, established the upper limit of exchange. The lower limit was determined by the London silver price and the cost of importing silver. The point at which it became profitable to export or import silver was defined as the “specie point,” which dictated whether it was less costly to make payment in specie rather than in bills of exchange and vice versa. The actual price of silver determined the “effective par rate” of exchange. For our purposes, the effective or market price of sterling and the standard price track each other sufficiently closely that we can use the standard par rate of exchange numbers in McCusker to establish equivalence between colonial currencies and sterling. Th is mechanism is described in Brock, “Colonial Currency, Prices, and Exchange Rates,” 11.

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New York

D

ur ing 1 7 0 9– 40 , New York issued sixteen rounds of bills. Eleven were tax backed, amounting to 100,607. Four totaling 19,000 replaced worn and torn bills, but extended the period of redemption of those they replaced. One was a 1737 public loan of 40,000 that generated about 1,800 of annual interest income for the colonial government through 1763.5 Altogether, 159,607 in bills was issued between 1709 and late 1739.6 When the era of salutary neglect came to a close, only 81,000 remained in circulation. About half was canceled with taxes as the bills came due for redemption.7 After a lapse of nearly a decade, the fi rst installment in a new round of legal tender bills was issued in May 1746 for 13,000 New York currency, scheduled for redemption in three years with a tax on real and personal estates. 8 It was followed with two tax-backed issues totaling 68,000 in November 1747, raising the outstanding stock of New York bills to 189,495.9 Steady cancellation over years of relative peace from the end of King George’s War to November 1754 reduced the stock to 126,081. In 1748, 17,488 was canceled, followed by 8,985, 9,078, 5,724, 7,254, 8,428, and 6,450 in successive years through 1754 as recorded in the Votes and Proceedings of the General Assembly of the Colony of New York.10 The outbreak of the French and Indian War required fresh recourse to the printing 5

The precise annual sums are tabulated later in the chapter. The specific purposes of these issues are in Newman, Early Paper Money of America, 266–76. 7 It should be recalled that the only specie that was made legal tender in New York was Lyon dollars, not pieces of eight, which enabled the colony to circumvent Queen Anne’s proclamation rate. Lyon dollars were not included in the list of coins subject to the proclamation maximum rate. 8 Instructions issued to royal governors required that they assent to legislation for new bills only if accompanied by taxes to ensure their redemption within a reasonable period of time to prevent depreciation of colonial currencies as happened in New England. The Currency Act of 1751 that applied to New England stipulated that bills issued for civil expenditures be retired in two years and those for military purposes be retired in five. Royal governors were instructed to apply the time period of redemption for New England to other colonies as well. Royal instructions issued to New York governor Charles Hardy stipulated that bills issued for sudden emergencies should be called in, sunk, and redeemed with taxes within a period of time not exceeding five years. New York’s heavy outlays in the peak years of the French and Indian War prompted the Crown to ease these terms, allowing redemption periods of up to eight years. Indeed, only the issue of 10,000 of April 1756 met the five-year requirement; all the others were permitted longer periods of redemption. 9 The figure appears in Brock, “Currency, Prices, and Exchange Rates,” table following page 10. 10 The figures are rounded to pounds from totals recorded in pounds, shillings, and pence. 6

[ 626 ]

Taxation of the Middle Colonies, 1739–1763

press. A series of acts between February 1755 and March 1760 approved 360,000 in new bills, backed with direct taxes apportioned to the several counties. The issues of 1756 were scheduled for redemption in four installments with taxes between November 1762 and November 1765. A later issue of 1759 would not be fully redeemed until November 1767. Some portion of each batch continued to circulate long after its date of issue.11 In 1759, 1761, and 1763, the governor also assented to postponement of loan office repayments to enable the continued collection of interest.12 The outstanding stock of bills peaked at 556,615 New York currency in November 1759. Redemptions slashed it by two-thirds to 188,497 by November 1768. As will be indicated later in the chapter, a modest amount of indirect taxes of duties, tonnage, and excises was sufficient to fi nance the ordinary costs of civil administration during 1748–54. Heavy military outlays during 1755–62 transformed the colony’s system of dependence on indirect taxes to one largely dependent on bills backed with pound-for-pound levies of direct taxation. A report of the colonial treasurer put war-related outlays of the colony at 143,230 New York currency from 1754 to the end of 1757 and 341,625 including 1758 and 1759.13 In 1766 the Board of Trade estimated the cost of the colony’s efforts in the war to its conclusion in February 1763 at 291,156 sterling (around 500,000 New York currency). British reimbursements to New York appear to have been at least half its war-related costs.14 If accurate, it means that up to half of all direct taxes on real and personal estates that backed war bills did not require collection.15

11 Table 22.1 links the bills with the schedule of deferred taxes, amounts due each year, and actual receipts reported by the treasurer to the General Assembly. 12 The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), 4:385–86, 554, 649. 13 A fi re that destroyed a large number of manuscripts in the New York State Library precludes an accurate, comprehensive accounting of the colony’s public finances from 1758 to 1764, but some fragmented records that survived for 1764 indicate revenue for that year. 14 Gipson, The Triumphant Empire, 80. Gipson does not itemize New York’s share of total British reimbursement of 1,072,784 sterling to all the colonies, beginning with major gifts of 115,000 in 1756, 50,000 in 1757, 200,000 in each of 1759, 1760, and 1761, and 133,333 in both 1762 and 1763 (these gifts sum to 1,031,666, slightly more than the actual amount received in the colonies). He states that 15,000 was allocated from the grant of 1756, and 22,792 in 1761. Entries from the colonial laws indicate that 2,997 7s. 8d. sterling was used to purchase provisions in 1756, 14,323 15s. 3d. was used to pay and clothe a regiment from December 1756 through March 1757, 15,878 8s. 8d. was used to pay and clothe a thousand men beginning April 1757, 2,369 13s. was transferred from the colony’s agents in London to the colonial trea surer in late 1760, and an act of March 20, 1762, appropriated 3,916 8s. 11d. from a portion of the 1758 grant. Colonial Laws of New York, 4:148–49, 163–64, 497–98, 602–5. 15 The extent of non-collection through February 1763 and up through 1768 is discussed later in this chapter and in chapter 27.

[ 627 ]

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Pennsylvania

P

ennsy lvania f irst issued paper money in 1723 and then in 1729 as loan office banks. A fresh printing of 80,000 Pennsylvania currency in legal tender bills in 1739 was designated to replace extensively counterfeited prior issues and add another 11,110 5s. for sixteen-year mortgage loans. The colony was under little pressure to provide men or money for King William’s War, so that only an additional 5,000 was issued in 1746, to remain current until October 15, 1762. The stock remained at 85,000 through 1749, falling gradually to 81,500 in 1754. Of the total, 80,000 remained on loan, with 1,500 backed with pledges of taxation. Loan office interest was a principal source of revenue for the colonial government. The French and Indian War dramatically changed the monetary and tax picture in Pennsylvania. Large emissions of tax-backed legal tender bills were put in circulation from October 1755 through May 1760, with schedules of tax collection and redemption extending over several years. The outstanding stock peaked in 1760 at 446,158, more than fivefold that of 1754. During this period, the amount on loan declined with repayment of principal from 80,000 in 1760 to 23,760 in 1763, while the amount of tax-backed bills peaked at 353,205 in 1760. The French and Indian War transformed Pennsylvania from a low-tax colony of interest-based public financing supplemented with excises on liquor into one of relatively heavy direct taxation during wartime.16 According to the 1766 report of the Board of Trade, the colony issued 485,000 Pennsylvania currency in bills of credit, of which 417,390 (313,043 sterling) was war related. The colony received 22,047 sterling reimbursement in 1760 from the Parliamentary grant of 1758.17 In 1762 it drew on another 25,000 in sterling reimbursement. Tax receipts, loan office interest, principal payments, and sterling reimbursements sold for Pennsylvania bills of exchange financed the redemption of 299,669 in Pennsylvania bills issued between 1757 and 1765, leaving only 117,721 of the war issues outstanding in 1765. The balance of 51,863 sterling reimbursement money invested in stocks in London was sold for 88,881 Pennsylvania currency in bills of exchange, which helped eliminate most of the remaining war debt by 1768. However, several hundred thousand pounds of non-war related bills continued to circulate, slowly declining from 233,934 in 1768 to a low of 135,006 in 1773. The government did not make a determined effort to 16 Bills in circulation declined to a low of 135,006 in 1773, with pledges of taxation required for their redemption falling to a low of 119,789 in 1774. Pennsylvania reverted to its historical status as a low-tax colony until just before the Revolution. These conditions are discussed in chapter 27. 17 An interesting account of this grant and its effect on Benjamin Franklin’s political career on his return to Pennsylvania in 1762 appears in James H. Hutson, “Benjamin Franklin and the Parliamentary Grant for 1758,” William and Mary Quarterly, 3rd ser., 23, no. 4 (October 1966): 575–95.

[ 628 ]

Taxation of the Middle Colonies, 1739–1763

redeem these bills promptly as they provided a valuable circulating medium for commerce and reduced the need for taxes that would be directed at their redemption.

Delaware

I

n de ce mb e r 1739 Governor George Thomas stated that the outstanding stock of loan office bills still amounted to 17,250. At that time the colony resolved to issue 6,000 in new bills to replace those that were ragged and worn, but an act of 1740 authorized payment of 1,000 of the 6,000 to the government for the intended expedition against the Spanish West Indies. The next issue was in 1746 for 20,000 for Delaware’s participation in King George’s War. An act of 1753 approved 3,000 similar to that of 1746. Thereafter, between 1756 and 1760, the colony approved five taxbacked issues totaling 45,000. Delaware’s share of Parliament’s reimbursement for 1758 came to 3,044 sterling (5,250 18s. Delaware currency). Bills of exchange were drawn on the amount and paid to the trustees of the loan offices. They were instructed to call in and redeem 4,000 in bills issued to the governor for the king’s use in 1760 and 1,200 from 1759. The colony’s agent in London, David Barclay, reported that grants for 1759 and 1760 amounted to 3,745 17s. 10d. sterling (6,457 18s. 9d. Delaware currency). The second reimbursement was used to redeem 7,000 in bills granted the governor in 1759, with the balance of 1,000 to be redeemed with a 3d. tax for one year. The two reimbursements financed the redemption of 12,200, almost half of the war bills of 25,000. The remainder of the colony’s debt was liquidated with taxes. By the time peace was declared in February 1763, Delaware was free of debt.

New Jersey

N

e w je r s e y ’s last issue during the era of salutary neglect was for a net 40,000 in Proclamation Money. New Jersey’s bills were denominated in Proclamation Money but in fact traded at their market rate in London, 170 to 100 sterling. In 1740 the House of Commons passed a series of resolutions forbidding all colonial governors from signing acts calling for further issues of legal tender bills without a suspending clause. New Jersey had obeyed this requirement in securing support for its loan office issues of 1730 and 1733. In autumn 1742, the General Assembly approved a 40,000 loan office act with a suspending clause, but Governor Lewis Morris rejected it and dissolved the legislature. In 1743, 1744, and 1746, the Assembly reintroduced a loan office bill, which was rejected either by the Council, the governor, or the [ 629 ]

chap t er 22

Crown. A small appropriation of 2,000 was approved in 1745 for the expedition against Fort Louisburg, which would be covered with interest from previous loan issues. Military requirements during King George’s War prompted a vote in spring 1746 to issue 10,000 in bills, reissue of 4,000 originally printed as replacements for torn bills of previous issues, and the postponement of another 2,000 due for retirement of the 1740 issue. Another 1,850 was voted in November 1746 for provisions and military purposes. Excluding the 2,000 postponed, all of the 17,850 was to be redeemed by 1753 with interest money. Several further attempts at a new loan office issue were disallowed in London. The prospective redemption of all previous loan office bills by 1753 meant that the colonial government, for the fi rst time in decades, faced the prospect of real taxation. One further petition for a new loan office issue of 89,000 in 1757 was not accepted. The French and Indian War brought forth thirteen issues of bills of credit that were backed with direct taxation. The first of 15,000 in May 1755, declared legal tender to May 15, 1760, was to be redeemed with annual taxes over five years. The last of twelve further issues in April 1762 was declared valid as legal tender until November 1, 1780, way beyond the British government’s desirable five-year limit. French and Indian War issues totaled 307,500. Sterling reimbursement for the colony’s expenses in the French and Indian War amounted to 44,539 (79,668 New Jersey currency) in allotments of 9,166 in 1760, 18,345 in 1762, and 16,961 in 1764, plus a bill of exchange for 67.18 These proceeds were used to pay down the stock of bills to 219,969 by the end of 1768. Only a meager 12,863 in taxes was required to supplement reimbursement to achieve the reduction in bills to that outstanding in 1768. As of the end of 1768, British taxpayers, not the inhabitants of New Jersey, had almost entirely paid for the colony’s participation in the war. In response to complaints of deflation and hardship from the reduction of bills, the colonial government eased its collection of taxes, maintaining the stock of bills in circulation above 200,000 into 1771. The view in the colony was that bills were a useful source of currency to lubricate commerce and finance public expenditure with minimal need for taxation of any sort. Despite the existence of a much larger per capita debt in New Jersey than that in the other middle colonies, the sterling exchange rate of its currency remained virtually unchanged up to the Revolution. 18

The exact equivalent of New Jersey currency appears in Kemmerer, “History of Paper Money in Colonial New Jersey,” 12. Although the colony’s bills were declared in silver as Proclamation Money—for example, a 1s. 1756 note stated its value at 2 dwt. 22 gr. of silver—the market value of New Jersey bills was roughly 8 to 5 against Proclamation Money during peak war time years, which means that it took 160, not 133.33, New Jersey currency to buy 100 sterling.

[ 630 ]

Taxation of the Middle Colonies, 1739–1763

Taxation in New York, 1739–1763

N

e w yor k was on the front line during the French wars. Along with Massachusetts, it bore the brunt of supplying and financing men and material. The colony’s fiscal regime of indirect taxes of duties, tonnage, and excises, coupled with interest from its outstanding loan issue, remained in place. However, the need for much greater revenue during war time shifted primary reliance to bills of credit backed with direct taxes on real and personal estates. The annual average of 2.4d. per capita in direct taxes compared with 26.4d. in indirect taxes during 1714–39 was inverted, with direct taxes becoming the preponderant source of revenue.

External Taxes

N

e w yor k e rs produced or traded few enumerated goods, which limited their payment of imperial trade taxes. The 1733 Molasses Act was the sole measure that was rigorously enforced during the French wars in an attempt to halt the supply of food and other goods to the French West Indies. Between 1734 and 1755, royal officers collected a meager 5,686 sterling in revenue, an annual average of 259, from its American colonies, with Bermuda and the Bahamas accounting for up to a third of the total. During 1756–64, revenue totaled 8,016, more than tripling the annual average to 891. In 1760 and 1761, when special efforts were made to restrict trade, the proceeds were 1,170 and 1,189, respectively.19 At most, New York taxpayers are likely to have paid only several hundred pounds a year. The real cost was not in taxes but in economic losses associated with the disruption of a lucrative trade.

Direct Taxes

D

ir ect taxe s were regarded as extraordinary revenue in New York, to be levied only in case of such emergencies as war. In September 1744 the General Assembly voted a direct tax of 3,200 New York currency on freeholders, residents, and sojourners due the following November. All subsequent direct tax levies were linked to war bills of credit. Between May 1746 and November 1747, 81,000 in taxes, stretched out to 1756, was levied to back three issues. Between February 1755 and March 1760, 385,000 in taxes was levied to redeem another eight issues. Including the 3,200 tax of 1744, total direct provincial tax levies during the period 1739–63 amounted to 469,200, an annual average of 18,768. Full redemption of these issues 19 George Louis Beer, British Colonial Policy, 1754–1765 (Gloucester, MA: Peter Smith, 1958), 114–17. First published in 1907 by Macmillan.

[ 631 ]

chap t er 22

was scheduled for November 1767, four-and-a-half years after the Treaty of Paris formally concluded the French and Indian War. In peacetime, the General Assembly met in autumn to pass laws, appropriate funds, and vote taxes. During war time, it met more often to approve supplementary bills and taxes. Each year the General Assembly instructed the treasurer to present the colony’s accounts. Several times in the 1740s he did not present any numbers, noting that some collectors of specific revenues had not submitted their records. In other years he presented accounts that lumped several taxes into one category or commingled revenues and expenditures, making it impossible to identify the proceeds of each source of revenue. In other years his reports were incomplete, listing the proceeds of one or more sources of revenue but not from others. On occasion he presented a comprehensive accounting of large blocks of years, but these do not permit reconciliation of different sets of overlapping numbers to determine the annual revenue from each source. His reports after 1750 permit a better construction of the colony’s revenue. Table 22.1 presents the list of bills of credit, the schedule of direct taxes levied for their redemption, total payments due each year, and actual receipts reported by the treasurer to the General Assembly. Two entries for 1746, three for 1755, and two for 1756 reflect multiple issues of bills in those years. Column 3 lists the number of years over which specific tax payments were scheduled; for example, 28,000 in bills of 1747 was to be redeemed in eight annual payments of 3,500. Column 4 shows due dates for tax payments. To redeem the 1747 bills the first payment was due November 1748, with seven subsequent payments through 1755. Column 5 lists the total amount due the first Tuesday of each November. In the early years, payment was directed to retire one issue of bills; in later years, several payments came due to retire multiple issues. For example, the figure of 40,500 due in 1760 represented six tax payments that were scheduled to retire portions of six issues of bills. Column 6 shows actual receipts reported by the treasurer. Direct taxes to redeem the bills of King George’s War were not paid on schedule. In 1753 the treasurer presented a series of accounts for 1720–53 that covered specific sources of revenues and outlays for different clusters of years.20 Taxpayer compliance was relatively good through 1747. A later act of December 11, 1762, required the disclosure and collection of arrears for direct taxes levied between 1721 and 1747. Arrears for the twelve acts in question amounted to 7,716 0s. 51 ⁄4d., a modest 7.9 percent of total levies. The two largest sources of 17.4 and 10.9 percent were for the two most recent levies of 13,000 in 1746 and 28,000 in 1747. 21 20

There are no published proceedings of the General Assembly between December 17, 1746, and February 11, 1748, and again between November 1751 and October 1752. 21 Colonial Laws of New York, 4:656–66.

[ 632 ]

Taxation of the Middle Colonies, 1739–1763

tabl e . New York Bills of Credit, Schedule of Payments for Redemption, Total Payments Due, and Actual Tax Receipts, 1746–1763 (.s.p. New York Currency) c ol u m n 1

colum n 2

c olum n 3

c olum n 4

column 5

column 6

Year

Bills of Credit

Schedule of Payment

Dates Due

Total Payments Due

Direct Tax Receipts

1746 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755

13,000 40,000 28,000

3 × 4,333.6.8 8 × 5,000 8 × 3,500

11/46 . . . 48 11.49 . . . 56 11/48 . . . 55

1755 1755 1756

10,000 8,000 10,000

1756 1757 1758

52,000 100,000

1759

100,000

1760 1761 1762 1763 1764 1765 1766 1767 Total

45,000

60,000

1 × 5,000, 4 × 10,000 1 × 10,000 5 × 1,600 5 × 1,400, 1 × 3,000 4 × 13,000 2 × 9,000, 5 × 8,000, 2 × 21,000 1 × 12,000, 8 × 11,000 8 × 7,500

4,333.6.8

11/56 . . . 60

4,333.6.8 7,833.6.8 8,500 8,500 8,500 8,500 8,500 8,500 8,500

11/61 11/56 . . . 60 11/56 . . . 60

13,000

11/62 . . . 65

6,733.18.4 8,122.8.8 8,354.10.10

8,242.6.6 12,162.10.8

11/59 . . . 67

13,000 13,000

11/59 . . . 67

34,000

11/60 . . . 67

40,500 39,500 39,500 39,500 39,500 39,500 39,500 39,500 466,000

466,000

3,171.9.0

13,907,18.8

32,290.6.4 64,184.18.9 29,364.15.7 46,356.13.11

Sources: The Colonial Laws of New York from the Year 1664 to the Revolution (Albany: J. B. Lyon, state printer, 1894), 3:403–5, 548–56, 577–79, 660–62, 1038–40, 1131–32, 4:43–48, 60–62, 215–18, 317–28, 400–10, and Votes and Proceedings of the General Assembly of the Colony of New York, figures from the years reported.

[ 633 ]

chap t er 22

Arrears increased after 1747. Up through November 1753, scheduled tax payments to redeem portions of the 13,000, 40,000, and 28,000 in bills issued in 1746–47 amounted to 78,739 10s. Receipts amounted to 43,836 12s., 55.7 percent of taxes due, with arrears of 34,854 7s. 1d., 44.3 percent. 22 The treasurer’s report of 1753 helped fi ll in some omissions of financial information from previous years. Thereafter, annual reports without any mention of cumulative arrears became the norm. Direct tax receipts between 1746 and 1753 averaged 5,480 a year, 16.4d. per person. While modest compared with British tax burdens, it was sevenfold the 2.4d. rate in the era of salutary neglect. The treasurer reported that direct taxes came to 103,965 for the longer period 1746–59, a higher annual average of 7,426 reflecting the larger receipts in the later years of the period. The absence of further discussion of arrears in the legislative record suggests that British reimbursement eased the pressure for their collection. For example, 8,500 was due in direct taxes in 1754, but the treasurer reported no receipts for that year. Direct taxes resumed in 1756, remaining relatively moderate through 1758 even though the French and Indian War had been underway for several years and almost two-thirds of the war bills had been issued. Taxes due markedly increased in 1759, remaining at an annual level of 39,500 between 1761 and 1767. Beginning in 1760, actual receipts reached and remained at historically high levels for the duration of the war.23 Annual per capita taxes during the four years 1760–63 averaged 43,050, 86d. per capita. Of the 466,000 in direct taxes voted to redeem war bills, 197,500 was scheduled for payment eight months after the Treaty of Paris. Sterling reimbursement in 1761 was sold for 36,666 16s. 51 ⁄2d. New York currency in bills of exchange and 46,875 in 1762, amounts in the neighborhood of actual receipts for those years. Absent British reimbursement, per capita direct taxes would have been significantly higher, perhaps double, as Lawrence Henry Gipson has suggested. From time to time, the General Assembly voted to authorize cities and counties to levy direct taxes for various public purposes, most frequently for military fortifications, the erection of jails and courthouses, and quartering British forces during the French and Indian War. Thirty-four acts amounting to about 14,800 were approved between November 1739 and December 1762, of which some 10,450 was for New York City. Several of the acts did not stipulate any maximum sum that could be raised.24 The residents of

22

The accounts do not balance in the treasurer’s report. The sum of receipts and arrears is about 50 less than taxes due. 23 Receipts of direct taxes after 1763 are presented in chapter 27. The figure for 1763 includes arrears of 3,023 10s. 6d. 24 Colonial Laws of New York, 3:34–35, 36–37, 127–32, 284–86, 442–43, 462, 493–94, 542–43, 619–20, 830–31, 770–71, 863, 864–65, 941–42, 1025–26, 4:211–13, 236, 309–10, 314, 392, 396, 418, 420, 496–97, 536, 573, 576, 580, 615–16, 671, 683.

[ 634 ]

Taxation of the Middle Colonies, 1739–1763

New York City thus bore an extra burden in its central role during the wars. With an average population of about 14,000 during 1739–63, each city resident paid an annual surtax of about 7d., more than triple the overall provincial direct tax rate of 1714–39, but small compared with the 86d. charge of the four heavy war years.

Indirect Taxes

I

ndir ect taxe s funded civil administration, with annual government support of about 3,000–4,000 New York currency to pay salaries and other government expenses. From time to time, an extra 1,000– 2,000 was allocated for gifts to Indians and related expenses involving Indian allies of the British and colonists, and to clear past debts for special ser vices provided by the colonial government. Sources of revenue were regular and special duties, tonnage, excises, and licensing of hawkers and pedlars. Duties, tonnage, and license receipts were generally reported for fiscal years beginning September 1 and ending the following August 31. Excises were reported for miscellaneous periods of one year from November 1 through the following October 31 up to 1743, for odd blocks of time through 1754, and annually thereafter. Exact calendar year accounts of total indirect taxes cannot be reconstructed without the treasurer’s complete records, which do not exist for 1758–64 and which were not presented to the General Assembly in other years. Nonetheless, it is possible to assemble a reasonably accurate estimate of indirect taxes collected during 1739– 63 (see table 22.2).

Duties

D

u t ie s w e r e imposed on imports of wine, rum, molasses, salt, cacao, and dry goods, tea from 1758, documents in the form of a stamp tax during 1758–60, and occasional special duties on Indian goods shipped up the Hudson River and goods sold at auction. Regular duties were generally renewed on an annual basis. The rates that applied from December 1, 1740, through 1763 continued those enacted in 1737: 30s. per pipe of wine, 2d. per gallon of rum, brandy, and distilled liquors, 4s. per hundredweight (112 pounds) of cacao, 5 percent on European (non-British) or East Asian goods imported from Great Britain, and 2 for each slave over four years of age from Africa, the latter also payable as five ounces of Seville, Pillar, or Mexican plate, with 4 for slaves, double in specie, imported from other places.25 25

Colonial Laws of New York, 3:2–3, 31–34, 87–88, 151, 223, 277–78, 417, 480–81, 616–17, 655, 722–23, 857–58, 872–73, 879–80, 963–64, 999–1000, 4:2–3, 159–60, 183–86, 279–80, 359–60, 471– 74, 549, 625–26, 653.

[ 635 ]

chap t er 22 tabl e . New York Indirect Taxes and Interest Income, 1739–1763 (.s.d. New York Currency) Year

Duties

Tonnage

Excises

Hawkers

Miscellaneous

Interest

1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763

1,818.16.4 3,107.9.3 2,641.1.412⁄ 2,153.12.134⁄ 2,309.13.1012⁄ 7,242.1.9 2,605.9.0 (incl. in 1749) (in 1749) (in 1749) 8,183.10.312⁄ n.e. n.e. 2,754.16.014⁄ 1,788.8.2 1,620.19.714⁄ 2,433.19.634⁄ 4,171.9.2 5,504.18.614⁄ 5,187.11.212⁄ 8,155.7.814⁄ 10,091.4.11 10,318.16.1114⁄ 6,381.14.534⁄ 8,288.0.1034⁄

605.17.7 (in 1740 duty) (incl. in 1743) (in 1743) 1,475.9.1134⁄ (in 1745) 1,916.15.912⁄ (in 1750) (in 1750) (in 1750) (in 1750) 6,366.4.1014⁄ 966.16.234⁄ 643.12.712⁄ 836.16.812⁄ 886.13.112⁄ 587.2.814⁄ 890.10.412⁄ 752.5.512⁄ 998.15.914⁄ 1,376.10.6 2,040.5.712⁄ 1,626.12.314⁄ 1,204.13.414⁄ 1,001.17.614⁄

1,193.19.0 1,029.10.0 991.10.0 992.10.0 983.10.0 1,007.0.0 1,029.0.0 1,146.0.0 1,211.0.0 2,552.0.0 none 1,460.0.0 none 2,754.16.034⁄ 1,286.10.0 861.5.0 1,050.0.9 1,731.16.9 2,813.4.1112⁄ 1,500.0.0 1,500.0.0 1,500.0.0 1,500.0.0 1,500.0.0 1,500.0.0

(in 1740) 41.2.0 (in 1745) (in 1745) (in 1745) (in 1745) 139.13.6 n.e. n.e. (in 1749) 85.0.0 200.0.0 150.0.0 175.0.0 170.0.0 160.0.0 185.0.0 100.0.0 210.0.0 135.0.0 335.0.0 487.17.1 345.0.0 387.10.0 275.0.0

21.9.9 (in 1742) (in 1742) 1,884.14.19 n.e. n.e. n.e. n.e. n.e. (in 1750) (in 1750) 10,557.11.534⁄ n.e. n.e. n.e. n.e. n.e. n.e. n.e. 1,821.2.1 (in 1760) 3,700 (in 1762) 1,648.4.334⁄ 212.5.614⁄

1,800.0.0 1,800.0.0 n.e. 1,667.0.0 1,800.00 n.e. 1,800.0.0 1,800.0.0 n.e. 1,782.7.6 1,501.2.6 n.e. n.e. 1,783.15.0 2,066.0.0 1,534.0.0 1,800.0.0 1,800.0.0 1,800.0.0 1,800.0.0 1,768.10.6 1,759.12.6 1,784.17.6 1,775.15.0 1,778.15.0

Notes: 1. Duties. The amount reported is net duties, which is gross receipts minus drawbacks for goods reexported within six months of importation. The amount of duties in 1749 includes that of 1746–48. Tonnage in 1743 includes 1741–42, 1745 includes 1744, and 1750 includes 1746–49. The same years of coverage apply to licenses for hawkers, and miscellaneous items. 2. N.e. means no entry was recorded for this source of revenue in the trea surer’s report to the General Assembly for the year in question, or that no report for that year was included in the Journal of the Votes and Proceedings of the General Assembly of the Colony of New York. No figure was reported for excises after 1757. The sum of 1,500 for excises during 1758–63 is based on targets stipulated in annual acts of the General Assembly. 3. Miscellaneous items are as follows: 1739, vendue (auction) duty; 1742, duties on Indian goods shipped up the Hudson River to Albany (includes 1740, 1741); 1750, duties on Indian goods, goods for Oswego, and wig tax (includes 1748, 1749); 1758, tea tax of 1,200 and stamp tax of 681 2s. 1d.; 1760, tea tax (includes 1759); 1762, tea tax (includes 1761); 1763, tea tax. Not included in 1761 is an auction tax of 7 15s. 10 3 ⁄4d. 4. A report submitted to London in 1766 listed annual revenue from duties between 1756 and 1766. Excluding 1764–66, revenue for the period 1756–63 amounted to 56,815 16s. 4 1 ⁄2 d., somewhat less than the approximately 58,100 that I compiled from the annual reports of the colonial treasurer published in the Votes and Proceedings, although the numbers in the document submitted to London are based on the same reports. My calculation and the fi gure in the report agree only for 1761. In any case, the annual difference amounts to less than 200 a year, which does not materially affect the overall totals and estimated tax burdens of New York’s inhabitants. See also fn. 13 to this chapter, which explains the destruction by fi re in the New York State Library of some fi nancial records from 1758 to 1764 that precludes a precise computation of tax revenues. Sources: The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), and treasurer’s accounts reported in the Journal of the Votes and Proceedings of the General Assembly of the Colony of New York. Public Record Office, Kew, United Kingdom, fi le T 1/452/273–74, “North America, New York: General State of the public funds in New York Province and the uses to which they are applied” (dated 1766; period covered not indicated).

[ 636 ]

Taxation of the Middle Colonies, 1739–1763

Slave duties were negligible over the entire period. Duties generated several thousand pounds a year in revenue up through 1755, after which it markedly increased during the French and Indian War, exceeding 10,000 in 1760 and 1761, with soldiers being allotted large daily rations of taxed rum. At its height, and only for a few years, duties generated in the neighborhood of a quarter of direct tax revenue. Special duties of 1s. per gallon of rum and liquor and 10s. per twentyfour-yard piece of cloth were enacted for two years from November 1740, and reenacted in the late 1740s to regulate the Albany fur trade and support the Oswego garrison. Excises were placed on the fur trade during 1740–44, along with a 3 percent duty on goods sold at auction, the latter to replace the repealed duties on cider, beef, and pork. To protect local industry, duties were imposed on empty casks made outside New York from 1744 through 1757. The charges were 3s. per tight hogshead, 18d. per tight barrel, 1s. per tight half barrel, anchor, half anchor, and tight cask, 1s. per flower or bread barrel, and 9d. for all other dry casks. 26

Tonnage

T

on n ag e c ar r i e d ov e r from the era of salutary neglect. The charge was 3s. per ton on foreign-built and foreign-registered vessels, with exemption granted to locally built and locally and British-owned vessels, those in the coastal trade from Cape Henlopen to New Hampshire, and all whaling vessels. Annual receipts ranged from a low of 605 17s. 7d. in 1739 to a high of 2,040 5s. 7 1 ⁄2d. in 1760, when large shipments of supplies and war material flowed into New York. For the entire period, tonnage exceeded 25,000, just over 1,000 a year. 27

Excises

F

r om nov ember 1, 1739, through the end of 1752, excises on liquor were farmed out to bidders from the several counties; thereafter they were collected by public officials who were paid on commission. No excises were enacted in 1749 and 1751. For the period 1739 through 1753, total receipts came to 17,637, an annual average of 1,176. Thereafter excises were set at a fi xed amount of 1,500 per year for the next decade with a management fee of 167 10s., a commission of 11.2 percent, divided among the collectors in the several counties. Actual receipts varied from year to year. Legislation authorizing excises was routinely extended for periods of ten years, the last 26 27

Colonial Laws of New York, 3:83–84, 104–5, 241–43, 440–42. Tonnage was lumped together with duties in 1740 and 1745.

[ 637 ]

chap t er 22

from November 1, 1757, to October 31, 1767. In addition to liquor excises, an excise on tea of 6d. per pound of weight was collected during 1758–62, producing 6,750 over the five years. 28 Receipts from excises were not included in the treasurer’s annual reports after 1757, but were likely to have been near the target rate of 1,500 stipulated in annual legislation.

Licenses: Hawkers, Pedlars, and Chapmen

A

no t h e r s o ur c e of revenue was an annual license required of itinerant traders known as hawkers, pedlars (peddlers), and chapmen (another, now archaic, term for peddlers). The license fee was routinely renewed, the last extending to the end of 1764. The charge was 7 10s. per individual on foot and the same per horse or beast used in transporting goods, with an additional charge of 5 for any carriage or wagon used to move goods. 29 The license raised 100–200 in peacetime, with 300–400 during 1739–63. Although small in absolute amounts, every farthing mattered in war time.

Stamp Tax

A

s i n m as s ac h u s e t t s, New York made temporary recourse to a stamp tax for three years. A series of rates ranging from 1 ⁄4 to 4d. were applied to nineteen different kinds of documents. The treasurer reported receipts of 681 2s. 1d. in 1758, but did not include any figures in his 1759 and 1760 accounts. The printer of the New-York Gazette, James Parker, complained that it placed him at a disadvantage against competitors in nearby states. The tax was allowed to lapse after three years. 30

Loan Office Interest

I

n 1 759, 1761, and 1762, the governor signed legislation extending the term of loan office bills to enable the colony to continue to receive interest on its outstanding mortgages. Loan office interest supplied about 1,800 a year between 1739 and 1763.31 28

Colonial Laws of New York, 3:50–54, 153, 225–27, 278–79, 372–73, 464, 600, 650, 738–39, 747, 858, 887, 952–54, 1001–3, 4:1–3, 105, 116–18, 189, 191–94, 283–85, 292–93, 364–66, 378–81, 477–79, 557, 568–69, 643–45, 653. 29 Colonial Laws of New York, 3:417–18, 873, 4:388, 447. 30 Colonial Laws of New York, 4:110–12, 188–89, 290–91, and Mack Thompson, “Massachusetts and New York Stamp Acts,” William and Mary Quarterly, 3rd ser., 26, no. 2 (April 1969): 253–58. 31 Colonial Laws of New York, 4:385–86, 554, 649. Estimates of revenue are in Cathy Matson, Merchants and Empire: Trading in Colonial New York (Baltimore and London: Johns Hopkins University Press, 1998), appendix A, table 4, 324, 411n96.

[ 638 ]

Taxation of the Middle Colonies, 1739–1763

Under normal circumstances, indirect taxes and interest money provided a comfortable revenue for the colonial government. Excluding interest, which was paid by the beneficiaries of loans, indirect taxes ranged from a low of 3,529 in 1754 to a high of 17,819 in 1760. They were relatively light until the French and Indian War brought a rapid increase to 9,280 in 1757, 9,643 in 1758, and 13,249 in 1759, remaining at a relatively high 11,277 in 1763. During peacetime years in the period 1739–55, per capita indirect taxes ranged between 16 and 18d., increasing to 24d. during the French and Indian War, which was well below annual direct war taxes of about 86d. Some portion of indirect taxes was borne by British paymasters, importers, sailors, and other visitors to New York. The rapid growth of population in New York resulted in lower per capita indirect taxes during 1739–63 than in the previous quarter century.

Lotteries

L

ot t er ie s w e r e used on several occasions in place of, or in addition to, city and county taxes. The General Assembly authorized twelve lotteries between 1746 and 1762 totaling 25,200. Four went to found a college, two for a jail in New York City, one to repair its city hall, one to enhance its fortifications, two in the amount of 9,000 for land and a lighthouse at Sandy Hook, one to provide guns for residents of Richmond County, and one for general support in Albany. To ensure that only public bodies could raise funds through lotteries, the legislature prohibited private lotteries in 1747.32

Quitrents

I

n 1 742 the General Assembly passed legislation that dealt with the partition of lands held in common to aid the collection of quitrents. The Privy Council disallowed the act over concerns that large arrears would accumulate if collections were suspended until the Crown’s receiver-general of revenue appointed a collector, a distinct possibility in the political environment of New York. The objectionable clause was removed in similar legislation approved in 1755. The act, renewed in 1762 and 1768, provided the basis for enforcing payments of quitrents for the remainder of the colonial period. Table 22.3 presents, in sterling (100 sterling = 180 New York currency), the value of quitrents received and spent locally between September 1750 and September 1765. The annual average for the twelve-year period 1750–62 was

32 Colonial Laws of New York, 3:528, 607, 675–76, 679, 899–900, 1027, 4:38–39, 126, 202–3, 239, 524, 621, 667.

[ 639 ]

chap t er 22 tabl e . New York Quitrents Collected and Discharged, 1749–1765 (.s.d. Sterling) Year

Balance for 1749 Sept. 1750–Sept. 1751 1751–52 1752–53 1753–55 1755–56 1756–57 1757–59 1759–60 1760–61 1761–62 1762–65 Total Received Total Discharged Balance 1750–65 Total Balance

Quitrents Received

Quitrents Discharged

324.18.8 691.0.3 556.1.2 625.3.4 166.10.5. 274.2.7 513.0.10 550.14.11 1,657.7.4 435.12.412⁄ 2,172.2.6 7,966.4.412⁄

278.2.10 633.15.6 596.1.11 622.19.0 199.12.1 247.14.4 375.17.5 565.18.2 1,659.17.4 461.16.3 1,828.16.8

Balance

35.7.7

7,470.11.6 496.2.1012⁄ 531.10.512⁄

Note: The period covers September 29 of one year to September 29 of the following year or, in some instances, September 29 two or three years later. Source: Public Record Office, Kew, United Kingdom, fi le T 1/437/206, “North America, Miscellaneous: Abstract of the receipt and discharge of the New York Quit Rents 29 Sept. 1750–29 Sept. 1765.” Report of R. Cholomondy, receiver-general of revenue, November 14, 1766.

about 483 sterling (870 New York currency). Excluding the one-time higher collection of 1,657 7s. 4d. in 1760–61, the average of the eleven remaining years is a much lower 376 sterling (677 New York currency). The bottom entry in the fourth column indicates that the balance in the quitrent account on September 29, 1765, was a modest 496 2s. 101 ⁄2d. Of that sum, the lion’s share, 343 5s. 10d., 69.2 percent, was attributable to the excess of revenue over expenditure during the years of the last entry for 1762–65. Quitrents contributed a relatively insignificant sum to provincial revenues compared with direct taxes, indirect taxes, and interest income. In 1747 Governor George Clinton calculated that the application of quitrents to all lands in the colony would produce 4,000 a year, and would rise in future years. No more than a tenth of Clinton’s projection materialized. In 1767 Governor Henry Moore reported that quitrent arrears stood at 18,888 16s. 10d., indicating, despite improved legislation, that attempts to enforce payment were largely unsuccessful. 33 Quitrents did not seriously burden New York landowners.

33 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 271–78.

[ 640 ]

Taxation of the Middle Colonies, 1739–1763

Appropriations

F

or t h e twenty years in which the General Assembly appropriated funds for annual government support, the amounts ranged between a low of 3,090 New York currency in fiscal 1743 (September 1, 1742-August 31, 1743) to a high of 6,979 in fiscal 1755. 34 The latter figure included clearing accumulated past debts. No figure was reported for fiscal 1740, 1749, 1750, and 1754. For the twenty years, total funds appropriated for annual government support were 80,705, an annual average of 4,035. 35 Some years were higher due to the provision of gifts for Indians and special compensation to the governor for his war-related activities. The annual appropriation also included money for the colony’s agent in London. Annual appropriations were generally less than annual indirect tax revenues, excluding interest. The provincial administration luxuriated in financial clover. Beginning with an appropriation of 3,976 on May 19, 1744, for military fortifications, the General Assembly approved another thirty acts to fund military expenditures. Some were for troops and supplies, some for Indian allies of the British and colonists, some to help neighboring colonies pay for men and supplies, some for quartering troops, some to pay volunteers for frontier defense, and some for other measures. One of 2,500 in 1760 was for poor relief in Boston in the aftermath of a fire.36 The 1766 report of the Board of Trade estimated total war outlays at 291,156 sterling (around 500,000 New York currency), of which perhaps half was reimbursed. Even at half, 250,000 in war outlays that was not reimbursed was more than triple the total appropriated for general provincial administration during 1740–63. Some of the appropriations relating to war debts were paid from positive balances that accumulated in the separate duties, excises, tonnage, and loan office interest accounts.

Taxation in Pennsylvania, 1739–1763

T

h e s t o c k of loan office bills in 1739 stood at 80,000, where it remained until an additional 5,000 in 1756 raised it to 85,000. Until the outbreak of the French and Indian War, interest and excises on liquor were more than sufficient to pay the cost of civil administration. Principal

34 Each appropriation provided per diem funds for clerks of the General Assembly, rental payments for legislators, and related costs of meeting. These added a few pounds to the totals specifically itemized in the annual legislation. 35 Colonial Laws of New York, 3:127–32, 170–76, 233–38, 286–91, 430–34, 487–91, 628–32, 717– 21, 815–17, 874–77, 894–98, 4:43–48, 149–56, 183–86, 280–82, 360–63, 471–74, 550–52, 626–32. 36 Colonial Laws of New York, 3:339–41, 450–55, 548–56, 634–47, 578–87, 634–47, 656–59, 708– 14, 733–36, 793–813, 916–24, 995–96, 998–99, 1038–46, 1125–27, 4:51–57, 65–66, 134–49, 163–64, 221– 22, 47–78, 317–28, 350–51, 400–410, 421–22, 454, 516–23, 539–40, 602–5, 611, 617–18, 630–32, 653.

[ 641 ]

chap t er 22

repayments of mortgages were generally loaned out again, or not pressed for payment, to maintain the stock of interest-earning bills. Even some of the interest was reloaned. In March 1755 Governor Robert Hunter Morris wrote to Major General Edward Braddock, sent from Britain to lead an assault against the French and their Indian allies, on the beneficial condition of the colony’s public fi nances. Pennsylvania was free of direct taxes and debt, with 15,000 Pennsylvania currency in reserve at the disposal of the General Assembly. 37 The outbreak of war dramatically changed the structure of taxation in Pennsylvania. Between November 1755 and 1760, the colony issued 485,000 Pennsylvania currency in bills of credit. Apart from 30,000 in late 1756 that was backed with a ten-year extension of the 4d. excises per gallon on spirits, the remaining 455,000 was backed with direct taxes dedicated to its redemption. Tables 22.4 and 22.5 highlight the radical change in the composition of provincial revenue brought about by the war. Table 22.4 shows the continued reliance on interest and excises from 1740 to the outbreak of war; table 22.5 indicates the wartime emphasis on borrowed money and direct taxes. Several patterns are evident in table 22.4. Excises were relatively stable, ranging between 2,000 and 3,000 save in two of the later years when they exceeded 4,000.38 Interest supplied 3,200–3,900 during 1740–47, and averaged over 4,000 between 1748 and 1754. Outstanding interest reached almost 8,500 in 1754, more than double the level of interest income. With a substantial surplus in the hands of the loan office trustees and the provincial treasurer, house members saw little need to reduce arrears in interest and excises. A happy state of affairs prevailed between the elected members of the house and mortgage-holding voters. House members approved annual expenditures. The list in table 22.4 consists of incidental expenses paid by the provincial treasurer from funds remitted to him by the collectors of excise and trustees of the General Loan Office. The trustees also made approved payments from interest, for example, their salaries, support of the Pennsylvania Hospital, and gifts for Indians, to name but three. 37

Gipson, The Triumphant Empire, 86n54. Excises paid by residents and visitors to Pennsylvania were somewhat higher than the amounts received by the provincial treasurer. County collectors of excises were allowed a commission of 5 percent in Philadelphia and 10 percent in the other counties, which means that excises were higher by about 6–7 percent of the treasurer’s receipts, around 100–200 a year save in the two years when excises exceeded 400. The accounts of each collector do not permit an exact calculation of total excises until about 1770. In some years not all of the collectors’ accounts were recorded. In some the transfers from the collectors to the provincial treasurer overlapped more than one fiscal year. 38

[ 642 ]

Taxation of the Middle Colonies, 1739–1763 tabl e . Pennsylvania Excises, Interest, and Provincial Payments, 1739/40–1753/54 (.s.d. Pennsylvania Currency) Fiscal Year

1739/40 1740/41 1741/42 1742/43 1743/44 1744/45 1745/46 1746/47 1747/48 1748/49 1749/50 1750/51 1751/52 1752/53 1753/54

Excises

2,636.14.7 2,046.11.9 34⁄ 2,364.0.0 2,398.17.1 2,245.11.1 2,135.11.9 2,470,18,7 2,201.4.0 1,992.18.0 2,105.3.9 2,421.13.10 4,187.7.2 2,991.2.11 4,179.5.8 2,226.3.0

Interest Received

3,238.18.0 3,579.0.5 3,662.19.5 3,964.16.134⁄ 3,753.11.51 ⁄2 3,736.5.9 3,901.9.01 ⁄2 3,704.17.5 4,109.1.1 1 ⁄2 3,982.7.0 3,401.17.5 3 4⁄ 4,990.0.01 ⁄4 4,104.13.9 4,394.18.0 4,144.4.01 ⁄2

Interest Outstanding 3

4,981.4.2 4⁄ 5,142.10.01 ⁄4 5,770.18.81 ⁄4 5,822.5.21 ⁄4 6,018,16.01 ⁄4 6,286.0.111 ⁄4 5,051.18.103 4⁄ 6,556.7.7 6,921.6.41 ⁄2 7,067.6.41 ⁄2 8,205.8.7 6,688.6.71 ⁄2 7,159.4.31 ⁄2 7,688.4.7 8,460.12.3

Approved Payments

2,086.6.1 854.15.6 1,952.12.7 2,695.12.0 1,275.18.41 ⁄2 2,637.1.101 ⁄2 3,265.9.1 2,551.14.5 1,738.7.7 2,292.3.1 1,674.4.91 ⁄2 3,799.15.9 2,789.7.6 1,443.0.0 1,628.8.7

Notes: 1. The fiscal year for excises ran from June 1 to the following June 1. The fiscal year for the operations of the General Loan Office typically ran from mid-July to the next mid-July. 2. Approved payments in 1739/40 included 500 for the lieutenant governor. No salary support was provided in the next two fiscal years, which prompted his formal complaint to the house on January 8, 1743. Support of 1,500 was included in payments for 1742/43, none in 1743/44, 1,000 in 1744/45, 2,000 in 1745/46, 1,500 in 1746/47, none in 1747/48, 600 in 1748/49 and another 600 from the loan office trustees, 400 in 1749/50, 1,000 in each of 1750/51 and 1751/52. Payments were made for the executive’s use in the two years 1752/54 but none was specifically designated as salary in the audited accounts. Sources: Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, August 29, 1740, August 10, 1741, August 19, 1742, August 1, 1743, August 8, 1744, August 20, 1745, August 20, 1746, August 20, 1747, August 26, 1748, August 10, 1749, August 16, 1750, August 16, 1751, August 19, 1752, August 11, 1753, and August 15, 1754.

On July 15, 1754, the beginning of the General Loan Office fiscal year, the trustees held in their hands 5,784 11s. 6d. Outstanding interest of 7,688 4s. 7d. put its overall credit position at just under 13,500. The provincial treasurer began the year with 1,108 14s. 5d. in hand, not counting several hundred pounds of excises in the hands of county collectors not yet remitted to him. These numbers explain Governor Morris’s claim of 15,000 in reserve at the disposal of the General Assembly. Table 22.5 shows the change in the composition of provincial revenue with the outbreak of war. It displays the issue of bills of credit to finance war spending, the timetable and annual amounts of taxes levied for their redemption, total annual taxes scheduled for payment, net annual redemption of bills, and actual receipt of excises, direct taxes, interest, duties and tonnage, and sterling reimbursement from Parliament sold for Pennsylvania currency. [ 643 ]

chap t er 22 tabl e . Pennsylvania Bills of Credit, Schedule of Payments, Total Bills Redeemed, Taxes Received, British Reimbursement, and Loan Interest, 1755–1769 ( Pennsylvania Currency) c ol u m n 1

Year

1755 1756 1757 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 Total

c ol u m n 2

c olum n 3

c olum n 4

c olumn 5

column 6

column 7

Scheduled Taxes Due to Redeem Bills

Net Bills Redeemed

Excises

Bills of Credit

Schedule of Payment

Dates Due

55,000 30,000 100,000 100,000 100,000 100,000

4 × 13,750 10 × 3,000 3 × 33,333 3 × 33,333 3 × 33,333 3 × 33,333

1756 . . . 59 1756 . . . 65 1759 . . . 61 1760 . . . 62 1764 . . . 66 1767 . . . 69

485,000

16,750 16,750 16,750 50,083 69,666 69,666 36,333 3,000 36,333 36,333 33,333 33,333 33,333 33,333 484,996

37,216 88,296 56,216

4,788 2,756 4,048 4,122 3,433 3,635 4,179 3,998 3,894

181, 728

34,853

Notes: 1. From 1753 to 1757, the fiscal year ran from June 1 of each year to the following June. The year 1753, for example, refers to the fiscal year June 1, 1752, to June 1, 1753. Beginning in 1758, the fiscal year moved forward one month to July 1. The accounts were typically audited within three to four months of the conclusion of the fiscal year. The change in dates explains the later presentation from August to September of the audited accounts to the House of Representatives. 2. The accounts laid before the house varied in their comprehensiveness. Thorough accounting was of little consequence while the colony derived its revenue from interest, which was reported in the accounts of the trustees of the General Loan Office, and liquor excises, reported in the accounts of the collectors of excises and the colonial treasurer. The audit committee of the house rarely complained about delays in reporting by the collectors or the growing arrears of interest. The accounts became much longer with the imposition of direct taxes dedicated to the sinking of bills. Even so, fully comprehensive accounts that permit the exact calculation of taxes derived from all sources did not appear in the audited printed records until about 1770. A fuller description of the accounting process and the accounts in Pennsylvania is presented in chapter 27, fn. 31.

Column 2 in table 22.5 itemizes annual bills issued between 1755 and 1760 during the war. The Board of Trade report of 1766 estimated that 417,390, 86 percent, was for military purposes. The first issue of 55,000 in November 1755 was set for sinking with an annual tax of 13,750 payable in four installments beginning in 1756 (columns 3 and 4). It consisted of a charge of 6d./ on the yearly value of estates and 10s. on single persons with annual income not exceeding 30. The issue of 30,000 in 1756 was to [ 644 ]

Taxation of the Middle Colonies, 1739–1763

c ol u m n 8

Direct Taxes

11,707 28,396 29,228 23,038 26,941 25,418 20,900

165,628

c ol u m n 9

Interest Income

4,174 4,271 3,106 3,934 3,390 3,246 2,354 1,527 6,311

32,313

c olum n 10

c olum n 1 1

column 1 2

column 1 3

Duties and Tonnage

Direct Tax Transfers from Treasurer to Loan Office

British Grants Used to Redeem Bills

Principal Repayment of Loans to Redeem Bills

15,156 3,851 3,020

22,027

10,357 26,941 27,445 22,007 25,984 25,333 20,829

158,896

22,047 42,500

18,503 15,488 35,150

64,547

69,141

Sources: Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766 (New York: Alfred A. Knopf, 1967), 86–88. Gipson cites correspondence of August 11, 1764, from Governor John Penn to the Board of Trade, in the Colonial Office fi les housed in the British Public Record Office, for details of the specific taxes that were enacted to accompany bills of credit. For the volume of bills redeemed each year, Gipson refers to the “Settlements of the General Loan Office, 1751–1765” and “Settlements of General Loan Office Accounts, 1756–1765,” both among the Pennsylvania Loan Office Papers, Historical Society of Pennsylvania, Philadelphia. Revenue from excises, direct taxes, interest, duties and tonnage, and transfers of direct tax from the colonial treasurer to the trustees of the General Loan Office are from Votes and Proceedings of the House of Representatives of the General Assembly of Pennsylvania, August 11, 1753, August 15, 1754, September 20, 1755, September 22, 1756, September 30, 1757, September 30, 1758, September 28, 1759, September 27, 1760, October 17, 1761, and September 25, 1762. Net bills redeemed are derived from Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld.com/colonial _currency.htm (June 3, 2003), table, “Pennsylvania: Bills of Credit in Circulation,” interspersed between pages 10 and 11.

be sunk with ten equal payments of 3,000 over ten years. The 100,000 issue of 1757 was to be repaid in three annual installments of 33,333 in 1759, 1760, and 1761. The rate was set at 1s./ on real and personal estates and 10s. on single freemen. The issue of 100,000 in 1758 was to be redeemed in three installments of 33,333 in 1760, 1761, and 1762 with a higher tax of 18d./ and the same 10s. on single freemen. The same provisions were made for the 100,000 issues of 1759 and 1760, with the period for redeeming bills of 1759 [ 645 ]

chap t er 22

to run from October 1764 to October 1766 and bills of 1760 to run from October 1767 through October 1769. Column 5 shows the amount of taxes that was programmed to retire the full series of bills. Column 6 shows net redemptions. The issue of bills during 1755–60 increased the annual stock until the cessation of new paper resulted in net redemptions beginning in 1761. Columns 7, 8, 9, and 10 itemize actual receipts from excises, direct taxes, interest, and duties and tonnage. British reimbursement sold for Pennsylvania bills of exchange (column 12) and repayment of principal (column 13) complete the data. Direct tax transfers from the treasurer to the loan office, which were slightly less than actual collection of direct taxes, appear in column 11.39 The stock of bills on loan began to decline rapidly after 1760, falling to 61,496 in 1761 and 23,760 in 1763. Total outstanding bills, including those backed with tax levies, declined from 446,158 in 1760 to 264,460 by 1763. Net bills redeemed, the increase in new bills offset with redemptions, between 1757 and 1763 came to 181,728.40 Direct taxes of 158,896 to redeem bills were transferred from the treasurer to the loan office trustees. The treasurer also transferred that portion of excises enacted to redeem the 30,000 issue of 1756. British grants sold for 64,547 and loan office principal of 69,141 were also used to retire debt. Altogether, the General Assembly levied 498,996 in direct taxes, slightly more than required to redeem 485,000 in war bills. By 1763, 165,628 of that was collected, representing 63.2 percent of the 262,248 that was due under legislation. The difference was made up of British grants and principal repayments. Adding in excises of 34,853 and duties and tonnage of 22,027, and assuming the full amount of indirect taxes was borne by residents of Pennsylvania, their tax burden during the war years amounted to 222,508, an annual average of 27,814, about 3s. a head (13 ⁄4s. sterling), well below that in New York. Britons paid about fi fteen times as much, some of which redeemed the colonists’ war debts. Bear in mind that Pennsylvanians paid little in taxes until the war. Excises of 2,000–3,000 during 1740–54 and 3,000–4,000 during 1755–63, the colony’s principal source of provincial revenue apart from loan office interest, represents a tax burden of less than a shilling a head. Moreover, a portion of the excises would have been borne by visitors and traders drinking in the colony. Assuming per capita income in the neighborhood of 10 Pennsylvania currency, a conservative estimate, tax burdens before the great 39

The colony continued to collect direct taxes after 1763 up to the Revolution. The sums are displayed in table 27.3. With the exception of 1764, the annual amount exceeded 20,000 every year. 40 Brock, “Colonial Currency, Prices, and Exchange Rates,” table, “Pennsylvania: Bills of Credit in Circulation,” interspersed between pages 10 and 11.

[ 646 ]

Taxation of the Middle Colonies, 1739–1763

war would have been a fraction of a percent, and only a modest 1.5 percent during the war.

County Direct Taxes

I

n addit ion to provincial direct taxes levied during the French and Indian War, the counties collected local property taxes over the entire period 1739–63.41 As noted in chapter 18, the basic rate was levied at 1–3d./ of assessed wealth of improved land and livestock, a rate of 0.4–1.25 percent. The effective rate was considerably lower since assessments of real estate holdings were well short of the known value of residents’ holdings. Records of 3,111 loans issued by the public loan office between 1724 and 1756 in Chester County, about four-fi fths of the total in the county, reveal that the average loan amounted to 65 13s. Each loan required that property and houses mortgaged as security be worth, respectively, double and triple the amount of the loan. On this basis, the minimum average valuation of personal estate would be at least 131 6s., and somewhat more depending on what portion of the loan was secured by a mortgage on a house. The average tax payments of loan recipients in Chester County was 7s. 6d. in 1729, declining to 4s. 7d. in 1754. The tax rate was set at 3d. in 1729, with a lower 2d. in 1754. A charge of 3d./ on 131 13s. amounts to 1 7s. 10d., which is nearly four times the average tax that loan recipients paid in 1729; a rate of 2d. amounts to 1 1s. 3d., about three times the average paid in 1754. On these calculations, the effective rate of tax in 1729 was 3 ⁄4d./, or 0.31 percent; that in 1754 was 2 ⁄3d./, a lower 0.28 percent. Total county taxes of 406 were paid by 1,498 householders in Chester County in 1729; 3,584 householders paid 553 in 1754. During this period, the value of Pennsylvania currency depreciated from 148.61 to 100 sterling in 1729 to 168.35 in 1754, further reducing the real value of direct tax burdens. To complete the picture on county taxes, carpenters received a daily wage of 3s. in 1729. These rates were typical during the years of salutary neglect. A freeman’s tax in 1729 was 9s. per head, reduced to 6s. in 1754. It took three days of wages, or roughly 1 percent of the year, to meet the freeman’s poll or head tax in 1729, and only two days, or two-thirds of 1 percent, in 1754. Nor can it be assumed that the full tax was collected, given the undervaluation of real property. Table 22.5 shows annual provincial direct tax receipts during 1758–63 in excess of 20,000. Based on Chester County’s representation of one quarter 41 Schweitzer, Custom and Contract, 155–56. Schweitzer examined mortgage records in Chester County and county taxes assessed in 1729 and 1754 on which the figures in this section are based. These two years are likely to be representative of the years they encompass and sums collected in other counties based on their respective populations.

[ 647 ]

chap t er 22

in the Pennsylvania legislature and its county taxes of 553, a reasonable estimate of total county taxes in 1754 would be around 2,200, on the order of a tenth of annual provincial direct taxes during 1758–63. Adding county taxes of a few pence per head to provincial taxes does not significantly alter the tax burden borne by Pennsylvania residents.42

Quitrents and the Tax Treatment of the Proprietor’s Lands

D

ur ing t he era of salutary neglect, quitrents generated little revenue for the Penn family. In 1732 they were a meager 567 7s. 21 ⁄2d. Numerous efforts to strengthen the collection and reduce arrears met with limited success. Only in 1757 was an attempt begun to establish a general rent roll to estimate current rents and arrears. By 1762, quitrents totaled 3,453 4s. 81 ⁄4d.43 With a population nearing 200,000, quitrents amounted to a mere 4d. per person.44 During his stay in the colony from 1734 to 1741, Thomas Penn reserved 150,000 acres of land for the Penn family. He also stipulated that Penn property was to remain exempt from taxation. The Penns thus enjoyed an advantage in speculating in land for sale to immigrants over other residents, who first had to buy land and then pay quitrents. These issues came to the fore during the French and Indian War when direct taxes, more than ten times the level of county taxes, were levied on property. A central issue was the Penn family’s contribution to the cost of the colony’s participation in the French and Indian War.45 Despite a 1748 ruling of the Board of Trade that rejected the right of the General Assembly to tax proprietary estates, the assemblymen insisted that the proprietors should be taxed to support the war effort. 42

Tax lists and records for the counties are available in the Pennsylvania State Archives, running to hundreds of microfi lm rolls. Apart from Schweitzer’s sampling of Chester County records, no attempt has been made to compile this information for all counties from the date of their establishment to the Revolution. 43 Bond, Quit-Rent System in the American Colonies, 146–61. One of the receiver-generals of quitrents, Edmund Physick, estimated that the total quitrents due during 1700–1779 was 182,248 12s. 10d. sterling, of which only 63,679 8s. 31 ⁄2d., about 35 percent, was paid. Total arrears including interest in 1779 were 118,569 4s. 61 ⁄2d. The annual rent roll grew steadily with settlement, reaching 10,204 0s. 73 4⁄ d. in 1776, of which no more than a third was collected. 44 It should be recalled that the Penns invested tens of thousands of pounds of their own money to found and settle Pennsylvania; quitrents, along with land sales, can be regarded as reimbursement of their costs. 45 Th is contest and other issues are described in James H. Hutson, Pennsylvania Politics, 1746–1770: The Movement for Royal Government and Its Consequences (Princeton: Princeton University Press, 1972), and William R. Shepherd, History of Proprietary Government in Pennsylvania, Studies in History, Economics, and Public Law, vol. 6 (New York: Columbia University, 1896), 435–73.

[ 648 ]

Taxation of the Middle Colonies, 1739–1763

The deadlock over this disagreement was temporarily broken in November 1755. In support of a first issue of war bills, Thomas Penn instructed the receiver-general to pay 5,000 from quitrent arrears as a “free gift to the public” in exchange for exempting his holdings from taxation. This was not a cash contribution but rather the subtracting of 5,000 from the accumulated arrears of quitrents, which reduced the outstanding debts that landowners owed the Penns. Still, the sum of 5,000 was ten times as much as a tax on the Penn properties was likely to produce, and thus it was difficult to argue that he was not paying his fair share. General Braddock’s defeat, subsequent deadly assaults on settlers along the colony’s western frontier, and the fear that Philadelphia might come under attack prompted the General Assembly to accept this compromise. Thomas Penn instructed his governors, at the risk of losing a 5,000 bond they had to post as a condition of appointment, to block the taxation of proprietary land. Governor William Denny upheld Penn’s instruction for the supply and tax bills of 1757 and 1758, but under the financial demands of the war, capitulated in 1759, signing a bill that included the taxation of proprietary property. The governor even consented to the taxation of Penn’s quitrents. Since the first installment of this tax was not due until 1764, Penn had time to press for its disallowance in London. The Board of Trade upheld Penn’s claims, charging the General Assembly with encroaching on the rights of the proprietor and the Crown. However, the urgent need for military funds led the Privy Council to uphold the Supply Act of 1759, stipulating six proposed amendments for the General Assembly to adopt to ensure the fair assessment of proprietary lands. Although not fully enacted into law, the terms and conditions of the Privy Council were largely honored in practice. For his part, Penn accepted the taxation of the family’s estates in accordance with the Privy Council’s suggested amendments. He was permitted to deduct the earlier gift of 5,000 from the total amount of his taxes. Although the 1759 act did not call for the first payment of taxes until 1764, the General Assembly nonetheless added a rate on the Penns for all the previous supply bills. The addition of a rate for the act of 1757 obligated Penn to pay taxes in 1759, which came to 566 4s. 10d., about 2 percent of the more than 27,000 collected that year. Adding the act of 1758 required two payments in 1760, which yielded 2,173 18s. 31 ⁄4d. Smaller sums of 563 5s. 91 ⁄2d. were collected in 1761, 552 6s. 7 1 ⁄2d. in 1762, and 580 6s. 111 ⁄2d. in 1763.46 These amounts were 9.9, 2.2, and 2.8 percent, respectively (excluding 1762), of direct provincial taxes in those years.47

46 47

Shepherd, Proprietary Government in Pennsylvania, 468n1. Receipts after 1763 appear in chapter 27.

[ 649 ]

chap t er 22

These amounts were not a serious burden in that quitrents exceeded direct taxes collected on proprietary property. Penn’s payments only slightly reduced the tax burden on Pennsylvania’s householders. More important was the General Assembly’s successful assault on the preferential tax treatment of proprietary lands, establishing the principle that the colony’s largest landholder would be treated equally with fellow subjects in the taxation of private property. Taxation of proprietary quitrents and lands was conceived as a repudiation of the feudal principle underpinning the constitutional foundation of landownership in the colony. Indeed, the anti-proprietary faction in Pennsylvania politics tried, but failed, to secure the establishment of royal rule.

Taxation in Delaware, 1739–1763

T

h e is s ue of paper bills in Delaware followed that of Pennsylvania, with a first loan office of 5,000 in April 1723 and a second of 6,000 in November 1723.48 Recognition that the entire amount would be retired in 1729 prompted a fresh issue of 12,000 that year to run for sixteen years. Redemption of 3,750 of the latter issue within five years brought another issue of 12,000 in 1734. In 1739, at the end of the era of salutary neglect, some 17,500 Delaware currency in bills remained in circulation. New bills were periodically printed to replace worn and ragged ones. Of the 6,000 authorized but not entirely used for that purpose in 1739, 1,000 was granted the following year to the governor to prepare for an expedition against the Spanish West Indies. That 1,000 was to be retired with taxation of estates in each county in five equal annual payments, a modest annual provincial direct tax of 200. A new loan office issue of 20,000 was approved in 1746. Interest, coupled with excises on liquor, continued as in Pennsylvania to be the principal source of revenue for the provincial government. Between May 1756 and May 1760, the legislature approved five issues of paper bills for military and public expenditures. The amounts were 2,000, 4,000, 8,000, 27,000 (20,000 to replace the loan office issue of 1746 plus 7,000 for public expenses), and 4,000, a total of 18,000 in new bills. From the five issues, the legislature granted the sum of 1,000, 2,000, 4,000, 8,000, and 1,200, respectively, a total of 16,200, 90 percent of all issued bills, to the governor for war time use. Bills of 7,000 for public expenses of the 27,000 issue were backed with a 6d./ tax on property payable in five years beginning June 1, 1763. The last issue of 4,000 was backed with a 3d./ tax also payable in five years beginning June 1, 1763. The other three were scheduled for 48

Th is section draws from Rodney, Colonial Finances in Delaware, 17–40.

[ 650 ]

Taxation of the Middle Colonies, 1739–1763

redemption over four to seven years, backed with excises or a rate of 3–9d./ on property. Delaware’s share of Parliament’s reimbursement for 1758 came to 3,044 sterling (5,250 18s. Delaware currency). Bills of exchange were drawn on that amount and paid to the trustees of the loan offices, who were instructed to call in and redeem 4,000 in bills issued to the governor in 1760, as well as 1,200 from 1759. The colony’s agent in London, David Barclay, reported that grants for 1759 and 1760 amounted to 3,745 17s. 10d. sterling (6,457 18s. 9d. Delaware currency). The second reimbursement was used to redeem 7,000 in bills granted the governor in 1759, with the balance, 1,000, redeemed with a 3d. tax for one year. The two reimbursements financed the redemption of 12,200, about half of the war bills of 25,000. Delaware emerged from the war debt free and almost tax free, save for modest excises.

Taxation in New Jersey, 1739–1763

L

iv ing of f int er e st, New Jersey remained a tax haven until February 1752, when the General Assembly levied a direct tax of 8,000 to be paid by November 21, 1752, to clear past debts. On June 9, 1752, Governor Jonathan Belcher transmitted to the Lords of Trade the accounts of the treasurers of the Eastern and Western districts of New Jersey for the periods October 1734 to October 1751 and from 1733 to 1751, respectively.49 The existence of separate treasurers was a holdover from the colony’s historical division into East and West New Jersey. In the Eastern division, between March 1738 through October 1751, all receipts consisted of interest or the transfer of bills; so too in the Western division from 1740 through 1751. Eastern interest totaled 14,075 13s. 111 ⁄2d., with Western interest of 11,766 19s. 2d. over the two respective periods. During 1739–51, total interest income was around 25,000, more than 1,900 a year.50 49

These accounts are reprinted in William A. Whitehead, Documents Relating to the Colonial History of the State of New Jersey, vol. 8, Completing the Administration of Governor Jonathan Belcher, 1751–1757 (Newark, NJ: Daily Advertiser Printing House, 1885), part 1, 65–83 (hereafter Documents of New Jersey). 50 The Eastern accounts do not present separate results for 1738, 1739, and 1740, and the Western accounts do not provide separate information for 1739. Too, some of the interest income appears commingled with loan repayments. The figure of 25,000 in total interest revenue gives a general view, but not precise to the level of shillings and pence, of the colony’s public revenue. Accounts appear in the Documents of New Jersey for Western New Jersey between April 1754 and October 1756 and Eastern New Jersey between June 1754 and August 1756, vol. 8, part 2, 150–56, 171–72, 223–24, 228–35. Given the historic division of the colony into East and West New Jersey, the unified royal colony continued to maintain separate treasurers for the two divisions. The accounts of both

[ 651 ]

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Appropriations for general government support during 1739–63, which paid the salaries of key government officials, rent for the governor’s house, per diem for members and clerks of the General Assembly during its sessions, related incidental expenses, and the payment of other minor debts, totaled about 39,000–40,000, an annual average of 1,560–1,600.51 These costs were met with interest through 1751. For the next seven years through 1759, small annual direct tax levies of 3,000, save a smaller 2,000 in 1754, underwrote the general cost of colonial administration (see table 22.6). These levies ceased in 1760. Apart from direct taxes levied during 1753–59 to meet immediate public expenses, most taxes were enacted to redeem war bills of credit.52 The first was for 15,302, to sink outstanding bills of credit left over from King George’s War, to be paid in ten equal installments of 1,530 with the first due November 1754. Between 1755 and 1762, twelve issues of bills were approved to finance the colony’s role in the French and Indian War and maintain its defenses after the conclusion of major hostilities in Quebec. Each issue was backed with a schedule of deferred taxes, the last of 1762 due for payment in 1779 and 1780. Column 1 presents the year of issue, three in 1755, two in 1757, two in 1758, and one in the other listed years. Column 2 lists the volume of each issue. Column 3 shows the rise in outstanding bills of credit. Column 4 presents the schedule of payments for redemption, with due dates in column 5. Column 6 lists payments due each year to redeem the bills in accordance with the schedule provided in the legislation. Column 7 lists the separate

treasurers were recorded each year in the proceedings of the General Assembly. The accounts of New Jersey, which are difficult to decipher, lack the clarity of those of Massachusetts or of later accounts of Pennsylvania. A detailed description of New Jersey’s accounts and the difficulties in assessing them appears in chapter 27, fn. 40. 51 Information on appropriations, taxes, British reimbursement, and other provincial matters appears in Bernard Bush, ed., The Laws of the Royal Colony of New Jersey, 1703–1775, New Jersey Archives, 3rd ser., vol. 2, 1703–1745 (Trenton: New Jersey State Library, Archives and History Bureau, 1977), vol. 3, 1746–1760 (1980), and vol. 4, 1760–1769 (1982). Laws providing annual general government support appear in 2:498–502, 541–45, 555, 581–85, 601, 3:65–70, 83–94, 124–27, 168–72, 195–203, 234–38, 269–74, 327–31, 393–96, 472–75, 381–84, 639–43, and 4:5–9, 107– 11. Exact amounts are specified for official salaries and rent for the governor’s house. For other charges, amounts are specified in terms of per diem and other miscellaneous expenses, for which actual payments depend on the number of days the legislature was in session and actual costs incurred. Based on information in some of the legislation specifying the payment of debts for past ser vices, it is reasonable to assume that these annual costs were in the neighborhood of a hundred pounds. 52 A small issue of 2,000 was approved in 1740 to finance the colony’s participation in the War of Jenkins’ Ear, to be paid either with loan office interest or bills that were already printed but not yet signed. Laws of New Jersey, 2:531–33.

[ 652 ]

Taxation of the Middle Colonies, 1739–1763 tabl e . New Jersey Bills of Credit, Schedule of Payments for Redemption, Total Payments Due, Annual Tax Levies, and British Reimbursement, 1753–1780 ( New Jersey Currency) c ol u mn 1

Year

1753 1754 1755 1755 1755 1756 1757 1757 1758 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776 1777 1778 1779 1780

c ol u m n 2

c olum n 3

c olum n 4

c olum n 5

column 6

column 7

column 8

Bills of Credit

Bill of Credit Outstanding

Schedule of Payment

Dates Due

Total Payments Due

Annual Tax Levies

British Grants

15,302 15,000 15,000 10,000 17,500 10,000 30,000 50,000 10,000 50,000 45,000 25,000 30,000

21,711 21,147

19,783 58,147

73,868 112,326 163,976 201,109 228,028 236,488 246,916

10 × 1,503

1764 . . . 73

3 × 5,000 3 × 5,000 1 × 10,000 4 × 2,500, 1 × 15,000 1 × 10,000 6 × 5,000 5 × 10,000 1 × 10,000 4 × 12,500 6 × 7,500 5 × 5,000 2 × 15,000

1757 . . . 59 1758 . . . 60 1761 1761 . . . 62 1763 1768 . . . 73 1774 . . . 78 1760 1764 . . . 67 1768 . . . 73 1764 . . . 78 1779 . . . 80

1,503

3,000 2,000

1,503 1,503

3,000 3,000

6,503

3,000

11,503 11,503 16,503 14,003 16,503 11,503 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 10,000 5,500 5,500 5,500 5,500 15,000 15,000

3,000 3,000 15,505 31,033 28,805

Sources: Bernard Bush, The Laws of the Royal Colony of New Jersey, 1703–1775, vol. 3, 1746–1760, New Jersey Archives, 3rd ser. (Trenton: New Jersey State Library, Archives and History Bureau, 1980), 219–23, 238–41, 274–79, 307–15, 318–19, 331–35, 345– 53, 373–78, 397–402, 413–20, 421–22, 466–70, 476–81, 517–22, 549–50, 553, 572–73, 585–88, 631–33, 635–36, 643–47, 673–78, and vol. 4, 1760–1769 (1982), 10–13, 83–85, 87, 135–36, 139–40. Outstanding bills of credit are derived from Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld.com/colonial _currency.htm (June 3, 2003), tables, “New York: Bills of Credit Outstanding” and “Pennsylvania: Bills of Credit in Circulation,” interspersed between pages 10 and 11. British grants appear in Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766 (New York: Alfred A. Knopf, 1967), 84.

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annual tax levies for general government support. Column 8 displays the net New Jersey equivalent of British sterling grants.53 Total bills issued during the French and Indian War amounted to 307,500 New Jersey currency. Total taxes scheduled for payment during 1755–62, the years in which bills were issued, amounted to 67,500, 22 percent of the volume of war bills. (This sum excludes the 1,503 due each year during 1757–62 dedicated to sinking the bills of King George’s War.) Not all the scheduled payments were made. The General Assembly instructed the treasurer to use the proceeds of British grants to abate some of the taxes previously scheduled to redeem bills of credit. Some 46,500 in New Jersey currency in reimbursement was received in 1760 and 1762. Subtracting these amounts from the scheduled tax payments leaves only about 21,000 in direct taxes that was actually collected, apart from the 20,000 that was levied to meet the non-military general costs of government during 1753–59. In addition, the final grant, worth 28,805 New Jersey currency, was more than sufficient to eliminate all tax liabilities for 1763, 1764, and part of 1765. Summing up, the total amount paid by the colony’s taxpayers between 1753 and 1763 comes to about 51,000, consisting of some 9,000 to redeem outstanding bills of King George’s War, 22,000 to redeem war bills of 1755–62 after accounting for British reimbursement, and 20,000 in annual levies. During the eleven years of direct taxation encompassing 1753–63, annual taxes averaged 4,630, about 13d. (8d. sterling) per capita.54 After the war, the colonial government slowed the collection of taxes, leaving the stock of bills above 200,000 into 1771. Few of the taxes scheduled for 1765 through 1771 were actually collected. In contrast with New York, New Jersey’s taxpayers barely noticed the cost of the war. As a rule, New Jersey did not impose duties or excises on its residents. A previous slave duty act expired in 1721. It was reenacted in September 1762, just at the close of the period. Importers of slaves into the Eastern division of the colony paid 2 a head, with 6 in the Western division. The difference took into account the duty of 2 in New York, which neighbored 53 The colony’s agent in London paid 0.5 percent in fees to receive the reimbursements and deducted 5 percent for administrative expenses. The colonial treasurer received 94.43 percent of the gross value of the three payments of sterling grants in the form of bills of exchange in New Jersey currency. These are the net sums that appear in column 8. 54 The treasurer’s accounts show tax receipts of 1,817 15s. 1 ⁄4d. in the Western division between April 15, 1754, and November 5, 1755, and 1,152 13s. 1d. in the Eastern division between June 21, 1754, and November 21, 1755. For the subsequent year, receipts in the West were 1,428 5s. 5 1 ⁄4d. from November 8, 1755, to November 11, 1756, and 1,432 8s. 9d. in the East from November 8, 1755, to August 21, 1756. Over the twenty-six months encompassing both sets of reports, total reported tax revenue was 5,831 2s. 3 1 ⁄2d., in the neighborhood of the annual tax levies of 2,000, 3,000, and 3,000 levied in 1754, 1755, and 1756. Documents of New Jersey, vol. 8, part 2, 150–56, 171–72, 223–24, 228–35.

[ 654 ]

Taxation of the Middle Colonies, 1739–1763

the Eastern division, and the higher duty of 10 in Pennsylvania, bordering the Western division.55 Another exception to the rule was temporary duties of 4 per pipe on the importation of rum and distilled liquor that was not from the British West Indies or from the colony of growth. It was passed on June 1, 1744, but was repealed shortly thereafter.56 To preserve timber, the General Assembly laid export duties on logs or timber (except for firewood less than four feet in length) shipped from East New Jersey. This was not a revenue measure as such but an attempt to protect supplies of timber for local industry.57

Other Taxes

I

n july 1740, the General Assembly placed a tax on hawkers, pedlars, and chapmen. It set the rate at 10s. a person traveling with a wagon or cart, 6s. a person traveling with one horse or beast of burden, and 3s. a head on foot. The purpose of the tax was to collect some revenue for poor relief from itinerant vendors who were not residents of the colony.58

Lotteries

O

n ly a handful of lotteries were approved, one not to exceed 1,000 to finance a church, parsonage, and cemetery in the town of Burlington, another of up to 400 for a bridge in Somerset County, and the last for a maximum of 3,000 for New Jersey College.59

Summary

B

e t w een 1 7 1 4 and 1739, per capita taxes in New York amounted to an estimated 31.4d., somewhat lower at 25–28d. if the portion borne by sailors, merchants, and other visitors is excluded. During the French and Indian War, taxation reached historically high levels. Per capita indirect taxes in peacetime were in the range of 16–18d. through 1755, thereafter rising to about 24d. in war time. During the four costliest war years, New York City residents bore an annual direct tax burden of about 93d., the rest of the 55

Laws of New Jersey, 4:171, and Edgar Jacob Fisher, New Jersey as a Royal Province, 1738 to 1776, Studies in History, Economics, and Public Law, vol. 41, no. 107 (New York: Columbia University and Longmans, Green, and Company, and London: P. S. King and Son, 1911), 288. 56 Laws of New Jersey, 2:579–81. 57 Fisher, New Jersey as a Royal Province, 287. 58 Laws of New Jersey, 2:524–26. 59 Laws of New Jersey, 4:141–42, 177.

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colony 86d. Combined per capita direct and indirect taxes in the four heaviest years amounted to about 117d., about 70d. sterling on the basis of the 1760 exchange rate of 168.2 New York currency to 100 sterling. During the four costliest war years, the average British taxpayer paid 5.2 times as much as that of his New York counterpart. Moreover, British taxpayers reimbursed perhaps half of New York’s war debts, thereby lowering future burdens in the colony. The imposition of direct taxes to fund the issue of war bills of credit permanently altered the tax system of Pennsylvania. Direct taxes remained in place as a principal source of revenue up to the Revolution. Despite the relatively heavy level of direct taxes compared with the colony’s previous reliance on excises to supplement loan office interest, the total burden remained minuscule as a percentage of income and in relation to the threetimes-heavier burden in New York and the far heavier burden of Britons. Pennsylvania escaped the war with manageable debt and low taxes. The residents of Delaware barely noticed taxes before, during, and after the several wars that characterized the quarter century following the era of salutary neglect. Few war bills were issued and most were promptly redeemed. Few taxes were levied or collected. Apart from modest direct taxes actually collected to redeem war bills of credit, the roughly one hundred thousand residents of the colony of New Jersey paid neither duties nor excises. Until the outbreak of, and then again after, the French and Indian War, the colonial administration managed to cover its limited expenses with interest from its outstanding loan office mortgages. The average 13d. level of direct taxes encompassing 1753–63 was inconsequential compared with that of New York, about a third that of Pennsylvania, and a minuscule 2 percent that of Britons. Including 1739–52, the average annual burden was lower still. The French and Indian War barely nudged New Jersey from its status as a tax haven. The great war with France was felt in New York, but it had little impact on taxpayers in the other middle colonies. The principal cost was the disruption in trade with the French West Indies, the higher cost of insurance on shipping, and the loss of vessels to French privateers. The great benefit was the end of the French threat to British political and economic institutions and practices in the colonies. As the war came to a formal close in February 1763, the middle colonies were reverting to their prior regimes of low taxation and were debt free, or well on their way to paying off their debt.

[ 656 ]

chap t er 23
Taxation of the Southern Plantation Colonies, 1739–1763

T

he p opul at ion of the southern plantation colonies more than doubled from 387,177 in 1739 to 799,591 in 1763. The Negro population increased from a third to just over 40 percent, signifying the central role of the plantation economy in the production of tobacco, indigo, rice, naval stores, and other primary products for export. The southern colonies were active in the War of Jenkins’ Ear but only somewhat in King George’s War, with New England and New York bearing the brunt of the expeditions to Canada. When the French and Indian War broke out in 1754, Virginia was at the forefront of the hostilities, indeed helped set off the spark. The colony committed the second largest amount of men, material, and money after Massachusetts in the great war. The other four southern colonies were largely bystanders, concerned mainly with their own defense. When the war ended, the western frontier was open to expansion and speculation in land, blocked only by the Appalachian Mountains, increasingly weakened Indian tribes, and a handful of French trappers, traders, and settlers.

Money

V

i r g i n i a’s e c onom y, and that of Maryland, differed from all the other colonies in that its principal export crop served both as a means to pay for imported goods and as a medium of exchange for internal business and payment of taxes.1 The 1730 inspection act that established public

1 The treatment of money in the southern plantation colonies draws from Leslie V. Brock, The Currency of the American Colonies, 1700–1764: A Study in Colonial Finance and Imperial Relations (New York: Arno Press, 1975), 66–99, and Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld.com/colonial _currency.htm (June 3, 2003). Exchange rate and currency values are from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). Details of specific paper money issues are from Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). Statistics on British reimbursement of colonial war debts in the southern colonies appear in Lawrence Henry Gipson, The Triumphant Empire:

[ 657 ]

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warehouses provided for the issue of tobacco notes that circulated as currency. Crop notes supplemented—at times supplanted—specie and bills of exchange. The colony’s general trade surplus with Europe enabled it to earn specie or bills of exchange to pay for imported goods. The tax system, consisting of the 2s./hogshead export duty, a minuscule poll tax, and low import duties on liquor and slaves, was sufficient to pay the ordinary costs of civil administration, about 5,000–6,000 Virginia currency during 1739–63, along with a small export duty on hides to support the College of William and Mary. All that changed with the outbreak of the French and Indian War. Virginia required much more money than was available from its traditional sources of revenue.

Virginia

I

n t his r egar d, Virginia was the last of the thirteen colonies to print paper money. Between May 1755 and March 1762, the colony issued 537,962 10s. Virginia currency in provincial treasury notes. Of this amount, 99,962 10s. issued in June 1757 was exchanged for notes of prior issues, resulting in net war issues of 438,000. The first three emissions were redeemable with 5 percent interest, which was dropped after December 1, 1757. As in other colonies,

Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 38–52, 91–110, and Jack P. Greene, “The Seven Years’ War and the American Revolution: The Causal Relationship Reconsidered,” in Peter Marshall and Glyn Williams, eds., The British Atlantic Empire before the American Revolution (London and Totowa, NJ: Frank Cass, 1980), 98. For Virginia, see “Paper Money in Colonial Virginia,” William and Mary College Quarterly Historical Magazine 20, no. 4 (April 1912): 227–62. For Maryland, see Clarence P. Gould, Money and Transportation in Maryland, 1720–1765, Johns Hopkins University Studies in Historical and Political Science, ser. 33, no. 1 (Baltimore: Johns Hopkins Press, 1915), and Kathryn L. Behrens, Paper Money in Maryland, 1727–1789, Johns Hopkins University Studies in Historical and Political Science, ser. 41, no. 1 (Baltimore: Johns Hopkins Press, 1923). For South Carolina, see Richard M. Jellison, “Paper Currency in Colonial South Carolina, 1703–1764” (Ph.D. thesis, Indiana University, 1952); Jellison, “Antecedents of the South Carolina Acts of 1736 and 1746,” William and Mary Quarterly, 3rd ser., 16, no. 4 (October 1959): 556–67; Jellison, “Paper Currency in Colonial South Carolina: A Reappraisal,” South Carolina Historical Magazine 62 (July 1961): 134–47; Converse D. Clowse, Economic Beginnings in Colonial South Carolina, 1670–1730 (Columbia: University of South Carolina Press, 1971), 184–250; Maurice A. Crouse, The Public Treasury of Colonial South Carolina (Columbia: University of South Carolina Press, 1977), 25–42; and M. Eugene Sirmans, Colonial South Carolina: A Political History, 1663– 1763 (Chapel Hill: University of North Carolina Press, 1966). For Georgia, see William Estill Heath, “The Early Colonial Money System of Georgia,” Georgia Historical Quarterly 19, no. 2 (June 1935): 145–60, and Milton LaVerne Ready, “An Economic History of Colonial Georgia, 1732–1754” (Ph.D. thesis, University of Georgia, 1970), 307–22. A summary discussion for all the southern royal colonies appears in Jack P. Greene, The Quest for Power: The Lower Houses of Assembly in the Southern Royal Colonies, 1689–1776 (New York: W. W. Norton, 1972), 108–25. First published in 1963 by the University of North Carolina Press.

[ 658 ]

Taxation of the Southern Plantation Colonies, 1739–1763

treasury notes were typically scheduled for redemption with deferred taxes; the final 1762 war issue of 30,000, for example, was to be redeemed with a combination of taxes on polls and land in three installments with the first due October 20, 1767, and the next two on the same dates in 1768 and 1769. In addition to taxes on polls and land, some treasury notes were backed with an additional export duty on tobacco, an additional import duty on slaves, duties on chariots and carriages, and a few miscellaneous measures.2 On May 24, 1763, a committee of the House of Burgesses, which was established to examine the state of treasury notes and the taxes enacted for their redemption, presented its report to the full chamber.3 It listed eight issues of notes between June 1757 and March 1762 totaling 392,962 10s. (excluding the three earlier issues of June and December 1755 and March 1756). The committee tabulated 85,655 6s. 6d. in burned notes received in taxes between July 1760 and November 1762. Notes in the Treasury awaiting burning amounted to 49,874 13s. 1d. In addition was 10,625 in notes in the Treasury remaining from two issues not yet placed in circulation.4 For its ser vice in the war in 1756, Virginia received 32,814 9s. 0 1 ⁄4d. sterling in reimbursement from Britain; for 1758, 20,546. These funds became available for use in the colony in 1760.5 Based on the exchange rate of Virginia currency in London, bills of exchange drawn on these sterling funds provided almost 75,000 Virginia currency that could be used to abate some of the taxes that were enacted to redeem treasury notes. Reimbursement for ser vice in the war during 1759–62 supplied another 54,500 sterling (about 80,000 Virginia currency). French and Indian War reimbursement of about 155,000 Virginia currency was equivalent to 28 percent of the taxes levied to sink treasury notes.6 2 Table 23.4 links the issue of treasury notes with redemption dates, and the schedule and amounts due each year of four different deferred taxes on polls, land, hogsheads, and slaves. 3 The Journal of the House of Burgesses include references to the annual statements of the colonial treasurer that were set forth for the approval of its members, but not the actual accounts. Virginia’s copies of most colonial government documents did not survive wars, fi res, and poor archival practices. Apart from the Journal, most of the colony’s surviving records are those in the Public Record Office in the United Kingdom. They consist of correspondence and reports of lieutenant governors to the Board of Trade and customs accounts of the receiver-general for selected years. The documents in the Public Record Office do not include copies of the colonial treasurer’s annual statements. Dr. Patricia F. Watkinson, Archives Reference, Library of Virginia, correspondence with the author, September 23, 2005. 4 The report then listed annual taxes of 39,919 due in 1763, 1764, and 1765, 41,895 due in 1766, 1767, and 1768, and 32,817 15s. in 1769. All these summed to 424,414 14s. 7d., leaving a projected balance of 11,452 4s. 7d. in taxes, assuming full collection, in excess of the value of all issued notes. 5 Journal of the House of Burgesses, sixth session of the General Assembly, May 19, 1760, 4. 6 Exact amounts, apart from 1761, cannot be found in reports to the burgesses or in the British Public Record Office. Gipson, The Triumphant Empire, 99n45. Compiling and estimating

[ 659 ]

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As of June 1763, 238,439 Virginia currency in treasurer’s notes was outstanding. The 1766 report of the Board of Trade estimated Virginia’s warrelated expenditures as of 1763 at 385,319 2s. 9d. sterling, of which only 143,272 1s. 6d. sterling remained outstanding. It further stated that taxes scheduled for collection in 1766–69, confirming the May 24, 1763, report of the committee of the House of Burgesses, would redeem the remaining balance. Instead of following through with prompt redemption, the General Assembly continued the circulation of some of its notes by repealing all poll and land taxes due for payment in 1768–69.

Maryland

T

h e e vol u t ion of the dual currencies of tobacco and paper bills in Maryland was set forth in chapter 19. Tobacco served as the colony’s principal currency until 1733, when Maryland issued 90,000 in paper bills.7 The bills were fully backed by sterling securities in Britain purchased with funds from an export duty of 15d. sterling on each hogshead of tobacco for a period of thirty-one years ending September 29, 1764. The price of having a paper currency was an additional tax on tobacco beyond the export duty that financed the colonial administration, paid the proprietor in lieu of quitrents, and supplied import duty for the British government. Recall that Virginia passed an inspection act in 1730 that established public warehouses, provided for official inspectors, required planters to transport their tobacco to a warehouse for inspection, and authorized the issue of tobacco notes to the owner specifying the weight and kind of tobacco. Maryland followed suit in 1747, which improved the efficiency of tobacco as currency. Tobacco continued to enjoy broader legal status in payment of private and public debts than did paper bills. The development of grain agriculture gradually diminished the utility of tobacco as currency that served as the financial connection between tobacco planter and merchant. Tobacco money was largely irrelevant in the West Indian grain trade. Grain merchants gradually switched their accounts from tobacco to money. Trade in tobacco continued but accounts were increasingly rendered in currency or hard money. Turning to paper currency, the 1733 act provided that individuals were to turn in all bills to the office of loan commissioners between September 29, 1748, and March 29, 1749, and receive back two-thirds of their value in figures from treasury papers in the Public Record Office in Britain, Greene puts reimbursement at 99,177 sterling, a slightly lower 25.7 percent. “Seven Years’ War,” 98. 7 Between 1739 and February 1765, loan office interest supplied the provincial Treasury with 16,419 Maryland currency, an annual average of 632. Gipson, Th e Triumphant Empire, 92n4.

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Taxation of the Southern Plantation Colonies, 1739–1763

new bills and one-third in sterling bills of exchange at the rate of 133.33 Maryland currency for 100 sterling, higher than the market rate in London at that time. Between the same days in 1764 and 1765 the two-thirds of bills remaining in circulation were to be similarly redeemed. The history of paper bills in Maryland can be divided into two periods: from 1734 to the first redemption in 1748–49, and from 1749 to the final redemption in 1764–65. The initial issue precluded its use in payment of officers’ fees, clergymen’s salaries, and all special assessments for building or repairing churches. Paper currency rapidly depreciated, severing its relationship to the currency value of coin in the colony. This divergence resulted in trade and accounting distinctions between paper currency and gold and silver hard money. In 1739 paper money traded at 212.34 Maryland currency to 100 sterling. It depreciated to 285.13 in 1743, thereafter fluctuating, often wildly from year to year, between 225.22 and 140.00. The full redemption of paper currency in 1765 closed at the proclamation rate of 133.33. Following the 1733 loan office issue, the next printing of 5,000 was approved in 1740 to support an expedition against the Spanish West Indies. Payment was to be made from the loan office but taxes were enacted to repay the outlays. New bills totaling 60,000 in 1748 replaced those turned in under the redemption requirement of 1733. In July 1754, with the outbreak of hostilities in the Ohio Valley, the General Assembly issued 6,000 Maryland currency backed by several duties and taxes. The bills, scheduled for redemption by November 26, 1763, were all turned in and burned in 1764. A much larger issue of bills was approved in 1756 for local defensive purposes, 30,000 in new legal tender bills and the return to circulation of 10,000 of prior redeemed issues; of these amounts, 34,015 was actually printed. The notes were backed with land, excises, duties, and other taxes, and were fully redeemed in 1765. The balance of 26,800 sterling in Bank of England stock held by the province in 1765 permitted the General Assembly to abate any remaining taxes that would otherwise have been required to liquidate the limited issue of war bills. Maryland was relatively free of the financial burden of the French and Indian War and was spared the high taxes levied in more northerly colonies. The Board of Trade placed its war debts at 39,000 sterling, which were fully discharged at the end of the war. The value of coin in the colony underwent a different pattern. It traded around 139 to 100 sterling in 1739, a depreciation of about 4.5 percent from the proclamation rate of 133.33. Gold and silver coin largely held its value against sterling during the 1740s, trading in a range of 138.64 to 142.50 during the 1740s. The Maryland value of coin steadily depreciated in the 1750s, falling to 165 in 1755, well off the proclamation rate, fluctuating around that value until the Revolution. To further improve the payments mechanism, in 1753 the General Assembly added silver coin to the list of acceptable currencies. The allowed [ 661 ]

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rates for payment of public obligations were 12s. 6d. per hundred pounds of tobacco, or 7s. 6d. per Spanish dollar, the value of coin in Pennsylvania through which most of Maryland’s trade flowed. These rates were set to try to equate the value of paper money and coin. The act stabilized the colony’s monetary conditions until the early 1760s, when the approaching date of redemption of Maryland bills in sterling at the proclamation rate resulted in temporary hoarding of paper bills. The boom and bust accompanying the French and Indian War and its conclusion prompted the General Assembly to continuously adjust the price of coin. The price of Maryland coin at Pennsylvania’s rate exceeded Parliament’s legal limitation of 133.33 above sterling. Accordingly, coin was removed as legal tender for payment of taxes in 1760. It was restored in 1765 at the former value of 166.66, but months later in 1766, under complaints from the proprietor and the Crown about the breach of parliamentary law, it was reset at the mint par of exchange, or the actual sterling value of its silver content. To complete the story, Maryland, along with Georgia, was the only colony that failed to receive any reimbursement of its war expenditures from Britain.

North Carolina

F

ol l ow i ng t h e division of Carolina in 1712, North Carolina’s paper currency underwent an enormous depreciation. In 1715 the colony set its official rate at 150 North Carolina currency to 100 sterling. It declined to 500 in 1722 and fell even further to 1,000 in 1739. In 1748 the colony tried to establish Proclamation Money as the value of its currency, setting North Carolina New Tenor at 7.5 to 1 Old Tenor, with the par of exchange reduced from 1,000 to 133.33 North Carolina currency for 100 sterling. By 1754, New Tenor currency had depreciated 25 percent to 166.67, falling further to a par rate of 200 in 1761, at which level it remained in 1762 and 1763, for a total depreciation of 50 percent between 1748 and 1763. North Carolina played little part in the French and Indian War. To assist Virginia with troops in the 1754 campaign in the Ohio Valley, the General Assembly voted to issue 40,000 in legal tender bills for military purposes, a public school, and the erection of parish churches and parsonages. The bills were to be redeemed with a poll tax and import duties on spirits. Two further issues of 12,000 in 1760 and 20,000 in 1761 were to be retired with a poll tax. Added to the 21,350 printed in 1748, the total of bills came to 93,350, of which 25,286 was burned by 1764. In addition to bills of credit, the colony placed into circulation five issues of 6 percent interest-bearing treasury notes totaling 29,406, with 1,370 in interest added to the total, between 1756 and 1758. These were set [ 662 ]

Taxation of the Southern Plantation Colonies, 1739–1763

for redemption with a mix of taxes on polls, lawsuits, and spirits. By the end of 1764, 23,807, 77.4 percent, was burned. As of 1764, a combination of 75,032 of legal-tender bills and treasury notes remained outstanding. North Carolina received 7,781 sterling reimbursement in 1760, followed with 2,981 in both 1763 and 1764, for a total of 13,743 sterling (about 27,486 North Carolina currency). British funds amounted to 36.6 percent of the colony’s outstanding debt.8 The Board of Trade put the colony’s war debts at 30,776 sterling, of which only 6,968 16s. 2d. remained to be discharged by a poll tax and duties on spirits.

South Carolina

T

h e f i n a nc i al requirements of South Carolina’s involvement in the War of Jenkins’ Ear and King George’s War prompted four issues of public orders totaling 119,508 South Carolina currency between April 1740 and May 1745. Each was fully backed with taxes to ensure timely redemption. Those of April 8, 1740, for 25,000 and of September 19, 1740, for 11,508 were sunk by 1745; that of July 10, 1742, for 63,000 by 1752; and that of May 25, 1745, for 20,000 by 1750.9 An earlier issue of 106,500 in bills of credit on August 20, 1731, failed to provide taxes for redemption. Most of the currency remaining in circulation at the end of 1752 consisted of the 1731 issue. A third paper currency, the tax certificate, was introduced in South Carolina as early as 1736.10 The passage of the yearly tax bill included the names and approved amounts due the colony’s creditors. In practice it took several months to assess and collect the taxes after each year’s bill was passed by the General Assembly. On passage the colonial treasurer issued tax certificates of indebtedness to those whose names were included in the tax bill. Each certificate shows the sum that would be paid to each creditor when taxes were actually collected, but the certificate could be used by the creditor to pay his taxes. Certificates were endorsable from one person to another. Even though they were not legal tender, the fact that they could be used to pay taxes ensured their circulation and acceptance among the inhabitants. The volume of certificates remained small until 1753, when they 8 Gipson, The Triumphant Empire, 104. Greene puts the number at 11,010, a difference of 2,733, or 8.9 percent of the colony’s war expenditures. “Seven Years’ War,” 98. 9 A table of public orders issued between May 1740 and August 1760 with their redemption dates appears in W. Roy Smith, South Carolina as a Royal Province, 1719–1776 (New York and London: Macmillan, 1903), 276–77. 10 Some writers date the issue of tax certificates from the 1750s. Crouse differs, putting the date as early as 1736, citing instructions issued by the legislature on May 29, 1736, recorded in the Common House Journal. Public Treasury of Colonial South Carolina, 36.

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became sufficiently large to become an important part of the colony’s money supply. In general, the bulk of each year’s tax certificates were retired by the end of each fiscal year for which they were issued. In addition to bills of credit, provincial orders, and tax certificates, the economy’s strong export performance brought in a considerable quantity of specie in the early 1750s. Governor James Glen reported in 1755 to his colleague Arthur Dobbs of North Carolina that gold and silver coins were the basis of two-thirds of the internal payments in South Carolina. Though this claim was perhaps exaggerated, the trend toward greater use of specie was interrupted with the outbreak of the French and Indian War. The printing presses were cranked up. During 1755–57, 312,900 in public orders along with 245,889 in tax certificates were issued, of which 427,042 remained outstanding in 1757. To this must be added 106,500 in bills of credit remaining in circulation, bringing the total stock of outstanding South Carolina paper currency in 1757 to 533,542. In 1760 another 371,693 in public orders was issued, which pushed outstanding paper currency in 1760, after netting out redemptions, to 712,145. In contrast with North Carolina, South Carolina did not attempt to reset the value of its currency at the proclamation rate. The par rate on London in 1739 was 791.91 South Carolina currency per 100 sterling. It appreciated 12.8 percent to 690.83 in 1741, stabilized at 700 during 1743–45, and after some fluctuation around that mark during 1747–50 remained fi xed at 700 between 1751 and 1762 save a tiny depreciation of about 2 percent in 1756 and again in 1763. At this rate of conversion, the stock of paper currency in 1760 amounted to 101,735 sterling, or 135,643 Proclamation Money. Tax certificates were automatically redeemed with their use in payment of taxes. Public orders were redeemed with taxes dedicated to that end. Public orders issued in 1755, 1757, and 1760 in amounts of 33,600, 229,300, and 436,693 2s. 5d., respectively, were redeemed by 1760, 1762, and 1765. The 106,500 issued in 1731 continued to circulate to provide a means of payment, along with the annual issue of temporary public orders and tax certificates, which circulated at par with the remaining bills of credit. The Board of Trade put the colony’s war debts at 90,656 3s. 51 ⁄2d., which were fully discharged by 1765. South Carolina’s limited participation in the French and Indian War qualified it for only a limited amount of reimbursement. Its sole grant from Parliament was for 9,941 sterling (69,587 South Carolina currency) out of the 50,000 approved for the southern colonies in 1760.11 11

Gipson, The Triumphant Empire, 105. Greene puts the number at a slightly higher 10,226 (“Seven Years’ War,” 98). In either case, British funds reimbursed about 11 percent of the colony’s war expenditures.

[ 664 ]

Taxation of the Southern Plantation Colonies, 1739–1763

Georgia

T

h e l ast of the colonies to be established in 1732, Georgia was a ward of Parliament for much of its colonial history. Between 1754 and 1763, annual grants of Parliament averaging 3,500 sterling paid the lion’s share of the cost of the colony’s civil establishment. Military forces stationed within its borders were also financed by Parliament. Georgia’s legislature first issued bills of credit in 1755, amounting to 7,000 sterling, for lending at 6 percent interest, which required royal approval. Three-fourths of the interest was dedicated to the use of the government, with one-fourth set aside to redeem the bills by 1762. The act of 1755, and subsequent acts of 1757 and 1759 that issued another 1,437 sterling, concerned war expenditures. In the aftermath of the French and Indian War, the legislature determined to strengthen the colony’s defenses. It issued 1,820 in treasury certificates that did not need royal approval for building forts, repairing a lighthouse, and erecting several batteries. The certificates were issued as an emergency measure and declared accepted for payment up to October 1, 1762. A final issue of 7,410 sterling in loans was approved in May 1760 to increase the supply of currency and provide a steady stream of annual interest. In 1764, 8,237 8s. in sterling bills and treasury certificates remained in circulation. In 1763 Georgia received 4,136 sterling in general support from the British Treasury with the colonial assembly appropriating only 1,934 to cover the extraordinary expenses of that year. The Board of Trade put the colony’s war debts at 1,820 sterling, of which 827 13s. remained to be discharged. Georgia’s currency remained on par with sterling through 1763. Georgia did not receive any specific war-related reimbursement.

Taxation in Virginia, 1739–1763

T

axat ion i n v ir g i n i a during 1739–63 can be divided into two periods. The first, 1739–53, continued the prior regime of low taxation; the second, 1754–63, inaugurated a new era of paper currency backed with heavy taxation. Imperial taxes of British duty on tobacco, royal quitrents, and the 1d. tax on intercolonial shipments remained in place over both periods.

Imperial Taxes: British Import Duty, Quitrents, and 1d. Tax on Intercolonial Shipments

T

obacco imported from Virginia and Maryland was lumped together in recorded British statistics with estimates of two-thirds from Virginia and one-third from Maryland. The volume fluctuated between a low of [ 665 ]

chap t er 23

32,943,000 pounds in 1756, when the French and Indian War interfered with normal shipping, and a high of 64,500,000 pounds in 1763, on the war’s conclusion. The annual average during 1739–63 was 47,311,080 pounds.12 Of this, Virginia’s share was about 28,750,000 pounds. During this quarter century, annual customs receipts in Britain gradually rose from 1,398,000 to 2,283,000 sterling, with the most rapid expansion during the Seven Years’ War.13 The British government set the duty on imported colonial tobacco at 61 ⁄3d. a pound in 1703, raised it to 71 ⁄3d. in 1748, and then raised it again to 81 ⁄3d. in 1758, but it was fully rebated on exportation from Britain after 1723. By 1750 that proportion reached 75–80 percent and continued to rise up to the Revolution. On the assumptions that two-thirds of recorded imports from Virginia and Maryland originated in Virginia, that one-fifth was consumed in Britain, and that full duty was collected, customs revenue on Virginia tobacco consumed in Britain would amount to 2,135,494 sterling during 1739–47, an annual average of 237,277; for 1748–57, 3,043,659, an annual average of 304,366; and for 1758–63, 1,943,450, an annual average of 323,908.14 The total for the entire period comes to 7,122,604, an annual average of 284,904. Tobacco duty was an important source of revenue for Britain, especially during the costly Seven Years’ War. The 1766 Board of Trade report put total French and Indian War debts incurred by the thirteen colonies at 2,514,499, of which 1,072,784 sterling, 42.7 percent, was reimbursed.15 Britain indirectly rebated over two-fifths of the duty it collected on Virginia tobacco to the colonies for their assistance in the French and Indian War.16 It is difficult to estimate what portion of British import duty was borne by colonial planters. One view is that it fell largely on British consumers with merchants passing on the duty to consumers in the form of higher prices.17 12 Tobacco imported by England from Virginia and Maryland was 98.6 percent of recorded imports from the American colonies during 1739–63. Statistics are derived from Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker, which includes a chapter on colonial statistics. See table Eg1038–45: “Tobacco Imported into England, by Origin: 1697 to 1775,” S-752–54. 13 B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance I: Net Receipts of the Public Income—Great Britain, 1688–1801,” 575–76. 14 Another scholar puts the figure in the middle of the eighteenth century at 300,000– 400,000 a year. William Z. Ripley, The Financial History of Virginia, 1609–1776, Studies in History, Economics, and Public Law, vol. 4, no. 1 (New York: Columbia College, 1893), 65. 15 Greene reports total war expenditures of 2,568,248, and reimbursement of 1,068,769, 41.6 percent. “Seven Years’ War,” 98. 16 Or, one might say, Britain rebated 85.3 percent of the duty it collected on Maryland tobacco. 17 Arthur Pierce Middleton, Tobacco Coast: A Maritime History of Chesapeake Bay in the Colonial Era (Baltimore and London: Johns Hopkins University Press and the Mary land

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Taxation of the Southern Plantation Colonies, 1739–1763

The duty amounted to three to seven times the purchase price of tobacco in the colonies. It is likely that duty-free import into Britain would have increased consumer demand and the price paid to planters, or that direct shipment from the colonies to continental European markets would have secured higher returns. However, offsetting any loss from duty and restriction on shipment was tobacco’s enumerated status under the Navigation Acts, which provided Royal Navy protection across the Atlantic, a network of British merchants and financing, and final markets in continental Europe without having to pay for marketing arrangements for four-fifths of colonial tobacco exports. The balance sheet of costs and benefits cannot easily be compiled. A second source of imperial taxes was royal quitrents. Beginning with the administration of Governor Alexander Spotswood in the second decade of the eighteenth century, the collection of quitrents improved. Annual receipts during 1715–22 averaged about 2,450 sterling. During the 1730s average annual net receipts, after subtracting the cost of collection, were 3,500– 4,000 sterling. Table 23.1 presents receipts and payments from quitrents between 1750 and 1763. At the end of 1749 the balance in the quitrent account stood at 4,549 6s. 3d. Virginia currency. Collections during 1750–63 totaled 95,911 17s. 8d., an annual average of 6,850 16s. 11d. Funds expended totaled 68,782 19s. 1d., but the latter excluded warrants for another 15,285 in approved expenditures that were not paid, bringing total outlays from quitrents to 84,067 19s. 1d. At the end of 1763, the balance in the quitrent account was 16,303 4s. 10d.18 Little of the quitrents remained in Virginia for local expenditure by the General Assembly after 1720. The report of the auditor-general, Robert Cholmondeley, does not itemize arrears, which were reported at over 2,000 a year.19 Cholmondeley’s audited statement of November 14, 1766, shows payments of 2,695 14s. 6d. from quitrents in 1764, consisting of 150 for his ser vices, 70 for the attorney general, an allowance of 200 for Receiver General James Abercrombie, a charge of 1,512 12s. 11d. for a bill of exchange to remit 7,260 14s. 2d. to London, and 763 1s. 7d. as the usual (additional)

State Archives, 1984), 124. Originally published in 1953 by the Mariners’ Museum in Newport News, VA. 18 The report of the auditor-general, Robert Cholmondeley, includes expenditures for 1764. The warrants do not indicate what share derives from outlays of that year. Thus the actual excess of receipts over outlays through 1763 may differ slightly from the number in the text. Public Record Office, Kew, United Kingdom, fi le T 1/452/213–14, “North America, Virginia: Observations and accounts of the Auditor General of Plantations relating to quit rents and the two shillings per hogshead revenue in Virginia 1750–1766.” 19 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 248–51.

[ 667 ]

chap t er 23 tabl e . Virginia Quitrents Collected and Discharged, 1749–1763 (.s.d. Virginia Currency) Year

Balance for 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763 Total Received Total Discharged Balance

Quitrents Received

Quitrents Discharged

5,941.7.7 6,918.2.8 5,789.17.5 5,746.13.8 5,146.2.8 5,495.9.2 7,714.7.7 6,697.3.7 6,651.8.0 7,318.2.11 7,944.16.5 10,232.13.3 7,275.4.2 7,040.8.7 95,911.17.8

975.6.1 8,349.12.0 7,967.8.2 6,241.13.0 5,648.3.4 897.0.4 5,130.0.1 6,563.4.0 7,378.7.5 8,739.15.8 1,961.19.10 3,657.19.6 2,748.3.5 2,624.5.5

Balance

4,459.6.3

68,782.19.1 31,588.4.10

Source: Public Record Office, Kew, United Kingdom, fi le T 1/452/217, “North America, Virginia: Observations and accounts of the Auditor General of Plantations relating to quit rents and the two shillings per hogshead revenue in Virginia 1750–1766.”

allowance to the auditor and receiver of revenue. 20 The British government made occasional use of quitrents to support ser vices in the West Indies, pay royal household costs, and, in one of the most egregious cases, enlarge the gateway that led to Parliament. On one occasion an allowance of 300 was granted to a local magistrate whose house was burned by felons in revenge for the arrest of one of their members. The remaining external tax was the 1d. per pound on tobacco on intercolonial shipments, which generated no more than a few hundred pounds a year. It was allocated for the support of the College of William and Mary.

Domestic Taxes: Ordinary Levies, 1739–1763

T

he t wo main sources of general support for the colonial government were the 2s. hogshead export duty and the poll tax, supplemented with several import and export duties. 20

Public Record Office, Kew, United Kingdom, fi le T 1/452/221.

[ 668 ]

Taxation of the Southern Plantation Colonies, 1739–1763

Tobacco Export Duty

T

he 2s. hogshead duty supplied about 3,000 Virginia currency in 1740. 21 While records of the receipts for the duty are not extant for 1739–44, it is possible to estimate the proceeds of the duty on the basis of exports of hogsheads recorded by the naval officer in Virginia from 1745. 22 The 1766 report of Robert Cholmondeley provided a detailed account of receipts and expenditures from the 2s. duty for each six-month period beginning April 25, 1750, with the last entry for the period April 25, 1765. 23 Table 23.2 displays both the estimated receipts for 1745–50 and Cholmondeley’s figures for April 1750 to April 1763. Annual receipts were relatively stable during 1745–47, rising by several hundred pounds during 1748–49. The entries in Cholmondeley’s account show that substantially larger revenues accrued during each April to October period, when some two-thirds of each year’s harvest was shipped from the colony. His entries also show the yearly ebb and flow of the economy; for example, exports were substantially below average between the war months of October 1758 and April 1760 due to the risk of French privateers. From 1751, the hogshead duty supplied the provincial government with a steady flow of about 6,000–8,000 Virginia currency a year, save the previously cited eighteen-month period. The duty was collected in five separate districts and one port and credited to the account of the receiver-general. A typical list of expenditures debited from his account for each half-year period entailed salaries of the governor (1,000), members of the Council (600), officers of the court of oyer and terminer (100), receiver-general (50), solicitor (100), attorney general (35), clerk of the Council (75), military adjutant (160), armorer and gunner of the fort (25), expenses for meetings of the General Assembly, maintenance of the governor’s house, additional allowances for the auditor- and receiver-generals (282), and contingent charges. Basic salaries remained constant, with contingent charges and allowances for the auditor- and receiver-generals varying from year to year.

21

Ripley, Financial History of Virginia, 104. Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1135–41: “Tobacco Exported from Virginia, by Port: 1745–1773,” S-760. There are no extant figures on annual expenditures charged to the hogshead duty account during 1745–49. 23 Public Record Office, Kew, United Kingdom, fi le T 1/452/218. The figures from the end of the French and Indian War appear in chapter 28. 22

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chap t er 23

tabl e . Virginia Hogshead Receipts and Expenditures, 1745–1763 (.s.d. Virginia Currency) Year

1745 1746 1747 1748 1749 1750 April 25, 1750–October 25, 1750 October 25, 1750–April 25, 1751 April 1751–October 1751 October 1751–April 1752 April 1752–October 1752 October 1752–April 1753 April 1753–October 1753 October 1753–April 1754 April 1754–October 1754 October 1754–April 1755 April 1755–October 1755 October 1755–April 1756 April 1756–October 1756 October 1756–April 1757 April 1757–October 1757 October 1757–April 1758 April 1758–October 1758 October 1758–April 1759 April 1759–October 1759 October 1759–April 1760 April 1760–October 1760 October 1760–April 1761 April 1761–October 1761 October 1761–April 1762 April 1762–October 1762 October 1762–April 1763 Total Receipts Total Expenditures

Receipts

4,281.2.0 4,024.4.0 4,180.8.0 4,678.6.0 4,798.14.0 4,856.14.0 4,714.17.7 2,263.12.8 4,989.4.7 1,830.8.8 4,889.1.2 2,695.5.10 5,692.5.8 2,216.9.8 4,717.0.10 1,825.11.10 4,965.1.11 3,335.1.2 4,936.8.3 n.e. 3,963.11.1 2,528.12.10 4,523.1.10 1,564.15.4 2,286.19.2 2,457.7.10 6,325.6.6 1,976.12.4 4,954.14.7 2,048.8.11 4,978.5.0 2,417.19.8 89,095.14.11

Expenditures

3,511.9.4 2,301.17.3 3,416.3.7 3,890.17.7 3,811.19.4 2,689.1.5 6,404.11.7 3,299.3.1 7,030.8.3 4,206.5.11 5,779.1.5 5,195.4.1 5,016.5.6 n.e. 3,168.13.11 3,026.4.11 4,430.17.2 2,863.19.4 2,735.0.5 2,669.19.8 3,503.6.5 2,926.3.3 2,932.8.1 2,705.14.3 3,118.1.11 4,502.5.3 95,135.2.11

Source: For the full years 1745–50, Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), table Eg1135–41: “Tobacco Exported from Virginia, by Port: 1745–1773,” S-760. For the six months intervals beginning April 25, 1750, Public Record Office, Kew, United Kingdom, fi le T 1/452/218, “North America, Virginia: Observations and accounts of the Auditor General of Plantations relating to quit rents and the two shillings per hogshead revenue in Virginia 1750–1766.”

[ 670 ]

Taxation of the Southern Plantation Colonies, 1739–1763 tabl e . Virginia Poll Tax Rates, 1738–1762 Years

Pounds of Tobacco

11/1/38–5/22/40 5/22/40–5/6/42 5/6/42–9/4/44 9/4/44–2/20/45 10/27/48–2/27/52 2/27/52–11/1/53 11/1/53–5/1/55 5/1/55–4/14/57 4/14/57–2/22/59 2/22/59–3/6/61 3/6/61–11/2/62

6 4.5 6 5 12.5 5.5 6.5 10 6 6 7

Source: William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (Richmond, VA: Franklin Press, 1819). Volume 5, published in 1819, covers 1738–48. Volume 6 (1819) covers 1748–55. Volume 7 (1820) covers 1756– 63. Sources are 5: 110–11, 182–83, 308–9, 389–90, 6: 247–48, 374, 498–99, and 7: 139–40, 290–91, 395, 543. I was unable to fi nd any number for the missing years in the statutes.

Poll Tax

P

ol l tax levied for the general support of government generated in the neighborhood of 1,000 a year. 24 Figures compiled from the Journals of the House of Burgesses appear in table 23.3. Total poll taxes of seventy-five pounds of tobacco levied over the twenty-one years encompassed in the data amount to an annual average of 3.6 pounds. When additional poll taxes were levied to back the issue of French and Indian War treasury notes, taxpayers could pay in hard cash or tobacco at ten pounds per shilling, or one pound of tobacco at 1.2d. At this valuation, the average annual tax burden per tithable during 1739–63 comes to 4.3d., just over one-third of a shilling. Poll taxes estimated at 790 in 1742 and 1,025 in 1748 reflect these numbers. 25

Import Duties

I

m p ort d u t y on slaves was set at 5 percent in 1732, which continued until 1769. In 1740, an additional 5 percent was imposed for the next four 24 25

Ripley, Financial History of Virginia, 104. Ripley, Financial History of Virginia, 104.

[ 671 ]

chap t er 23

years until July 1, 1744, to assist the Crown in the War of Jenkins’ Ear, which expired on schedule. Additional rates imposed during the French and Indian War are described below.

Other Import and Export Duties

T

he col onial government continued to collect duties on imported liquor, which it routinely renewed for specific periods of time. Liquor duties were rationalized and combined into one piece of legislation in February 1745. Rates were set at 2d./gallon on wine, rum, brandy, and other distilled spirits, 1d./gallon on cider, beer, and ale, both to run four years, and an extra 1d./gallon on all of the above for eleven years to support the College of William and Mary. Beverages imported directly from Great Britain were exempt. Duties were rebated if imported liquor was exported within six months, but only if by sea, not by land. To encourage the importation of specie, a reduction of 15 percent was granted to those who paid with imported “good and lawful money.” The 1745 act, scheduled to expire on June 10, 1751, was renewed in 1748 for four years through June 10, 1755, with an additional charge of 1d./ gallon on wine, rum, brandy, and spirits. Subsequent renewals continued up to the outbreak of the French and Indian War, when an additional duty of 4d./gallon was placed on all liquors from non-British islands in the West Indies, exempting those directly from Britain. This was less a revenue measure than an attempt to restrict trade during wartime. The standard charges, including the additional 1d. rate, were reenacted during the French and Indian War through 1759, with the rate doubling to 4d. on hard liquor and remaining at the 1d. rate on cider, beer, and ale. The laws were renewed through June 10, 1765, but the additional 4d. duty on non-British West Indies liquor was repealed in May 1763. Throughout, the governor was permitted duty-free import of ten pipes of Madeira wine a year.26 Duties on alcoholic beverages generated a modest several hundred pounds a year. In November 1744, export duties were placed on skins for the support of the College of William and Mary. Former charges of 3d./raw hide and 6d./ tanned hide were increased, respectively, to 2s. 6d. and 5s. 27 A far more extensive piece of legislation was passed for the support of the college in October 1748. It levied duties of 6d. per raw hide; 6d., tanned hide; 13 ⁄4d., dressed buck skin; 1d., undressed buck skin; 11 ⁄2d., dressed doe skin; 3 ⁄4d., undressed doe skin; 3d., beaver skin; 2d., otter skin; 1 1 ⁄2d., wild rat skin; 1d., mink skin; 26

William Waller Hening, ed., The Statutes at Large; Being a Collection of All the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (Richmond, VA: Samuel Pleasants, 1809–23), 5:28–31, 161–63, 236, 310–18, 6:193–94, 222, 354–55, 471–72, 7:133–34, 265–66, 273–74, 386, 646. 27 Hening, Virginia Statutes, 5:237.

[ 672 ]

Taxation of the Southern Plantation Colonies, 1739–1763

11 ⁄2d., fox skin; 3d., a dozen raccoon skins; 2d., a dozen muskrats; and 41 ⁄2d., elk skin. 28 In May 1742, the General Assembly placed duties of 10 on imported horses, mares, and colts, effective December 1, 1742, valid till September 4, 1744, and subsequently reenacted in October 1748 with indefinite duration. 29 To support the lighthouse at Cape Henry, tonnage of 2d./ton was imposed on every vessel clearing out of Virginia, with no time limit specified in the legislation. 30 These ordinary revenues were more than sufficient to pay the cost of civil administration and other contingent expenses. In 1754, salaries and fi xed charges of government came to 4,345, with ordinary revenue that year of about 6,500; the difference paid miscellaneous expenses. 31 The cost of government was low and taxes were light.32

Domestic Taxes: Extraordinary French and Indian War Taxes, 1754–1763

T

he f isc al landscape underwent a dramatic change in 1754. In February the General Assembly authorized the treasurer to borrow 10,000 at 6 percent interest to underwrite the settlement of colonists near the Mississippi River. To provide security for the borrowed funds, several taxes were enacted to run for three years with payments due in 1754, 1755, and 1756. These included an extra 5 percent duty on slaves, 20s. tax on four-wheeled carriages with 10s. on two-wheeled chairs or carriages, 20s. annual license fee for traders, and several charges for writs or suits brought in court. In May 1763, to ensure full repayment of the loan, these taxes were reenacted as security for the loan on a contingent basis for five years unless reimbursement from Britain permitted full repayment of the remaining balance. 33 Concern over French military movements along the colony’s frontier prompted the fi rst specific war tax. The General Assembly voted 20,000 in new taxes consisting of two poll taxes of 2s. 6d. per tithable, the fi rst due April 10, 1755, the second October 10, 1755.34 This 5s. rate is twelve to twenty times higher than the annual peacetime rate. The following May, to meet the growing demand for money, the General Assembly approved a first issue 28

Hening, Virginia Statutes, 6:91–94. Hening, Virginia Statutes, 5:176–78, 6:124–31. 30 Hening, Virginia Statutes, 6:227–29. 31 Ripley, Financial History of Virginia, 103–4. 32 Exact figures for Virginia are not readily available for most of the colonial era. See footnote 3 above. 33 Hening, Virginia Statutes, 6:417–20, 7:639–41. 34 Hening, Virginia Statutes, 6:436. 29

[ 673 ]

chap t er 23

of 20,000 in treasury notes, backed with three specific taxes to run for three years: a charge of 2s. per slave, 1s. 3d./100 acres of land, and an extra 10 percent duty on slaves, above and beyond the standard 5 percent and the additional 5 percent that supported settlement near the Mississippi River. 35 The burgesses insisted on their financial supremacy, which compelled the governor to accept the specific taxes they recommended. Governor Robert Dinwiddie wrote to the governors of the other colonies that they should jointly recommend to Parliament enactment of a general poll tax of 2s. to meet the rising costs of the war. Nothing came of his proposal. Two years later he changed his view, suggesting a land tax of 2s./100 acres in Virginia, which would raise 6,000 disproportionately from those with the greatest amount of property. He estimated that the average rate from a 2s. land tax would be about 0.2 percent.36 Altogether, the General Assembly approved 438,000 in net war issues of treasury notes backed with taxes on polls, land, tobacco, and slaves. The relationship between treasury notes and the rates and schedules of payment of these taxes appears in table 23.4. Column 1 lists the date of approved treasury issues. Columns 2 and 3 list the volume of treasury notes and the date of full redemption. Columns 4 and 5 list the rates of poll tax and number of years each was scheduled for payment. Columns 6 and 7 do the same for land tax, 8 and 9 for an additional 2s. hogshead duty, and 10 and 11 for several additional slave duties. The table excludes the one-time poll tax of 2s. levied on Negro slaves payable in 1756 and the miscellaneous taxes on carriages, licenses, and writs. Apart from the one-time poll tax on slaves paid by their owners, the cumulative annual legislated poll rate was 1s. in 1757; 4s. in 1758–63; 5s. in 1764–66; 3s. in 1767; 5s. in 1768; and 4s. in 1769. (Poll taxes due in 1768 and 1769 were repealed in March 1768 and not collected.)37 Annual rates of land tax, newly levied in over a century, were set at 1s. 3d./100 acres during 1756–57; 2s. 3d. in 1758–60; 2s. in 1761–68; and 1s. 3d. in 1769. In March 1762 the General Assembly voted to use grants of reimbursement from Parliament to redeem treasury notes and cease the collection of taxes levied for that purpose. 38 Along with poll taxes, all land taxes due in 1768–69 35

Hening, Virginia Statutes, 6:463–67. Ripley, Financial History of Virginia, 40. The conversion to decimal currency works as follows. In 1756, one Spanish milled dollar traded near 60d. Virginia currency, about the proclamation rate, in London. The 2s. rate, 24d., amounts to 42 percent of a dollar (treating a dollar as one hundred cents). Forty-two cents per hundred acres is 0.42 cents an acre, or just over four mills an acre (ten mills in a penny). The effective rate of tax depends on the value of land, which ranged between two and ten dollars an acre. At two dollars, the rate is 0.2 percent; at ten dollars, 0.04 percent. Neither is especially onerous. 37 Hening, Virginia Statutes, vol. 8, 1764–1773 (Richmond: J. & G. Cochran, 1821), 295–98. 38 Hening, Virginia Statutes, 7:500–501. 36

[ 674 ]

tabl e . Virginia Treasury Certificates, Tax Rates, and Schedule of Payments, 1754–1762 (Virginia Currency) c ol u m n 1

col u mn 2

c olum n 3

c olum n 4

column 5

column 6

column 7

column 8

column 9

c olu m n 10

c ol u m n 1 1

Year

Approved Treasury Notes

Redemption Due Date

Additional Poll Tax

Number of Years, Schedule

Additional Land Tax / 100 Acres

Number of Years, Schedule

Additional Hogshead Duty

Number of Years, Schedule

Additional Slave Duty

Number of Years, Schedule

2/1754 10/1754 7/1755 8/1755 5/1756 5/1756 6/1757 4/1758 10/1758

n.a. n.a. 20,000 40,000 25,000 25,000 80,000 32,000 57,000

5

6, 1754 . . . 59

1756 1760 1760 1760 1765 1765 1766

3, 1755 . . . 57 7, 1758 . . . 64

52,000 10,000 20,000 32,000

1768 1769 1768 1769

1, 1755 1, 1756 4, 1757 . . . 60 3, 1758 . . . 60 3, 1758 . . . 60 4, 1761 . . . 64 4, 1761 . . . 64 4, 1761 . . . 64 2, 1765 . . . 66 3, 1765 . . . 67

10

4/1759 11/1759 3/1760 5/1760

5s. 1s. 1s. 1s. 2s. 2s. 1s. 1s. 2s. 2s.

4/1762

30,000

1769

2s. 2s. 3s. 1s.

1, 1768 1, 1768 1, 1769 6, 1764 . . . 69

1s. 3d. 1s. 3d. 1s.

1, 1756 4, 1757 . . . 60 3, 1758 . . . 60

1s. 1s. 2s.

4, 1761 . . . 64 4, 1761 . . . 64 2, 1765 . . . 66

1s.3d. 9d. 1s.3d.

2s.

7, 1758 . . . 64

2s. 2s.

3, 1765 . . . 67 2, 1768 . . . 69

10

2, 1767 . . . 68 2, 1767 . . . 68 1, 1769

Notes: 1. An act of July 1756 imposed a poll tax of 2s./Negro slave, which is not shown in the table. 2. The 5 percent slave duty enacted in 1754, expiring in 1758, was renewed for 1765 through 1769. 3. The fi rst additional 10 percent slave duty was renewed to run through 1765, but was repealed in 1760. 4. The second additional 10 percent slave duty was renewed to run through 1764, but was repealed in 1761. Sources: William Waller Hening, ed., The Statutes at Large: Being a Collection of All the Laws of Virginia from the First Session of the Legislature in the Year 1619, vol. 6 (Richmond, VA: Franklin Press, 1819), 417–20, 463–67, 522, vol. 7 (1820), 9–10, 28–29, 77–81, 165–66, 173–74, 258–59, 277–78, 281, 333, 349–50, 359–60, 363, 373–74, 383, 497, 500–501, 639–41.

chap t er 23

were also repealed in 1768. An additional hogshead duty of 2s. was imposed during 1759–69, which continued to be collected over the entire period. Apart from the additional slave duty of 5 percent enacted in 1754 as security for 10,000 in borrowing by the treasurer, another 10 percent was laid on in May 1755 to run for three years, extended several times through 1767, as part of a tax package to ensure the redemption of 20,000 in treasury notes. Yet a further 10 percent was tacked on in legislation of April 1757, effective July 9, 1758, for seven years, to help support an issue of 80,000. Cumulative duty paid on slaves rose from the standard rate of 5 percent to 10 percent in 1755, 20 percent during 1756–57, 30 percent in 1758, and declined to 25 percent in 1759. With hostilities winding down, the General Assembly found high duties “very burthensome.” By two acts in May 1760 and March 1761, the two additional 10 percent duties were immediately repealed, reducing total duty to 15 percent in 1760 and 5 percent in 1761. One further measure was a 20 percent surcharge on slaves imported by their owners from other colonies in November 1759 to continue until April 20, 1767. 39 The May 24, 1763, treasurer’s report printed in the Journals of the House of Burgesses, which was intended to demonstrate that anticipated receipts for 1763 through 1769 would retire the colony’s public debt, projected receipts for 1763 as follows: tax on 120,000 tithes at 4s., 24,000; on 10 million acres of land at 2s./100 acres, 10,000; on 50,000 hogsheads at 2s., 5,000; on slaves at 5 percent, 2,000; and on wheel carriages, writs, and licenses, 2,000. The total sums to 43,000. Deducting 3,081 for the collector’s and treasurer’s commissions yielded a net of 39,919. It is important to stress that these figures were estimates, not actual revenues. Identical revenues were projected for 1764 and 1765. Estimates of net revenue for 1766, 1767, and 1768 were put at 41,895 after commissions, the higher figure due to the poll tax of 5s., with a decline in revenue in 1769 to 32,817 15s., owing to cuts in the poll tax to 4s. and the land tax to 1s. 3d.40 39 Hening, Virginia Statutes, 5:28, 92, 160, 318, 6:217–21, 417, 419, 461, 466, 7:69, 81, 281, 338, 363, 383. A summary treatment of Negro slave duties in Virginia appears in W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (Baton Rouge: Louisiana State University Press, 1969), 12–14, 215, 218–19. First published in 1896 by Russell and Russell, Inc. 40 The cumulative rates of poll tax I derived from acts published in the Virginia Statutes differ slightly from the rates in the treasurer’s report. The treasurer projected poll tax revenue on the basis of a 4s. rate during 1763–65, 5s. in 1766–68, and 4s. in 1769. The rates I derived from the statutes are 4s. in 1763, 5s. during 1764–66, 3s. in 1767, 5s. in 1768, and 4s. in 1769. Bear in mind that rates for 1768–69 were repealed. I was unable to fi nd any language in the statutes that explains these discrepancies between the sum of rates in law and those presented in the treasurer’s projections.

[ 676 ]

Taxation of the Southern Plantation Colonies, 1739–1763

Not all the notes authorized for issue were put into circulation. The treasurer stated that as of May 24, 1763, 375 of the 57,000 approved for issue in September 1758 was not emitted. So too for 10,250 of the 30,000 approved for issue in March 1762. Non-issue of 10,625 in notes eliminated the need to collect that amount in taxes. The following year’s report of 1764 estimated that collecting the taxes levied to redeem all notes due in 1768 would leave the Treasury with a surplus of 57,503 in revenue, with a smaller surplus of 37,786 if all remaining notes due in 1769 were redeemed. Based on these projections, British reimbursement of about 155,000 Virginia currency amounting to just over a quarter of war-related treasury notes, as well as the desire to keep some currency in circulation, the General Assembly repealed all remaining poll and land taxes due in 1768–69. From 1769 onward, the cost of the civil administration was met almost entirely from the 2s. export duty on tobacco and some use of the quitrents. In the absence of comprehensive treasurer’s reports, a rough estimate can be attempted of annual revenue during the French and Indian War by extrapolating the information in the 1763 report to earlier years. The number of tithables was put at 120,000 in 1763. Heavy taxation did not commence until 1758. Assuming tithables in proportion to the population between 1758 and 1763 would put the number at 102,600 in 1758 and 106,100 in 1759, increasing by about 3,500 per year. A poll tax of 4s. would yield proportional amounts, beginning at 20,520 in 1758, rising some 3.4 percent a year. Land taxes were relatively stable, hogshead duty was known, and slave duties were falling rapidly during 1758–63. Assuming similar compliance as in 1763, it is likely that war taxes supplied between 34,000 and 39,000 a year during 1758–62. The full picture requires adding to these revenues the standard taxes from polls and duties of 5,000–6,000 and several thousand pounds in quitrents, bringing the annual burden during the heavy war years to about 40,000–45,000 Virginia currency. Jack P. Greene has estimated the tax per adult white male of Virginia’s financial contribution to the war at 7 4s. sterling (9 11s. 6d. Virginia currency).41 Virginia was in fifth place, following South Carolina (10 19s. In this vein, it is worth commenting on the difficulty in reconciling different sets of numbers found in several secondary sources. Gipson, for example (The Triumphant Empire, 97), cites the act in the session beginning February 1759 as levying 2s./tithable in 1765–66 and 4s. in 1767, whereas the statute states a rate of 2s. for all three years. Ripley (Financial History of Virginia, 39), also citing statutes in Hening, differs from the rates I derived for 1758–60, 1767, and 1769. Nor do Gipson and Hening fully agree with each other. Ripley reports land tax at 3s./100 acres for 1761–64, whereas I derive from the statutes a rate of 2s. in those years. Converting all three sets of rates into currency would not yield a very large difference in any case. 41 Greene, “Seven Years’ War,” 98. Greene derived the figure by fi rst estimating net expenditures (total expenditures minus reimbursement by Parliament) and dividing net expenditures by the adult white male population for 1760.

[ 677 ]

chap t er 23

sterling), Massachusetts (10 14s.), New Jersey (8 15s.), and New York (7 10s.). Apart from Pennsylvania at 6 13s., Rhode Island was a much lower 3 10s., with the remaining colonies all below 2. The total adult white male tax of 9 11s. 6d. Virginia currency is less than 11 ⁄2 ( just over 1 sterling) per year. In 1755, 43,329 white persons were tithable, subject to taxation.42 The total white population in 1755 was around 167,000. Including white women and children, the annual per capita burden is a much lower 7–8s. Virginia currency. Ordinary taxes add less than a shilling to the per capita burden, perhaps 7d. if slaves are included. One estimate puts the annual per capita tax burden in 1765 at 5d. sterling (6.7d. Virginia currency), compared with 26s. in Great Britain, roughly sixty-two times higher.43 Even the substantially heavier war time tax burdens still left Virginians lightly taxed compared to the tax burden of their British counterparts across the Atlantic and, equally important, with little residual debt.

Taxation in Maryland, 1739–1763 axat ion in mary l and continued as before.44 External taxes included British duty on tobacco and quitrents and miscellaneous fees paid to the proprietor. Internal taxes consisted of a poll tax and duties, and the export tax on tobacco enacted in 1733, continued to 1764, to guarantee the redemption of 90,000 in Maryland bills of credit. To these were added several taxes to underwrite a war tax in 1754 and a further issue of 40,000 in war bills in 1756.

T

External Taxes: British Tobacco Duty

M

ary l and tobacco, about a third of that imported into Great Britain from Virginia and Maryland, was dutiable on importation. Any external tax borne by Maryland planters from this charge was similar to that in Virginia. It is difficult to construct a balance sheet of the costs and benefits from the enumeration of Maryland tobacco under the Navigation Acts. 42

Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999), table 5.41, 157–58. 43 R. R. Palmer, The Age of the Democratic Revolution: A Political History of Europe and America, 1760–1800 (Princeton: Princeton University Press, 1959), 155. 44 Internal revenues in Maryland are discussed and tabulated in John Allen Kinnaman, “The Internal Revenues of Colonial Maryland” (Ph.D. thesis, Indiana University, 1955; Ann Arbor, MI: University Microfi lms), 453–92, 522–23, and Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 207–36. For quitrents, see Bond, Quit-Rent System in the American Colonies, 193–218, and Charles A. Barker, The Background of the Revolution in Maryland (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1940), 380, appendix, table 2.

[ 678 ]

Taxation of the Southern Plantation Colonies, 1739–1763 tabl e . Maryland Quitrents, 1748–1761 (.s.d. Sterling) Year

Annual Net Returns

1748 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761

4,339 11s. 7d. 5,013 15s. 212⁄ d. 5,752 4s. 814⁄ d. 5,325 12s. 914⁄ d. 5,126 2s. 4d. 5,121 3s. 1134⁄ d. 6,082 17s. 034⁄ d. 8,593 16s. 4d. 9,273 16s. 412⁄ d. 6,093 19s. 734⁄ d. 8,383 5s. 1112⁄ d.

Sources: Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 216, and Charles Albro Barker, The Background of the Revolution in Maryland (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1940), 380.

External Taxes: Proprietary Quitrents

P

r opr ie tary q uit r e nt s, assessed in sterling, were the private income of the Calverts, not the public income of the colonial government. From the proprietary income, the only local expenditures were the governor’s salary of 1,000 sterling, petty commission paid to the keepers of the rent roll, and the occasional gift of a few pounds to a school. Quitrents and alienation fees became payable in specie after 1733, remaining so until the Revolution. Payment was set at 3 17s. 6d. an ounce of gold and 5s. 3d. for silver. The commutation of quitrents with a 2s. export duty on tobacco in the early decades of the eighteenth century was replaced with direct collection in 1733. Reorganization of the system in 1733 coupled with vigorous collection yielded steadily rising receipts. In 1745, the gross value of collection was 5,369 11s. 3d, netting 4,508 15s. 4d. after subtracting the one-fi fth loss in collection. The ratio of loss to collection fell to about one-seventh in 1755, and the collection of arrears steadily improved over the next five years. Annual net returns for 1748 and between 1752 and 1761 appear in table 23.5.45 45 Bond, Quit-Rent System in the American Colonies, 216, and Barker, Background of the Revolution in Maryland, 380. Barker lists 5,814 10s. 11 1 ⁄2d. in 1759, considerably less than Bond’s calculation. Barker states that he took this figure and the net quitrents in 1748, 1752, and 1757 from the Calvert Papers in the Maryland Historical Society. For all other years, he cites Bond as his

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Between 1745 and 1753, the white population of Maryland increased about 8 percent, with quitrents up 28 percent; the comparable figures during 1745–61 were 21 and 86 percent. Per capita white quitrents in 1745 amounted to 11.4d., rising to 13.5d. in 1753 and 17.6d. in 1761, an increase of 54 percent during 1745–61. The Calverts were far more successful than the Penns and the Crown in collecting quitrents. Beverly W. Bond attributes their success to consistency in the administration of the system, moderation in the method of enforcement and payment, and granting of special rates and exemptions. For example, Lord Baltimore periodically offered exemption from quitrents to those who would immigrate and settle on frontier lands for three to five years. Some 2,800 persons accepted the offer of a three-year exemption and settled in the Monocacy River Valley between 1748 and 1756.46 Proprietary income from other sources included land sales, manor rents, alienation fines, tonnage, and such minor revenues as permits to operate ferries. Annual land sales fluctuated between a low of 1,484 5s. 4d. in 1757 and a high of 6,113 13s. 63 ⁄4d. in 1761, generating 29,632 6s. from 1752 through 1761 inclusive (no data for 1753), an annual average of 3,292 10s. Manor rents provided annual average income of 995 7s. during 1752–61, alienation fines 150 17s. a year, tonnage about 1,000 a year, and other minor revenues less than a hundred pounds a year.47 Aubrey Land summarizes the increase in net proprietary income from all sources, reflecting the growth in population and settlement, from a modest 5,969 sterling in 1733 to 9,880 in 1748, 14,960 in 1754, and 15,976 in 1761.48 source. Barker presents no quitrents during 1762–67 inclusive in his table. Bond lists the average annual gross value of quitrents for 1760–65 at 7,398 17s. 3 1 ⁄4d. without any numbers for net annual returns by year. 46 Bond, Quit-Rent System in the American Colonies, 217. 47 Barker, Background of the Revolution in Maryland, 380–81, tables 2 and 3. The data in the tables are in sterling save for minor revenues, which are a mixture of sterling and Maryland currency. For 1748 and 1752–55, tonnage was commingled with the 12d. hogshead duty, which makes it impossible to estimate annual average tonnage income. For the six years 1756–61, annual average tonnage was 992 1s. Receipts in 1761 from quitrents, land sales, alienation fi nes, and tonnage were all significantly higher than in preceding years. Excluding the entries for 1761 would reduce annual average income from quitrents and land sales by several hundred pounds. 48 Land, Colonial Maryland, 223. Land’s total includes the revenue from the 12d. hogshead duty allocated to the proprietor for the use of the colonial government, which generated over a thousand pounds a year. Not every source of proprietary income should be considered a tax. Whereas quitrents are a property tax, an external tax drained abroad as the proprietor’s personal income, land sales are the purchase of a productive asset, not a tax. Nor are the numerous fees and charges paid to officials for legal and documentary ser vices rendered, as private fees are offset with purely private benefits. The estimated cost of the fees for individual ser vices, placed at about 12,000 sterling in 1767 by Governor Horatio Sharpe, is not a tax. It is possible that some fees were excessive or higher than they were in other colonies, but fees for ser vices rendered on behalf of private individuals are not a tax. The same argument can be made about church levies.

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Taxation of the Southern Plantation Colonies, 1739–1763

The Calverts were better able to defend their privileges than were the Penns, who had been forced to agree to the taxation of their lands during the French and Indian War. In 1740 the Maryland House of Delegates passed a supply bill to support an expedition against Spanish Cartagena that included the income from ordinary license fees, considered by custom the income of the provincial secretary.49 To assure themselves of annual sessions as the British House of Commons had done in passing the Mutiny Act, the house refused to approve any duties for longer than one year. The Council of State refused to accept this condition, resulting in the failure to approve the arms and ammunition duties until 1747, when Baltimore replaced Thomas Bladen (1742–47) with Samuel Ogle as governor in 1747 (who served previously during 1735–42). Lord Baltimore had instructed Bladen not to yield an inch on his claim to the tonnage and other sources of proprietary income. The return of peace and the restoration of Maryland native Ogle temporarily eased the tension between the house and Council of State. During a brief session in 1750, the house passed a resolution condemning the 12d. hogshead duty, which secured over a thousand pounds a year in revenue for the operation of the colonial government, as invalid and unconstitutional. If successful, Baltimore would require annual votes of supply to meet even the minimal cost of his colonial administration. Nothing came of this resolution.50 When the first of two war bills for 6,000 was approved in 1754, the Council of State and governor, the latter violating his instruction from Baltimore, agreed that the income from ordinary licenses be transferred from the proprietor’s personal income to the provincial military effort. The second, a war supply bill of 40,000 in March 1756, included a levy of 12d./100 acres on all land including the proprietary manors, along with a double tax on Catholic landholders. The tax applied only to leased and productive lands, exempting undeveloped lands, generating about 400 a year from Baltimore for the five-year life of the act, about half the normal income from these manors.51 Moreover, the abandonment of land along the frontier after Braddock’s defeat was estimated to cost Baltimore 1,600 in rental income, which explains his concurrence in the act. Following the 1756 act, The established Church of England rendered a broad range of ser vices, although dissenters were not entirely happy about their compulsory support. Land states that “It is therefore technically incorrect to say that the 8,000 for the Anglican Church represented a levy on the economy, as did the Lord Proprietor’s personal income” (225). Church officials routinely complained about lax enforcement of the church levy. 49 Barker, Background of the Revolution in Maryland, 233. 50 Barker, Background of the Revolution in Maryland, 236. 51 Barker, Background of the Revolution in Maryland, 239–41. The war bill of July 1754 had exempted the proprietary quitrents and lands from taxation.

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Baltimore instructed his governor and councillors to resist any further encroachment on his financial privileges. A proposal of the House of Delegates in 1758 to raise 30,000 in land tax that included the proprietary estate and to permit landholders to deduct a part of their quitrents from the levy, followed by a subsequent bill to similarly raise 45,000, were rejected by the Council of State. No further efforts against Baltimore’s privileges succeeded until 1766.

Internal Taxes

T

h e t wo principal sources of provincial revenue were the 12d. hogshead duty and poll tax. The former supplied the colonial government with more than a thousand pounds a year sterling (one-and-a-half times that of Maryland currency).52 Poll tax varied with the needs of the annual supply bill. Another internal tax consisted of the 15d. sterling duty per hogshead enacted in 1733 for a period of thirty-one years ending September 29, 1764, to guarantee 90,000 in Maryland bills. The proceeds were used to purchase sterling securities in London that provided the wherewithal for the timely redemption of the bills. Paper currency ceased to circulate from 1765. From time to time, the House of Delegates sought to draw on bills in the custody of the loan office to meet current expenses. As described in chapter 19, payments from the loan office during 1735–37 were reimbursed with taxes from duties for 1735 and 1737, but no provision was made for 1736. In 1741 the house explored the further use of loan office funds to meet outlays but chose instead to levy taxes. Only small sums on the order of several hundred pounds were occasionally drawn from the loan office to meet the odd expense, but these were to be repaid from county levies and other public funds as they became available. In the spring of 1740, troops were offered bounties to enlist for an expedition against the Spanish West Indies. To meet this expense, the legislature approved the withdrawal of 2,562 10s. from the loan office, but the loan office was repaid in three equal installments in the public levies of 1741, 1742, and 1743. In July 1740, another 5,000 was borrowed from the loan office, which was reimbursed with half the duties on Negroes, Irish servants, and liquor, and a fee for an ordinary license. An attempt to borrow 3,000 in 1745 to support the garrison at Louisburg failed over the Council of State’s refusal to permit the inclusion of an additional 2s. sterling export duty on tobacco to support an agent in Britain, lest it give the House of Delegates a means to appeal to the Crown against the interests of the

52

Barker, Background of the Revolution in Maryland, 381, table 3.

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Taxation of the Southern Plantation Colonies, 1739–1763

proprietor. Excluding funds for an agent, an act in 1746 appropriating 4,500, borrowed from the loan office, for the support of an expedition against Canada was approved. The final appropriation during King George’s War was 900 borrowed from the loan office repaid with a fee on ordinary licenses.53 Throughout these years of warfare, the use of loan office funds was fully backed with taxes. No new bills were issued.

The French and Indian War

S

av e on e new currency issue in 1756, war appropriations were met with funds borrowed from the loan office and general revenues collected by the two treasurers of Maryland’s Eastern and Western shores. In July 1754, 6,000 Maryland currency was voted for the defense of the Virginia frontier, of which 4,000 8s. was borrowed from the loan office and the rest from the treasurer. Repayment rested on a tax of 5s. per wheel on all kinds of coaches and carriages, an additional fee for ordinary licenses, a license on all pedlars, and import duties on servants and Madeira wine.54 Numerous attempts to appropriate funds in December 1754, February 1755, and June 1755 failed over disagreement between the House of Delegates and the Council of State on the use of bills in the custody of the loan office. Braddock’s defeat in July 1755 put the colony’s frontier settlements in jeopardy. Advancing his own funds for its maintenance, Governor Horatio Sharpe ordered the Maryland militia into action to secure the frontier, later asking the General Assembly for reimbursement. In March 1756 the house suggested that 40,000 be raised, 30,000 in new bills, the rest borrowed from issued and uncirculated bills in the loan office. Redemption of new bills and repayment of borrowed ones were secured with excises on all liquor made or consumed in the province, new taxes on bachelors and billiard tables, stamp duty on a variety of documents, a tax of 1s./100 acres on developed and leased land, import duties on liquor, pitch, tar, turpentine, and horses, and an additional duty on Negroes. Duties enacted in 1754 were to apply to redemption of bills when their proceeds fully repaid the borrowed funds of that year. All bills were discharged by 1763. Attempts by the house in 1758 and 1759 for further issues were rejected by the Council of State, which argued that Maryland currency would depreciate under an increased supply of paper money. The house, for its part, claimed the right to appoint government officials, approve the claims of individuals submitted for public payment, and determine the amount of tax to be laid upon officials, British merchants, and vacant lands of the

53 54

Behrens, Paper Money in Maryland, 29–34. Behrens, Paper Money in Maryland, 35.

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proprietor. Nine times between 1756 and 1762 the house sent up supply bills that included taxing the fees and salaries of officials, and each time the Council of State refused its assent. The lower and upper houses blamed each other for the failure to appropriate any further funds during the war.55 The conclusion of the war removed the leverage of the house in considering supply bills. It no longer had any means to attempt to put any of Baltimore’s private income to public use. Expiration of the land tax in 1761 left proprietary lands completely free of taxation. Baltimore emerged from the war in full control of his private income. Redemption and repayment of borrowed funds and new bills were faithfully carried out. The last of the money borrowed in 1737 was repaid in 1747. Borrowed funds approved in the act of 1740 for the expedition against the Spanish West Indies were repaid in 1755, leaving a surplus that was transferred to the account for the expedition against Canada. The money for this adventure was repaid by August 1758. When the commissioners appointed by the 40,000 act of 1756 act met in August 1760, they found a deficit of 14,148 4s. 6d. in the fund to sink the 40,000 in the 1756 act. They imposed an additional land tax of 7s. 7d./100 acres, again double that on Catholics, for the remaining year of the five years of the 1756 act. That high rate, far above what was expected, prompted the General Assembly to continue the duties and taxes enacted in 1754 for an additional two years. By 1763 the Treasury was in surplus regarding the receipt of funds dedicated to sinking the 40,000. Maryland spent little on military activities during the French and Indian War, issued little debt to that end, and received no reimbursement from Parliament. The Board of Trade estimated the colony’s war outlays at 39,000 sterling, only 2.6 percent of colonial financial contributions to the war. Greene estimates the tax per adult white male for the war at 1 18s. 2d., which for the nine years 1754–63 amounts to an annual average levy of 51d., just over 4s.56 Adding white women and children reduces the annual war levy to less than a shilling. The war tax is less than a fifth that of Massachusetts, and less than a third that of neighboring Virginia and Pennsylvania. Apart from specific war taxes, taxation was extremely light. The General Assembly usually set the public levy each year for provincial expenses as a mixture of tobacco and money. John Kinnaman tabulated assessments for selected years for which full data were available.57 55

Behrens, Paper Money in Maryland, 38–41. Greene, “Seven Years’ War,” 98. For the seven years 1756–63, the tax would be a higher 65d., almost 51 ⁄2s. 57 Kinnaman, “Internal Revenues of Colonial Maryland,” 492. The selected years, total tobacco levied (pounds), and total Maryland currency (.s.d.) are as follows: 1742, 607,601 pounds, 1,328.18.1; 1756, 2,302,998 pounds, 764.6.4; 1757, 2,302,998 pounds, 764.6.4. 56

[ 684 ]

Taxation of the Southern Plantation Colonies, 1739–1763

The price paid to Maryland tobacco farmers in local currency averaged 1.33d. a pound in 1742, 1.76d. in 1756, and 1.83d. in 1757.58 At these prices, taxes in 1742 of 3,367 2s. 5d. in tobacco and 1,328 18s. 1d. in currency sum to 4,696 0s. 6d. Per capita taxes of the white population of 93,174 in 1742 amounted to 12.1d., or 9.3d. including Negro slaves. The comparable figure for 1756 was 39.6d., or 27.7d. including slaves.59 For many years a dispute raged between the House of Delegates and the Council of State over allowances for councillors, which often blocked the approval of a general appropriation bill for purely local administration. The house objected to the use of taxpayers’ money to pay councillors, insisting that the proprietor pay them, as he did the governor, from his portion of the duty received in commutation of quitrents. The proprietor declined, urging the house to accept its responsibility in the matter of their pay. Councillors went without pay for a decade after 1725, finally renewing their demand in 1735, by which time the export duty had been reduced to the one-third portion allocated for the expenses of the provincial government. The house rejected the Council of State’s demand that year and the next. In 1737, the council refused to approve the journal of accounts, the basis on which the treasurer paid the colony’s creditors, unless it received a regular allowance. The house yielded, agreeing to a regular allowance for eleven years. In 1748, the fees of government officials were made subject to law, and an allowance for councillors was made for the last time. In response, the Council of State refused to approve the journal of accounts through 1756. The lower house, rather than yield to the council’s claim for an allowance, let the accounts go without passage, which meant that their own ser vices were unpaid. Finally, in 1756, the council waived its claim, passing the accounts without the inclusion of an allowance it had so long demanded.60 This explains the above-cited appropriation of 1756, half to be paid that year and half in 1757. Needless to say, the obstruction of the journal of accounts left creditors angry and the colonial government in disrepute. A coincidental dispute concerned the clerk of the Council of State. Knowing that he received compensation from fines and forfeitures, the house insisted that any further pay should come from the 12d. export duty on tobacco voted for the general support of the government, not from any supplementary appropriation. The Council of State objected on the ground that payment from general revenue would expose its confidential proceedings to

58

Purvis, Almanacs of American Life, 71, table 4.64. For 1756, 16,888 13s. plus 764 6s. 4d. equals 17,652 19s. 4d., divided by 107,007 white persons equals 39.6d. For 1757, 17,560 7s. 2d. plus 764 6s. 4d. equals 18,324 13s. 6d., divided by 108,571 white persons equals 40.5d. Slaves constituted 23 percent of Maryland’s population in 1742, rising to 30 percent in 1756–57. 60 Newton D. Mereness, Maryland as a Proprietary Province (New York and London: Macmillan, 1901), 364–67. 59

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the public. This disagreement prevented the journal of accounts from passing into law in 1739. Then, from 1747 to 1756, a fi xed allowance to the clerk was regarded as objectionable as for the council. Although the council surrendered the claim to an allowance for itself, it continued to demand payment for its clerk, John Ross. The house refused. No allowance was made for the next seven years after the appropriation of 1756, and hence no journal of accounts was passed and public debts were not paid. The pay of the militia fell into arrears. In 1765 Bernard Veasey was still waiting for payment of 30 3s. 3d. due him for messenger ser vices in November 1755 during an Indian alarm.61 Each year the house insisted it would pay the clerk only for his itemized list of ser vices rendered and which it deemed reasonable, a position the council firmly rejected. The problem remained unresolved at the conclusion of the French and Indian War, deferred for future delegates and councillors to address.62

Clergy Tax

T

h e c l e r g y tax in Maryland was set at forty pounds of tobacco for each taxable or the money equivalent in 1702, reduced to thirty

61

Land, Colonial Maryland, 251–52. Mereness, Maryland as a Proprietary Province, 368–70. Despite the failure of the General Assembly to approve the journal of accounts, which prevented the treasurers from making payments out of the colonial Treasury, the business of colonial administration did not grind to a complete halt. The proprietor paid the governor’s salary. The income of the colony’s official establishment of one hundred twenty persons, eighty officers and forty clergy, derived from fees for ser vices rendered. The courts continued to function, their cost, paid by fees, estimated at 637 sterling in 1766 by Governor Sharpe. County levies that defrayed local charges were governed by an act of 1704, which authorized justices to apportion a local levy for construction and repair of roads, bridges, and public buildings. Sharpe put the total for all fourteen counties at 14,695 sterling in 1766. Residents enjoyed better transportation infrastructure and public facilities in return. However, to prevent wasteful, excessive, and unnecessary expenditure as taxes tended to rise, the General Assembly passed a supplemental act to that of 1704 limiting local expenditures to the “ordinary, usual, and necessary charges annually arising,” which required any special expenditure to come before it for approval. The dispute between the house and Council of State over the journal of accounts came to a head in May 1766. Lord Baltimore finally agreed that license fees could be appropriated for provincial purposes. Simultaneously the house and council put aside the issue of the clerk’s salary, agreeing to submit the question to the Crown-in-council for a binding decision. The house prepared the journal of accounts and drew up an account to pay public claims by issuing bills of credit. The public debt stood at 5,623,499 pounds of tobacco and 19,841 1s. 2d. Maryland currency, totaling 32,995 15s. 2d. sterling. At this time, the legislature established the dollar as a new monetary unit at 4s. 6d. per dollar. The act issued 173,733 dollars in bills of credit secured with Bank of England stock in the hands of the colony’s London trustees. Within two months, 146,801 dollars was paid out to creditors, some of which had been unpaid for ten years. Land, Colonial Maryland, 253. 62

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Taxation of the Southern Plantation Colonies, 1739–1763

pounds per poll with passage of the Inspection Act of 1747. 63 The number of taxables was on the order of a third of the total population, which put the per capita clergy contribution at about thirteen pounds. Th is amounts to 17.3d. per capita in 1742, 23d. in 1756, and 23.8d. in 1757. About half of the white population in the southern colonies worshiped in Anglican churches.64 Marylanders were relatively heavily taxed compared with settlers in other colonies. Th is was largely a result of the payment of quitrents, which, apart from the governor’s salary and other minor local expenditures, were transferred abroad in sterling bills of exchange. Provincial taxes derived largely from the 12d./hogshead duty allocated to local expenditures that remained from the original duty that included the commutation of quitrents. One-third of English imports of Virginia and Maryland leaf amounts to some 15 million pounds a year during 1739–63. The Maryland inspection act of 1747, following that of Virginia, set the weight of a hogshead at 950 pounds. Fifteen million pounds of annual tobacco exports amount to about 16,000 hogsheads a year. At 12d./hogshead, this volume would produce about 800 sterling in annual revenue. The tax was rarely appropriated due to the confl ict between the House of Delegates and the Council of State over allowances for councillors and their clerk that blocked passage of the journal of accounts. Kinnaman’s survey of assessments on the taxables of Maryland between 1716 and 1766 reveals no entries for 1743–46, 1747–55, and 1758–63. The special taxes enacted during the French and Indian War were just over 3s. per year for each adult white male, or less than 1s. for all whites. The 15d. sterling duty on tobacco enacted to redeem the currency issue, a tax on Maryland planters, was off set with the advantages of a circulating paper currency that facilitated commerce and enabled the payment of taxes in paper currency (and the stock it purchased in London was used in 1766 to issue dollar bills to settle unpaid debts that had accumulated during the years of failure to approve the journal of accounts). In addition, the conversion of paper bills by their holders into sterling bills of exchange at the proclamation rate at the date of redemption was a better rate than the currency enjoyed in the years preceding its retirement. In this vein, any tax burden stemming from the extra duty was largely off set by other benefits. Apart from quitrents, Marylanders paid little tax. 63

Land, Colonial Maryland, 225. Purvis, Almanacs of American Life, 182. Catholics amounted to about 10 percent of all Maryland whites in 1708. The early English character of the colony was gradually diff used with the immigration of Scots and Irish, and later Germans, into the western parts of the province, who were rarely practitioners of Anglicanism. 64

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Taxation in North Carolina, 1739–1763

A

s d ur ing the era of salutary neglect, North Carolinians remained subject to external taxes of royal quitrents and the 1d. intercolonial duty, and internal taxes of duties, poll tax, and license fees.65

Imperial Taxes: Quitrents and the Intercolonial Tax

T

he col l ect ion of royal quitrents achieved a substantial measure of success during 1735–37.66 In 1738 Governor Gabriel Johnston secured passage of a quitrent act that sought to put quitrents on a fi rm basis. The act provided for the payment of quitrents in commodities, including tobacco, hemp, flax, deerskins, and beeswax, which had been acceptable in payment of provincial taxes for many years. The act purposely undervalued the stipulated commodities, which would presumably prompt landowners to purchase gold or silver with which to pay their rents. Johnston estimated to the Board of Trade that the act would increase receipts by 1,800 sterling. To his dismay, the Privy Council disallowed the act on the grounds that it failed to require payment in sterling or in commodities of equal value. When Lord John Carteret (later ennobled as the Earl of Granville) refused to sell his share of the Carolinas to the Crown, he was allowed one-eighth of the gross quitrents from future collections in both Carolinas. In 1744 he waived this allowance in exchange for a grant of land in North Carolina along its border with Virginia, which became known as the Granville Grant or Granville District. Table 23.6 displays the receipts of quitrents in North Carolina between 1739 and 1748. The figures are in sterling (st.) during 1739–44 and Proclamation Money (PM) for 1745–48. When converted from Proclamation Money into sterling, the decline from 1745 is even more precipitous. The values in sterling, rounded to the nearest pound, for those four years amount to the smaller sums of 242, 301, 292, and 110, respectively. Only a meager 161 8s. Proclamation Money was collected in 1751.67 The 65

An overview of taxation in North Carolina appears in Coralie Parker, Th e History of Taxation in North Carolina during the Colonial Period, 1663–1776 (New York: Columbia University Press, 1928). Concrete data for the period 1748–63 are found in William K. Boyd, “Some North Carolina Tracts of the 18th Century,” North Carolina Historical Review 3, no. 3 (July 1926): 475–76, plus the following table. Marvin L. Michael Kay uses Boyd’s fi gures and other data to estimate the overall tax burden in “The Payment of Provincial and Local Taxes in North Carolina, 1748–1773,” William and Mary Quarterly, 3rd ser., 26, no. 2 (April 1969): 218–40. 66 The treatment of quitrents in North Carolina appears in Bond, Quit-Rent System in the American Colonies, 295–310. 67 Parker, Taxation in North Carolina, 64.

[ 688 ]

Taxation of the Southern Plantation Colonies, 1739–1763 tabl e . North Carolina Quitrents, 1739–1748 (.s.d.) Year

Quitrents

1739 1740 1741 1742 1743 1744 1745 1746 1747 1748

343.14.6 st. 1,906.12.612⁄ st. 995.15.6 st. 1,240.13.112⁄ st. 763.5.8 st. 1,003.6.1o12⁄ st. 323.7.6 PM 402.0.0 PM 389.6.1 PM 146.13.0 PM

Source: Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 300.

reduction in quitrents put the salaries of royal officials even further into arrears.68 The arrival of Governor Arthur Dobbs in 1754 signaled a renewed attempt to collect quitrents, but Dobbs achieved no greater success than had Johnston. Public opposition to payment increased, sheriff s often refused to collect the rents, and North Carolina paper currency depreciated from its proclamation rate, further reducing the real value of receipts. Only the equivalent of 455 sterling was collected in 1761 out of an estimated value of quitrents of 3,000. 69 Between 1739 and 1763 the population of North Carolina rose from just under 50,000 to more than 130,000, an increase of 160 percent. The per capita burden of quitrents in 1761 amounted to 0.9d. sterling, or 1.7d. North Carolina currency, an inconsequential sum. The 1d. duty on intercolonial shipment of tobacco was rarely enforced and there are no extant records of receipts. 68

Estimates of arrears up to 1735 amounted to 3,528 15s. The governor was to receive an annual allowance of 1,000, and payments to other royal officials increased the amount to 1,455. Beginning with Dobbs, the governor’s salary was shifted to the 4 1 ⁄2 percent export duty collected in the Leeward Islands, but other royal payments remained a charge against quitrents throughout the colonial era. On the death of Governor Johnston in 1752, arrears of 13,462 19s. 2d. were owing on his salary. When the attorney general of North Carolina, Thomas Child, was asked in 1753 why he declined to continue his duties, he reported that he had received no salary since his appointment in 1745. Bond, Quit-Rent System in the American Colonies, 301n1. 69 Bond, Quit-Rent System in the American Colonies, 309n3.

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Internal Revenues

D

ur i ng t h e preceding quarter century, the poll tax was the principal source of revenue, supplemented with license fees, relatively insignificant duties and tonnage, and modest local taxes. Per capita taxes were a meager few pence sterling a head. Compared with the previous era, taxation markedly increased after 1748, especially during the French and Indian War. Provincial and county poll taxes on white males aged sixteen and over and on slave or free Negroes aged twelve and over remained the leading source of revenue. The second major provincial tax from 1748 was duties on alcoholic beverages, of which rum was the principal beverage. Rum duty and poll tax supplied more than 90 percent of provincial revenue, the balance provided by sporadically levied minor taxes.70 Inefficiency and corruption plagued the administration of provincial taxes throughout the entire period.

Direct Taxes

T

o un de rw r i t e the colony’s participation in the War of Jenkins’ Ear, the General Assembly appropriated 12,000 sterling in 1740, levying a poll tax of 3s. Proclamation Money.71 To defend the colony against several Spanish invasions off the coast of North Carolina, it approved additional poll taxes of 8d. in 1743 to provide magazines, 1s. in 1745, and 1s. in 1748 to sink an issue of 6,000 to build two large forts at Cape Fear and Ocracoke (the currency act of 1748 called for the redemption of all outstanding old bills at 7.5 old bills for new bills at the proclamation rate).72 Modest poll taxes were levied during the brief era of peace. In 1749 an act was passed to fi x the seat of government at New Bern with a poll tax of 4d. for three years, continued in 1753 for three more years. A clause was added to the act in 1750 to establish circuit courts with a poll tax of 2d. for two years.73 The French and Indian War brought substantially higher levies. In 1754 the General Assembly levied a poll tax of 1s. to partially fund the redemption of 40,000 in bills of credit used for military purposes, a public school, and erection of parish churches and parsonages, along with a tax of 1s. 6d. for four years to pay the salaries of the chief justice and attorney general and

70

Kay, “Provincial and Local Taxes in North Carolina,” 218–24. The minor taxes consisted of two taxes on lawsuits, two on petty and itinerant traders, and one each on vehicle wheels, imported rice, and exported raw hides (224n17). 71 All subsequent levies are in Proclamation Money unless otherwise stated. 72 Parker, Taxation in North Carolina, 112–13. In 1748 North Carolina made all taxes payable in Proclamation Money, refusing to accept commodities in tax payments. 73 Parker, Taxation in North Carolina, 114.

[ 690 ]

Taxation of the Southern Plantation Colonies, 1739–1763

other governmental purposes, the latter renewed for four more years in 1758. A series of poll taxes, beginning in 1756, were approved to redeem interestbearing treasury notes issued to underwrite military expenditures. Notes issued in 1756 to erect a fort and pay two companies of troops to defend the western frontier were secured with a 2s. poll tax to be collected in 1757. Notes of 5,306 issued in the spring of 1757 were backed with a poll tax of 4s. 6d. for that year. Another issue of 9,500 late in 1757 was backed with a poll tax of 2s. 6d. Two further note issues of 7,000 and 4,000 in 1758 were backed, respectively, with a poll tax of 4s. 6d. to be collected in 1759 and one of 3s. 1d. in 1760. In addition to these levies to retire treasury notes, a poll tax of 1s. 8d. was voted in 1759, scheduled for collection in 1761, 1762, and 1763, to refund 5,500 used in paying the provincial militia. An issue of 12,000 in bills of credit in 1760 was accompanied by a poll tax of 1s. to be collected in 1763 and as long thereafter as required to sink the bills, modified in 1761 to 2s. to continue for five years.74 In December 1768 the House of Commons authorized John Burgwyn, clerk of the court of Chancery and secretary of the Council, to investigate the state of the public accounts, in part to determine whether the taxes that were levied to redeem outstanding issues of paper money had achieved their purposes and should no longer be collected. The authorization was repeated the following December. Burgwyn submitted three reports, one a statement of the accounts of the sheriffs showing the extent of arrears in settlements with the colonial Treasury, the second indicating that the amount of taxes levied to retire the currency exceeded the amount issued, and the third a county-by-county table of the number of taxables and taxes paid between 1748 and 1770. His first report, submitted in 1770, disclosed that receipts from poll taxes during 1748–70 were 56,616 North Carolina currency, an annual average of 2,462, and that the sheriffs’ arrears to the treasurers during 1754–70 were 64,013 13s. 3d., a larger number. Extrapolating the missing years in arrears suggests that only 44.9 percent of the sum of 126,197 (which would have been an annual average of 5,486) that should have been collected was actually received.75 The third report is the tables of poll taxes and receipts actually collected from 1748 (see table 23.7).76 The impact of the French and Indian War is 74

Gipson, The Triumphant Empire, 101–2, and Parker, Taxation in North Carolina, 115–16. Kay, “Provincial and Local Taxes in North Carolina,” 224. Of the missing taxes, Kay supposes that a quarter of the total due was embezzled by the sheriff s. He is unable to estimate the amount embezzled by the treasurers. Marvin L. Michael Kay, “Provincial Taxes in North Carolina during the Administrations of Dobbs and Tryon,” North Carolina Historical Review 42, no. 4 (October 1965): 441n1. 76 There are numerous problems with the legal justification for the entries in Burgwyn’s table. Some of the statutes that authorized portions of the poll tax do not exist. Rates for contingencies are not included in the revenue laws. Rates on certain funds are not stated in the 75

[ 691 ]

chap t er 23 tabl e . North Carolina Poll Tax Rates, Revenue, and White Per Capita Taxes, 1748–1763 Year

1748 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763

Poll Tax (s.d.)

1.8 1.8 1.8 1.8 1.8 1.8 1.8 5.7 7.7 10.1 12.1 10.1 6.8 7.3 6.2 7.2

Revenue (.s.)

White Per Capita Taxes (d.)

367.16 412.10 462.14 471.17 497.3 1,130.8 1,274.0 1,298.6 1,315.8 1,354.11 1,366.16 1,469.5 1,502.12 1,816.19 1,821.13 3,732.18

1.7 1.9 2.1 2.0 2.1 4.5 4.9 4.8 4.6 4.7 4.5 4.7 4.7 5.3 5.0 9.7

Source: William K. Boyd, “Some North Carolina Tracts of the 18th Century,” North Carolina Historical Review 3, no. 3 (July 1926): 475–76, plus the following table.

clearly seen on the poll rate, which steadily rose from 1s. 8d. during 1748–54 to a peak of 12s. 1d. in 1758, declining thereafter. The amount of poll tax collected during 1748–52 more than doubled in 1753 and more than tripled from 1760. The effective per capita tax burden on the white inhabitants of the colony more than doubled in 1753 from 2.1d. to 4.5d., thereafter remaining in the 4.5–5.3d. range through 1762, with a marked rise to 9.7d. in 1763.77 Of course, the burden was borne in proportion to the incidence of slave ownership.

statutes. During the five years 1757–61, the poll tax rate to sink bills of credit was set at 1s. and another 8d. to meet contingent expenses, for a total of 1s. 8d. Obscurity affl icts the school tax levied at 9d. per poll for 1755–61 inclusive even though there is no provision for it in the statutes. Governor Dobbs, writing to the Board of Trade in 1757, mentions the tax in the act of 1754 and that it yielded 900 a year. The purpose of the tax was to support 6,000 in bills of credit voted in 1754 for a public school, but the money was diverted to war expenses. Church levies were incorporated in the poll tax in 1755–59. The lack of data for the four counties of Chowan, Pasquotank, Perquimans, and Tyrrell for 1748–52 is attributable to a rebellion of 1748 and the subsequent confusion that followed. Burgwyn’s table lists the total poll tax from each of its separate components for the relevant years in question. Boyd, “Some North Carolina Tracts,” 475–76. (The data for 1764 to 1770 are presented in chapter 28.) 77 The average poll tax rate of 8s. 1d. during 1755–63 fell to 6s. 3 1 ⁄2d. between 1764 and 1771.

[ 692 ]

Taxation of the Southern Plantation Colonies, 1739–1763

Owing to depreciation of the colony’s currency, real per capita taxes were less than the numbers shown in the table. In January 1748 the legal value of the colony’s currency was 1,000 North Carolina currency to 100 sterling in London. In April 1748 it was set at the proclamation rate of 133.33. By December 1754, the rate had depreciated to 166.67, falling to 200 in December 1761. Depreciation resulted in a reduction of about a quarter from the numbers in the table after 1754. Another reason was arrears, which were especially heavy in 1757–59, averaging 1,913 13s., the three years of the highest poll tax rates. Arrears were much lower in the preceding and succeeding years, 739 12s. 8d. in 1756 and 460 14s. 5d. in 1760.78

Indirect Taxes

D

u t i e s on l iq uor were approved in 1734, after which no records appear in the proceedings of the General Assembly until 1747, when they were reenacted on wine, rum, and distilled liquor, along with a duty on rice, the latter renewed into 1748 and 1749. The rate on liquor was set uniformly at 3d., or in equivalent bills of credit or even in the value of liquor itself, excepting that imported directly from Britain. Duties were renewed in 1752, with an increase to 4d. on light wine for a period of three years, extended for three more years in 1754 in the face of war. In 1756 an additional 2d. was levied on all beverages for one year. Two years later, in 1758, an additional 2d. was placed on all wines and distilled liquors for the next four years.79 The average duty rate was 1.7d./gallon during 1748–54, tripling to 5.1d./gallon during 1755–63. For 1748–54, 92 percent of revenue from duties underwrote general contingent charges of administration with the balance paying for printing expenses. During 1755–63, only 6.5 percent paid contingent charges, with 71.7 percent dedicated to redeeming bills of credit, and the balance used to support military expenditures.80 In contrast to the collection of the poll tax, the collection and remission of duties were more faithfully executed. A report of three members of the Council to Governor William Tryon on December 6, 1768, calculated that 26,000 in duties on rum was collected during the thirteen years 1755–67 inclusive, an annual average of 2,000, and that 2,500 would be collected in 1768.81 Extrapolating for the period 1748 to 1770 puts total rum duties at 34,000.

78

“Finances and Delinquent Taxes of North Carolina,” letter dated March 24, 1775, published in the North Carolina Gazette, reproduced in the North Carolina Historical Review 5, no. 1 (January 1928): 114. 79 Parker, Taxation in North Carolina, 90–91. 80 Kay, “Provincial and Local Taxes in North Carolina,” 225, 225n1. 81 D. L. Corbitt, ed., “Rough Notes on the Council Journal,” North Carolina Historical Review 8, no. 3 (July 1931): 346–47.

[ 693 ]

chap t er 23

Tonnage was charged from time to time, generating little revenue. An act of 1754 applied tonnage for two years at a rate of a half pound of gunpowder and one pound of shot per ton. Amended in 1756, the rate was fi xed at 2s./ton instead of powder and shot. Reenacted in 1762 for five years, tonnage was set on a progressive scale at 6s. on vessels of five tons, 12s. on those between fifty and one hundred tons, and 20s. on all above one hundred tons.82 Tobacco exports from North Carolina generated a small amount of revenue for Britain, which it used to pay the salaries of royal officials in the colony. During 1739–63, British imports of tobacco from Carolina (both Carolinas were lumped together) ranged between 12,000 and 989,000 pounds, an annual average of 433,000 pounds (about 455 hogsheads), only once surpassing a million pounds. In contrast with Virginia and Maryland, tobacco generated little in the way of internal revenue for the colonial government, although it served as currency for a short period of time. The other indirect tax was export duties on raw, or untanned, hides. To prevent their export to encourage local industry, in 1748 the General Assembly placed a rate of 10s. per hide loaded onboard a vessel to run for fifteen years. Summing up all indirect taxes, annual receipts during 1747–63 would have averaged just over 2,000 North Carolina currency. Adjusting for population growth and currency depreciation, the annual per capita indirect tax burden during 1747–54 would be on the order of 1–1.5d., rising to about 3d. during 1755–63.

Minor Taxes

A

tax on lawsuits was enacted in 1743 and again, under the pressing war time need for additional revenue, in 1757 at 5s. above any fees due court officials. Tavern keepers were charged a license fee of 20s. in 1741. In 1752 traders, peddlers, and petty chapmen were levied a license fee of 27s. 8d., divided among the governor, his clerk, and the justices. Lotteries were also permitted. None of these taxes raised any considerable amount of revenue.83

County Taxes

J

u s t ic e s of the county courts were empowered to impose reasonable poll taxes for local purposes. The tax base was the list of taxables compiled

82 83

Parker, Taxation in North Carolina, 93–95. Parker, Taxation in North Carolina, 127–33.

[ 694 ]

Taxation of the Southern Plantation Colonies, 1739–1763

for the General Assembly. County courts and vestries were separately administered. The General Assembly established guidelines for county rates. In 1741 the justices of each county were authorized to tax polls at no more than 1s. Proclamation Money for two years to build a courthouse, a prison, and stocks. On occasion, individual counties were permitted to impose additional rates that varied between 2 and 3s. to complete public buildings. Other examples of additional local levies included establishing tobacco warehouses and increasing the salaries of inspectors, and constructing the occasional bridge. The additional rates were to run for brief, specified periods of one to three years. A few town taxes supplied limited revenue to build and maintain fences.84 A detailed account of taxes in Craven County between 1722 and 1835 disclosed the first county levy of 2s. 6d. per tithable in 1741 for buying standard weights, scales, and measures and for repairing the courthouse and prison. The next year brought a levy of 6d. for two years for a new prison, which was continued for 1745 and 1746, and one of 8d. for one year in 1743 for a magazine to store powder. Between 1753 and 1758, a county building tax was set at 1s., raised to 1s. 4d. in 1759 and then to 2s. during 1761–63 (data missing for 1760). An additional 1–1.6s. was added in other county taxes during 1754–59. Total county tax of 2s. 10d. in 1754 exceeded the provincial poll rate of 1s. 8d. Thereafter, the county poll tax ranged between a fifth and a third of the provincial rate.85 Marvin L. Michael Kay examined the minutes of six county courts in three Piedmont counties and three from the Coastal Plain covering various portions of the period 1748–71, the years determined by the available records. Average annual poll rates ranged from 1s. 2d. in Bertie County to 1s. 81 ⁄4d. in Carteret County, with an average of all six at 1s. 5d.86 The lack of data makes generalizations about parochial taxes impossible, although data for Chowan County show an average levy of 2s. 10.9d. during 1748–71. Church levies paid for building, maintenance, and repair of churches, purchased Bibles, paid ministers and other church personnel, provided poor relief to parishioners, paid burial expenses, assisted widows in caring for young children, and covered other miscellaneous expenses.87

84

Parker, Taxation in North Carolina, 140–48. Alonzo Thomas Dill, Jr., “Public Buildings in Craven County, 1722–1835,” North Carolina Historical Review, 20, no. 4 (October 1943): 301–12. 86 Kay, “Provincial and Local Taxes in North Carolina,” 229–30. 87 Kay, “Provincial and Local Taxes in North Carolina,” 230–31. For members of the Anglican Church, parishioners received ser vices in exchange for their taxes, similar to the fees that public officials charged for private ser vices. Only dissenters and non-believers could be said to be victims of compulsory taxation in this regard. 85

[ 695 ]

chap t er 23

Means of Payment

U

n t i l 1 748 commodities were used to pay provincial, county, and church taxes. A law of 1740 rated tobacco, rice, deerskins, beeswax, tallow, and barreled beef and pork for public and private debts. Some taxes and debts could be paid with promissory notes issued by warehouse inspectors on rated commodities. County and parochial, but not provincial, taxes could also be paid with commodities not rated by law, but which inspectors could grant if the produce was acceptable. Beginning in 1748, commodity payments began to be limited. The poll tax of 1s. enacted in 1748 to redeem the issue of 21,350 in bills was payable solely in gold, silver, bills of credit, or, beginning in 1758, the colony’s note issues. The poll and rum taxes accompanying the 1754 issue of 40,000 were payable only in specie or bills of credit. From the end of 1757 onward, interest-bearing notes were acceptable in payment of provincial taxes. Indigo notes were accepted for all taxes from the end of 1755 through December 1762, save those assigned for redemption of bills of credit. Tobacco and indigo were acceptable for county and parochial taxes from 1748, with tobacco notes valid from 1755, but none of these could be tendered in payment of provincial taxes after 1752. A 1748 law, which established that the sinking fund tax was payable only in specie or bills of credit, augmented payment with note issues from 1757.88 The Board of Trade estimated the colony’s war outlays at 30,766, of which 11,010, 35.8 percent, was reimbursed. Taxes in excess of those

Estimating that fees exceeded provincial outlays in the 1760s, Kay writes that “The conclusion seems inescapable that any estimate of the tax burden of North Carolinians that ignores the role of fees would be far too low” (235). But this defi nition incorrectly treats fees as taxes rather than as payment for private ser vices rendered. Private benefits should not be charged against taxpayers in the same manner as roads, defense, and public ser vices. Kay’s calculation of average tax burdens covers the years 1755–71, which is three times higher for poll tax and duties than for the period 1748–54. He puts the yearly poll tax for all three charges at 11s. 10d., annual duties on liquor at 2s. 5d., and annual fees at 13s., for a total of 27s. 3d. Assuming a ratio of three persons per poll yields an average annual tax of 9s. 1d., which he reduces to 8s. 3.3d. presuming a degree of non-collection. A correct accounting would remove the charge of 13s. in fees, eliminate the years after 1763, and average in the much lower one-third rates on polls and duties during 1748–54. These changes would leave annual taxes during 1748–54 at a much lower 5–6s., lower still when the negligible taxes during 1739–47 are included. Excluding the war years of 1755–63, the annual peacetime per capita tax including quitrents would be on the order of several shillings North Carolina currency, a fraction of Kay’s infl ated estimate. Despite the efforts of Governors Arthur Dobbs (1754–65) and William Tryon (1765–71) to place the funding of the Church of England on a fi rm foundation, both failed in their efforts to collect in full the taxes levied to support the church. Hugh T. Lefler and William S. Powell, Colonial North Carolina: A History (New York: Charles Scribner’s Sons, 1973), 199. 88 Kay, “Provincial and Local Taxes in North Carolina,” 235–39.

[ 696 ]

Taxation of the Southern Plantation Colonies, 1739–1763

dedicated to the redemption of bills were not much more than the annual war tax, and far less in the earlier years of peace. Greene puts the tax per adult white male for the war at 1 5s. 7d. sterling (about 2 11s. 2d. North Carolina currency at the London rate of exchange). At the ratio of three persons to one taxable, per capita war taxes over the seven war time years amount to 7s. 4d., just over 1s. a year (6d. sterling). British per capita taxes during the war were about 1 10s. sterling a year. During the war, threequarters of Britain’s public expenditure went to the army, navy, or purchase of ordnance. Military expenditures during the war were four to seven times higher than they were during the preceding years of peace. The yearly tax burden of the war on Britons was some forty times higher than it was on residents of North Carolina.

Taxation in South Carolina, 1739–1763

S

o u t h c ar ol i n a continued to develop as a slave-labor plantation economy. Its white population grew from 13,318 to 40,414, with the Negro population increasing from 37,280 to 62,711. Charleston became a major shipping hub and financial center with a near doubling of its outbound tonnage.89 Attempts to obtain a British bounty on indigo succeeded in 1748, resulting in an increase in the production and export of indigo from 138,300 to 438,900 pounds between 1747 and 1763.90 During these years, the price of indigo rose from 2.43s. to 4.03s. sterling a pound, producing a marked rise in income.91 Turning to rice, exports fluctuated between a low of 37,393 barrels in 1753 to a high of 110,335 in 1763, with an annual average of 72,150 barrels during 1739–63. The price of rice fluctuated between 2.24 and 9.60s. sterling per hundredweight, with the value of rice exports ranging between 47,100 and 202,440 sterling (an annual average of 130,300), illustrating the boom and bust cycles in rice agriculture.92 Exports of rice earned planters less

89 Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg634–73: “Vessels Clearing Charleston—Number and Tonnage, by Origin or Destination: 1717–1772,” S-726–29, and Peter A. Coclanis, The Shadow of a Dream: Economic Life and Death in the South Carolina Low Country, 1670–1920 (New York and Oxford: Oxford University Press, 1989), 100, tables 3-25, 3-26. 90 Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” table Eg1027–32: “Indigo and Silk Exported from South Carolina and Georgia, 1747 to 1788,” S-749–50. 91 Coclanis, Economic Life and Death in the South Carolina Low Country, 107, table 3-30. 92 Stephen G. Hardy, “Colonial South Carolina’s Rice Industry and the Atlantic Economy: Patterns of Trade, Shipping, and Growth, 1717–1755,” in Jack P. Greene, Rosemary BranaShute, and Randy J. Sparks, eds., Money, Trade, and Power: The Evolution of Colonial South Carolina’s Plantation Society (Columbia: University of South Carolina Press, 2001), table 5.1: “Quantity and Constant Value of South Carolina Rice Exports,” 125–28.

[ 697 ]

chap t er 23

than 50,000 sterling in one year, between 50,000 and 100,000 in four years, between 100,000 and 150,000 in thirteen years, 150,000–200,000 in six years, and over 200,000 once. During the 1740s, annual exports of deerskins from Charleston averaged about 36,750 sterling.93 By the mid-eighteenth century, South Carolina enjoyed the highest per capita income and wealth of all of the North American colonies. Land speculation was rampant in Charleston, with rapid appreciation of real estate in the suburbs. The colony enjoyed a favorable balance of trade with Britain except in years of heavy importation of slaves, which enabled its settlers to import a wide variety of merchandise and lend money at interest.

External Taxes

S

o u t h c ar ol i n a was subject to external taxes of British import duties on its principal exports and royal quitrents. Shipment of rice, an enumerated product, was subject to duty of 3d. sterling a pound, augmented with a 5 percent ad valorem rate. Under normal conditions, the duty came to 6s. 4d. per hundredweight, often as much as the first cost of the rice in Carolina.94 On reexportation from Britain, drawback reduced the rate to a modest 2.5 percent ad valorem. With over three-quarters of the rice imported from America typically reexported to markets in continental Europe, less than a quarter of the colony’s rice shipped to Britain was subject to import duty.95 Offsetting this charge, in part, is that the bulk of rice exported to Europe was on the account and risk of British merchants. In 1762–63, for example, only 15 percent of rice exported from Charleston was shipped in Charlestonbased vessels as against 60 percent in British-owned ships and 25 percent

93

Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 143. 94 Leila Sellers, Charleston Business on the Eve of the American Revolution (Chapel Hill: University of North Carolina Press, 1934), 158. 95 The House of Commons Sessional Papers include Accounts and Papers from 1731 to the present day, but the collection is not complete. Data on rice duties were tabulated in two Accounts and Papers. The fi rst was presented to the House of Commons on March 15, 1741, titled “Net produce of duties on rice since the accession of George II.” The second was presented on May 6, 1757, titled “Gross and net produce of duty on rice imported, seven years past.” Neither document was reproduced in the Journal of the House of Commons or ordered to be printed. The only copies that exist are the original manuscripts laid before the house. Virtually all of the original records of the House of Commons were destroyed in the fi re that burned down the old houses of Parliament in 1834, and these documents would have been destroyed then. The surviving records of the house are the manuscript journals and minutes and printed journals of the house. Inasmuch as copies of the rice duties were not presented to the House of Lords, there are no surviving records. Mari Takayanagi, archivist, House of Lords Record Office, London, correspondence with the author, January 17, 2006.

[ 698 ]

Taxation of the Southern Plantation Colonies, 1739–1763

owned in other ports. Capital invested in South Carolina was mainly provided from London. Direct shipment of rice to countries south of Cape Finisterre was permitted after September 30, 1730. This rice was subject to payment of duty in Great Britain of an equivalent amount of British duty less the drawback, in essence, a colonial export tax imposed by Parliament at the request of South Carolina. During its first seven years, the tax generated about 1,200 sterling yearly. Receipts fluctuated with the volume and price of rice exports, reaching a high of about 3,000 sterling in 1763, the second highest year between 1739 and 1763. Carolina rice reexported from Britain, in roughly the same amount shipped directly to Europe, would have generated another 3,000 sterling in duty that year, less in previous years. There is little statistical or anecdotal evidence that duty on rice consumed in Britain significantly dampened demand and reduced the income of the colony’s planters. Colonial rice was granted duty-free status in 1767. Average annual exports of all products from South Carolina to Britain amounted to 186,355 sterling during 1738–42, 187,770 during 1748–52, and 171,812 during 1758–62. Between November 1, 1747, and November 1, 1748, South Carolina exported sixty-one different items totaling 161,365 sterling. The top ten exports constituted 99.12 percent of their value, with rice at 54.8 percent, deerskins at 22.31 percent, and indigo at 10.4 percent. Indigo replaced deerskins after 1748, which continued to rank third up through 1769, generating a little over 4 percent of the value of total exports to Europe.96 Hides and skins were not added to the list of enumerated products until September 29, 1764, but given free access after 1769. Pork, naval stores, and lumber products contributed another 7 percent. The British bounty on naval stores that lapsed in 1724 was restored in 1729 and continued throughout the colonial period. With South Carolina concentrating on rice and indigo, North Carolina became the primary colonial producer of pitch and tar. In 1734 Parliament placed indigo on the free import list. In 1744 the General Assembly of South Carolina granted a bounty of 1s. Proclamation Money per pound exported for five years, but repealed the measure the following year fearing a heavy increase in taxation. In response to petitions in the colony and Britain, in 1748 Parliament granted an import bounty of 6d. sterling a pound on all indigo grown in the American colonies, reduced to 4d. in 1770. The bounty continued until the Revolution, provided the indigo was as good and merchantable and worth at least three-fourths as much per pound as the best French product.97 Indigo was subsidized, not taxed, by the British Treasury. 96

Sellers, Charleston Business on the Eve of the American Revolution, 170. Lewis Cecil Gray, History of Agriculture in the Southern United States to 1860 (Clifton, NJ: A. M. Kelley, 1973), 1:292. First published in 1933 by the Carnegie Institution of Washington. 97

[ 699 ]

chap t er 23

Deerskin exports from Charleston during 1740–63 totaled 11,159 hogsheads, an annual average of 465. The range fluctuated from a low of 276 hogsheads in 1761 to a high of 661 in 1745. The volume remained relatively stable during any par ticu lar five-year period of time.98 Deerskin exports generated 252,000 South Carolina currency (36,000 sterling) between November 1, 1747, and November 1, 1748. Annual exports of deerskins would have generated 35,000–40,000 sterling in annual income during 1748–63. British duty on Carolina deerskins, on which there is no separate recorded data, would have been modest and of little detriment to consumption. To summarize, external taxes imposed by Britain derived largely from rice, with a small sum from deerskins. The colony’s other leading exports were subsidized or free of British restrictions and taxes. In a balance sheet of external taxes, the subsidy on indigo partly offset the duty on rice, with British naval protection, marketing arrangements, and credit compensating for much or all of the rest.

Quitrents

R

oyal of f ic i al s made numerous attempts to improve the efficiency of the quitrent system. Its deficiencies stemmed from several problems. First was the quitrent act of 1731, which allowed large amounts of land to escape quitrent payments as the act failed to explicitly require the registration of royal grants and conveyances of royal lands. Second, the statute did not require the holders of warrants, which were permits for surveying land, or plats, the actual surveys themselves, to convert their claims into grants, the only form of land possession subject to lawful collection of quitrents. Efforts of royal officials to withdraw recognition of warrants and plats failed because the colony lacked a court of exchequer to provide remedies in equity not available in local common law courts, which generally ruled in favor of settlers. Although royal prerogative exercised by crown officials was inadequate to force judgments against landowners, the Crown was reluctant to seek a statute from Parliament rectifying the system’s defects lest members claim control over the quitrents.99 Quitrent revenues gradually increased between 1739 and 1763.100 Table 23.8 displays quitrents in the years for which data are extant, the acreage on 98 Purvis, Almanacs of American Life, table 4.136: “Deerskin Exports from South Carolina, September 1726-November 1763,” 96. 99 Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): 195–96. 100 Scholars have been unable to provide a comprehensive accounting of quitrents owing to the lack of extant records. Quitrent receipt books for the years 1733–42 and 1760–74 are extant in

[ 700 ]

Taxation of the Southern Plantation Colonies, 1739–1763 tabl e . South Carolina Quitrents and the Percentage of Land on Which Quitrents Were Paid, 1739–1763 Year

Quitrent Revenues Procl. Money (.s.d.)

Acreage on Which Quitrents Were Due

Acreage Reported for Quitrent Payments

Percentage Reported

1739 1740 1741 1745 1746 1747 1748 1749 1750 1760 1761 1762 1763

1,584.15.0 1,537.7.0 1.395.6.2 1,190.11.10 1,840.10.10 2,167.7.9 1,394.15.9 1,996.4.9 1,371.17.7 1,666.10.8 2,557.2.3 2,358.16.11 2,307.11.10

2,762,425 2,789,713 2,817,187 n.a. n.a. n.a. n.a. n.a. n.a. 3,464,373 3,508,480 3,522,680 3,536,530

886,674 771,755 771,889 n.a. n.a. n.a. n.a. n.a. n.a. 565,692 810,770 658,693 654,552

32 28 27 n.a. n.a. n.a. n.a. n.a. n.a. 16 23 19 19

Note: Watson converted South Carolina currency into Proclamation Money at a rate of fi ve to one, a ratio he states that generally obtained throughout the royal era. A five-to-one rate converts one unit of Proclamation Money into 6.67 (decimal value) South Carolina currency. McCusker reports the average exchange rate of South Carolina currency on London at 791.91 in 1739, 795.95 in 1740, 690.83 in 1741, 700 in 1745 and 1746, 760.74 in 1747, 762.50 in 1748, 725.36 in 1749, 702.28 in 1750, 700 in 1760–62, and 716.66 in 1763. John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 223–24. McCusker’s volume was published two years after Watson’s essay. Using McCusker’s exchange rates, the quitrent revenues in Watson’s table overstate by 5 to 19 percent the real value in Proclamation Money depending on the exchange rate for each of the various years. Correcting for the actual rates would not significantly alter the trend. Source: Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): 192–93, table 1, “A Comparison of Quitrents Revenues and Provincial Tax Revenues, 1736–1772,” and table 2, “The Percentage of Land on Which South Carolinians Paid Quitrents, 1734–1772,” 201.

which quitrents were due, the acreage reported for quitrent payments, and the percentage of land reported for quitrents. Table 23.8 shows relative stagnation in revenues through 1760, with a noticeable increase in 1761–63. Between 1739 and 1763, the white population slightly more than tripled from 13,318 to 40,414. In 1739 per capita white quitrents amounted to 281 ⁄2d. Proclamation Money. Comparable figures for 1750 (the highest year during 1745–50) and 1763 are 13d. and 14d., respectively, a one-half decline from 1739. Converting quitrents into per capita revenue corresponds with the effective collection of quitrents in the last column of

the South Carolina Archives, while those for 1743–59 have either not survived or not been found. Accounts of revenues during 1745–50 appear in Treasury Papers I/347, 79, in the British Public Record Office.

[ 701 ]

chap t er 23

the table, which also shows a substantial decline in acreage reported for payments.101 Although the burden of quitrents fell from about 2s. 4d. to slightly over 1s. during 1740–63, the receipts were important to the Crown. They were used to help maintain the independence of royal officers from the penurious and power-seeking Commons House of Assembly. Over time, quitrents were used to pay the salaries of the chief justice, attorney general, clerk of the Crown, provost marshal, secretary of the colony, and commander of Fort Johnson, which guarded Charleston’s harbor. Others paid included the crown agent charged with supervising, inspecting, and controlling crown revenues and grants of land in both Carolinas, and an occasional grant and pension to governors.102 The single largest disbursement was a warrant for the back pay of 12,500 8s. 8d. sterling secured by the widow of Governor Gabriel Johnston after his death in 1752. All but 2,018 19s. 2d. was obtained before the Revolution, with the balance secured after much delay.

Internal Revenues

I

nt er nal r e v en ue s derived from direct and indirect taxation and licenses, fees constituting a payment for private ser vice. Duties were regarded as funding expenditures of a recurrent or continuing nature. The accounts of duty itemize receipts of each specific duty, for example, import 101

The percentage reported for payments in Watson’s table continued to decline after 1763, to 15 percent in 1768, 14 percent in 1769, and 13 percent in 1771. Only in 1772 did it rise, to 19 percent, indicating very late success in strengthening the system, with the percentage reporting payments still below that of 1739–41. Watson notes that acreage reported for provincial property taxes during 1761–63, which were under the control of the Commons House of Assembly, was about three times greater than reported for quitrents (table 4: “Land Reported for Public Taxes and Quitrents,” 209). Taxpayers readily distinguished between quitrents payable to the Crown versus land taxes payable to the colonial Treasury to fund provincial expenditures. A final note on Watson’s essay is in order. Watson writes that he undertook his study of royal quitrents in South Carolina to remedy the deficiency in Beverly Bond’s broad review of quitrents in all the American colonies, which necessarily limited Bond’s treatment of South Carolina. Watson sought to reevaluate the effectiveness of the system in South Carolina, which Bond judged in positive terms from the rise in revenue. Watson concluded from the declining share of acreage reported for quitrents that the Carolina system slowly decayed and that rising monetary revenue did not reflect improved administration. In marked contrast, but without presenting data on acreage, Bond stated that the average annual return was scarcely a third of the rent rolls between 1735 and 1740, increased to fully one-half from 1746 to 1751, and rose to three-quarters by 1770 (Quit-Rent System in American Colonies, 345). The percentage of acreage reported in Watson’s paper is markedly less than that presented in Bond’s work. On this difference, Watson questions whether Bond’s treatment of quitrents in all the colonies is similarly suspect (“Quitrent System in Royal South Carolina,” 200). 102 Watson, “Quitrent System in Royal South Carolina,” 202–6.

[ 702 ]

Taxation of the Southern Plantation Colonies, 1739–1763

duty on rum, general merchandise, imported Negroes, and goods imported by transient persons, and export duty on deerskins and tanned and sole leather. The funds recorded in the several accounts were generally earmarked to support such specific expenditures as building and maintaining fortifications and churches, paying ministers’ salaries, and redeeming the annual issue of public orders. Irregular, unpredictable, and incidental expenses, for example, military expenditures, were paid from a general annual tax, which was levied on land, Negro slaves, and from 1758 on personal income, shopkeepers, and monies at interest, extended in 1760 to all trades and professions and certain properties. On occasion, if annual tax was insufficient to meet certain expenditures, funds were transferred from one of the duty accounts, but this was not the regular pattern. Limitations of data preclude a comprehensive accurate account of provincial tax revenue before 1761.103

Indirect Taxes: Import and Export Duties

D

u t i e s w e r e levied on a limited number of categories of articles, chiefly alcoholic beverages, foodstuffs, wood products, animal skins, and slaves. Some were taxed at a specific rate regardless of their values, while others were taxed at an ad valorem rate.104 The general act of 1751, which replaced that of 1733, increased the rates of import duty by a third on a pipe of Madeira wine, nearly sixfold a gallon of rum, tenfold a barrel of northern cider, two-thirds a gallon of molasses, a third to a half on refined sugar, and double on cocoa, tobacco, butter, and biscuits. A few items such 103

Th is treatment of the dual sources of internal revenues follows Crouse, Public Treasury of Colonial South Carolina, 43, and Smith, South Carolina as a Royal Province, 279–84. Crouse (chapter 1, 1–24) explains in detail how the public treasurer kept his accounts and made payments, and identifies the extant records. Surviving treasury records are not complete. They include a “ledger” kept by Alexander Parris for the years 1725–30; three journals labeled “Journal A: Duties, 1735, 1748,” “Journal B: Duties, 1745–1765,” and “Journal C: Duties, 1765– 1776”; two ledgers labeled “Ledger B: Accounts Approved, 1735–1773” and “Publick’s Ledger, 1771–1776”; and a record of general tax receipts and payments for the period 1761–71. I have examined some of these ledgers in microfi lm in the series of Early State Records compiled in the 1940s by the Library of Congress and the University of North Carolina. Many of the pages in the folios are so heavily water stained that the numbers cannot be accurately deciphered. To the extent that the documents are clearly legible, extant records permit a compilation of receipts from duties for most years after 1745, but not for other sources of revenue, such as the taxes on land and Negro slaves, monies at interest, the value of stores, and profits from faculties, professions, and stock in trade, which are available only for 1761–71. 104 A list of duties levied in the colony appears in Crouse, Public Treasury of Colonial South Carolina, table 1: “Import and Export Duties Levied by the Province of South Carolina,” 45–47. A comparison of rates of duty per unit of imported or exported commodities for 1703, 1725, and 1751 appears in table 2: “Comparison of the Duty Acts of 1703, 1723, and 1751,” 50–51.

[ 703 ]

chap t er 23

as beef and soap remained unchanged. Most exported items remained unchanged. The general duty fund—the proceeds from items subject to duty in the 1733 and 1751 acts—was used to pay ministers’ salaries, other church personnel, and masters of the Free School. The 1751 act further authorized payment for fortifications and new churches. By the 1750s, income from general duties produced about 12,000 South Carolina currency a year, which rose to about 30,000 a year in the 1760s.105 Additional duties on the same items were sometimes levied to meet military emergencies. Additional duties were posted to separate accounts during 1735–45. During those years, an additional duty on rum produced between 1,700 and 3,000 South Carolina currency per year, with other additional duties on wine, rum, molasses, flour, and sugar producing between 3,800 and 7,700. After 1745 the additional merged duties produced about 10,000 a year. Both additional duties expired on June 14, 1751. The onset of the French and Indian War brought a fresh round of additional duties on wine, rum, biscuits, and flour in 1757 and again in 1767, which generated about 10,000 a year.106

Indirect Tax: Slave Duty

R

ec al l f r om chapter 19 that the General Assembly provided 5,000 from the duty on slaves to finance the immigration of poor Protestants to supply the colony with freemen for five years, both to increase the whiteNegro ratio and to assist in the suppression of possible slave rebellions.107 The fear materialized when slaves freed themselves by force in 1739 and headed for the Spanish town of St. Augustine. Along the way they destroyed property and murdered white settlers. The uprising was suppressed by the South Carolina militia, with severe penalties for those who had participated in the revolt. In response to this rebellion, in 1740 the General Assembly passed a law for more stringent enforcement of the slave code and, for the purposes of this segment, a new law, increasing the rate of duty to ten times the normal rate from July 1741 to July 1744. A surtax of 50 was put on all slaves imported 105 Numbers in South Carolina are high compared with those of other colonies. The exchange rate of about 700 South Carolina currency to 100 sterling in London that prevailed during 1739–63 converts to a much lower set of proclamation or sterling numbers. For example, 12,000 local currency converts to 1,714 sterling or 2,285 Proclamation Money. The word “currency” is used throughout the remainder of this section on taxation in South Carolina to mean local money. References to sterling or Proclamation Money are made explicit. 106 Crouse, Public Treasury of Colonial South Carolina, 49–55. 107 Details of the slave laws and proceeds of slave duty appear in W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967). Figures on duty appear on 259–64.

[ 704 ]

Taxation of the Southern Plantation Colonies, 1739–1763

from other American colonies. Net revenue (gross duty minus drawback or remission of three-fourths of the original duty paid for slaves exported within a limited time of their arrival in South Carolina) declined precipitously from 18,605 in 1739, to 6,920 in 1740, and to 100, 375, and zero in the next three years. In 1746 the act was renewed for five years, to apply until 1751. A one-year burst in imports supplied 5,530 in 1744, but proceeds fell to 105 in 1745, refunds on exportation exceeded import duty by 105 in 1746, and no duty was collected in 1747–48. The bounty on indigo enacted by Parliament in 1748 produced a demand for new slave labor. Large-scale importation resumed in 1749, generating 4,375 in revenue that year and 7,017 10s. in 1750. The Commons House of Assembly wrote a new law in 1751, rather than renew the 1740 act. It remained, with extensions, the legal basis for the importation and taxation of slaves until 1772. Between 1751 and 1763, annual average net slave duty was 16,845 12s., varying between a low of 4,295 in 1762 and a high of 27,668 5s. in 1758. The average is skewed upward by the unusually large sum of 51,612 10s. collected in 1760. Removing 1760 reduces the annual average to a significantly lower 13,948 7s. for the other twelve years. Slave duty, which supplied over half of provincial government revenue during 1714–39, provided a decreasing share of provincial revenue during 1739–63. Tax revenue from land, on slaves owned, monies at interest, and profits from faculties, professions, and stock in trade became far more important in financing provincial expenditure. One other minor measure deserves mention: a tax on goods brought into the harbor sold by persons who were not residents of the province. Beginning in 1739, it rarely produced over 500 a year at rates of 1 percent of the prime cost of items not subject to duty and 1 ⁄2 percent on the prime cost of items subject to duty.108

Direct Taxes

L

e g i s l at ion of December 18, 1739, illustrates the composition of direct taxation. The act levied 35,833 6s. 113 ⁄4d. to be raised, consisting of 10s. per head on all Negro and other slaves and 10s./100 acres, excluding land allocated to churches and free schools, town lots outside Charleston, and the lands of new settlers in frontier townships and on the Welsh tract on the Pedee River. Residents of Charleston were further taxed 1,827 8s. 8d. for building a work house and maintaining the town watch. Masters of vessels and transient traders were taxed on the value of goods imported into Charleston.109 108 109

Crouse, Public Treasury of Colonial South Carolina, 58. Smith, South Carolina as a Royal Province, 282–83.

[ 705 ]

chap t er 23

The French and Indian War prompted the need for higher revenue. To the direct tax on slaves and land, the act of May 19, 1758, imposed a poll tax on free Negroes, introduced an income tax on faculties, and a new tax on annuities, money loaned at interest. In 1760, the tax on faculties was extended to all trades and professions except the clergy and a tax was also imposed on the value of lots, wharves, and buildings in towns, villages, and boroughs. These taxes remained in place through 1769, although rates were reduced after the war. The volume of direct taxes levied correlated with war time expenditures. Between 1739 and 1742, direct taxes averaged 39,950. Over the next eight years through 1750, the annual average increased to 52,370. Between 1751 and 1754, the average fell to 40,147, the level of more than a decade earlier, even though the population increased about 70 percent during 1739–54. Thereafter direct tax levies rapidly increased to 62,136 in 1755, an annual average of 123,820 between 1756 and 1760, peaking at 263,845 in 1761. The levy was cut to 161,550 in 1762. No act was passed in 1763, but that of 1764 allocated half to 1763, amounting to 123,198. In 1769, the levy fell threequarters from its 1761 peak to 65,833.110 Direct taxes were a makeweight in times of fiscal need to supplement reliance on indirect taxes in normal conditions.

Total Taxes

T

able 23.9 summarizes the individual and total taxes borne by white residents of South Carolina during 1739–63. The figures includes separate entries for slave duty, all other duties (general account import duties, additional import duty for fortifications, transient import duty, export duties on deer skins and leather, and night watch duty), annual general tax, excluding 1752, and quitrents. All entries are in South Carolina currency, unless specifically identified as sterling or Proclamation Money. Given the absence of data on the annual general tax for 1752, the per capita figures for that year understate the full amount of tax. The four French and Indian War years, 1758–61, are clearly the heaviest in per capita terms, roughly double the average for most of the other years 110

Watson, “Quitrent System in Royal South Carolina,” table 1, 192–93, and Crouse, Public Treasury of Colonial South Carolina, table 4: “Expected versus Actual Tax Collections, 1761– 1769,” 83. Annual figures are presented in table 23.8 in the text of this chapter. Figures for all years up through 1760 are taken from the levies specified in the annual statutes. Figures beginning in 1761 are taken from the actual receipts, as explained in fn. 103. Actual receipts were 7.3 percent lower in 1761, 0.4 percent lower in 1762, and 11.8 percent higher in 1763 than the levies specified in the statutes. The number for actual receipts reported by Crouse for 1763 is about 1,800 higher than that given by Watson, with both citing the same 1761–71 record of general tax receipts and payments.

[ 706 ]

Taxation of the Southern Plantation Colonies, 1739–1763

during 1739–63. Only in four years, 1758 and 1760–62, did taxes exceed one pound Proclamation Money. Peacetime per capita white taxes in South Carolina were as much as five to fifteen times greater as in the other plantation colonies. Several trends are readily visible in the table. Slave duty declined as a share of total duty during the period. Quitrents were relatively insignificant, and thus drained little money out of the colony to London. Throughout the entire period, receipts from the general annual tax were typically twice as large as those of duties. Apart from the heavy taxes collected during the French and Indian War, the per capita tax burden remained relatively stable, 10 to 20s. Proclamation Money. Even though the colony’s taxes were heavier than those of their neighbors, South Carolina was widely regarded as the wealthiest of the all the colonies, and thus its large tax burden in absolute terms was more readily borne.

Power of the Purse

S

o ut h c ar ol i n a exemplified the rising power of the lower house to control the expenditure of public money.111 The Commons House of Assembly secured the power to approve or disapprove the accounts of the public treasurer, which made that officer accountable to it. Payment from the Treasury by the public treasurer on the order of the governor or his lieutenant without the approval of the Commons House would have made him personally liable to replace that amount. The Council’s participation in an examination of the public treasurer’s accounts ceased in 1755 when the Commons House successfully denied the Council access to the documents used in drafting the tax acts. Approval of all the accounts 111

Crouse, Public Treasury of Colonial South Carolina, 104–20. Crouse also describes a peculiar feature of the office of the public treasurer. He enjoyed the privilege of loaning public money at interest as long as there was no immediate need for it, and he could retain the interest as his personal income. The treasurer received modest compensation in the form of commissions, fees, or salary, deriving a large part of his income from lending unused public funds. Th is arrangement was satisfactory in normal times even though outstanding tax certificates exceeded the cash in the Treasury. As certificates were presented for redemption, there was usually sufficient cash from the taxes collected to redeem them. These conditions enabled the treasurer to commingle public and private funds. In the event of an unforeseen crisis, such as the hurricane that struck Charleston on September 15, 1752, that required immediate funds, the treasurer might find that his funds on hand, which remained in the Treasury after loaning out unused cash, were insufficient to meet expenditures. Th is situation put the credit of the colony in some jeopardy in the event that the treasurer could not redeem tax certificates when they came due. The treasurer was required to post a bond backed by his personal assets to make up any difference, which could bankrupt him and still leave the Treasury short of funds to meet immediate outlays. One or two episodes in the colony’s history produced a short-term financial crisis, but none prompted any change in the arrangement (Crouse, Public Treasury of Colonial South Carolina, 13–20).

[ 707 ]

chap t er 23 tabl e . South Carolina Taxes, 1739–1763 c ol u m n 1

c olum n 2

Year

All Duties Excluding Slave Duty

1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763

21,068.00 14,874.75 23,344.05 15,652.75 26,361.55 18,515.25 27,110.50 24,130.05 17,758.00 26,246.15 21,471.40 27,158.95 26,665.10 14,477.95 22,305.85 26,098.95 25,140.50 51,373.25 25,002.40 109,176.95 60,009.80 57,370.95 62,370.00 35,708.10 54,786.25

c olum n 3

c olumn 4

column 5

column 6

Slave Duty

Total Duties

Provincial Taxes (Watson)

Quitrents

18,605.00 6,920.00 100.00 375.00 0.00 5,530.00 105.00 (25.00) 0.00 0.00 4,375.00 7,017.50 5,457.50 13,175.00 13,612.50 19,751.25 16,206.50 14,105.00 12,598.75 27,668.25 15,825.35 51,612.50 12,661.25 4,295.00 12,023.75

39,673.00 21,794.75 23,444.05 16,027.75 26,361.55 24,045.25 27,215.50 24,105.05 17,758.00 26,246.15 25,846.40 34,176.45 32,122.60 27,652.95 35,918.35 45,850.20 41,347.00 65,478.25 37,601.15 136,845.20 75,835.15 108,983.45 75,031.25 40,003.10 66,810.00

35,833.25 40,082.25 44,932.75 38,953.25 51,195.50 51,205.50 45,393.25 50,121.50 52,827.00 59,448.00 48,408.00 60,358.75 39,441.00 0.00 43,102.00 37,898.00 62,134.75 91,157.50 100,431.75 166,438.75 97,360.75 163,710.25 263,844.50 161,550.25 121,326.50

7,923.75 7,686.75 6,976.50 0.00 0.00 0.00 5,953.00 9,202.75 10,837.00 6,974.00 9,981.25 6,859.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8,332.75 12,785.50 12,694.25 11,538.00

Sources: Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): 192–93; Early State Records, South Carolina, “Ledger A. Treasurer’s Journal, 1735– 1748” and “Ledger B: Accounts Approved, 1735–1773” (microfi lm); and W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967), 259–64.

between May 26, 1736, and May 11, 1754, contain the signatures of the governor, president of the Council, and speaker of the Commons House; after 1754, the president of the Council’s signature no longer appears. The Commons House also secured sole power over auditing the accounts of the creditors of the colonial government, denying the Council any right to see them after 1756. The Council gradually lost its right to amend money bills, although it retained its right to reject them up to the end of the colonial era. [ 708 ]

Taxation of the Southern Plantation Colonies, 1739–1763

c ol u m n 7

c ol u mn 8

c olum n 9

c olum n 10

c ol umn 1 1

column 1 2

column 1 3

Per Capita White Taxes (Currency Pounds)

Per Capita White Taxes (Sterling Pounds)

Per Capita White Taxes (PM Pounds)

Per Capita White Taxes (PM Shillings)

Total Taxes (Currency)

Total Taxes (Sterling)

Total Taxes Proclamation (Money)

83,430.00 69,563.75 75,353.30 54,981.00 77,557.05 75,250.75 78,561.75 83,429.30 81,422.00 92,668.15 84,235.65 101,394.70 71,563.60 27,652.95 79,020.35 83,748.20 103,481.75 156,635.75 138,032.90 303,283.95 173,195.90 281,026.45 351,661.25 214,247.60 199,674.50

10,535.29 8,739.71 10,907.65 7,866.12 11,079.58 10,750.11 11,223.11 11,918.47 10,703.00 12,153.20 11,612.94 14,439.58 10,223.37 3,950.42 11,288.62 11,964.03 14,783.11 21,951.31 19,716.17 43,326.28 24,742.27 40,146.64 50,237.32 30,606.80 27,866.09

14,046.70 11,652.66 14,543.17 10,487.89 14,772.40 14,333.12 14,963.77 15,890.90 14,270.31 16,203.86 15,483.54 19,252.29 13,630.82 5,267.10 15,051.12 15,951.64 19,710.32 29,267.68 26,287.57 57,766.93 32,988.87 53,527.51 66,981.42 40,808.05 37,153.86

6.26 4.64 4.71 3.23 4.31 3.96 3.93 3.97 3.70 4.03 3.51 4.06 2.73 1.01 2.77 2.82 3.35 4.89 4.16 8.82 4.87 7.65 9.27 5.47 4.94

0.79 0.58 0.68 0.46 0.62 0.57 0.56 0.57 0.49 0.53 0.48 0.58 0.39 0.14 0.40 0.40 0.48 0.69 0.59 1.26 0.70 1.09 1.32 0.78 0.69

1.05 0.78 0.91 0.62 0.82 0.75 0.75 0.76 0.65 0.70 0.65 0.77 0.52 0.19 0.53 0.54 0.64 0.91 0.79 1.68 0.93 1.46 1.77 1.04 0.92

21.1 15.5 18.2 12.3 16.4 15.1 15.0 15.1 13.0 14.1 12.9 15.4 10.4 3.9 10.6 10.7 12.8 18.3 15.8 33.6 18.6 29.1 35.3 20.8 18.4

Taxation in Georgia, 1739–1763

G

e or g i a was transferred from trusteeship to royal government on June 23, 1752, although the new royal officers did not arrive in the colony to take up their duties until October 31, 1754. At the beginning of the royal period, the annual expenses of the colonial administration amounted to about 2,000 Georgia currency, which remained equal to sterling through 1763.112 In addition to a small sum of locally raised funds, Parliament provided annual grants for the support of the colony, which ranged between 112

The cost of colonial government in Georgia is presented and analyzed in Percy Scott Flippin, “The Royal Government in Georgia, 1752–1776. IV: The Financial System and Administration,” Georgia Historical Quarterly (September 1925): 187–97.

[ 709 ]

chap t er 23

3,100 and 4,100 a year until the Revolution. Despite the existence of a quitrent law, the royal government made no attempt to collect this tax. The confl ict between the Commons House and the Council and governor that existed in other colonies was absent in Georgia. The main reason was the colony’s heavy dependence on grants of Parliament under the control of the governor, which far exceeded the annual tax levies voted by the provincial assembly. British grants provided royal salaries and a contingency fund spent by the governor as he saw fit with the much smaller levies enacted by the Assembly spent at its direction. The Assembly enacted annual tax bills to meet general provincial expenses, which included its annual meeting, the cost of a court of oyer and terminer, and contingent charges of government. Between February 1755 and February 1757, taxes consisted of a charge of 1s. on each Negro or other slave, 1s./100 acres of land, 7s. on every 100 loaned at interest or of stock in trade, and 7s. on every 100 valuation of town houses and lots. Estimated annual receipts during 1755–56 were about 320, roughly a tenth of the annual grant from Parliament. Rates were doubled to raise 645 in 1757 and, on the basis of some population and economic growth, 820 in 1759. A levy of 1,118 3s. 8d. was enacted on April 24, 1760, which, in addition to the ordinary expenses of administration, provided for two hundred militia for the defense of the colony. The rates were increased to 2s. 6d. per hundred acres of land, 2s. 6d. on every slave, 14s. on each 100 loaned at interest, and 14s. on each 100 valuation of town houses and lots. On the same day, a supplemental tax of 1,100, to be collected in five annual installments of 220, was voted to improve the forts in the colony. To pay the immediate costs, temporary paper money certificates in the amount of 220 were issued and made current for one year at a time for the five-year period. Three tax bills totaling around 3,000 were approved in 1761. The first of April 23, 1761, was levied 1,353 5s. In addition to taxes on land, slaves, money at interest (reduced to 10s.), stock in trade (reduced to 7s. 6d.), and town houses and lots (reduced to 7s. 6d.), several new taxes were imposed. These included 4 on every 100 of income from annuities, 1 on every 100 value of faculties, profession, and handicraft trades, 10s. on every free Negro and mulatto over sixteen years of age, 2d., 4d., and 6d., respectively, on calves, cows, and steers, and 2s. 6d. on every wheel on all conveyances. The rate on annuities was fourfold that on personal income. The second measure of May 20, 1761, levied 1,160 15s. The third of December 3, 1761, of 540 was allocated for erecting a fort, lookout, and battery. The latter was to be met with a tax of 10s./100 valuation on deerskins and beaver skins exported to any part of the British Empire except Great Britain. The easing of war time needs permitted a reduction in provincial taxes. A levy of 1,421 5s. was approved on February 22, 1762. The next year’s act of [ 710 ]

Taxation of the Southern Plantation Colonies, 1739–1763

March 30, 1763, set the levy at 1,934 9s. Rates on land and slaves remained the same, unimproved lots were taxed at 5s., free Negroes were assessed 15s. a head, and imported goods were taxed at 7s. 6d. per 100 valuation, a rate of 0.375 percent. Local taxes were under the purview of church wardens and a vestry of five to ten persons, which were the only local government organizations in Georgia. The vestry was empowered to levy taxes on all parish citizens for poor relief and church expenses, limited to 30 annually in Christ Church or St. Paul and 10 in other parishes where there was no church.113 The population of Georgia grew slowly, from about 2,000 in 1739 to 13,717 in 1763. Of these, Negro slaves increased from around 1,000 in 1750 to 5,692 in 1763. Annual tax burdens of white Georgians during the five years 1755–59 averaged 560, about 2s. 3d. a head. During the next four years, 1760–63, white Georgians paid annual taxes of 1,868, about 5s. 4d. a head.

Summary

B

e t w e e n 1 7 39 and 1763, peace and war time tax burdens on white residents in the southern plantation colonies varied considerably. In peacetime, per capita white taxes in Virginia amounted to 6.7d. Virginia currency (5d. sterling), rising to 7–8s. Virginia currency (5.3–6s. sterling) during the French and Indian War. The comparable figures for the other colonies, excluding Georgia, were, in peacetime, 1s. Maryland currency (equivalent to sterling), 7–10d. North Carolina currency (5.3–7.5d. sterling), and 15s. South Carolina currency (equivalent to Proclamation Money, or 11.3s. sterling). During the war years, the corresponding per capita white taxes increased to 2–3s. Maryland currency, 9–12d. North Carolina currency, and 25s. South Carolina currency. Taxes were not levied in Georgia before the French and Indian War. The additional wartime taxes were enacted to redeem the issue of several forms of paper money and finance other costs incurred during the French and Indian War. The corresponding per capita tax rate in Great Britain was about 30s. sterling, three to thirty times higher than that of the southern colonies.114 Moreover, the colonies emerged from the war largely or soon-to-be free of debt, while Britons remained heavily mired in debt. These conditions prompted members of Parliament to consider levying an American tax to relieve the heavy burdens on their fellow Britons. 113

Kenneth Coleman, Colonial Georgia: A History (New York: Charles Scribner’s Sons, 1976), 231. 114 If the Negro slave population is included in the calculation of per capita tax burdens, the charge falls by three-fi fths in South Carolina. However, it seems inappropriate to includes slaves in a comparison of tax burdens.

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pa r t s i x
An American Tax, 1763–1775

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T

h e t r e at y of par i s, signed on February 10, 1763, temporarily concluded hostilities between Britain and France. France surrendered all its possessions in North America east of the Mississippi River save the two small islands of St. Pierre and Miquelon located a few miles off the southeast coast of Newfoundland. From Spain Britain received East and West Florida, which became the fourteenth and fi fteenth American colonies, but they were returned to Spain at the conclusion of the American Revolution. Britain secured several Ca ribbean islands, giving it command of the sea lanes in the West Indies, leaving France with the sugar-producing islands of Guadeloupe and Martinique. With the aid of the colonists, Britain won a conclusive victory in North America and the Caribbean. It did not, however, win a similarly decisive victory in Europe. That victory came more than a half century later when Wellington defeated Napoleon at the Battle of Waterloo on June 18, 1815. Even though French forces were largely removed from North America, Britain remained concerned that their new subjects in Canada, the Floridas, and west of the Appalachians to the Mississippi River, which had been hostile to Britain for nearly a century, were a potential source of trouble. The French had suddenly seized Newfoundland in 1762 and other areas were vulnerable to French and Indian attacks. To guarantee the security of Britain’s vast new territories in North America would require a large permanent contingent of British regulars. In February 1763 an estimate of the pay of the troops to be stationed in America was prepared, with the cost put at 224,903 sterling. Adding the cost of transport, contingencies, extraordinary expenditures, and the increased cost of the fleet to be stationed in American waters pushed the total above 300,000. The fact that these forces would be defending Americans naturally raised the issue of the colonists bearing a portion of their cost. The colonists, largely free from the French threat, saw British troops more as an occupying, rather than a defensive, force. The Navigation Acts structured trade between Britain and its colonies, but its minuscule taxes were deemed more in the nature of regulatory, rather than revenue, measures. The 1673 plantation duty levied a trivial charge on intercolonial shipments. The Molasses Act of 1733 had long been a dead letter. The major external taxes borne by the colonists consisted of royal quitrents paid to the Crown and proprietary families and British import duties on enumerated products, which were greatly relieved with drawbacks on reexportation from Britain. Any remaining burden was offset in part or in whole with the benefits of Royal Navy protection afforded colonial shippers, a network of global markets that British merchants supplied, and British loans to colonial producers.

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i n t r od uc t ion t o part s i x

All of the colonies save Pennsylvania had been founded with tax exemptions. Immigrants were lured on the basis of cheap land and a variety of tax incentives. Now the colonists were being considered as a source of tax revenue. A British-imposed American tax was finally in the cards. A succession of British taxes and other coercive measures ultimately sparked the American Revolution.

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chap t er 24
British Politics, Imperial Governance, and Colonial Government and Politics, 1763–1775

T

h e t w e lv e years between the signing of the Treaty of Paris on February 10, 1763, and the midnight ride of Paul Revere on April 18, 1775, were riven with rising tension and anger between the colonists and their British overlords. During these tumultuous years the British government was in a state of flux, a revolving door of six ministries in the short span of 1762–70. Political infighting between Whig groups disrupted the conduct of colonial policy. Debt- and tax-weary Britons came to believe that their prosperous American colonies should bear some share of the cost of imperial protection, in short, that Britain should levy an American tax. The colonists had different ideas, seeking even more control over provincial affairs, especially with regard to revenue and expenditure. This chapter examines imperial governance against the backdrop of British and colonial politics. The following chapter addresses paper currency and the taxes Britain imposed on the colonists. The remaining chapters in part VI analyze internal taxation in the colonies.

British Politics, 1763–1775

T

h e c or on at ion of George III in 1760 brought a fresh round of political rivalries for control of the British government.1 In the waning years of George II, Britain was unified under the leadership of William Pitt, who directed British efforts in the defeat of the French in North America, at sea, and India. The new king was at odds with Pitt’s costly war policy. George III, who had been tutored by the Earl of Bute, a Scotsman, disliked Pitt and the Duke of Newcastle. 2 In 1761 George appointed Bute 1

The rivalries among Britain’s leading political figures under King George III are described in R. W. Harris, England in the Eighteenth Century, 1689–1793: A Balanced Constitution and New Horizons (London: Blandford Press, 1963), 175–91. 2 Following Walpole’s resignation, the Earl of Wilmington served as First Lord of the Treasury for a year and a half. On Wilmington’s death, George II took Walpole’s advice, appointing Henry Pelham to the post. Newcastle, the elder brother of Henry Pelham, had held high office since 1717. In 1724 he became secretary of state for the Southern Department, which

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[ 718 ]

f ig ur e 24.1. Colonial America, 1763.

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chap t er 24

secretary of state. Pitt and Newcastle, who hated each other and refused to work together, were unable to block Bute’s appointment. Pitt wanted to crush France completely and declare war on Spain before Spain could attack Britain.3 Facing near-unanimous opposition among the king’s other ministers who were weary of war, Pitt resigned in October 1761. Newcastle, having lost control over patronage to Bute, resigned in May 1762. Bute was appointed First Lord of the Treasury, the chief minister, with the objective of winning approval of the terms of the Treaty of Paris in the House of Commons. Bute secured an overwhelming vote of 319 to 65 over the opposition of both Pitt and Newcastle and no recorded opposition in the Lords. Bute had little time to enjoy his victory. Facing criticism over a proposed excise on cider, Bute resigned in March 1763. He was succeeded as First Lord by George Grenville, who concurrently became chancellor of the Exchequer and leader in the Commons.4 Grenville lasted two short years. He concentrated his efforts on imposing an American tax. He proposed strict enforcement of all previous revenue-producing duties in the colonies, most notably the 1673 intercolonial plantation duty and the Molasses Act of 1733, the latter in conjunction with the Sugar Act of 1764. More important, he pushed through Parliament the Stamp Act of 1765 to cover part of the cost of maintaining British troops in America. The act produced riots in America and the demand by British merchants for its repeal. Grenville was succeeded by the Marquis of Rockingham, who lasted only one year. Rockingham wanted Pitt to join his administration, but Pitt,

dealt with the colonies, where he served for twenty-four years. Of all Britain’s ministers, he had the most extensive knowledge of colonial affairs. In 1748 he moved to the Northern Department and, on Henry’s death in 1754, became First Lord of the Treasury where he remained until 1762, save a few months in 1756 and 1757. The role of the Treasury in the confl ict with America is discussed in Dora Mae Clark, The Rise of the British Treasury: Colonial Administration in the Eighteenth Century (Hamden, CT: Archon Books, 1969). First published by Yale University Press in 1960. Newcastle was strongly supportive of the American colonies, opposed to harsh measures of colonial government that would damage colonial good will and injure British trade with the colonies. Despite his aversion to collaboration with William Pitt in government, he shared Pitt’s favorable view of the colonies. During his stint as head of the British Treasury, he resisted every call for an American tax. Later, he was among the strongest supporters for repeal of the Stamp Act of 1765, which imposed a British tax on a broad variety of colonial documents. 3 Pitt’s concerns were borne out when the French seized Newfoundland in a surprise attack in June 1762, which was recaptured by the British in September and the entire French force taken prisoner. 4 An interesting account of Grenville’s short tenure as the king’s fi rst minister appears in J. L. Bullion, A Great and Necessary Measure: George Grenville and the Genesis of the Stamp Act, 1763–1765 (Columbia and London: University of Missouri Press, 1982). Details of the revenue measures in the Sugar and Stamp acts appear in chapter 25.

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objecting to the appointment of Newcastle as Lord Privy Seal, refused to serve. When Parliament repealed the Stamp Act in 1766, it concurrently approved the Declaratory Act, which proclaimed its right to make laws binding the colonists “in all cases whatsoever,” including the right to tax. Pitt opposed the act, believing it would strain relations between Britain and the colonies. In the face of Pitt’s opposition, Rockingham could not muster sufficient support to remain chief minister and was forced to demit office. In July 1766 George summoned Pitt, whom the king had previously elevated to the peerage as the Earl of Chatham, to form a new government. Pitt appointed the Duke of Grafton as First Lord of the Treasury and Charles Townshend as chancellor of the Exchequer. Pitt’s health collapsed in January 1767 and, although remaining the king’s chief minister, he retired into seclusion. Townshend took advantage of his absence to impose a wide range of duties on the colonies. The Townshend duties were enacted in 1767 but subsequently withdrawn in March 1770 under the pressure of a colonial non-importation agreement that curtailed British imports. Meanwhile, Pitt resigned in 1768, with Grafton becoming the king’s chief minister. Grafton’s government fell over a purely internal British dispute concerning representation in the House of Commons that did not involve the colonies. He resigned in January 1770, replaced by Lord North. North had been a lord of the Treasury under Newcastle, succeeded Townshend as chancellor of the Exchequer in 1767, and was leader of the Commons under Grafton. North remained in office through the outbreak of the American Revolution, providing Britain with its first stable government since 1755. Tired of a succession of short-lived administrations, Britons rallied around North. Pitt had opposed an American tax from the beginning, arguing that it was foolish to provoke a potential revolution over 100,000 a year in revenue when trade was approaching two million. Pitt failed in a last-ditch effort in 1775 to win a vote for a conciliation plan in Parliament. In April 1778, he appeared for the last time in the Lords, making a final protest against the war in America. He fainted, was carried from the chamber, and died two months later. The man who saved America from the hated French defended his beloved American colonies to the end. Arrayed against him were the king, who demanded obedience from upstart colonials, and both Commons and Lords, which insisted that Parliament was the empire’s supreme legislative body, with colonial legislatures subordinate to its authority. Britain was unified and determined to levy an American tax when Paul Revere set out on his midnight ride.5 5 The identity of the colonists as Americans began to emerge at the conclusion of the French and Indian War. The Albany Plan of Union was a fi rst effort in 1754 to join forces to fight the French and Indians, but it was unsuccessful. The Stamp Act Congress of 1765, formed to protest the Stamp Act of 1765 (see below), demonstrated the ability of the colonies to coordinate

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chap t er 24

The Indian Question

T

h e rais i ng of an American tax arose partly from the Indian question.6 Prior to the French and Indian War, Britain had left the management of Indian affairs to the separate colonies. In the aftermath of the war, Britain sought to pacify the Indian population in its vastly enlarged North American empire. Competition for the fur trade and the quest for land among the colonists were pushing Indians out of their historical hunting grounds. Land-hungry entrepreneurs and settlers coveted the sparsely settled lands in the Ohio River Valley and elsewhere on the western side of the Appalachians. To persuade the Indians to live in peace with their new overlords, Britain promised to halt the westward expansion of the colonists. On October 7, 1763, it issued a proclamation prohibiting the settlement of any lands west of the sources of the rivers flowing into the Atlantic, and required all traders to secure licenses from the colonial governors.7 The Proclamation Line was a provisional arrangement. A permanent solution regulating the Indian trade required an act of Parliament. The Board of Trade was instructed to prepare a plan for submission to Parliament. Meanwhile, the colonists had different ideas. With the French threat removed, many packed up and moved west. By late 1763 the Indians had lost control over areas deeded to the Crown for safekeeping. Under the able leadership of Pontiac, Indian discontent erupted into a serious war, which raged on the western frontier for two years. Up to two thousand colonists were killed or captured and others were driven from their homes on the Pennsylvania and Virginia frontiers. The British army under the command of General Jeffrey Amherst failed to suppress the uprising. Amherst returned to England on leave of absence, turning his command over to MajorGeneral Thomas Gage, who subsequently made peace with the Indians, but neither Britain nor the colonists were satisfied with each other’s behavior and performance during the uprising. their efforts in common cause. Resistance to the Townshend duties and other repressive measures further cohered the colonies in their struggle against their British overlords. Although each of the colonies retained its own identity and its residents still regarded themselves as New Yorkers, Virginians, and so forth, they also began to see themselves as Americans, in a broader sense. Thus the term “American,” in the sense of an American tax being levied on the residents of all thirteen colonies, is used throughout part VI. 6 Aspects of British policy toward the Indians are discussed in George Louis Beer, British Colonial Policy, 1754–1765 (Gloucester, MA: Peter Smith, 1958), 252–73. First published by Macmillan in 1907. 7 Bernhard Knollenberg, Origin of the American Revolution: 1759–1766 (Indianapolis: Liberty Fund, 2002), 88–94. First published in 1960 by the Free Press. Specific provisions of the resolution appear on 91–92.

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British Politics, Imperial Governance

In 1764 the Board of Trade presented its plan, proposing to place all Indian affairs under the charge of two crown-appointed officers, confi ning trade to certain posts and to those who took out licenses. The problem with the plan was that it would be costly to administer and enforce. Without a ready source of funds, the king’s ministers declined to seek the approval of Parliament. Chafi ng under British restrictions, colonial assemblies would not vote funds to pay administrative costs. The turmoil generated by the Stamp Act of 1765 and Townshend Act of 1767 halted any further effort to implement the plan. In 1768 the board advised that its plan be shelved, noting that the cost of centralizing the Indian trade would exceed its value. Management of the Indian trade was returned to the separate colonies. Colonial assistance to Britain during the French and Indian War relied on voluntary requisitions of the separate colonies, encouraged by promises of British reimbursement. With their constituents groaning under heavy taxes, Parliament was in no mood to guarantee reimbursement of colonial assistance in defending the western colonial frontier. The British government viewed voluntary requisition as a wholly unsatisfactory way to provide funds and troops to suppress future Indian uprisings and defend a string of inland forts. In its view, the safety of the empire would require a large, permanent British military establishment, which many colonists would regard as a coercive occupying force. The annual cost of British garrisons in the thirteen colonies prior to the French and Indian War was a modest 13,000 sterling. The bulk of British expenditure totaling 80,000 supported its bases in the West Indies. Establishing a standing army of ten thousand men and the cost of ordnance to ensure the safety of North America and the West Indies after 1763 was estimated at 320,000. Of this, about 220,000 in new resources would be necessary to fund fifteen battalions in North America. The colonies had shown that they would not provide for their common defense. Only an act of Parliament imposing an American tax would ensure their cooperation.

British Government Spending in the American Colonies

T

h e a m e r ic an c ol oni e s were an important part of the British Empire. Within the framework of mercantilism, increasingly populated and prosperous colonies would provide a growing market for British industry. To achieve its goal, Britain would have to rid America of the threat from France and Spain. Contemporary writers emphasized the importance of the American market. Benjamin Franklin, in his 1760 pamphlet “The Interest of Great Britain,” stated that exports from England to the northern colonies and [ 723 ]

chap t er 24 tabl e . English Exports, 1701–1775 ( £ Sterling) Year

Exports to America

Total English Exports

1701 1711 1721 1731 1741 1751 1761 1763 1766 1771 1772 1773 1774 1775

343,826 297,626 331,905 536,266 885,492 1,233,168 1,652,078 1,631,997 1,804,333 4,202,472 3,012,635 2,079,412 2,590,437 196,162

4,049,000 4,088,000 4,512,000 5,081,000 5,995,000 8,775,000 10,804,000 9,522,000 9,890,000 11,219,000 10,503,000 8,976,000 10,049,000 9,723,000

Source: For figures on exports from England to the colonies, see Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations” (Cambridge: Cambridge University Press, 2006), edited and with an introduction by John J. McCusker, includes a chapter on colonial statistics. See table Eg429–42: “Value of Imports into and Exports from England, by Colony or Locality: 1693–1791,” S-710–13. Figures on total British exports are from B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “External Trade I: Official Values of External Trade—England and Wales, 1697–1791, and Great Britain, 1772–1804,” 448–50.

West Indies during the five years 1744–48 were almost identical at 3,486,268 and 3,363,337, respectively. Ten years later, during 1754–58, exports of 7,414,057 to the northern colonies were almost double the 3,767,841 to the West Indies.8 In his 1765 book The Administration of the Colonies, Massachusetts’s former governor Thomas Pownall (1765–70) stressed the growing importance of the thirteen American colonies as customers of the mother country.9 Table 24.1 displays the value of English exports to the American colonies compared with total English domestic exports (excluding reexports) during the eighteenth century. The share of English domestic exports to the thirteen colonies increased after the Seven Years’ War. Increasing sales to America seemed to confirm that removing the French from Canada and east of the Mississippi River was worthwhile. 8 Benjamin Franklin, “The Interest of Great Britain” (London, 1760), 57. Cited in Beer, British Colonial Policy, 1754–1765, 137. 9 Thomas Pownall, The Administration of the Colonies, 2nd ed. (London, 1765), 25–26. Cited in Beer, British Colonial Policy, 1754–1765, 137.

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British Politics, Imperial Governance tabl e . British National Debt, British Government Spending, and Annual Interest Cost, 1739–1775 ( £ Sterling) Year

National Debt

Government Revenue

Government Spending

Annual Interest

Interest ( Spending)

1739 1748 1755 1762 1775

46,954,623 78,293,313 74,571,849 146,682,844 135,943,051

5,820,000 7,199,000 6,938,000 9,459,000 11,112,000

5,210,000 11,943,000 7,119,000 20,040,000 10,365,000

2,047,000 2,842,000 2,731,000 4,404,000 4,674,000

39.3 23.8 38.4 22.0 45.1

Sources: Figures on the British national debt are reproduced from Sir John Sinclair, The History of the Public Revenue of the British Empire, 3rd ed. (New York: A. M. Kelley, 1966), 1:460, 465, 469. First published in 1803 by A. Strahan. Sinclair cites as his one of his sources the Journals of the House of Commons. Data on annual government spending and interest charges are from B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), tables.5: “Public Finance 1: Net Receipts of the Public Income—Great Britain, 1688–1801,” 576, and “Public Finance 2: Net Public Expenditure–Great Britain, 1688–1801,” 579.

Worthwhile but costly. The defeat of France did not come cheaply. During 1740–48, British government spending in America totaled 1,331,000 sterling, an annual average of 148,000.10 Outlays on the army, navy, and ordnance consumed 83.5 percent, with colonial administration the balance. Although the seven years 1749–55 inclusive were relatively peaceful, British government spending escalated to 1,876,000, an annual average of 268,000. The lion’s share of the increase is attributable to Parliament’s reimbursement of 469,045 (467,000 net of fees and commissions) to the colonies in 1748 and 1750 for their war time assistance. Direct military expenditures remained high to support the garrison in Nova Scotia and build the town and fortress of Halifax. These outlays paled against the level of spending in America during the French and Indian War. Total outlays more than quadrupled to 7,984,000, a yearly sum of 998,000. Parliamentary reimbursement was responsible for 1,078,000 of the total. British government spending in America was only a small part of its global outlays. Britain was also fighting on the European continent, in the West Indies, and in Asia. Table 24.2 displays the growth in the British national debt from the end of 1739 to midsummer 1775 shortly after the outbreak of the American Revolution, annual interest charges on the debt, and the percentage of annual spending on interest. 10 These figures are taken from table 1, “British Government Spending in America, 1740– 75,” in Julian Gwyn, “British Government Spending and the North American Colonies, 1740– 1775,” in Peter Marshall and Glyn Williams, eds., The British Atlantic Empire before the American Revolution (London and Totowa, NJ: Frank Cass, 1980), 77.

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chap t er 24

Between 1740 and 1748 the national debt rose two-thirds, with annual interest rising almost 800,000. Repayment of principal during the next seven years reduced the national debt by 4.8 percent and annual interest by more than 100,000. Heavy expenditures during the French and Indian War almost doubled Britain’s debt, pushing annual interest above 4.4 million. During both periods of warfare, about four-fifths of the extra money raised to finance the wars was borrowed, with one-fifth through additional taxes.11 Annual government spending reached a historically high level of just over 20 million in 1762, with annual taxes generating almost 9.5 million. The decline in British government spending between 1762 and 1775 is due to the reduction in military outlays, falling from 70 percent of government spending during 1756–63 to 37 percent during 1764–75.12 To ser vice and pay down the country’s debt, Britons were saddled with high taxes, of which 45.1 percent went to pay interest in 1775. Estimates of the British population vary among historians. One puts the population at 8,676,000 in 1775.13 On this estimate, per capita British taxes in 1775 come to about 1 6s., with per capita national debt at about 15 13s. Historians have not derived precise estimates of British national income during the eighteenth century, but they have derived proxies on national income, for example, the growth of commodity output and real wages, which permit a rough determination of the overall tax burden. Patrick O’Brien puts national income at 69.80 million in 1750, 74.02 million in 1760, 92.67 million in 1770, and 100.20 million in 1780.14 Interpolating between 1770 and 1780 yields a figure of about 97 million in 1775. The share of national income appropriated in taxes comes to 11.5 percent.15 A national debt of 135.9 million in 1775 amounts to 140 percent of British national income.

11

Patrick K. O’Brien, “The Political Economy of British Taxation, 1660–1815,” Economic History Review, 2nd ser., 41, no. 1 (February 1988): 4, table 3: “Taxes and the Finance of War, 1689–1815.” 12 O’Brien, “Political Economy of British Taxation,” 2, table 1: “The Allocation of Government Expenditures, 1688–1815.” 13 Peter Mathias and Patrick K. O’Brien, “Taxation in Britain and France, 1715–1810: A Comparison of the Social and Economic Incidence of Taxes Collected for the Central Government,” in Julian Hoppit and E. A. Wrigley, The Industrial Revolution in Britain, vol. 1 (London: Blackwell, 1994), 605, table 2: “Trends in the Burden of Taxes in Britain, 1715–1812.” 14 O’Brien, “Political Economy of British Taxation,” 3, table 2: “Taxation and the Tax Base, 1660–1815.” 15 The trend lines show a rise from 3.4 percent of national income in 1670 to 8.8 percent in 1700, 10.8 percent in 1720, declining to 8.7 percent in 1740 under Walpole, rising to 10.5 percent in 1750, 11.5 percent in 1760, and thereafter falling to 10.5 percent in 1770 (O’Brien, “Political Economy of British Taxation,” table 2). O’Brien explains the capacity of the British state to extract the necessary tax revenue as owing less to economic growth and more to its successful administrative management of a slowly expanding tax base (7). The share of national income appropriated in taxes ranging between 8.8 and 11.5 percent is low in twenty-fi rst-century terms, but was considered high, indeed extremely burdensome, in

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British Politics, Imperial Governance

Another analysis estimates that the share of commodity output appropriated in taxes during 1735–75 ranged from a low of 16 percent in 1755 to a high of 20 percent in the two war time years of 1745 and 1760, with an average of 18 percent in each of the other five-year intervals.16 The share of per capita output collected in taxes varied from a low of 15 percent in 1755 to a high of 20 percent in 1745, 1760, and 1765, otherwise ranging between 17 and 19 percent.17 The price of empire was one-fifth of Britain’s national income.18 The situation in the American colonies was radically different. In his account of the colonies, Pownall wrote in 1765 that the annual peacetime expense of provincial government in Massachusetts, which provided more public ser vices than any other colony, was slightly less than 13,000 sterling and that of New York about 4,000.19 In 1765 the Board of Trade prepared an account of the colonial civil establishments, estimating their annual costs at about 60,000 sterling, excluding local and vestry taxes. That same year Jared Ingersoll, Connecticut’s agent in Britain, placed an even lower figure of 40,000 for the annual cost of civil government in all the colonies. 20 the eighteenth century. The growth in national debt reached historically unprecedented levels, rising from about 72 percent of national income in 1740 to 100 percent in 1755, exploding to 140 percent in 1775, a doubling of the burden as a share of the economy during 1740–75. As the text subsequently shows, both the per capita tax and national debt burdens, especially the latter, were far greater in Britain than they were in the American colonies. 16 Mathias and O’Brien, “Taxation in Britain and France,” 609, table 4: “Taxes and the Growth of Commodity Output in Britain, 1715–1812.” 17 Mathias and O’Brien, “Taxation in Britain and France,” 613, table 6: “Taxes and Per Capita Income in Britain, 1715–1812.” 18 Another set of calculations comparing taxation and economic growth appears in J. V. Beckett and Michael Turner, “Taxation and Economic Growth in Eighteenth-Century England,” Economic History Review, n.s., 43, no. 3 (August 1990): 377–403. Beckett and Turner exclude Scotland, only counting the population of England and Wales. They use total net income of Great Britain, which includes Scotland, thus producing somewhat different per capita results from those of Mathias and O’Brien. Beckett and Turner compile an agriculture price index in order to estimate the burden of taxation in real per capita terms. The object of their essay is to identify the relative burdens imposed by the different taxes, pointing to the real per capita rise in customs revenue, excise revenue, and other revenue, while real land tax revenue actually declined. Between 1775 and 1781 per capita tax revenue outgrew earnings. The index of the ratio of tax revenues to money wages rose from 102.7 in 1731 to 108.3 in 1741, 113.6 in 1751, and 146.0 in 1761 (a peak war time year of expenditure), thereafter falling to 137.9 in 1771 and 133.4 in 1776. Th e index shows that Britain’s tax burden increased as a share of money wages beginning with the wars with Spain and France in the 1740s, thereafter rising to a peak during the Seven Years’ War, but falling only modestly on its conclusion due to the heavy debt burden. (Beckett and Turner, “Taxation in Britain and France,” table 3: “Index of the Ratio of Tax Revenues to Money Wage Rates,” 390.) The only period in which the ratio declined, from 107.8 in 1726 to 99.1 in 1736, was during Walpole’s era of salutary neglect. 19 Beer, British Colonial Policy, 1754–1765, 295. 20 Bullion, A Great and Necessary Measure, 199.

[ 727 ]

chap t er 24 tabl e . Colonial Contributions to the Seven Years’ War, Parliamentary Reimbursements, and Provisions for Redemption of Remaining Colonial Debts (£ Sterling) Colony

Massachusetts Virginia Pennsylvania New Jersey New York South Carolina Maryland Rhode Island Connecticut North Carolina New Hampshire Georgia

Expenditure

Reimbursement

Remaining Debt

Provision for Redemption

818,000 385,319 313,043 204,411 291,156 90,656 39,000 80,981 259,875 30,776 53,211 1,820

351,994 99,177 75,311 51,321 139,468 10,226 0 51,480 231,752 11,010 47,030 0

160,000 143,272 121,836 181,176 115,375 0 0 13,000 0 6,969 18,000 828

Taxes in 5 years Taxes in 1766–69 Taxes in 1767–72 Taxes in 17 years Taxes in 1766 and 1768

Taxes in 1767 Poll tax and duty Taxes in 1766–67 Taxes in regular proportions

Sources: Data on reimbursement are from Jack P. Greene, “The Seven Years’ War and the American Revolution: The Causal Relationship Reconsidered,” in Peter Marshall and Glyn Williams, eds., The British Atlantic Empire before the American Revolution (London and Totowa, NJ: Frank Cass, 1980), 99. Data on the amount of remaining colonial debt and the provisions for its discharge are from Richard M. Jellison, Paper Currency in Colonial South Carolina, 1703–1764 (Ph.D. thesis, Indiana University, 1952), 244. Data on the colonial contribution to the war efforts are from both, each citing the January 28, 1766, report of the Board of Trade, found in the British Public Record Office, in the Colonial Office 323/19 fi le.

The board issued its report on January 28, 1766. It itemized colonial contributions to the Seven Years’ War, noted the amount of reimbursement that Parliament granted each colony, and listed the provisions each colony had made for eliminating the remaining debt that resulted from their issue of paper currencies. Table 24.3 below presents the board’s findings. Subtracting reimbursement of 1,068,769 from colonial war expenditures of 2,568,248 sterling puts net colonial war expenditure at 1,499,479, an annual sum of 187,435 for the eight years 1755–62 inclusive. The cost of the Seven Years’ War, with expenditures continuing to 1766 to suppress Pontiac’s uprising, to Britain has been estimated at 82,623,738. 21 On these numbers, colonial war outlays amounted to 1.8 percent of those of Britain. The tax per adult white male in the colonies for the entire duration of the French and Indian War ranged from a low of 0.84 in New Hampshire to a high of 10.94 in South Carolina. In five of the colonies—Maryland 21 Stephen Dowell, A History of Taxation and Taxes in England: From the Earliest Times to the Year 1885, vol. 2, Taxation from the Civil War to the Present Day, 2nd ed. (London and New York: Longmans, Green, and Company, 1888), 534, appendix no. 5: “Cost of Each War from 1688 to 1869.”

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North Carolina, Georgia, Connecticut, and New Hampshire—the tax was less than 2, a matter of a few shillings a year throughout the war. Rhode Island white males paid 3.51, an annual sum of about 10s. White males in New Jersey, New York, and Virginia paid 7.20–8.77, a little over a pound a year. Only those in Massachusetts and South Carolina paid over 10, or about 1 10s. a year. Including white women and children reduces per capita burdens in every case by more than two-thirds. Using the figure of 82,623,738 for British war expenditures for the twelve years 1755–66 inclusive puts annual war outlays at 6,885,312, more than four times total net colonial war expenditure. Using the population figure of 7,817,000 for 1760 puts per capita war outlays at 10.57 (10 11s. 4d.). This is at least twenty times greater than the per capita fi gures for the white population in South Carolina and Massachusetts, thirty times that of New Jersey, New York, and Virginia, sixty times that of Rhode Island, and more than a hundred times that of the other colonies. Even the ostensibly heavily burdened taxpayers of South Carolina and Massachusetts bore only a trivial fraction of that paid by Britons. The comparison is even more dramatic regarding national debt. Britain’s debt amounted to 140 percent of its national income, a per capita burden of about 15 13s. The war debts remaining to be discharged in the nine colonies that had not yet fully redeemed their war issues of paper currency by the end of 1765 amounted to a meager 760,456, on the order of one half of 1 percent, one two-hundredth, that in Britain, or about 2 percent in per capita terms. Contemporary writers commented that Americans enjoyed a higher standard of living than did their British counterparts, which means that colonial war taxes as a share of income were lower still when stated in sterling. The Board of Trade estimated the cost of the civil provincial establishment in the colonies at 60,000 a year, certainly no more than 100,000 including county, town, and vestry taxes. In Britain, annual taxes during 1764–75 inclusive averaged 10,680,000. The nearly two million white colonists paid on the order of about 1 percent of the annual taxes levied on the roughly 8.5 million residents of Britain, or one twenty-fifth in per capita terms, not taking into account the higher average income and consumption in the colonies. On these comparisons, Parliament believed that Americans could and should shoulder some of the cost of their defense. Staggering under heavy taxes and a monumental national debt, Parliament began to look for any way to relieve the burden of defending the empire from British taxpayers. The obvious place was America.

The Pros and Cons of an American Tax

P

r op on e n t s of an American tax could be found on both sides of the Atlantic, but most were in Britain. Not all the opponents were colonial.

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Some of the most vocal were America’s great friend, William Pitt, and the prominent phi losopher Edmund Burke. Still, most of the opposition emanated from America, from the pens and pamphlets of Daniel Dulaney of Maryland, John Dickinson of Pennsylvania, James Otis and John Adams of Massachusetts, Thomas Paine, and others. Their views are presented following the motives underlying British advocacy of an American tax.

The British View

B

r itain’s v ie w on the need for an American tax rested on several key points.22 One of the most important was that the heavy interest cost of servicing the national debt would undermine Britain’s power and prosperity. It was vital to free the country from the burden of debt as soon as possible. The greater the debt, the heavier the tax burden. The need to maintain the nation’s credit rating, to ensure it could borrow in future emergencies, meant that the government would have to increase taxes on the poor and middle classes, taxing consumption of coal, candles, windows, salt, beer, and other consumer goods. Heavy duties would burden the poor, who would demand higher wages to afford the bare necessities of life. Manufacturers would have to raise their prices, thus losing competitiveness in overseas markets, or lay off workers to reduce costs. The poor would resort to rioting or begging. At the top of the government’s agenda was lightening the burden on British taxpayers. A second argument was the necessity for a larger military presence in America, exemplified in the outbreak of Pontiac’s rebellion. Security was paramount. Canada, the Floridas, and much of the land west of the Appalachians required a strong British presence. In February 1762 Welbore Ellis, secretary of war, calculated that the pay of the troops in America would be 224,903, excluding transport, other contingencies, and an increase in the size of the fleet stationed off America. That these forces would be defending America raised the question of Americans paying for them. A third theme was that America was sufficiently prosperous to bear the cost of its defense. Customs records of the day revealed that one-quarter of British trade consisted of exports to North America. In addition, British officials believed that clandestine trade was four to five hundred thousand pounds more than recorded legal trade. Americans could not claim hardship. If they were sufficiently prosperous to purchase British manufactured goods and illicitly import a large volume of goods, they were clearly able to bear a tax for their own defense.

22 These themes are summarized from and elaborated at greater length in Bullion, A Great and Necessary Measure, 15–26.

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A fourth argument was that Americans either could not or would not voluntarily assume the burden of defending the western frontier of the empire. Rivalries and jealousies among the provinces precluded united action. The Pennsylvania and North Carolina assemblies refused to raise troops in 1762 in support of the war effort. Colonial legislatures were willing to raise men and money only under their own terms, not at the request of British commanders. Pitt had promised the colonies that Parliament would reimburse them for a considerable portion of the expense they bore in the French and Indian War. Reimbursement drained over a million pounds, money that Parliament would not again appropriate to secure colonial cooperation in defense of its North American empire. Britain’s succession of chief ministers concluded that Parliament would have to force the colonists to pay, at least in part, for their defense. Colonial legislatures could not be trusted to voluntarily agree to substitute local taxes for a British-imposed American tax. A fifth belief was that the longer an American tax was postponed, the more difficult it would be to impose, especially in the charter colonies of New England, which enjoyed a high degree of autonomy and exuded a large degree of independence. Smuggling was rampant in Rhode Island. Enforcement of the trade acts met with little success in New England during the French and Indian War, as many colonists continued to trade with the enemy in the West Indies. The Molasses Act of 1733 was barely enforced. These precedents suggested that the sooner an American tax was levied, the better its chance of success. Postponing an American tax would give the colonies more time to mount opposition in Parliament, among British merchants, and among the colonists themselves. A sixth point was that Parliament was the supreme legal body in the empire. The colonists enjoyed the rights of Englishmen, of self-government and raising local revenue, but these rights derived from royal grants and acts of Parliament. They did not rest on any inherent right of residence in British colonies, even if the settlers were British subjects. Colonial legislatures were subordinate to Parliament, plain and simple.23 Near-unanimity on this point 23 Despite the fact that the bill of particulars in the Declaration of Independence was levied against King George III, the American Revolution was more the assertion of colonial legislatures that they, not Parliament, should determine their own aff airs and enjoy the exclusive right to tax themselves. Royal prerogative had long given way to the supremacy of Parliament, which had several times avoided legislation that, augmenting royal authority in America, would have strengthened royal prerogative in Britain. British sovereignty had become synonymous with Parliament, Britain’s supreme political organ. Acts of Parliament, not prerogative, structured trade within the empire, enumerated products, restricted colonial manufacturing, and set currency rates. For example, the Sugar Act of 1764 stipulated that the collectors of customs, not the king’s receivers, were responsible for the revenue. The king could pick his ministers but it was they, not him, that set the political agenda and controlled any revenue from an American tax.

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prevailed in Parliament. The only question that arose in parliamentary debate was the means and wisdom of an American tax, not its legality. On this last point, some colonial legislatures enacted laws that countered royal prerogative. Receivers of crown revenue in some of the colonies had fallen into the hands of provincial, not royal, appointees. Receivers, though royal officials in name, were accountable to provincial assemblies, which controlled the use of the revenue even if the accounts were sent to a royal auditor general. Since governors were dependent for their salaries on votes of the provincial legislatures, they often turned a blind eye to the usurpation of royal authority. The colonies had developed a large measure of autonomy during Walpole’s era of salutary neglect. Neither Walpole, Henry Pelham, nor the Duke of Newcastle had shown any inclination to tax the colonies. The British government had little time to consider changes in its treatment of the colonies in the midst of war; it needed their cooperation, not their resentment. A regular grant of Parliament had supported the civil establishment in Georgia since its founding. In the course of considering an American tax, British leaders gave some thought to using a portion of the revenue to pay the salaries of royal officials, freeing them from the political power of colonial assemblies. Th is idea was abandoned as too provocative; it would unnecessarily anger the colonists, who would see it as an attempt to impose greater royal control over their local privileges. An American tax would not be readily welcomed in the colonies, but its use for any purpose other than defense, especially to strengthen royal officials against provincial assemblies, would make matters worse. British opponents of an American tax included William Pitt, Edmund Burke, and some forward-looking merchants. The most outspoken was Pitt, who resisted an American tax to his last breath. Burke warned that an American tax would pit Englishman against Englishman in a struggle that would cost Britain its American colonies. Others feared the loss of business from a growing market. But most of the opposition came from the colonies.

In its view, Parliament was entrusted with the welfare of the empire as a whole. To allow the colonists exclusive power to tax themselves would be to surrender Parliament’s authority to subordinate provincial legislatures established by royal prerogative in charters and grants. Provincial assemblies were increasingly challenging the authority and power of Parliament. Colonial assemblies opposed British payment of royal officials from any source, especially an American tax. Withholding royal salaries was their most effective means to pressure members of the executive branch of colonial government. The American tax was a clash of legislatures, provincial versus Parliament. Th is thesis is elegantly argued in Richard R. Johnson, “ ‘Parliamentary Egotisms’: The Clash of Legislatures in the Making of the American Revolution,” Journal of American History 74, no. 2 (September 1987): 338–62.

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The American View

T

h e c ol on i st s did not share Britain’s view on the need for an American tax. They had accepted the several minor duties on intercolonial shipments, which yielded little revenue, and the Molasses Act of 1733, which cost more to administer than it collected in duty. These measures, defined as regulating trade in the context of the empire, were more than compensated with Royal Navy protection, credit, and a network of European markets provided by British merchants. None of these measures was deemed a “tax” in the eyes of the provincial assemblies or as taxation without representation; nor were they regarded as a burden on colonial economic activity. 24 24 Oliver Dickerson argues that the writings and papers of leading American revolutionaries support the view that the Navigation Acts were not a principal cause of the Revolution. Dickerson surveys the writings of John and Samuel Adams of Massachusetts (the latter wrote a series of articles that appeared in the Boston Gazette under a variety of fictitious signatures between 1768 and 1772), Governor Stephen Hopkins of Rhode Island, and James Otis, author of the Rights of the British Colonies published in 1764, along with such other New England pamphleteers as Jeremiah Gridley, Oxenbridge Thatcher, and Edward Bancroft. In the middle colonies the leading revolutionaries were Pennsylvanians John Dickinson, author of The Regulations Respecting the British Colonies on the Continent of America Considered, in a Letter from a Gentleman in Philadelphia to his Friend in London, published in 1765 and reprinted in London, and Benjamin Franklin, who wrote numerous letters regarding the trade acts, and Maryland’s Daniel Dulaney, author of Considerations on the Propriety of Imposing Taxes in the British Colonies, For the Purpose of Raising a Revenue, By Act of Parliament, known simply as Considerations. In the southern colonies the leaders were Thomas Jefferson, Patrick Henry, R. C. Nichols, and Arthur Lee of Virginia; William Henry Drayton and Henry Laurens of South Carolina; and John Jacob Zubly of Georgia. Dickerson highlights Dulaney as an able political writer who drew a sharp distinction between Parliament’s right to regulate trade and to impose laws that were intended to raise a revenue. Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 103–22. First published in 1951 by the University of Pennsylvania Press. Dickerson contends that a systemic review of the writings of the American revolutionaries reveals few attacks on the British commercial system and on almost none of the Navigation Acts specifically. (Chapter 25, table 25.4, shows that less than a tenth of British revenue raised in the colonies stemmed from enforcement of the Navigation Acts.) The Revolutionary pamphleteers do not explicitly call for a change in the commercial system. They were careful to draw a distinction between internal taxes, to be imposed only by local assemblies, and external taxes used to regulate trade. They conceded that Parliament had the power to enact regulatory measures for the common good of the empire, but not to legislate an internal American tax. John Dickinson, perhaps the most effective of the pamphleteers, argued that the fi rst attempt to tax the colonies was the Stamp Act, and that all previous measures, including the Sugar Act, were enacted to regulate the trade of the empire as a whole. Several writers acknowledged the off setting benefits of preferential access to British markets, bounties, drawbacks, and other encouragements given to the colonists (12–15). Dickerson also surveys the several resolutions of the colonial assemblies, failing to fi nd even one attacking the British commercial system or suggesting repeal of the Navigation Acts. The only criticism he fi nds concerns the wool, hat, and iron acts, and the conduct of the Commissioners of Customs in administering the trade acts (129–34).

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The successful conclusion to the French and Indian War meant that the colonists were free, after nearly a century of concern over French and Spanish predations of their lands and lives, to spread over the North American continent. An American tax to fund a permanent British military establishment was seen as an impediment to their future, a coercive rather than defensive measure. Amherst’s failure to put down Pontiac’s rebellion reinforced the notion that the colonies would be better off defending themselves with their militias if and when it became necessary to suppress the Indians and any remaining French trappers west of the Appalachians. After all, the militias of the Carolinas and New England had thoroughly defeated several Indian uprisings in the late seventeenth and early eighteenth centuries. The specific arguments put forth by the colonists against a Britishimposed American tax encompassed several themes. New Englanders pointed to their charter rights to self-government, especially the principle of no taxation without representation, which had existed since 1620. The most general theme was that an American tax would be an internal tax levied without the consent of the colonists themselves. The colonists rejected the concept of “virtual representation” in Parliament in that it would not protect the interests of British subjects outside Britain. They believed that physical representation in a body three thousand miles away would not guarantee the rights of British subjects in the colonies. They feared that even a small tax would be a thin edge of the wedge that would inexorably develop into ever-heavier taxes on the colonists, destroying their prosperity and estates, a fear justified by British expectation of an annual American revenue more than double the annual provincial taxes of the thirteen colonies combined. They were concerned that an American revenue would free royal officials, including the governor, collectors, royally appointed councillors, judges, and British military officers, from their dependence on, and thus the need to work with, colonial assemblies for their support, resulting in autocratic government dictated by London. They disliked the prospect that Britain would fi ll the colonies with cronies of lords and nobles, providing patronage for British politicians to secure their positions at court or in Parliament in place of appointments for better-educated colonists in their provincial governments. An American tax would enhance royal prerogative after more than a century of colonial efforts that steadily strengthened provincial assemblies against the power and authority of royal officers, especially over taxes and provincial expenditure, but also over the conduct of legislative proceedings.25 Leading colonial figures had been free for too long to accept diminished status in their own homes. 25

Th is argument is the theme of a monumental study by Jack P. Greene, The Quest for Power: The Lower Houses of Assembly in the Southern Royal Colonies, 1689–1776 (New York: W. W. Norton, 1972). First published in 1963 by the University of North Carolina Press.

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Imperial Governance

I

n t h e course of seeking to impose an American tax, the British government set out to strengthen the administration of customs to ensure that the mother country secured the benefits of imperial trade. Each of these measures grated on the colonists.

Enforcement of the White Pine Acts

T

h e m as s ac h u s e t t s Charter of 1691 granted by William and Mary reserved certain trees in the province to the Crown. 26 Subsequent acts of Parliament in 1711, 1722, and 1729 further tightened British control over the harvesting of colonial white pine. Penalties for illegal felling of white pines without license from the Crown were severe, but enterprising colonists generally thwarted successful enforcement of the acts or blatantly disregarded the laws. Royal officials under governors or the supervision of the Surveyor-General of the King’s Woods in America were often physically assaulted. Mills where seized logs were sawed into boards and planks were burned down, destroying the confiscated timber products. Colonial judges often refused to provide assistance to royal deputies in their effort to prosecute assailants and enforce the white pine acts. Still, steady escalation of attempts to enforce the acts bred hostility throughout New England, especially in Connecticut and New Hampshire.

Enforcement of the Molasses Act of 1733

T

he mol asse s act of 1733, continuously renewed through 1764 to protect British West Indies producers from French competition, imposed duty on colonial imports of foreign molasses, sugar, and rum. 27 The act, the first import duty levied on the colonies by an act of Parliament, collected 330 sterling in its first year, falling to a meager 76 a year during 1738–41, well below administrative costs. Bribery at a customary rate of a farthing to a half penny a gallon, a fraction of the statutory 6d. rate on molasses, was generally sufficient to clear customs in New York and Massachusetts. In 1739 Parliament permitted direct shipment of West Indies sugar to Europe if carried in British-built ships. It followed in 1748 with an export bounty on sugar refined in Great Britain from raw sugar grown in the British West Indies, coupled with a drawback of the full amount of the import duty paid upon the raw sugar. These measures muted any rigorous effort to enforce the 1733 act. 26 27

Knollenberg, Origin of the American Revolution, 1759–1766, 116–26. Knollenberg, Origin of the American Revolution, 1759–1766, 127–38.

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If enforced, the duty on foreign molasses amounted to about 100 percent of its value. The colonists had come to regard the customary rate as the basis of normal practice and ill-paid collectors of revenue readily connived to overlook the law. Despite British naval efforts to deprive the French islands of supplies during the French and Indian War, the trade continued with colonial governors granting “flags of truce,” ostensibly to exchange prisoners of war but in fact providing a means to conduct clandestine trade. With peace in 1763, Charles Townshend, then president of the Board of Trade, proposed to use the Molasses Act to raise an American revenue through reducing the rate from 6d. to 2d. a gallon (subsequently set at 3d. in the Sugar Act of 1764). 28 The idea was to lower the tax to a level the trade would bear and use the proceeds to finance Britain’s military establishment in the colonies. Estimates of smuggling that a lower tax might curtail were based on reports that seventy-three large distilleries in America produced almost twenty-five thousand tons of spirits a year from illicit commerce. 29 If the lower molasses duty were to yield serious revenue, customs operations would require drastic overhaul. To indicate the scope of the problem and justify his measures, Grenville reported in 1764 that gross revenue of the 1673 and 1733 acts came to less than two thousand pounds a year, with the cost of collection between seven and eight thousand. 30 Grenville undertook a series of measures to improve the productivity of customs collections in America. The British Hovering Act, passed in 1763 before Grenville moved to the Treasury, had led to the stationing of fiftythree naval ships around Britain and Ireland to enforce the various revenue laws. The Treasury reported that customs revenue increased 391,186 in its first full year of application.31 With the approval of the cabinet, Grenville transmitted the provisions of the Hovering Act to America on June 2, 1763, instructing naval officers to prevent smuggling between the French Islands of St. Pierre and Miquelon, which France retained in the 1763 Treaty of Paris, and any British dominion in North America. 32 28 The tax provisions in the Sugar Act appear in chapter 25. Knollenberg refers to the Sugar Act of 1764 as the American Act of 1764 in that it encompassed a much broader range of restrictive measures than simply an attempt to collect revenue through reducing the duty on sugar, molasses, and rum to levels the trade might willingly bear. 29 Bullion, A Great and Necessary Measure, 39. 30 Cited in Knollenberg, Origin of the American Revolution, 1759–1766, 148. 31 Cited in Bullion, A Great and Necessary Measure, 54. In fact, customs revenue increased from 1,824,000 in 1762 to 2,283,000 in 1763, a gain of 459,000, higher than the contemporary treasury report. B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), table: “Public Finance 1: Net Receipts of the Public Income—Great Britain, 1688– 1801,” 576. 32 Bullion, A Great and Necessary Measure, 63.

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As First Lord of the Treasury, Grenville set out to strengthen the American customs ser vice to collect both existing taxes and any new American tax he could secure in Parliament.33 On July 25, 1763, the Treasury instructed the Commissioners of Customs to order all officers to their stations in the colonies; they would be dismissed if they did not depart by August 31. This order ended a long-established practice of hiring deputies. In November a circular letter was sent to all customs officers in America, numbering about two hundred, threatening them with instant dismissal if they failed in their duty to enforce the trade acts. Each officer was instructed to maintain regular correspondence with London, report any obstructions found in his work, and report exact amounts of imports and exports in each port and the revenue collections. 34

The Sugar Act of 1764

T

he sugar ac t of 1764 strengthened imperial governance over colonial trade. Hides, skins, potash, and several other products were added to the list of enumerated commodities that could only be legally exported under the Navigation Act of 1660 to Great Britain or another British colony.35 Direct export of colonial lumber and iron to continental Europe or Ireland was prohibited. With few exceptions, vessels were prohibited from transporting cargo from Britain to the colonies unless they had fi rst been loaded in Britain. Any vessel returning from Europe with some cargo, which collected additional cargo in Britain, fi rst had to unload its existing cargo, pay duty on it, reload it, and only then load the new British cargo and legally proceed to the colonies. The act disrupted direct trade between the colonies and Madeira, the Azores, and the Canary Islands by levying heavy duties in the colonies of 7 a ton on wine imported directly from them as against 10s., one-fourteenth the rate, if shipped from Britain. The wine trade had grown into a substantial reexport business in the major American ports. The new levy transferred most of this trade to British merchants. Exports of wine from New York shrank from over 250 pipes in 1763 to a little more than seven in 1769. The much heavier rates also curtailed colonial consumption, with total wine imports at New York from all sources in 1769 reduced to half those recorded in 1763.36

33

Clark, The Rise of the British Treasury, 108–45. Bullion, A Great and Necessary Measure, 71–77. 35 The Sugar Act is reproduced at http://www.founding.com/ library/ lbody.cfm?id=85& parent=17 (May 1, 2003). The act consists of forty-seven clauses that stipulate rates and duties, and impose new restrictions on trade, requirements for shippers, penalties for violations, and provisions for prosecution. 36 Dickerson, Navigation Acts and the American Revolution, 176–77. 34

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Clauses 20–26 of the act required shipmasters to take out a cocket or cockets (sealed certificates) itemizing the quantity and quality of goods onboard, and specified that every vessel carry ing such non-enumerated colonial products as corn, wheat, lumber, meat, and dairy products give bond to pay duty on any foreign colonial molasses taken aboard during the course of a voyage. Bond was set at 1,000 sterling for vessels under one hundred tons and 2,000 if over. Failure to give bond or observe its terms subjected both the vessel and cargo to forfeiture. If strictly enforced, clauses 20–26 required farmers or merchants shipping local produce from one colony to another to travel to the nearest customs office, submit a detailed invoice of goods for shipment, give bond, and obtain a cocket, or risk having both the vessel and cargo seized. Customs officials had not previously required clearance from small vessels carrying non-enumerated products in coastwise and river trade. Given the few roads and bad or nonexistent bridges, these provisions threatened serious disruption of intercolonial trade. Another clause limited damages on a customs official to two pence if a suit he brought against any master or owner of a vessel was dismissed in court. This freed customs officials from the fear that colonial common law courts could impose large damages if the owner or master won his case. Another clause established a new vice-admiralty court in Halifax, Nova Scotia, to which a seizing officer could bring suit for condemnation of a vessel and its contents. In such cases, the owner of any vessel or claimer of goods, not the seizing officer, bore the burden of proof. Failure to appear and prove no violation resulted in seizure and division of the goods. The commander of a British naval vessel that seized a ship received half the net proceeds of condemnation. 37 Especially troubling was that vice-admiralty courts did not require trial by jury.

Vice-Admiralty Courts

V

ic e - admiralt y co urt s were authorized in the colonies in the Navigation Act of 1696. 38 Beginning work in 1697, they played only a limited role in enforcing the numerous acts of trade during Walpole’s era of salutary neglect and the years of war with Spain and France. With the 37

In fact, only one case was brought from the thirteen colonies to Halifax. A description of the activities of vice-admiralty courts in the colonies appears in Charles McLean Andrews, The Colonial Period of American History, vol. 4, England’s Commercial and Colonial Policy (New Haven and London: Yale University Press, 1964), 222–71. For coherence, the discussion of vice-admiralty courts in the colonies encompasses the Stamp Act of 1765 and the Townshend duties of 1767, although their revenue provisions are set forth later in the chapter. See also part III, chapter 11. 38

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establishment of peace in 1763, Britain saw vice-admiralty courts as a tool to strengthen customs enforcement, ensure that trade flowed to and from Britain in keeping with the trade acts, and support the collection of the several American taxes that were enacted during 1764–67. Cases before vice-admiralty judges generally fell into three categories. The most common involved disputes over seamen’s wages, contracts for building and furnishing ships, claims for money lent or advanced, and division of rewards from salvage, wrecks, and whales and other drift fish. A second concerned the division of prizes. The third involved violations of acts of trade. Before 1764, the pertinent acts were that of 1663 forbidding direct importation of goods from Europe into the colonies, the Molasses Act of 1733, and that of 1722 granting jurisdiction over cutting colonial white pine in New England.39 The Sugar Act of 1764 strengthened the jurisdiction and power of viceadmiralty courts in America. Clauses 40 and 41 authorized a prosecutor to choose, at his option, to bring suit for penalties and forfeitures in any common law colonial court of record or court of admiralty in the colonies.40 To implement the law, a new court of vice-admiralty with both appellate and original jurisdiction was set up in Halifax, Nova Scotia, far away from all colonial ports. A few months after the Sugar Act became effective, Parliament passed the Stamp Act of 1765 (discussed below), which would tax, requiring payment in sterling, the colonists’ use of paper for most legal and business transactions. Clauses 57 and 58 stipulated that penalties and forfeitures in violation of the act were recoverable either in common law or vice-admiralty courts. Treasury officials recognized that a court at Halifax was impractical. They proposed a new plan to move the court at Halifax to Boston and establish two new courts at Philadelphia and Charleston. The judges who presided over the courts would receive salaries rather than compensation through fees and sharing in condemnations. Repeal of the Stamp Act in the House of Commons on February 22, 1766, followed with repeal in the Lords, signed by the king on March 18, invalidated the vice-admiralty court 39

Andrews claims that vice-admiralty courts played a positive, constructive role in guarding the rights of colonial seamen and facilitating commerce in the leading colonial ports. Viceadmiralty judges undertook a wide range of duties involving disputes between sailors, merchants, and shipowners, and assisting ships in times of trouble and need. Common law courts could not deal with disputes arising at sea. Andrews contends that historians have overstated the coercive and oppressive role of the courts in the colonies. He writes that except in one case involving Edmund Porter in North Carolina, “I have yet to find an instance of manifest partisanship or injustice on the part of a colonial judge of vice-admiralty, and even in Porter’s case the evidence is not conclusive.” The Colonial Period of American History, 4:251–52. 40 The clause is repeated in clauses 57 and 58 of the Stamp Act of 1765. Although the act was soon repealed, the provision was implemented in 1767 in one of the Townshend acts.

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chap t er 24

provisions in the act. Authority was restored in one of the Townshend acts, which established four courts with both original and appellate jurisdiction at Halifax, Boston, Philadelphia, and Charleston. The four became courts of final resort, eliminating the right of appeal to Britain. The existence and operation of vice-admiralty courts were portrayed as a denial of rights to British subjects in the colonies.41 Leading spokesmen in the colonies described the new taxes in the Stamp and Townshend acts as unconstitutional, imposed without the consent of colonial assemblies, further condemning the procedure that the new taxes could be enforced in admiralty courts without trial by jury. The jurisdiction of admiralty courts in Britain had been carefully defined and limited over the years by common law courts. In contrast with the courts in Britain, the colonial courts of admiralty were granted a larger jurisdiction in the Navigation Act of 1696. The distinction lay relatively dormant between 1697 and 1764. The colonists were able to circumvent much of the authority and power of viceadmiralty courts. Common law courts often issued writs of prohibition halting proceedings in vice-admiralty courts or overturned their decrees. Low fees were legislated to discourage anyone from holding a judicial appointment in a vice-admiral court. The fact that the Molasses Act of 1733 quickly became a dead letter rendered vice-admiralty courts largely irrelevant in enforcing the trade acts. The strengthened jurisdiction of vice-admiralty courts after 1764 became a cause célèbre in the colonies. The Stamp Act Congress of 1765 listed it as a major grievance.42 Most colonial legislatures complained about the subversion of the rights of Americans, attaching it to their resolves against parliamentary taxation. Daniel Dulaney of Maryland, John Dickinson of Pennsylvania, and James Otis and John Adams of Massachusetts bitterly protested the vice-admiralty courts, describing them as 41

The contrast between the treatment of British subjects in colonial courts of viceadmiralty with that of British subjects in British courts became part of the Revolutionary movement in America. Th is theme is set forth in David S. Lovejoy, “Rights Imply Equality: The Case against Admiralty Jurisdiction in America, 1764–1776,” William and Mary Quarterly, 3rd ser., 16, no. 4 (October 1959): 459–84. 42 The Stamp Act Congress was an early example of concerted colonial action against a British measure. Nine of the thirteen colonies—excluding New Hampshire, which formally approved the proceedings after the congress was over, and Virginia, North Carolina, and Georgia, which were prevented from attending because their governors refused to convene the assemblies to elect delegates—that took part in the Revolution sent representatives. The Stamp Act Congress drew up thirteen resolutions that, among other measures, rejected parliamentary taxation. Participants and deliberations are described in Edmund S. Morgan and Helen M. Morgan, The Stamp Act Crisis: Prologue to Revolution with a new preface by Edmund S. Morgan (Chapel Hill and London: University of North Carolina Press, 1995), 107–19. First published in 1953 by the University of North Carolina Press.

[ 740 ]

British Politics, Imperial Governance

“star chamber courts” of old Britain, an “arbitrary and unconstitutional jurisdiction,” similar to the “Inquisition,” a “violation of the Magna Carta,” and “shamelessly distinguishing justice between Americans and Britons.” Vice-admiralty courts were an unconstitutional enforcement of unconstitutional taxes. The proceedings of trial without jury in vice-admiralty courts offended the colonists’ sense of justice as British subjects. Parliament had never dared to enlarge admiralty jurisdiction in Britain, but did so in America. Grenville and Townshend’s acts established the principle of Parliament levying a tax and placing its enforcement within the jurisdiction of the admiralty courts. If allowed to stand, Parliament could follow suit with other taxes.43 Two cases involving the most prominent and popular Americans in their respective colonies, Henry Laurens of South Carolina in 1767 and John Hancock of Massachusetts in 1768, thoroughly discredited the proceedings of the vice-admiralty courts in colonial eyes. These and others gave rise to the “era of customs racketeering,” in which royal officials sought to punish leading colonists through dubious seizures and condemnations. John Adams rose to fame defending Hancock, charging royal officials in Massachusetts with overturning the Magna Carta in permitting a single judge to determine the outcome of a legal proceeding. Public opinion ran so hostile to the Crown that the attorney general stopped proceedings and withdrew the case. The colonial presses reported the cases in all the colonies. Although most of the Townshend duties were repealed, vice-admiralty courts remained in existence, a constant reminder to the Americans of the threat of deprivation of trial by jury.

43

Under one of the Townshend Acts, the Treasury issued a warrant in July 1768 providing for four courts. The court at Philadelphia had original jurisdiction in New York, Maryland, Pennsylvania, New Jersey, and Delaware, and could take appellate cases from any subordinate court. That in Boston had original jurisdiction in New England and that in Charleston for the southern plantation colonies. Enforcing the complex trade acts was a difficult proposition. Alfred S. Martin describes the experience of John Swift, collector of customs in Philadelphia. The inspection process of ships involved numerous personnel including the collector, the comptroller, the surveyor who checked on the collector and comptroller, the tidesman, and the landwaiter. Their tasks included assessing customs fees, copying cockets, trying to decipher accounts, determining whether payment of duty could be made in gold as well as silver, issuing bonds and certificates for unloading and loading cargo, granting permission to sail, interpreting the continuing amendments and ambiguities in the trade acts, and facing the risk that they could be exposed to damages in the course of their duties. British customs commissioners often sent out men who became conspicuous failures or needlessly antagonized the colonists. Low salaries coupled with bribes often persuaded royal officials to overlook their responsibilities. Few colonial lawyers were willing to try cases for the colonial customs ser vice. Known informers were often beaten, stoned, ducked, or coated with tar and feathers. “The King’s Customs: Philadelphia, 1763–1774,” William and Mary Quarterly, 3rd ser., 5, no. 2 (April 1948): 201–16.

[ 741 ]

chap t er 24

f ig ur e 24.2. Obelisk erected on the Boston Common in celebration of repeal of the Stamp Act. It shows the four phases of the struggle against the Stamp Act. They are titled: “1. America in distress of the total loss of Liberty. 2. She implores the aid of her British Patrons. 3. She endures the Conflict for a short Season. 4. And she has Liberty restored by the Royal hand of George the Third.”

The Stamp Act Crisis of 1765

P

r eparat ions f or the Stamp Act, which was intended to raise an American revenue by requiring the purchase of stamps to be placed on all public documents, from property deeds to newspapers to playing cards, to be paid in sterling, were underway as the Sugar Act went into effect.44 Approved by the king on March 22, 1765, it consisted of 63 clauses. The fi rst clause listed fi fty-five separate documents subject to stamp tax with each applicable rate. Clauses 2–63 provided for the administration of the act, including penalties for violation of any of its provisions, and the option of prosecution of violators in vice-admiralty courts.45 44 In addition to Bullion, A Great and Necessary Measure, another account of the Stamp Act appears in Morgan and Morgan, The Stamp Act Crisis. 45 The Stamp Act appears at http://www.founding.com/ library/ lbody.cfm?id=87& parent= 17 (May 1, 2003). Revenue aspects of the act are examined in chapter 25.

[ 742 ]

British Politics, Imperial Governance

The Sugar Act, which entailed the imposition of duties on coffee, wines, sugar, and other products, with the rate on molasses initially reduced from 6d. to 3d. a gallon (further reduced to 1d. in 1766, which substantially reduced smuggling and provided a much larger source of revenue than under the previous higher rates), was a modification of existing trade acts. In marked contrast, the Stamp Act was an explicit tax levied by Britain on the colonists. The colonists tolerated, often evading, the trade acts, generally regarding them as the basis of imperial trade policy. The costs of restricted trade in the Navigation Acts were offset, in part, in whole, or even to the net benefit of the colonies, with the benefits of imperial protection, credit, and marketing arrangements. These benefits did not accrue from the Stamp Act, which was a revenue measure plain and simple. The Stamp Act caused a massive wave of resistance. Collectors were forced to resign under threat of violence. Merchants vowed not to import British goods. Sons of Liberty organizations sprang up everywhere. Boycotts became popular. The Stamp Act Congress met in New York City and adopted resolutions against the tax. Pamphleteers denounced this “internal tax.” On the other side of the Atlantic, British merchants complained of the loss of their North American market. Under these pressures, Grenville was forced to resign from office and the king asked Rockingham to form a new

f i g ur e 24.3. The Repeal, or Funeral Procession, of the Stamp Act, depicting men in a funeral procession on the banks of the Thames River with a row of warehouses in the background.

[ 743 ]

chap t er 24

f ig ur e 24.4. A mob of Bostonians pouring tea into the mouth of a loyalist tax collector who has been tarred and feathered.

ministry. His fi rst step was to repeal the Stamp Act, which took effect on March 18, 1766. Repeal was accompanied by the Declaratory Act of 1766. The British government was prepared to yield on the specific stamp taxes, but not totally on the general principle of the doctrine of imperial supremacy. The Declaratory Act of 1766 states “that the said colonies and plantations in America have been, are, and of right ought to be, subordinate unto and dependent on the Imperial Crown and Parliament of Great Britain; and that the King’s Majesty, by and with the advise and consent of the [ 744 ]

British Politics, Imperial Governance

Lords spiritual and temporal and Commons of Great Britain in Parliament assembled, had, hath, and of right ought to have, full power and authority to make laws and statutes of sufficient force and validity to bind the colonies and people of America subjects of the Crown of Great Britain in all cases whatsoever” (emphasis added). The act further stated that “all resolutions, votes, orders, and proceedings in any of the said colonies or plantations whereby the power and authority of the Parliament of Great Britain to make laws and statutes as aforesaid is denied or drawn into question are, and are hereby declared to be, utterly null and void to all intents and purposes whatsoever.”46 Although Parliament repealed the Stamp Act because it was an impediment to business, it fi rmly restated its legal right to tax the colonies. Some members of Parliament stated the doctrine of “virtual representation,” meaning that Parliament had the responsibility to legislate for the empire and that the colonies were part of the British Empire. Cheered by repeal of the Stamp Act, the Americans did not vigorously protest the accompanying Declaratory Act, with its stated power to tax the colonies, at the time. The Quartering Acts of 1765 and 1766, which required the colonists to provide barracks for British troops in unoccupied homes, taverns, and other facilities, generated hostility in New York and other colonies.

The Townshend Acts of 1767

U

nder pr e ssur e from landed interests in Britain, Parliament reduced the land tax from 4s. to 3s. in the pound. In January 1767, Grenville, though no longer chief minister, proposed that the American colonies should support their own defense through an external tax, import duties, that would not transgress the exclusive right of colonial assemblies to levy internal taxes. Acts in the form of duties were be an extension of previous measures that regulated trade but, in the process, collected a revenue. On June 29, 1767, the first Townshend Act was passed. The act imposed import duties on seventy-two items including glass, lead, paint, more than five dozen varieties of paper, and tea, the latter at 3d. per pound (by weight).47 The revenue to be raised differed from that in the Stamp Act in that its fi rst use was to provide for the administration of 46 The phrases in the Declaratory Act are reproduced in A. Berriedale Keith, Constitutional History of the First British Empire (Oxford: Clarendon Press, 1930), 351. 47 The Townshend Act appears at http://www.founding.com/ library/ lbody.cfm?id= 90& parent=17 (May 1, 2003). Details of the revenue measures, granting drawbacks of customs duties on exportation of coffee and cocoa nuts from the colonies, and other provisions appear in chapter 25.

[ 745 ]

chap t er 24

justice and the support of civil government in the colonies without any reference to representative colonial assemblies. The sums used in colonial administration were to be determined by the Crown under warrants countersigned by the Treasury. Any remaining funds were to be paid into the royal exchequer, applied under authority of Parliament for the defense of the colonies as laid down in the Sugar Act. The support of provincial government would pass from locally elected deputies and courts into the hands of men paid by the Crown. Concern arose that an American squirearchy, comparable to British lords and nobles, would seize colonial lands and governments, what the colonists had built over a century and a half. The act authorized the superior or supreme court of justice in each colony to issue writs of assistance to search for violations of the act, which removed the ambiguity in the Navigation Act of 1696 that had failed to specify the court of authority. The colonists viewed these writs as virtually blank search warrants. A complementary act gave a drawback of the duty of 1s. a pound on tea imported into Great Britain on reexportation to the colonies. A third act established an American customs board with the same powers as those of the Commissioners of Customs in Britain to avoid delays in referring matters home for resolution. The Sons of Liberty renewed their boycotts of British goods. Daughters of Liberty increased domestic production of cloth. The economic disruption resulted in the repeal of all the duties in early March 1770, except that on tea, which was retained by Parliament to reaffi rm its power to tax the colonies. New England had reduced its imports from Great Britain from an average of 429,317 sterling for the five-year period 1764–68 to 207,993 in 1769.48 Imports recovered to 394,451 in 1770, rose sharply to 1,420,119 in 1771, totaled 1,964,361 during 1772–74, before plummeting to 71,625 in 1775 with the outbreak of the Revolution. Overall, robust British imports of 2,249,710 in 1764 fell several hundred thousand pounds a year during 1765–77, recovered to 2,157,218 in 1768, then fell 38 percent to 1,336,122 in 1769. Colonial imports from Britain peaked at 4,202,472 in 1771, averaged 2,527,495 during 1772–74, and fell precipitously to 196,162 in 1775. Exports, mainly tobacco from Maryland and Virginia and rice and indigo from the southern colonies, remained relatively stable over the entire period. Trade with the thirteen colonies had been seriously damaged by the Stamp and Townshend acts. As of 1773, the principal sources of British 48

These and the following figures are from Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), which includes a chapter on colonial statistics. See table Eg429–42: “Value of Imports into and Exports from England, by Colony or Locality: 1693–1791,” S-710–13.

[ 746 ]

British Politics, Imperial Governance

f ig ur e 24.5. The Boston Tea Party.

revenue in America stemmed from the duties on molasses, which had been reduced to 1d. per gallon in 1766, and the 3d. per pound duty on tea.

The Tea Act Crisis of 1773

T

h e t e a ac t of 1773 granted a drawback of duties on the exportation of tea from Britain to the American colonies and granted licenses to the East India Company to export tea duty free.49 The act allowed the company to sell tea directly to America without first putting it on public sale in Britain. It eliminated the British middleman, enabled the company to sell tea in America at 10s. per pound, half its former price, and even less than American smugglers charged for it. Despite the reduction in price, the tea still carried a tax levied by Parliament, and also transferred control of the internal distribution of tea in America from the colonists to the company. On December 16, 1773, one hundred fifty thinly disguised Bostonians boarded British ships and dumped 342 chests of tea into the harbor. Variations of the Boston Tea Party took place in other colonies. Tea gradually disappeared from use. 49 The Tea Act of 1773 appears at http://www.founding.com/ library/ lbody.cfm?id=91& parent=17 (May 1, 2003).

[ 747 ]

chap t er 24

Prelude to the Revolution

N

e w s of the destruction of the East India Company’s tea at Boston reached London on January 19, 1774. King George, members of Parliament, and British public opinion turned against the colonies. The British government moved quickly to assert its power and authority. Parliament enacted the Coercive or “Intolerable” Acts. In March the Boston Port Act was passed, which closed the port from June 1, 1774, until the tea was paid for. The Act for the Imperial Administration of Justice was to take effect from June 1, 1774, for three years. It authorized the trial of officials, if indicted in Massachusetts for murder or other capital offenses while acting under the direction of a magistrate for collecting revenue or suppressing riots, to be shifted to Britain or any other colony if the governor, with consent of the Council, determined that an impartial trial could not be held in the colony. The new Quartering Act required soldiers to be accommodated in private homes if necessary. In May, the Massachusetts Regulating Act was passed, which amended the charter and laws of the colony, providing for all officials and the Council to be appointed by the Crown, limiting town meetings to once a year unless written permission was obtained from the governor for a second or additional meetings. Jurors were to be chosen by crown-appointed county sheriffs, replacing the selection by lot of grand jurors elected at town meetings. In June 1774, the Quebec Act was passed, vastly expanding the boundaries of the province and providing for its government by a governor and council appointed by the Crown, without any elected assembly. It was partial to the Catholic Church. The colonists feared that Britain would apply its provisions to the thirteen colonies, dissolve its representative assemblies, establish rule by royally appointed officials, and tax without consent. In response to the Coercive and Quebec acts, Committees of Correspondence were established in twelve of the colonies. Delegates were sent to Philadelphia to meet in the First Continental Congress, which assembled on September 5, 1774. The congress issued a Declaration of Rights and a List of Grievances, and agreed to a boycott of British goods after December 1. In early 1775 the British government declared Massachusetts to be in a state of rebellion. General Gage was instructed to arrest colonial leaders and seize military stores. On April 19, 1775, he dispatched seven hundred men to capture stores at Concord. Warned by the midnight ride of Paul Revere, the colonists assembled at Lexington Green and shots broke out. More militia gathered at Concord Bridge and the British were forced to retreat to Boston. The Second Continental Congress convened on May 10, 1775, became the de facto government of the united colonies, appointed George Washington commander in chief of the army, and, as its most notable achievement, declared independence on July 4, 1776. [ 748 ]

c h ap t e r 2 5
British Taxation of the American Colonies, 1763–1775

C

hap t er 24 set forth the specific taxes imposed by Parliament on the American colonies. Chapter 25 reviews a new currency restriction imposed on the colonies and then quantifies the several taxes imposed by Parliament. It examines the costs and success of British regulatory and revenue measures against the benefits afforded by membership in the British Empire, which included Parliament’s grants of bounties on colonial products imported into Great Britain, drawbacks on products exported from Britain to America, bounties on British exports to the colonies, credit facilities and marketing arrangements supplied by British merchants, and Royal Navy protection.

Money

P

ubl ic and private debts require money for payment. In the seventeenth century, a shortage of specie prompted colonial governments to accept wampum or a wide variety of commodities in tax payments. Merchants, too, had to accept payment in whatever form debts could be paid. The gold and silver coins that came into the colonies quickly drained abroad to pay for imports. In an attempt to retain specie, most of the colonies “cried up” the value of gold and silver coins above that for sterling in England. To impose some uniformity on the value of coin in the colonies, Queen Anne issued a proclamation in 1704, reinforced by a subsequent act of Parliament, setting the maximum value of a specified list of coins based on their silver content to a rate of 133.33 to 100 sterling, what became known as the proclamation rate, and, in many instances, Lawful or Proclamation Money. War time exigencies prompted Massachusetts to invent quasi-official paper money to pay returning soldiers. In 1690 the colony issued paper bills of credit, which were declared acceptable for payment of taxes. Most of the other colonies followed suit in the first three decades of the eighteenth century. Several passed laws stipulating that debts to British merchants could be paid in local currency, which prompted Britain’s concern that debts owed to its merchants would be paid in depreciating colonial paper. [ 749 ]

chap t er 25

To remedy this problem in New England, whose paper bills had sharply depreciated against sterling to as low as ten to one, Parliament passed the Currency Act of 1751.1 Using its share of Parliament’s reimbursement of New England for its participation in several expeditions to Canada, Massachusetts converted to a specie standard in 1751, setting the value of specie at Queen Anne’s proclamation rate. 2 It was followed in Connecticut in 1751 and Rhode Island in 1756 with a shift from Old and New Tenor paper to Proclamation Money. New Hampshire issued sterling bills from 1758 but subsequently joined the other three in setting its currency at the proclamation rate. After 1764 New England again had a common currency in Lawful Money. The 1751 act did not apply to the middle or southern colonies. British merchants trading in Virginia and North Carolina, concerned about the value of their colonial debts and investments, began seriously agitating in 1757 against the use of colonial paper as legal tender for the payment of colonial debts contracted in sterling. 3 Over the next seven years, the British government decided to reform the entire colonial currency system. A principal purpose was to restrict the use of paper money as legal tender in payment of British debts. On April 19, 1764, the king gave his assent to the Currency Act of 1764.4 The act, applying only to the colonies south of New England, left the Currency Act of 1751 intact. In contrast with the 1751 act, that of 1764 did not place limits on the amount of paper money in circulation or the period of redemption, nor did it restrict the issue of paper to government and wartime expenditures. However, it banned colonial paper money as legal tender in private, but not public, debt payments. Provincial taxes, but not debts owed to British merchant-traders, could continue to be paid in colonial paper money. Virginia, which had been at the center of the act, could continue to 1

See chapter 20. The four New England colonies received a total of 634,567 sterling in British aid for their support of British military operations between 1744 and 1750, of which 370,586 was for the expeditions to Canada in 1748 and 1750. Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http://www.studyworld.com/colonial _currency.htm (June 3, 2003). 3 Joseph Albert Ernst, Money and Politics in America, 1755–1775: A Study in the Currency Act of 1764 and the Political Economy of Revolution (Chapel Hill: University of North Carolina Press, 1973), 43–88, and Jack P. Greene and Richard M. Jellison, “The Currency Act of 1764 in Imperial-Colonial Relations, 1764–1776,” William and Mary Quarterly, 3rd ser., 18, no. 4 (October 1961): 485–518. Details of paper money issues in the individual colonies between 1763 and 1775 appear in chapters 26–28. Those affected by the 1764 act appear in chapters 27 and 28. 4 The text of the Currency Act of 1764 can be found at http://ahp.gatech.edu/currency_act _1764.html (December 22, 2005). Its specific features are described in Ernst, Money and Politics in America, 86. 2

[ 750 ]

British Taxation of the American Colonies, 1763–1775

circulate its treasury notes as full legal tender until 1769, when the last wartime issues would be redeemed. In comparison with the Sugar Act of 1764, the Stamp Act of 1765, and the Townshend Act of 1767 (see below), each running dozens of clauses, the Currency Act of 1764 consisted of five clauses that fit on one sheet of paper. Clause 1 stipulated that paper bills of credit could not be used to pay private debts beginning September 1, 1764. Clause 2 prohibited the extension of bills beyond the dates called for in the acts specifying their dates of redemption; those continuing to circulate after the said date would be null and void. Clause 3 levied a fine of a thousand pounds on any governor who assented to any act or order of a local legislature that contravened the first two clauses. Clause 4 let stand the Currency Act of 1751, and clause 5 prohibited the extension of legal tender status to existing bills. A movement to repeal the 1764 act commenced almost immediately.5 A postwar economic slowdown in New York and Pennsylvania prompted their petition for repeal. South Carolina joined the effort, but the movement failed, getting caught up in the politics of the imposition and subsequent repeal of the Townshend duties in the face of militant colonial opposition. In 1770, Parliament abruptly revised the Currency Act of 1764, authorizing New York to issue 120,000 on loan as legal tender for all debts. A follow-on act of 1773 allowed colonial legislatures to cover current and contingent costs by issuing certificates, notes, bills, or debentures on the security of any taxes and duties granted his majesty, and making the same legal tender to the public treasurer in discharge of any taxes, duties, or other debts payable at or into the Treasury. Pennsylvania, New Jersey, and Maryland all struck large amounts of money on loan in the fall of 1773. Virginia issued new paper bills in 1773, with South Carolina following suit the next year.6 The details of these currency issues and the relationship between money and provincial taxes in New England, the middle colonies, and the southern plantation colonies are treated in chapters 26–28.

British Taxes Imposed on America

B

r it ish taxe s collected in America before 1763 include the 1673 plantation duty, assessed at 1d. per pound (by weight) on tobacco and other amounts for enumerated commodities, on intercolonial shipments at the port of clearance to prevent direct colonial trade with Eu rope, and the Molasses Act of 1733. Following the Treaty of Paris, which formally ended the 5 Ernst, Money and Politics in America, 89–242, and Greene and Jellison, “Currency Act of 1764,” 491–504. 6 Ernst, Money and Politics in America, 245–350, and Greene and Jellison, “Currency Act of 1764,” 500–518.

[ 751 ]

chap t er 25 tabl e . Plantation Duty Revenue, 1763–1775 ( £Sterling) Year

Tobacco Duty

1763 1767–69 1769 1770 1771 1772 1773 1774

1,322 945 539 660 806 320 643 1,533

Source: Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 97n53. First published in 1951 by the University of Pennsylvania Press.

French and Indian War, Parliament enacted a series of taxes on America. The three measures were the Sugar Act of 1764 (which reduced the duty on molasses from 6d. to 3d. per gallon, with a further reduction to 1d. in 1766), the Stamp Act of 1765 (repealed in 1766), and the Townshend Act of 1767 (repealed in 1770, save the tax on tea).

The Plantation Duty of 1673

T

he pl an tat ion duty yielded very little revenue (table 25.1). Revenue collection in 1761 and 1762 at 381 and 704 sterling, respectively, markedly rose with peace to 1,322 in 1763. Data for 1769 through 1775, taken from the accounts of Charles Stuart, Declared Accounts, in the Audit Office of Customs reveal that revenue collected from 1767 onward was relatively insignificant, only once surpassing 1,000 sterling in 1774.7

The Sugar Act of 1764

C

ollect ions under the Sugar Act of 1764 were scheduled to begin September 29, 1764. The principal revenue measure was the duty on molasses, reduced from 6d. to 3d. per gallon, and the act was made permanent.

7 Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 79–80, 97n53. (First published in 1951 by the University of Pennsylvania Press.) The plantation duty was an export duty that was collected in the ports of the colonies where shipments originated. Total reported collections are sporadic, missing for some years, and not inclusive of exports of enumerated products from all colonial ports. The bulk of the duty was collected on tobacco.

[ 752 ]

British Taxation of the American Colonies, 1763–1775 tabl e . Sugar Act of 1764 Revenues, 1765–1774 ( £ Sterling) Year

1765 1766 1767 1768 1769 1770 1771 1772 1773 1774

Molasses

11,927 18,488 15,103 15,806 20,328

Sugar

4,145 12,836 8,759 5,269 14,055

Coffee

937 1,425 1,418 818 1,461

Madeira

7,000 6,510 5,341 4,872 6,055

Port

254 433 108 240 417

Pimento

99 107 72 80 159

Indigo

28 139 109 1 95

Sugar Act

All Duties

14,091 26,696 33,844 24,659 39,938 30,910 27,086 42,570 39,531 27,074

36,706 43,578 39,799 34,801 46,225

Notes: Dickerson presents a different set of numbers on page 189n34 from those on page 201 for payments into the Exchequer from the Sugar Act for 1765–67. Numbers in the table are from 201 while those on 189 are, respectively, 3,217, 21,990, and 29,244. Dickerson takes the latter numbers from George Louis Beer, British Colonial Policy, 1754–1765 (Gloucester, MA: Peter Smith, 1958), 283n2 (fi rst published in 1907 by Macmillan). Beer’s source in turn is Treasury Accounts Miscellaneous Revenue (England), vol. 59. Elsewhere, Beer (Treas. Acc. Rev. Misc., bundle 80) cites a November 17, 1766, account of the Custom House in London stating that duties of 41,610 were received from September 29, 1764 onward (283n3). It should be noted that this last number is not based on annual totals and thus does not compare directly with the numbers in the table. Another point of difference appears in table 25.4, which puts total Stamp Act revenue at 3,292. Th at number includes the proceeds of stamp duties in Quebec, Montreal, West Florida, Jamaica, St. Kitts, and Barbados. The problem arises in that Dickerson (201), presents Stamp Act revenue in table 13 of his book, which he states excludes collections in the West Indies. In any case, the difference for the years in question amounts to about 20,000, which, if correct, reduces the annual average per capita tax of the entire period from 30,000 to 28,000, or two-tenths of a penny a year. Sources: Individual items are from Oliver M. Dickerson, The Navigation Acts and the American Revolution, (New York: Octagon Books, 1978), 185 (fi rst published in 1951 by the University of Pennsylvania Press). Totals are from Dickerson (201), and Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), which includes a chapter on colonial statistics. See table Eg420–24: “Imperial Taxes Collected under Several British Revenue Laws: 1765–1774,” S-707.

Three pence proved to be too high when rigidly enforced; the duty was lowered to 1d. per gallon in 1766 and made uniform on both foreign and British molasses. The Sugar Act was chiefly a revenue, not a regulatory, measure, even though it was a modification of the 1733 act. The lower rate from 1766 onward virtually eliminated smuggling, with foreign molasses displacing British molasses in the colonial market. British imports contracted from 326,675 gallons in 1768 to 125,466 gallons in 1772, while foreign molasses increased from 2,824,060 to 4,878,794 gallons in the same period.8 Table 25.2 lists the amounts collected for each of the separate items enumerated in the Sugar Act for 1768–72 and total duties for 1765–74. The table reveals that about half of the revenues came from the duty on molasses, followed by sugar and the new duty on Madeira wine. Duties on coffee, port, pimento, and indigo, especially the latter two, generated little revenue. Total revenues, 8

Dickerson, Navigation Acts and the American Revolution, 85–86.

[ 753 ]

chap t er 25 tabl e . Stamp Act of 1765: Consignments, Cash, Returns, and Balances ( £.s.d. Sterling) Colony

Consignment

Connecticut New Hampshire Pennsylvania Virginia New Jersey Maryland North Carolina New York Massachusetts Rhode Island South Carolina Georgia Total

Returns

Balances

8,702.19. 31 ⁄4

Cash

6,793.8.41 ⁄4

4,146.5.6 3 4⁄ 11,852.15.81 ⁄2 9,684.0.21 ⁄2 5,412.7.11 7,428.1.51 ⁄2 7,446.6.51 ⁄2 12,934.11.111 ⁄4 12,413.16.81 ⁄4 7,059.10.4 10,818.11.31 ⁄2 4,151.2.11 ⁄2 102,050.8.11 1 ⁄2

1,657.7.113⁄4 7,950.10.9 4,948.6.7 1 ⁄2 3,552.8.61 ⁄2 4,948.6.7 1 ⁄2 4,966.11.71 ⁄2 181.3.0 8,245.17.53 4⁄ 3,236.8.9 10,818.11.31 ⁄2 3,820.6.7 3 4⁄ 61,119.7.8

1,909.10.11 2,488.17.7 3,902.4.111⁄2 4,735.13.7 1,859.19.41⁄2 2,479.14.10 2,479.14.10 12,753.8.111 4⁄ 4,167.19. 21⁄2 3,823.1.7 0.0.0 285.15.53 4⁄ 40,886.1.31⁄2

45.0.0 45.0.0

Notes: Consignments are the nominal value of stamped parchment supplied to the distributors of the various districts. Cash is the amount of money returned to Britain. Returns are the nominal value of the unsold stamped paper returned to Britain. Balances are the unsold stamped paper unaccounted for (burned, destroyed, lost). Including Canada, Florida, and the West Indies, total consignments came to 172,586.11.1 3 ⁄4; total cash, 3,292.9.11; returns, 105,138.8.9 1 ⁄4; and balances, 64,155.12.5 1 ⁄2. Source: Adolph Koeppel, “New Discovery from British Archives on the 1765 Tax Stamps for America” (Boyertown, PA: Publication of the American Revenue Association, 1962). The original source is at the Public Record Office, Kew, United Kingdom, under reference A.O. 3./1086, a ledger inscribed “the general account of the american stamp duties by virtue of an act of parliament passed in the fifth year of his present majesty and repealed by an act of parliament in the sixth year of his said majesty’s reign.”

excluding seizures, collected in the thirteen colonies under the Sugar Act between 1765 and 1774 amounted to 306,399, an average of just over 30,000 a year. Parliament presumed that Grenville’s Sugar Act would yield 60,000 a year. Annual and total receipts were well below the anticipated level.9 The white colonial population, averaging about 1.7 million during 1765– 74, paid an annual average per capita tax of about 4.2d., a fraction of a percent of per capita income, on Sugar Act duties. Part of the tax, perhaps a penny or so, was shifted to British merchants and non-resident consumers of these products who traveled in the colonies.

The Stamp Act of 1765

T

he stamp act of 1765, which differed from the Sugar Act in that it was intended to collect a largely “internal” American tax divorced

9

Dora Mae Clark, The Rise of the British Treasury: Colonial Administration in the Eighteenth Century (Hamden, CT: Archon Books, 1969), 136–37. First published in 1960 by Yale University Press.

[ 754 ]

British Taxation of the American Colonies, 1763–1775 tabl e . Sugar Act, Stamp Act, Townshend Act, and Navigation Act Revenues, 1765–1774 ( £ Sterling)

Year

Sugar Act of 1764

Stamp Act of 1765

1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 Total

14,091 26,696 33,844 24,659 39,938 30,910 27,086 42,570 39,531 27,074 306,399

3,292

3,292

Townshend Act of 1767

Total Three Acts

Navigation Acts

Navigation Acts as Percent of 1764–67 Acts

197 13,202 5,561 2,727 4,675 3,300 2,572 921 33,155

17,383 26,696 34,041 37,861 45,499 33,637 31,761 45,870 42,103 27,995 342,846

2,954 7,373 3,905 1,160 1,294 1,828 1,446 1,490 2,517 672 24,639

17.0 27.6 11.5 3.1 2.8 5.4 4.6 3.2 6.0 2.4 7.2

Notes: See notes to table 25.3 for explanation of 3,292 Stamp Act revenue and difference for Sugar Act revenue for 1765–67. Source: Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 201 (fi rst published in 1951 by the University of Pennsylvania Press), and Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), includes a chapter on colonial statistics. See table Eg420–24: “Imperial Taxes Collected under Several British Revenue Laws: 1765–1774,” S-707.

from the regulatory provisions embodied in the Navigation Acts, completely failed. More than one hundred thousand pounds worth of stamps to be affi xed to fifty-five separate kinds of documents were shipped to America. A grand total of only 45 was collected, entirely in Georgia. Detailed amounts of the value of stamps consigned to each colony, the value of stamps returned to Britain, and the value of unaccounted stamps are set forth in table 25.3. The repeal of the Stamp Act took effect on March 18, 1766, four days short of a year of its approval by King George on March 22, 1765.

The Townshend Act of 1767

T

h e t ow ns h e nd Act imposed duties on seventy-two items, including glass, lead, paint, paper, and tea. All but the duty on tea was repealed in 1770. Table 25.4 displays the proceeds of the Townshend duties alongside those of the Sugar and Stamp acts, and other Navigation Acts. The Townshend duties generated over 13,000 sterling in 1768 but, under the pressure of the non-importation agreement, fell sharply to 5,561 in 1769 and 2,727 in 1770, when all duties but the one on tea were withdrawn. Subsequent revenue under the Townshend Act consisted of duty on tea (see table 25.5). [ 755 ]

chap t er 25

For the entire period in the table, 1765–74, revenues from the Navigation Acts amounted to 7.2 percent of the total revenue collected under the three acts of 1764–67, significantly less if the fi rst three years are excluded. In this vein, Oliver Dickerson’s contention that the Navigation Acts were not a significant object of colonial opposition to British taxation appears reasonable. Moreover, the Sugar Act reduced the duty on molasses close to the pre-act customary rate of bribery, and thus seems not to have been a major bone of contention. The Stamp Act, which was repealed, and the Townshend Act, which retained the duty on tea after 1770, were the principal sources of concern in that they were admittedly attempts to levy an internal American tax without the consent of colonial legislatures. Moreover, total taxes of 342,846, or about 33,000 a year, were relatively light, on the order of about half those levied within the thirteen colonies to support their civil establishments. Too, the amount was only a small fraction of the several hundred thousand pounds annual cost of maintaining British troops in the colonies. It was less the amount of taxation, than the principle of taxation without local consent that animated colonial opposition to Britain.

The Burden of the Navigation Acts

O

liver Dickerson’s contention is part of a debate among economic historians that encompassed a good part of the twentieth century. In order of their publication, a sample of major participants includes Curtis P. Nettels, “British Mercantilism and the Economic Development of the Th irteen Colonies,” Journal of Economic History 12, no. 2 (Spring 1952): 105–14; Robert Paul Thomas, “A Quantitative Approach to the Study of the Effects of British Imperial Policy upon Colonial Welfare: Some Preliminary Findings,” Journal of Economic History 25, no. 4 (December 1965): 615–38; Roger L. Ransom, “British Policy and Colonial Growth: Some Implications of the Burden from the Navigation Acts,” Journal of Economic History 28, no. 3 (September 1968): 427–35; Robert Paul Thomas, “British Imperial Policy and the Economic Interpretation of the American Revolution,” Journal of Economic History 28, no. 3 (September 1968): 436–40; Peter D. McClelland, “The Cost to America of British Imperial Policy,” American Economic Review 59, no. 2, Papers and Proceedings of the Eighty-fi rst Annual Meeting of the American Economic Association (May 1969): 370–81; Joseph D. Reid, Jr., “On Navigating the Navigation Acts with Peter D. McClelland: Comment,” American Economic Review 60, no. 5 (December 1970): 949–55; Peter D. McClelland,

[ 756 ]

British Taxation of the American Colonies, 1763–1775

The Burden of the Navigation Acts (continued) “On Navigating the Navigation Acts with Peter McClelland: Reply,” American Economic Review 60, no. 5 (December 1970): 956–58; and Gary M. Walton, “The New Economic History and the Burden of the Navigation Acts,” Economic History Review, n.s., 24, no. 4 (November 1971): 533–42. The debate that took place in these pages addressed several issues. One was an attempt to assess the counterfactual, that is, how much more money would the colonists have earned if they were free from the trade acts to buy and sell in world markets without having first to ship products directly to or purchase goods directly from Great Britain. Freedom from the trade acts would not have meant global free trade because world markets were governed by each nation’s unique mercantile restrictions. But it is possible in an alternative world that colonial sellers could have received higher prices by avoiding the costs of unloading and reloading in British ports, and paid lower prices on foreign imports that bypassed British ports in the absence of the Navigation Acts. Other issues involved questions of methodology, of measurement of potential gains and losses, of the appropriateness of using different mea surements of world prices (for example, Amsterdam prices) for buyers and sellers, of the choice of time periods, and so on. The authors did not agree on the choice of methodology or evidence to settle their differences. The several authors varied on what factors they included in attempting a comprehensive measure of the costs imposed on, and benefits accruing to, the colonists by the trade acts. A few included the value of Royal Navy protection but only one, McClelland, included the value of British credit facilities and marketing arrangements. It would be important to know how much credit might have been provided by other European nations and whether direct sales to foreigners would have been as large in the absence of British marketing connections. No attempt was made to guesstimate this effect, only to note its existence. The total burden of the Navigation Acts on the colonists depended on their annual income. Estimates of per capita income used by the authors in the above list varied by as much as a factor of two, which would double or halve any burden of the Navigation Acts on colonial income. Despite the extensive debate that took place in the pages of these essays, the general conclusion is that the financial burden of the Navigation Acts, apart from the explicit revenue measures of the Sugar, Stamp, and Townshend acts to impose an American tax, were slight, about 1 percent of income, at most 2 percent. Depending on the value of credit facilities and marketing arrangements, the acts may have been a net positive for the colonies. Finally, it should be noted that the colonies most adversely affected by the enumeration provisions in the trade acts—Virginia and Maryland—never listed the Navigation Acts in their grievances against the mother country. Moreover, any perceived burden of the acts was probably less on the eve of Revolution than it was a century or so earlier.

[ 757 ]

chap t er 25

The Tea Tax

T

he taxat ion of tea in Britain underwent periodic changes. Tea was subject to both import duty and an inland excise. In 1748 drawbacks were granted on the inland excise if tea was exported to the colonies, but it was still subject to customs duty under the old acts, which amounted to an ad valorem rate of 112 ⁄3 percent from the days of William and Mary. In 1767, a five-year act valid until 1772 removed all inland excises and provided for complete drawback of all customs duties if tea was exported to Ireland or America. The measure was reenacted in 1772 with the provision that only three-fifths of duties were recovered on exportation. The act was modified in 1773 to permit the East India Company to export tea directly to America without payment of British duty.10 When the Townshend duties were withdrawn, the 3d. per pound duty on tea imported into America was retained. It was intended to reconfirm the principle of Parliament’s right to legislate for, including the right to tax, the American colonies, which it previously asserted in the Declaratory Act of 1766. Table 25.5 displays the duty and amount of tea imported into the colonies between 1761 and 1775. Table 25.5 clearly shows the results of the Boston Tea Party. The quantity of tea imported from Britain fell 90 percent in 1774, with duty receipts declining 76.3 percent. Taking stock, Parliament’s attempt to garner an American tax largely failed. The Sugar Act generated 306,000, but estimates of anticipated receipts in the British Treasury ran to a much higher 760,000. The Stamp Act, anticipating over a million pounds in revenue in the thirteen colonies, raised only 45. Indeed, the expenses incurred in printing forms, shipping them to America, distributing them to collectors, returning unused forms to Britain, and other expenses ran in the thousands of pounds. The Townshend duties, including the duty on tea, were a great disappointment, generating a tad over 33,000, against revenue estimates of about 400,000. Altogether, the three revenue-raising acts projected receipts of 2,160,000 for the ten years 1765 through 1774 inclusive, of which a total of about 343,000, not quite 16 percent, was collected.

British Subsidies: Bounties, Drawbacks, and Export Subsidies

T

he br it ish government had long provided bounties on certain colonial products. The enumeration of naval stores from 1706 was accompanied by bounties on tar, pitch, rosin, turpentine, hemp, masts, and bowsprits. 10

Dickerson, Navigation Acts and the American Revolution, 87–91.

[ 758 ]

British Taxation of the American Colonies, 1763–1775 tabl e . American Tea Imports and Duty Collected, 1761–1775 (Duty Revenue in £ Sterling, Tea Imports in Pounds Weight) Year

1761 1762 1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

Duty ( Sterling)

Tea (Pounds Weight)

56,110 161,588 188,785 489,252 518,424 361,001 480,376 873,744 229,439 110,386 362,257 264,882 739,221 73,274 22,198

9,723 8,189 3,413 4,596 1,667 4,170 987

Notes: The figure of 9,723 listed for 1767 includes receipts for 1767, 1768, and part of 1769, with that of 1769 for the balance of that year. The numbers evidently include duties other than that on tea for the years 1767–71, which accounts for the sharp drop in receipts in 1772. The numbers for 1772–74 are for tea alone. The numbers are net amounts, minus the cost of collection, and only for some of the colonies. For these reasons, the figures differ from the numbers for the Townshend Act in table 25.4. Total duties for 1767–74 amounted to 32,755, but some of this before 1771 is attributable to duty on goods other than tea. Source: Duty is from Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 101 (fi rst published in 1951 by the University of Pennsylvania Press), citing Stuart’s Accounts, Audit Office, Customs, bundle 844, roll 1137, published in Edward Channing, A History of the United States, vol. 3, The American Revolution, 1761–1789 (New York: Macmillan, 1912), 90n. The quantity of tea imported is from Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), which includes a chapter on colonial statistics. See table Eg1151–59: “Tea Exported from England, by Importing Colony: 1761–1775,” S-762–63.

Indigo also received preferential treatment. In 1734 Parliament placed it on the free list. A decade later the General Assembly of South Carolina provided a bounty of 1s. Proclamation Money per pound of indigo exported, with the act to continue for five years, but repealed it in 1745 on the ground that it threatened to increase the burden of taxation. In 1748, in response to South Carolina merchants and the clothiers and dyers of Great Britain, [ 759 ]

chap t er 25

Parliament granted a bounty of 6d. per pound on all indigo grown in the American colonies provided it was worth at least three-fourths as much as the best French product. It also placed indigo on the enumerated list of products that must go directly to Britain. The bounty was continued until March 25, 1770, and then until the end of the next Parliament, when it was reduced to 4d., where it remained until March 25, 1777.11 Exports of indigo from Charleston averaging about 121,000 pounds (by weight) during the three years 1748–50 inclusive rose to 399,541 pounds in 1756. Between 1757 and 1762, annual exports from Charleston averaged close to 500,000 pounds. For the next eleven years through 1773, annual exports amounted to about 520,000 pounds. In 1774 and 1775, exports were over a million pounds each year.12 The provision of a bounty induced an inflow of capital and an expansion of indigo production. In 1748, indigo, the crop for that year valued at 16,465 sterling, earned the colony half as much as deerskins, which, bringing in 36,000, was second in importance to rice. In 1769 earnings from indigo generated 66,600, reaching 200,000 in 1775. The latter represented 35 percent of the value of Carolina exports to Britain.13 An act to remove some of the difficulties in the Sugar Act of 1764 was approved in the following session of Parliament. The new provisions extended the market for colonial lumber, iron, and rice to destinations outside Britain. Privilege to export rice to destinations outside Britain, previously accorded Georgia and South Carolina, was extended to North Carolina. Small coasting vessels were exempt from the requirement of cockets, but vessels sailing in ballast without goods were required to give the molasses bond.14 11

Leila Sellers, Charleston Business on the Eve of the American Revolution (Chapel Hill: University of North Carolina Press, 1934), 161–62. 12 Sellers, Charleston Business on the Eve of the American Revolution, 166. The figures in Sellers are taken from the June 21, 1773, issue of the South Carolina Gazette, which lists annual exports of indigo from Charleston for the years 1748–73 inclusive. These numbers differ from those in table 25.6, which are taken from later census data on historical statistics of the United States. 13 Sellers, Charleston Business on the Eve of the American Revolution, 167. One cannot determine how much additional income the bounty provided for Carolina planters in that it is impossible to know how much indigo would have been planted and sold in the absence of the bounty, what opportunities planters forewent in concentrating their investment and efforts on indigo, and how net profits of indigo compared with those of other products. The data show that indigo production expanded upon Parliament’s grant of a bounty. The benefits of the bounty were largely confi ned to South Carolina, with a small amount to Georgia, which suggests that their residents were substantial beneficiaries of the grants, and that the benefits probably more than compensated for any burdens of the Navigation Acts and the duties in the Sugar, Townshend, and Tea acts. 14 Clark, The Rise of the British Treasury, 119.

[ 760 ]

British Taxation of the American Colonies, 1763–1775

New bounties were granted to importers of bar iron, increasing colonial exports to Britain from 39 tons in 1761 to 2,222 tons in 1771.15 Between 1761 and 1776, British bounties on colonial products totaled 186,144, an annual average exceeding 12,000.16 Bounties on lumber of all kinds, including planks, boards, and dimension timber, were granted after 1765, partly to ease the reception of the Stamp Act of 1765 in the colonies. Exports of lumber from Georgia increased from 307,690 feet in 1761 to 2,163,582 feet in 1771, with increases in other colonies as well. Although the Stamp Act was repealed in 1766, the bounties continued. They were extended after 1771 to high-grade cooperage materials, including pipe, hogshead, and barrel staves and heading of white oak. Exports of staves from Georgia alone more than doubled the first year. Several industries disappeared after the Revolution, unable to survive without the bounties.17 Closely related to bounties was favored tariff treatment for certain colonial products in Great Britain. Iron smelting especially benefited. Free access to the British market for colonial pig and bar iron encouraged the growth of the iron industry in the middle colonies. Lumber received free access in 1721. After 1768, there were periods when colonial wheat, flour, bacon, salt, beef, and pork enjoyed free access. Rawhides and skins were extended similar privilege after 1769, assisting settlers in the back country of Carolina and Georgia.18 15

Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), includes a chapter on colonial statistics. See table Eg867–72: “Bar Iron Imported into England from British North America, by Colony: 1718– 1776,” S-741–42. Recorded bar iron exports to Britain from 1718 onward never exceeded 390 tons before 1764, when it surpassed 1,000 tons for the fi rst time. Each ton weighed 2,240 pounds. Exports of pig iron, which did not receive a bounty, exceeded 2,000 tons every year between 1731 and 1775, save 1746, 1759, and 1762. After the French and Indian War, annual exports rose from the previous level of about 2,000–3,000 to 3,000–5,000 tons a year. See table Eg811–15: “Pig Iron Imported into England from British North America, by Colony: 1723–1776,” S-737–38. 16 Bounties on naval stores totaled 1,438,762 from 1706 to 1774 inclusive, and were averaging 25,000 annually at the time of the Revolution. Indigo bounties between 1748 and 1775 amounted to about 190,000. Average payments for the five years 1771–75 were 13,458, and 20,039 the year hostilities began. Bounties paid up to 1776 on hemp were 5,619, on wood 40,618, and on silk 1,370. Combining known bounties for naval stores, indigo, hemp, wood, and silk yields a fi gure of 1,676,369. Dickerson, Navigation Acts and the American Revolution, 12–15. British reimbursement to New England between 1744 and 1750 for its participation in the war with France totaled 634,567. Reimbursement of all the colonies between 1756 and 1762 for their participation in the French and Indian War, which ended the threats from France and Spain, totaled 1,072,784. Combined reimbursement amounted to 1,707,351, close to the value of known bounties paid on American naval stores, indigo, hemp, wood, and silk. 17 Dickerson, Navigation Acts and the American Revolution, 49–51. 18 Dickerson, Navigation Acts and the American Revolution, 15–17.

[ 761 ]

chap t er 25 tabl e . Indigo Exports, Bounties, and Earnings, 1763–1775 ( £ Sterling)

Year

Indigo (lbs.)

Indigo Bounty

Price (Shillings Per Lb.)

Earnings (Shillings Sterling)

1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

447,700 543,000 351,900 506,200 n.a. 517,710 416,600 573,100 454,100 759,800 720,600 747,200 1,122,20

7,695 9,026 7,484 6,808 8,840 6,520 6,995 8,732 9,108 9,445 14,575 14,137 20,039

4.03 3.43 3.28 3.10 2.98 3.13 3.76 3.65 4.46 5.52 4.14 4.71 4.32

1,804,231 1,862,490 1,154,232 1,569,220

90,216 93,125 57,712 78,461

8.5 9.7 13.0 8.7

1,620,432 1,566,416 2,091,815 2,025,286 4,194,096 2,983,284 3,519,312 4,847,904

81,022 78,321 104,591 101,264 209,705 149,164 175,966 242,395

8.0 8.9 8.3 9.0 4.5 9.8 8.0 8.3

Earnings ()

Bounty as Percent of Earnings

Notes: Indigo exports for 1773–75 are only for South Carolina. (Georgia fi gures for 1763–72 ranged between 8,700 and 22,300 pounds, a small fraction of the total.) Annual exports in Leila Sellers, Charleston Business on the Eve of the American Revolution (Chapel Hill: University of North Carolina Press, 1934), differs from that in table 25.6. Sources: Indigo exports: Historical Statistics of the United States: Table Eg1027–32. Indigo and silk exported from South Carolina and Georgia: 1747–1778,” S-749–50; indigo bounties: Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 28 (fi rst published in 1951 by the University of Pennsylvania Press); South Carolina indigo prices: Peter A. Coclanis, The Shadow of a Dream: Economic Life and Death in the South Carolina Low Country, 1670–1920 (New York and Oxford: Oxford University Press, 1989), 107.

Table 25.6 puts the value of bounties on indigo in the context of total output and value. Column 2 lists annual exports of indigo in pounds. Column 3 presents annual bounty payments granted by Parliament. Column 4 lists the annual wholesale price of indigo in South Carolina. Columns 5 and 6 compute annual earnings of indigo production (output times price) in shillings and pounds sterling. Column 7 calculates the bounty as a share of the value of annual output. Note that the value of output responds to price, with the unusually high price of 1772 doubling earnings compared with each of the prior two years. Rising output coupled with high prices during 1772–75 generated historically high earnings for indigo planters. With the exception of 1765 and 1772, when bounties were historically high and low, respectively, as a percent of annual earnings, bounties generally amounted to 8–10 percent of the value of annual sales. The outbreak of the Revolution reduced the bounty payment in 1776 to a much smaller 3,769. Indigo bounties between 1763 and 1775 inclusive totaled 129,404, just under 10,000 a year. By way of comparison, they represented 37.7 percent of [ 762 ]

British Taxation of the American Colonies, 1763–1775

the combined collections of the Sugar, Stamp, and Townshend acts over the same period. But the economic impact of the indigo bounties is likely greater than the value of the bounties in that they fostered a dramatic increase in the output and income of South Carolina and Georgia planters. It is impossible to estimate the earnings of indigo planters if the product was not enumerated and could be sold on worldwide markets. Along with bounties on colonial products exported to Britain, Parliament provided drawbacks on goods exported from Britain to America and bounties on British goods exported to America. Drawbacks on goods shipped to America meant that the colonists paid less than did Britons for comparable goods (after deducting shipping, insurance, and related costs), and that Britons were taxed to subsidize British production, British merchants, and colonial consumers. The net subsidy to the colonists stemming from drawbacks and export bounties on British producers cannot be readily determined. It would be necessary to know the elasticity of demand with respect to the prices of items imported into the colonies. One approach is to determine the reduction in net prices the colonists paid stemming from drawbacks and British export bounties and the consequential increase in consumption, which would give a very rough estimate of the value of these British subsidies to the Americans.19 A fair conclusion is that colonial benefits were positive. A third category of benefits to Americans was the subsidies embodied in acts granting bounties on British exports. 20 The first in 1713 granted 1d. per yard on sailcloth, doubled permanently to 2d. per yard from 1717. Next in 1721 was silk. Six categories of silk exports, with an export bounty of 3d.–4s. per pound of goods, were enacted to encourage the use of English-made silk in place of Persian, Chinese, and East India products. The Sugar Act of 1764 enhanced this bounty in assessing a duty of 2s. per pound on all foreign silks imported into colonies, regardless of pure or mixed silk goods. The next item approved in 1731 was gunpowder, an especially important item for hunting and protection from Indians. Exporters received a bounty of 4s. per barrel of powder. The bounty was underwritten with receipts from general British duties on imports. A fourth category was linen, granted in 1742. The bounty was set at 1d. per yard if valued at 6d. and over per yard; 1 ⁄2d. was granted for goods valued below 6d. per yard. Export bounties on linen were substantial. The total value of bounties on British and Irish linen exported from England to America, based on data compiled by the London Custom House between 1757 and 1775 inclusive, was 455,098. Scotch bounties were 60 percent that of the English, putting 19 It is difficult to fi nd accurate data on the prices of the several products eligible for drawbacks and export bounties. Too, it would be necessary to know the price of these products consumed in America if imports were not restricted by the imperial commercial system. 20 Dickerson, Navigation Acts and the American Revolution, 71–75.

[ 763 ]

chap t er 25

total British bounties at 728,166, an annual average above 38,000. British exporters made repeated efforts to prevent foreign linen from securing bounties authorized for the native product. 21 A remaining category included cordage. In 1766, an export bounty on cordage paid 1s. 3 ⁄4d. per hundredweight if made of American- or Britishgrown hemp. Dickerson estimates that export bounties on sailcloth, gunpowder, silk products, cordage, refined sugar, and some minor items averaged about the same as those on linen exports from England. Table 25.7 presents the value of indigo bounties during 1763–75, along with total bounties on imports from America, drawbacks on exports from Britain to America, and export bounties on British/Scottish goods shipped to America for 1770–74. Columns 2 and 3 indicate that the bulk of bounties on American imports was largely paid on indigo, with naval stores and other items receiving a minority of the benefit. Columns 4 and 5 show the much larger value of drawbacks and export bounties on goods shipped to America to the benefit of colonial consumers. To determine the net benefit requires knowledge of the prices, which is not available, of the subsidized British products or goods shipped from Britain that producers in other nations would have charged in the absence of imperial restrictions on trade.

Summary

T

he br it ish t r ea sury anticipated revenue of more than 2 million from the Sugar, Stamp, and Townshend acts, enough to provide some 200,000 a year to maintain a standing army in the American colonies. His majesty’s revenue officers only collected a total of about 343,000, about a sixth of the hoped-for sum. From the standpoint of securing an American tax, the efforts of Parliament clearly failed, not to mention the loss of sales to British merchants and the Revolution that severed the colonies from the empire. Moreover, bounties, drawbacks, and export subsidies to British merchants more than offset the amount of revenue collected in the American tax in the form of cash benefits to colonial planters and consumers of imported goods. In retrospect, it appears that the king, Parliament, and the British people would have fared better following Walpole’s policy of salutary neglect, and the pro-American policies of Pitt and Newcastle. The chapters that follow describe and analyze taxes levied in the colonies to support provincial, county, town, educational, religious, and other expenditures. To anticipate the findings in the form of several previously 21 It is difficult to fi nd prices on linen or the total sterling value of exports shipped to America to estimate the percentage of the price attributable to bounties, which is the subsidy provided to colonial consumers. Too, it would be necessary to know the price of linen consumed in America if imports were not restricted by the imperial commercial system.

[ 764 ]

British Taxation of the American Colonies, 1763–1775 tabl e . Indigo Bounties, Total British Bounties on American Imports, Drawbacks on Goods Exported to America, and Export Bounties on British Goods Exported to America, 1763–1775 ( £ Sterling)

Year

Indigo

1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776

7,695 9,026 7,484 6,808 8,840 6,520 6,995 8,732 9,108 9,445 14,575 14,137 20,039 3,769

Total Bounties on Imports from America

Drawbacks on Exports to America

Export Bounties on British/Scottish Goods to America

14,577 13,768 12,751 17,827 16,694

268,956 409,064 344,699 279,560 318,555

51,774 78,539 62,040 49,989 73,886

Notes: Dickerson states that customs officials did not keep separate lists of drawbacks for goods shipped to America, although the colonies were heavily favored. He estimated the value of drawbacks as the same percentage of the ratio of the value of foreign exports to America compared with total exports. The value of drawbacks of all British exports during 1770–74 comes to 1,611,834, an annual average of 322,367 (Navigation Acts and the American Revolution, 75, 96). Sources: Indigo bounties: Oliver M. Dickerson, The Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 28 (fi rst published in 1951 by the University of Pennsylvania Press); total bounties and drawbacks: Dickerson, Navigation Acts and the American Revolution, 75.

cited sources, British officials surmised that the total cost of the civil government in the thirteen colonies was in the neighborhood of 60,000 sterling. The British government collected less than 35,000 a year of the projected 200,000 it sought in its American taxes and Navigation Act revenues. If it had been able to realize its target, taxes on the colonists would have tripled, without any limit in sight. In this context, one can understand colonial opposition to the principle of an American tax levied without the consent of local legislatures.

[ 765 ]

c h ap t e r 2 6
Taxation of the New England Colonies, 1763–1775

N

e w e n g l and was largely settled in 1763, with a population numbering 462,678. Over the next dozen years, it grew to 577,928, a modest increase of 24.9 percent compared with previous periods. New England remained largely rural, with a sprinkling of several hundred small towns. The only city of any real size was Boston. The 1764 census of Massachusetts counted 15,520 Bostonians, which increased to about 16,000 on the eve of the Revolution, just over 6 percent of the provincial population.1 The next largest town was Marblehead with 4,954 residents, followed by Salem and Dartmouth, each with over 4,000. Most had fewer than 1,000. Rhode Island had two towns, Newport and Providence, exceeding 4,000. 2 The 1767 provincial census of New Hampshire counted 4,455 residents of Portsmouth, 2,389 in Londonderry, ten towns of 1,000–2,000, and all others with less than 1,000.3 A 1756 census of Connecticut revealed three towns of 5,000– 6,000, two of 4,000–5,000, five of 3,000–4,000, with the remaining fiftynine fewer than 3,000.4 New England, especially Massachusetts, was heavily affected by British attempts to impose an American tax, which brought about the closure of the Port of Boston in 1774 and the amendment of its charter providing for crown appointment of all royal officials and the Council.

Money

T

h e c ur r e nc y ac t of 1751 stabilized the value of all four New England currencies at the proclamation rate, or Lawful Money (LM), by 1765.5 Even though Massachusetts adopted a specie standard in 1751, it 1

The 1764 provincial census of Massachusetts is reproduced in Thomas L. Purvis, ed., Colonial America to 1763, Almanacs of American Life (New York: Facts on File, 1999), table 5.8. The provincial census of Massachusetts for 1764 and that of Boston for 1775 are from Benjamin W. Labaree, Colonial Massachusetts: A History (Millwood, NY: KTO Press, 1979), 136–41, 161. 2 Purvis, Almanacs of American Life, table 5.11: “Census of Rhode Island Population, 1748,” 142. 3 Purvis, Almanacs of American Life, table 5.13: “Provincial Census of New Hampshire, 1767,” 142–43. 4 Purvis, Almanacs of American Life, table 5.16: “Census of Connecticut Population, 1756,” 147. 5 See chapters 20 and 21.

[ 766 ]

Taxation of the New England Colonies, 1763–1775

f ig ur e 26.1. Currency exchange table, 1775.

continued to issue paper money each year in the form of treasurer’s certificates through 1774, backed with a pledge of equal or greater taxation to ensure their timely redemption. Bills of credit amounting to 600,000 Old Tenor (OT) remained outstanding through 1774, but played little role in the form of a circulating currency.6 Connecticut resorted to treasury notes less frequently, borrowing at 5 percent interest in 1763, 1764, 1770, 1771, 1773, and 1775, backing them with pledges of taxation. New Hampshire did not issue any new paper currency during 1763–75 owing to its holding of parliamentary reimbursement funds on loan in London, which generated sufficient interest income to redeem bills of credit as they came due.7 The relationship between treasury notes, bills of credit, and taxes in New England is treated in the remaining sections of this chapter. Here the focus is on the repayment of the remaining war-related debts incurred in the four colonies. 6 Roger W. Weiss, “The Colonial Monetary Standard of Massachusetts,” Economic History Review, n.s., 27, no. 4 (November 1974): 587. 7 Lawrence Henry Gipson, The Coming of the Revolution, 1763–1775 (New York and Evanston, IL: Harper and Row, 1954), 121–24.

[ 767 ]

chap t er 26

Massachusetts was able to redeem most of its debt by the beginning of 1770. Governor Francis Bernard (1760–69) informed the Earl of Hillsborough that the remaining debt of the colony in 1767 amounted to 75,000 sterling. Governor Thomas Hutchinson (1769–74) wrote that the debt had declined to 40,000 by 1770, which could be liquidated with a poll tax not exceeding 6s. The General Court chose to retain, instead of redeem, the debt as an argument to oppose the imposition of an American tax by Parliament. Money, especially specie, was so abundant that Massachusetts became known as “the silver money colony.”8 For its participation in the French and Indian War, Connecticut drew on its reimbursement by importing specie, or giving bills of exchange, valued at 237,591 sterling, or 316,788 LM, excluding fees paid at the Exchequer or Treasury. British funds permitted the reduction of tax rates below those enacted for 1763 and 1764, with that of 1765 slashed to 1d. even though it was originally set at 7d. No new direct taxes were levied from 1766 to 1770. By 1769 the colony’s debt had declined to 31,713 LM, with tax arrears a much larger 45,369. Taxes were reinstated at the end of 1770 at 2d./ assessed valuation, thereafter fluctuating between a penny or two.9 In Rhode Island, the amount of outstanding Lawful Money in early 1764 amounted to about 40,000.10 Two-thirds was scheduled for redemption within the year, leaving only 13,000 to be retired. A tax of 12,000 LM was voted in October 1763 to cover general government charges, after which taxes were imposed to fund the annual cost of provincial government, liquidate outstanding LM bills, and retire the small sum of OT bills still in circulation. These goals were met with small annual levies through late 1766. None was enacted during 1767–68, when the legislature appropriated the remaining portion of its reimbursement to meet expenses. Thereafter it levied annual taxes of about 10,000–12,000 LM, of which 2,000–4,000 met the annual charges of government and the balance to redeem LM bills.11 Rhode Island authorized only two post-1763 issues of bills of credit, for 1,000 LM on March 1, 1766, of which 659 6s. 8 3 ⁄4d. was emitted, and 2,000 LM on February 28, 1767.12 In New Hampshire, most of the five war issues were burned by 1764. The remaining debt consisted of the treasurer’s sterling certificates. 8

Gipson, Coming of the Revolution, 124–26. Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 74–75. 10 As indicated in chapter 21, Rhode Island received total reimbursement of 41,666 sterling (55,441 LM), which was sufficient to redeem more than half of the colony’s war debts. 11 Gipson, The Triumphant Empire, 71–72. 12 Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997), 388–89. 9

[ 768 ]

Taxation of the New England Colonies, 1763–1775

Utilizing funds held in London, the legislature resolved that 6,824 in sterling bills and 11,920 New Tenor (NT) bills be brought into the Treasury by the fall of 1766 for burning before the General Assembly. In 1767 another 5,411 in sterling bills was redeemed in bills of exchange drawn on London, followed by another 1,549 in 1768, against which 44 in bills of exchange was drawn and the remainder exchanged for specie.13 By 1768, the province was virtually debt free.

Taxation in Massachusetts, 1763–1775

P

r ov i nc i al taxat ion continued as before, consisting of direct taxes on polls and estates, duties on wine, spirits, tobacco, sugar, molasses, and other non-British imports, save exempted commodities, tonnage, excises on wine, spirits, and citrus, a few lotteries, and local assessments on polls and estates to finance bridges, roads, meeting houses, and other local infrastructure.14 Recall that Massachusetts restored a specie standard in 1751.15 In addition to annual taxes that were levied and collected, the General Court authorized the treasurer to issue treasury certificates each year to borrow a specific sum of money to pay provincial bills and redeem them when they came due with interest of 6 percent, reduced to 5 percent beginning in 1765/66.16 The General Court levied taxes on polls and estates to guarantee full redemption of the certificates, but the full amount stated in the acts was not collected. Public finance consisted in large measure of rolling over major portions of previous certificates, enabling the General Court to keep taxes light yet meet its need for funds. Treasurer’s certificates, which constituted Lawful Money, were a valuable interest-earning asset for those with cash to invest. Table 26.1 displays the issue and redemption of treasurer’s certificates. Column 1 lists the year ending May 31, so that 1763/64 is the fiscal year June 1, 1763, through May 31, 1764. Column 2 presents the value of new certificates, the sums borrowed during the year. Column 3 lists the value of redeemed certificates that was burned, column 4 outstanding certificates, column 5 certificates redeemed and held in the Treasury but not burned, and column 6 certificates held by lenders, purchasers of the certificates. 13

Gipson, The Triumphant Empire, 64–67. A brief summary of taxation in the four New England colonies between 1763 and 1775 appears in Robert A. Becker, Revolution, Reform, and the Politics of American Taxation, 1763–1783 (Baton Rouge and London: Louisiana State University Press, 1980), 8–41. 15 The ledgers and journals of the treasurers are available beginning in 1753/54. Debits and credits in pounds, shillings, pence Massachusetts LM are entered in gold and silver, not bills or treasurer’s certificates. 16 The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 4:810–12. 14

[ 769 ]

chap t er 26 tabl e . Massachusetts Treasurer’s Certificates, 1763/64–1773/74 ( £ Massachusetts LM) Year Ending May 31

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74

Issued (Sums Borrowed)

Canceled (Burned)

72,334 131,063 12,385 197,000 157,000 125,850 100,000 88,158 75,091 909 16,000

175,506 181,654 87,774 247,020 203,123 160,978 129,468 102,543 84,648 37,078

Outstanding

387,009 336,418 216,029 211,000 164,877 129,749 100,281 85,896 76,339 77,248 56,170

Redeemed and in Treasury

Held by Lenders

56,862 57,129 70,535 41,307 17,991 18,094 6,020

330,147 279,289 190,494 169,693 146,886 111,665 94,261

Source: Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” vol. 34, 1992, Essays in History Published by the Corcoran Department of History at the University of Virginia, http:// www .studyworld .com/colonial _currency.htm ( June 3, 2005), table interspersed between pages 13 and 14. Specific legislation authorizing the issue of trea sur er’s certificates appears in The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, vol. 4 (Boston: Rand, Avery, and Company, 1881), 665–66, 726–27, 810–11, 880–81, 958–59, 1024–25, Acts and Resolves of Massachusetts Bay, vol. 5 (1881), 28–30, 107–9, 299–300, 339–40, 390–92. The amount of each authorization enacted in legislation, some laws approving sums to be issued over several years, differs from the actual amount of certificates issued by the trea sur er over the course of each fiscal year presented in the table compiled by Brock.

Column 2 shows that new borrowing fell to a low of 12,385 in 1765/66 due to the use of British reimbursement to redeem more than 75,000 that year. Heavy borrowing resumed in 1766/67, but fell more than 25,000 a year over the next three years. In 1772/73 the treasurer virtually ceased his borrowing. Column 4 shows the steady decline in outstanding debt, from 387,009 LM at the beginning of the period to 56,170 at the end, a trivial sum compared to Great Britain’s debt of more than 135 million sterling. In mid-1774 per capita public debt in Massachusetts amounted to 4 1 ⁄2s. LM, a little more than 3s. sterling, as against 15 13s. in Britain, more than one hundred times greater. In practice, the proceeds of direct and indirect taxes were commingled to fi nance provincial expenditure and redeem debt. In some years, surpluses in the Treasury arising from healthy receipts of indirect taxes were appropriated to meet provincial expenditures without the need for a new direct tax levy. Rates and levels of direct and indirect taxation appear in tables 26.2 and 26.3. Table 26.4 itemizes the debits and credits of the treasurer’s statements, with the qualification that information for [ 770 ]

Taxation of the New England Colonies, 1763–1775

some years is incomplete or missing.17 The treasurer’s statements itemize receipt of indirect, but not direct, taxes, which makes it impossible to determine the degree of noncompliance, indicated in the sustained high level of arrears.

Direct Taxation

T

able 26.2 displays the levels and rates of direct taxes during 1763–75, save the years in which records do not exist or fail to provide comprehensive information. Tax levies were generally voted during the last week in May, with the levies to run from mid-year to the next mid-year. A specific levy in Lawful Money was stipulated and apportioned to the towns and counties for collection, along with pro-rata fractions of the tax on polls and estates for representatives’ pay and, when imposed, fines on towns that failed to send delegates to sessions of the General Court. The poll tax on men aged sixteen and over ranged from a high of 6s. 8d. in 1763/64 to a low of 1s. 1d. in 1774/75. Adding in the pro-rata share for representatives’ pay increased the range to between 6s. 11d. and 1s. 4d. The rate on property, adjusted up or down to collect the revenue stated in the legislation, remained at 12d./ valuation, a rate of 5 percent, over the entire period. For purposes of assessment, the act applying to 1769/70 rated an ox at 40s., cow at 30s., horse at 40s., swine at 8s., goat at 3s., house and buildings at six years’ rent, and servants at the discretion of masters. Table 26.2 shows the decline in direct tax levies. Including pay and fines, the levy was set at just over 52,000 LM for 1763/64. Depending on pay and the imposition of any fines, the tax remained above 50,000 in the next two fiscal years 1764/66, fell to about 42,000–43,000 a year in the two years 1766/68, none in 1768/69, over 34,000 in 1769/70, over 28,000 in 1770/71, 27,300 in 1771/72, 27,500 in 1772/73, over 29,000 in 1773/74 (of which a disproportionate share was for representatives’ pay), and just under 13,000 in 1774/75. The levy at the end of the period was a fifth that at the beginning. Direct tax of 12,960 9s. LM (in column 3 in table 26.4) amounts to a little more than a shilling a head. To put this low level in perspective, arrears of direct taxes (column 2 in table 26.4) were more than four times greater than the final levy enacted before the Revolution. The lower levies in the few years preceding the Revolution reflected, in part, opposition to royal encroachments on the colony’s previous autonomy. The desire of members in the General Court to hold down direct taxes is clearly stated in the legislative record. In the May 1768 vote authorizing 17

Microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950, and treasurer’s annual statements in the Massachusetts State Archives.

[ 771 ]

tabl e . Massachusetts Apportioned Direct Taxes, 1763/64–1774/75 ( £.s.d. Massachusetts LM) c ol u m n 1

Year

[ 772 ]

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74 1774/75

c olum n 2 Poll and Property Tax (.s.d.)

50,171.19.6 50,032.14.9 50,097.18.1 40,135.3.11 40,558.5.4 0.0.0 30,306.13.11 25,734.4.0 27,300.0.0 27,500.0.0 20,625.0.0 10,312.10.0

c olum n 3

Representatives’ Pay (.s.d.)

1,828.2.0 1,849.2.6 2,412.19.6 2,553.2.6 3,026.15.0

column 4

No-show Fine (.s.d.)

72.0.0 158.3.0 98.7.0

3,829.14.0 2,559.17.0

7,720.15.0 2,301.15.0

1,112.11.3 346.4.0

column 5

column 6

column 7

column 8

Males 16+ Poll Rate

Rounded in Prop. Additional Poll Rate

c olu m n 9

Total Poll Rate

Prop. Tax (d./)

Per Capita Direct Tax (Massachusetts d.)

6s. 8d. 6s. 8d. 6s. 8d. 5s. 4d. 5s. 4d.

3d. 3d. 4d. 4d. 5d.

6s. 11d. 6s. 11d. 7s. 5s. 8d. 5s. 9d.

12d. 12d. 12d. 12d. 12d.

57.9 56.9 56.9 45.5 45.7

4s. 3s. 4d.

6d. 4d.

4s. 6d. 3s. 8d.

12d. 12d.

34.8 28.5

2s. 2d. 1s. 1d.

9d. 3d.

2s. 11d. 1s. 4d.

12d. 12d.

28.4 12.3

Sources: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, vol. 4 (Boston: Rand, Avery, and Company, 1881), 645–58, 706–19, 818–30, 883–97, 959–71; Acts and Resolves of Massachusetts Bay, vol. 5 (1881), 5–18, 89–104, 305–19, 395–407; annual trea surer’s statements; and Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association (Boston: T. R. Marvin, 1847), vol. 1, part 3, 375, 379. Felt has no entries for the three fi scal years 1769/72.

Taxation of the New England Colonies, 1763–1775

the treasurer to borrow 100,000, the text of the law states the wish of the court to minimize the tax burden by rolling over existing loans and gradually repaying them with surplus revenues.18 The record noted that a surplus of 18,000 remained from 1767/68 that would cover the cost of ordinary provincial expenditure for 1768/69. The record further stated that there would be a surplus of 32,140 in the Treasury by June 1769, which, with new borrowing, would be sufficient to redeem notes coming due. In a later act, the court appropriated a surplus of 8,500 to supply the government for 1771/72, and one of 10,300 for 1772/73.19 In a session of September 1770 the General Court repealed its levy of 92,500 of a prior act when it apportioned a much smaller 27,300 in its place. 20 Each act from 1763 apportioning poll and estate taxes, set well below the level of treasurer’s certificates coming due that year, stated that it would be “burdensome” to levy a heavy tax to redeem all the certificates. Since the holders of the certificates were willing to retain them, it would be better to replace the old notes with new ones. The authority to issue new certificates specified how the funds would be divided between civil administration and redemption of notes. The former was typically on the order of 10–20 percent of the authorization. Given the general health of the provincial Treasury, the towns felt little pressure to reduce the level of arrears after 1769. Column 2 in table 26.4, compiled from the treasurer’s annual statements, reveals outstanding taxes of 95,376 due from the towns in June 1763. Arrears fell to 51,232 in July 1769, thereafter hovering in the 60,000 range through the 1774/75 fiscal year. 21 From 1769 onward outstanding taxes substantially exceeded new levies, reaching six times the final 1774/75 levy. Given the general disinclination of provincial inhabitants to pay taxes in a timely manner, small wonder there was strong resistance to British efforts to impose an American tax.

Indirect Taxes

I

n di r e c t tax e s consisted of import duties and domestic excises. Dutiable items included wine, rum, brandy, and spirits, tobacco, sugar, molasses, bar iron (only in 1765/66), tea, other goods not specifically exempt or of British origin, and tonnage of one pound of pistol powder per ton of vessels. Items subject to excises included wine and spirits, and lemons, oranges, and limes used in making punch. Table 26.3 sets forth the rates of duty. 18

Acts and Resolves of Massachusetts Bay, 4:1024–25. Acts and Resolves of Massachusetts Bay, vol. 5 (1881), 170–71, 208. 20 Acts and Resolves of Massachusetts Bay, 5:89–104. 21 Becker, Politics of American Taxation, 236, appendix, table 7: “Outstanding Taxes Due from Massachusetts Towns, 1763–1773,” and treasurer’s statements. 19

[ 773 ]

tabl e . Massachusetts Duties and Tonnage, 1763/64–1774/75 (Massachusetts LM) c ol u m n 1 Year

[ 774 ]

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74 1774/75

c olum n 2

c olum n 3

column 4

column 5

column 6

column 7

colu m n 8

c ol u m n 9

All Wines (Per Pipe)

Hogshead Rum 100 Gallons

Other NonEnglish Goods

Hogshead Sugar

Hogshead Molasses

Hogshead Tobacco

American Tea (Per Pound)

Tonnage (Per Ton)

10s. 10s. 5s. 5s. 5s. 5s. 5s. 5s. 5s. 5s. 5s. 5s.

8s. 8s. 8s. 16s. 8s. 8s. 8s. 8s. 8s. 8s. 8s. 8s.

4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s. 4d./20s.

4d. 4d. 4d. 4d.

4d. 4d. 4d. 4d.

10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s. 10s.

4d. 4d. 4d. 4d. 4d.

1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr. 1 pd. pwdr.

Notes: The tax year for duties and tonnage runs from March 25 to March 25 of the following year. Import duty of 8s. per ton was imposed on bar iron only in 1765/66. Source: The Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay (Boston: Rand, Avery, and Company, 1881), 4:609–14, 669–74, 767–76, 767–72, 850–85, 913–17, 977–81, Acts and Resolves of Massachusetts Bay, vol. 5 (1881), 21–26, 75–82, 171, 251, 346.

Taxation of the New England Colonies, 1763–1775

Duty on wine was reduced from 10s. to 5s. per pipe beginning March 25, 1765, where it remained through March 25, 1775. With the exception of 1766/67, duty on a hogshead of rum was set at 8s. All other unspecified non-English goods were assessed at 5 percent of their value, stated as 4d./. Legislation does not mention rates for sugar and molasses from 1767/68 and American tea imports from 1768/69. The rate on tobacco was constant at 10s. per hogshead and that of tonnage at one pound of pistol powder per vessel ton. Twelve percent provision for leakage was allowed for wine. Duties were generally double on imported products belonging to inhabitants of other provinces. In those years for which duties were not explicitly stated for sugar, molasses, and tea, rates were imposed on non-resident importers at double the previous historical levels. The preferential or zero rate for residents of Massachusetts was designed to encourage local shipping, a policy that was very successful. In every case, substantial drawbacks, or refunds, amounting to 90 percent or more for residents, but on the order of only half for non-residents, were granted on imports that were reexported. Exempted commodities included provisions (foodstuffs), salt, cotton wool, bar and pig iron, mahogany, brazilwood, black walnut, lignum vitae, red cedar, logwood, hemp, raw skins and hides, and all prize goods brought into and condemned in the province. The entries for duties (column 7) in the treasurer’s statements (table 26.4) indicate that little revenue was collected during 1763–74 and no excises after 1769/70. Excises were set at 8d. per gallon on brandy, rum, and spirits, cut in half in 1766/67, with those on wine at 12d. per gallon, cut to 6d. in 1766/67. A hundred lemons, including oranges from March 25, 1765, and limes were charged 8s. and 3s., respectively. 22 There are no records of acts, resolves, or orders in the proceedings of the General Court extending or imposing excises for fiscal years after 1766/67, although receipts from excises continue to appear in the treasurer’s statements through 1769/70. These entries may reflect the collectors’ remission of arrears to the treasurer.23 References to excises appear in several votes of supply for general provincial expenditure. An act approved in the session beginning May 1765 noted that a surplus of 16,800 in the liquor excise account was sufficient to pay the annual expenses of provincial government for 1765/66. A surplus of

22

Acts and Resolves of Massachusetts Bay, 4:493, 753, 840–41. Th is point is stated in Gipson, The Triumphant Empire, 61n34. Gipson cites as his source Joseph B. Felt, “Statistics of Taxation in Massachusetts, Including Valuation and Population,” Collections of the American Statistical Association, vol. 1, part 3 (Boston: T. R. Marvin, 1847), 375, 379. Gipson also notes that the difference between a levy and collection of a tax varied with the sale of lands, parliamentary reimbursement, or other income, which might reduce or eliminate the collection of the legislative act. 23

[ 775 ]

chap t er 26 tabl e . Massachusetts Treasurer’s Statements and House of Representatives Audit Committee Reports, 1763/64–1774/75 (£.s.d. LM) Debits c ol u m n 1

colum n 2

c olum n 3

c olum n 4

column 5

column 6

Year

Beginning FY Outstanding Taxes

Current Tax Year Levy

Balance due from Last Account

Amount Borrowed

Excises

95,375.16.6 72,493.16.5 79,549.9.2 85,139.16.5 82,542.11.9 87,304.7.6 51,232.2.8 65,556.15.9 61,753.13.5 67,118.16.9 61,732.5.4 64,313.16.9

52,071.15.8 51,881.17.3 52,659.0.7 42,786.13.5 43,584.0.4 0.0.0 34,136.7.11 28,294.1.0 27,300.0.0 27,500.0.0 29,449.6.0 12,960.9.0

123,928.15.8 101,954.7.7 131,948.1.0 104,971.16.11 77,196.14.1 53,270.18.2 38,974.6.1 13,719.18.2 16,579.11.5 12,665.3.11 32,175.1.5 19,597.6.1

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74 1774/75n

72,334.0.0 131,063.0.0 12,385.0.0 197,000.0.0 157,000.0.0 125,850.0.0 100,000.0.0 88,185.0.0 75,091.0.0 909.0.0 13,000.0.0

6,787.12.11 27,722.4.10 12,240.0.1 6,422.15.11 2,366.1.5 2,298.3.0

Credits c ol u m n 1

c olum n 13

c olumn 1 4

column 15

Year

Outstanding Taxes

Approved Payments

Burned Bills of Credit

72,493.16.5 79,549.9.2 85,139.16.5 82,542.11.9 87,304.7.6 51,232.2.8 65,556.15.9 61,753.13.5 67,118.10.9 61,732.5.4 64,313.16.9

39,835.9.10 225,363.0.0 19,019.8.0 25,419.8.4 15,143.17.8 10,223.4.4 14,410.9.0 11,403.15.1 12,301.17.7 13,411.0.4 14,213.7.9

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74 1774/75

185,279.5.5 93,164.19.0 262,045.9.4 213,055.18.5 169,038.12.1 136,052.3.8 107,855.12.8 89,304.10.0 38,757.0.19

Notes: 1. Gold and silver coins became relatively plentiful after the French and Indian War. For example, of the total balance in hand for 1763/64, 41,954 was in gold and silver, the rest in trea surer’s certificates. 2. The 1764/65 treasurer’s statement is incomplete, with total debits less than total credits. 3. The full set of debits is missing in the 1765/66 trea surer’s statement. 4. The numbers for the separate categories of debits and credits for 1768/69 do not sum to total debits and credits. The former is short by 900, the latter by about 1,350. 5. The debits are missing in the 1770/71 treasurer’s statement.

[ 776 ]

Taxation of the New England Colonies, 1763–1775

c ol u m n 7

c olum n 8

c olum n 9

c olum n 1 0

column 1 1

column 1 2

Import Duties

Bills Drawn Parliament Grant

Tax on Coasting Vessels

Fines

Misc. Debits

Total Debits

47,600.0.0 1,961.15.4

262.8.6

349.1.0 1,256.10.5

410,223.14.0 413,415.0.8

1.11.0 22.4.0 241.19.0

5,749.10.9 781.3.10 1,551.2.11 1,371.9.4

41.9.4 9.16.4 34.2.1

952.12.4 1,825.8.5 1,628.1.4

449,299.15.6 369,559.10.2 271,068.5.2 229,739.6.7 198,642.2.1 182,220.9.3 110,543.7.1 138,324.2.5

1,516.14.16

1,411.17.10 1,071.16.7 603.9.0 601.9.7

883.17.0

502.2.9 515.1.8 305.6.3

c ol u m n 1 6

c olum n 1 7

c olumn 1 8

column 1 9

Interest Paid

Balance in Hand to Account for

Misc. Credits

Total Credits

10,660.14.9 10,510.13.4 274.6.3

830.1.0 3,025.0.0 1,442.1.0

101,954.7.7 131,948.1.0 104,971.16.11 77,196.14.1 53,270.18.2 38,074.6.1 13,719.18.2 16,579.11.3 12,665.3.11 32,175.1.5 19,587.6.1

81.18.1 1,753.1.3 784.8.5 1,600.0.0 1,049.9.6 200.00

410,223.14.0 436,860.10.2 312,888.12.6 449,299.15.6 369,559.10.2 271,068.5.2 229,739.6.7 198,642.2.1 182,220.9.3 110,543.7.1 138,324.2.5

6. Burned bills of credit in the treasurer’s statement differ from the figures in table 26.1, column 3, due to separate categorization of bills “redeemed and in Treasury” in table 26.1, column 5. 7. No audit reports were printed in the Journals of the House of Representatives for 1773/74 and 1774/75. 8. The statement of Trea surer Henry Gardener, which is barely legible in places, for the fi nal months preceding the Revolution encompasses the period November 1774 to June 1776. It does not segregate the numbers for fiscal years 1774/75 and 1775/76. The debits that are included in the table for 1774/75 are those carried over from the credits in 1773/74. Sources: Treasurer’s annual statements and Journals of the House of Representatives.

[ 777 ]

chap t er 26

18,000 was appropriated the following year to pay expenses for 1766/67, and one of 18,300 was voted to cover expenditures for 1767/68. 24 No further mention of any excise surplus appears in the legislative record. A surplus in the Treasury of 18,000 remaining after all approved outlays were made in 1767/68, without mentioning its source, was appropriated for miscellaneous provincial expenditures of 1768/69.25 An accounting of the colony’s public receipts and expenditures appears in table 26.4. The story that emerges in the table is the colony’s heavy dependence on borrowed funds (column 5), which were routinely rolled over through 1771/72 to finance provincial expenditures. Borrowing thereafter diminished markedly, along with the volume of redeemed (burned) bills (column 15). Column 14 shows that approved payments of the provincial government fell from about 40,000 in 1763/64, winding up the expenses of the French and Indian War, to less than 15,000 in each of the six fiscal years 1768/69 through 1773/74. The large entry for 1764/65 includes both approved payments and burned bills of credit. The reduction in annual expenditures explains the absence of a tax levy in 1768/69. From the end of the French and Indian War to the Boston Tea Party, annual debits and credits fell almost three-quarters, from over 400,000 to just over 100,000. Apart from anger and concern over British encroachments on the colony, Massachusetts was in excellent fiscal health. It was largely free of public debt, and its residents paid little in direct taxes, almost nothing in duties, and no excise taxes at all. Nor did they much care about the large volume of tax arrears.

Boston City Taxes

R

e sident s of boston were taxed more highly than its property and population warranted. On the basis of ratable property and population in Suffolk County in 1750, including Boston, the city should have paid about 10 percent of provincial property taxes, but in fact it paid over 15 percent.26 The ten-year annual average for 1750–59 stood at 16.6 percent. While it continued to pay more than its share, the relative stagnation of the city’s population against the overall growth in the province reduced the annual average during 1760–69 to 11.8 percent, and then to 9.2 percent during 1770–74. In actual amounts, the annual average fell during the three periods from 8,444 to 6,720 to 2,060. While the provincial tax burden borne by Bostonians declined during 1763–75, its diminishing provincial payments were offset with rising city taxes. During the three periods 1750–59, 1760–69, and 1770–74, annual

24

Acts and Resolves of Massachusetts Bay, 4:812, 882, 956. Acts and Resolves of Massachusetts Bay, 4:1104–15. 26 G. B. Warden, Boston, 1689–1776 (Boston: Little, Brown, 1970), 141. 25

[ 778 ]

Taxation of the New England Colonies, 1763–1775

average city taxes increased from 4,550 to 5,960 to 6,040. 27 Annual city taxes for the twelve years 1763–74 inclusive were 4,600, 7,000, 5,000, 5,000, 5,500, 6,000, 8,000, 4,000, 8,000, 6,500, 7,000, and 8,000. 28 Half or more was spent on poor relief or welfare ser vices, leaving less than half for infrastructure and other municipal ser vices. Combined provincial and city taxes weighed more heavily on Bostonians than on the more self-sufficient farmers and residents of rural areas and small towns scattered throughout the rest of the colony.

Miscellaneous Taxes

I

n c on t rast to the previous quarter century of chronic warfare, the remaining dozen years before the Revolution reveal only three lotteries in the legislative records. The largest in 1765 authorized 3,200 for a new student hall at Harvard. Generally speaking, the General Court empowered towns and counties to impose local taxes on polls and estates, sometimes including unimproved land, for roads, bridges, churches, meeting houses, and other infrastructure. The rates were very low, typically 1–2d. an acre, and were approved only for limited periods. Local taxes replaced the frequent recourse to lotteries in the prior era.

Summary

W

h e n paul Revere set out on his midnight ride of April 18, 1775, the residents of Massachusetts had created for themselves a fiscal paradise. They were not burdened by any meaningful amount of public debt. Direct tax levies had fallen to about one shilling a head, save the sixteen thousand inhabitants of Boston who paid a higher rate than the rest of the province. Duties, tonnage, and excises had virtually ceased. Local assessments were minuscule. Summing up, the provincial tax burden was less than 2s. a head, about 11 ⁄2s. sterling. The only real taxes that were paid in the colony were those imposed by Parliament, mostly those of the Sugar Act. Putting the colony’s provincial taxes in perspective, it is instructive to recall Governor Pownall’s comments and the report of the Board of Trade asserting that Massachusetts had the most extensive, costly civil administration in North America.

Taxation in Connecticut, 1763–1775

T

axat ion i n c onne c t ic u t continued as before, with the overwhelming bulk of provincial revenue collected from the tax on polls

27

Warden, Boston, 354n23. Becker, Politics of American Taxation, 233, appendix, table 1: “Boston City Taxes, 1763–1774.” 28

[ 779 ]

chap t er 26 tabl e . Connecticut Bills of Credit, Taxes Levied, and Due Dates of Redemption ( £LM) Time Issued

Sums Emitted

Tax Levied

Taxes Due Date

Redemption Date

May 1763 March 1764 May 1770 October 1771

10,000 7,000 10,000 12,000

2d. 13 ⁄4d. 2d. 2d.

May 1765 Mar. 1768 May 1772 Oct. 1773

May 1773

12,000

2d.

January 1775

15,000

2d.

Dec. 1764 Dec. 1767 Dec. 1771 1 ⁄2 Dec. 1772 1 ⁄2 Sept. 1773 1 ⁄2 Dec. 1775 1 ⁄2 June 1775 1 ⁄2 Dec. 1775 1 ⁄2 Dec. 1776

June 1775 Jan. 1777

Sources: Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut, vol. 12, From May, 1762, to October, 1767, Inclusive (Hartford: Case, Lockwood, and Brainard, 1881), 134–35, 233–34, vol. 13, From May, 1768, to May, 1772, Inclusive (1885), 300–301, 516, vol. 14, From October, 1772, to April, 1775, Inclusive (1887), 94–95, 346–47.

and estates, supplemented with minor duties and excises. Between May 1763 and October 1774, the legislature approved nine levies on polls and estates. Six funded the redemption of bills of credit, while three supplied the government with cash for current expenses. The Currency Act of 1751 permitted New England to issue paper bills to finance the “current ser vice” of government so long as taxes were voted to ensure their redemption within the timely space of two years from the date of the acts authorizing the bills, and they were not accorded private legal tender status. In each act, the General Assembly set the tax rate, identified the year of the Grand List to which it applied, and fi xed the due date for payment. Table 26.5 displays the date of issue, the amount issued, the tax rate enacted to fund redemption, the due date of taxes, and the redemption date of the bills. The treatment of taxation in this book concludes on April 18, 1775. Thus the levies of 2d. in May 1773 and January 1775, due, respectively, for payment in June 1775 and January 1777, are outside the scope of this book. As previously noted, Connecticut received 316,788 LM, excluding fees, in British grants. It used these funds to sink most of its outstanding war bills. Although the towns were assessed every year, no new rates were voted for the years 1765/66 through 1769/70 inclusive, although an act in March 1764 set a rate to be collected during 1767/68. Table 26.6 summarizes direct taxes in Connecticut between 1763 and 1775. Column 2 shows the gradual rise in the Grand List, which tracked the growth of population. Column 3 lists the rate that applied to the Grand List in each fiscal year, not the year in which the rate was enacted to ensure redemption of bills or supply cash to fund the provincial government. Column 4 presents the tax rate in percentage terms of the valuation of the list. Column 5 calculates the likely taxes that should have been collected based on [ 780 ]

tabl e . Connecticut Direct Taxes, 1763/64–1774/75 ( £.s.d. LM) col u m n 1

[ 781 ]

c olum n 2

c olum n 3

column 4

column 5

Year

Grand List (£)

Tax Rate (d./)

Tax Rate ()

Estimated Taxes ()

1763/64 1764/65 1765/66 1766/67 1767/68 1768/69 1769/70 1770/71 1771/72 1772/73 1773/74 1774/75

1,516,847 1,544,599 1,576,806 1,618,460 1,697,856 1,739,318 1,771,955 1,781,135 1,797,406 1,823,479 1,833,914 1,869,203

1 2 1

0.4167 0.833 0.4167

6,320.7 12,866.5 6,570.6

1.75

0.729

12,377.4

2 2 1 1 1

0.8333 0.8333 0.4167 0.4167 0.4167

14,836.9 14,972.4 7,598.4 7,641.9 7,789.0

column 6

column 7

col u m n 8

c ol u m n 9

Population

Per Capita Taxes ()

Per Capita Taxes (d.)

Treasurer’s Account Books Taxes

0.040 0.079 0.039

9.54 18.92 9.42

38,244.5 50,895.3 6,401.5

0.071

16.92

0.080 0.079 0.040 0.040 0.040

19.13 19.07 9.56 9.50 9.57

159,034 163,176 167,317 171,458 175,559 179,740 183,881 186,163 188,445 190,727 193,009 195,291

Sources: Charles J. Hoadly, ed., Th e Public Records of the Colony of Connecticut, vol. 12, From May, 1762, to October, 1767, Inclusive (Hartford: Case, Lockwood and Brainard, 1881), 134–35, 226–27, 233–34, 291–92, 334–35, 353, 387–88, 447–48, 488–90, 603–4, 647, vol. 13, From May, 1768, to May, 1772, Inclusive (1885), 76–78, 121–22, 226, 246–47, 300–301, 305, 368, 467–69, 516, 519, 653–54, vol. 14, From October, 1772, to April, 1775, Inclusive, (1887), 60–61, 94–95, 147, 204–5, 317–18, 346–47, 384–86; account books of State Trea surer Joseph Talcott, Trea surer 1755–1770 (Hartford: Connecticut State Library, 1922), microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950.

chap t er 26

actual fiscal year rates. Columns 7 and 8 list the level of per capita taxes in Connecticut LM pounds and pence. For purposes of comparison, column 9 displays the actual amounts reported in the account book of Treasurer Joseph Talcott through 1765/66. There are no figures in Talcott’s books for the three years 1766/67 through 1768/69, when he was dismissed from office in January 1769, replaced by Captain John Lawrence. The two account books and one receipt book of Lawrence in the Connecticut State Library do not disclose any receipts from the rates levied on the Grand List during 1770–75. In the years when direct taxes were collected, the per capita tax burden, assuming full compliance, ranged between three quarters to 11 ⁄2 shillings LM. Over the twelve years encompassed in the table, the average annual per capita levied rate, taking into account the zero rate in three years, amounted to 10.1d., less than a shilling. As indicated in column 9, receipts in 1765/66 were well below anticipated revenue. One reason for the shortfall was nonpayment of taxes, which periodically surfaced as a political issue. From time to time, the General Assembly took action to reduce arrears. Jared Ingersoll, a leading Connecticut figure, stated that the towns were 80,000 LM in arrears in 1765. Ostensible concern over arrears led the General Assembly to dismiss Talcott in January 1769. 29 A committee of the General Assembly was appointed to examine the treasurer’s accounts and report on the level of arrears. The ledger book of Lawrence under the date of February 1, 1769, showed arrears of 44,282 13s. 11 3 ⁄4d. on eight specific levies voted for 1758 through 1765.30 Arrears were well in excess of outstanding public debt, which consisted largely of 31,713 8s. in circulating bills of credit.31 In addition, there was a sum of 21,995 19s. 11d. still to be accounted for by Talcott. In some towns the collectors had gathered considerable revenue but failed to remit the money to the treasurer. In others the collectors were derelict in neglecting to collect taxes. Lawrence Gipson cites a few examples to indicate the depth of the problem. Hartford’s 1758 assessment of 2,150 18s. 9d. was 544 16s. 11 1 ⁄2d. in arrears eleven years later in 1769. Its rate of 2,212 9s. 111 ⁄2d. in 1759 was 781 16s. in arrears; that of 1,683 2s. 10d. in 1760 was 453 15s. 71 ⁄2d. in arrears. Arrears were proportionally higher in Suffield, Colchester, Norwich, Simsbury, Fairfield, Lebanon, Middletown, and New Haven. 32 29

Charles J. Hoadly, ed., The Public Records of the Colony of Connecticut, vol. 12, From May, 1762, to October, 1767, Inclusive (Hartford: Case, Lockwood and Brainard, 1885), 129 (hereafter Public Records of Connecticut). 30 Lawrence Henry Gipson, “The Taxation of the Connecticut Towns, 1750–1775,” reprinted from Essays in Colonial History (New Haven: Yale University Press, 1931), 292–94. The auditor’s report of May 1769 identified slightly larger arrears of 45,369 7s. 10d. 31 Lawrence Henry Gipson, “Connecticut Taxation and Parliamentary Aid Preceding the Revolutionary War,” American Historical Review 36, no. 4 (July 1931): 735. 32 Gipson, “The Taxation of the Connecticut Towns, 1750–1775,” 294–95.

[ 782 ]

Taxation of the New England Colonies, 1763–1775

In 1770 the General Assembly empowered the treasurer to appoint attorneys to sue towns in arrears to compel payment. Constables and collectors in numerous towns were sued, in some instances jailed. Hartford cleared its arrears of 1759 on February 12, 1774, but only after its constable and collector was jailed for two years during 1771–73. Stonington cleared its arrears of 1761 in 1773, while Suffield’s arrears of 1760 and Colchester’s of 1765 were not fully remitted until 1780.33 The receipt book of John Lawrence contains thirty pages listing hundreds of executions issued to Ezra Williams, sheriff, to collect arrears. The fi rst twenty-four pages list arrears of taxes with interest for specific towns as far back as 1750. The executions in the receipt book are dated from March 16, 1769, through July 17, 1777, and then again from August 29, 1780, through January 2, 1781. The pattern of individually recorded executions changed to lengthy listings beginning April 5, 1775, as the impending confl ict with Britain required more stringent collection of arrears. In successive pages, the sheriff indicates his receipt from the treasurer for twenty executions on the rates of 1771, 1772, and 1773 signed April 5, 1775; six for 1774 and 1775 (October 5, 1775); eighty-three for 1773, 1774, and 1775 (July 17, 1777); and eleven for unspecified rates (August 29 and 31, 1780). There is no way to know if the receipt book is comprehensive of arrears. The only set of figures in the book that reconciles rates due and funds received is for March 1781. To illustrate the contents of the receipt book, an execution signed February 22, 1769, stated back taxes and interest due from Hartford for the rates of 1763 and 1764 and one signed March 1, 1769, for Middleton for the rate of 1762, totaling 679 Lawful Money. Seven pages of executions were signed in 1769, four each in 1770, 1771, 1772, and 1773, and two in 1774. Arrears in each year were on the order of a few thousand pounds. From the onset of the Revolution, the value of executions markedly increased. To conclude the review of direct taxes during 1763–75, insofar as the records indicate, they were significant in the first two fiscal years of the period, declining some 87 percent in 1765/66, with no rates collected in the next four years. The account books of John Lawrence do not record any revenue from rates in the remaining years before the Revolution. His ledger, cited by Gipson, indicates some minor revenues from the settlement of arrears. Connecticut’s taxpayers were not heavily burdened with direct taxes in the nine years preceding the Revolution. 33

Gipson, “The Taxation of the Connecticut Towns, 1750–1775,” 296–97. Gipson’s examples are drawn from the “Rate Book of John Lawrence,” 29, 43, 47, 51, 62. The rate book consumes two-and-a-half feet of shelf space in the Connecticut State Library, which makes correlating arrears with subsequent collections a daunting task. The sample examined by Gipson is likely typical of the government’s success in collecting back taxes.

[ 783 ]

chap t er 26

Indirect taxes remained extremely light during 1763–75, but their collection was also plagued with dereliction and inefficiency. In October 1764, the General Assembly required town clerks to certify to the treasurer the names of the collectors of excises that were chosen in their towns for each year since November 1755, imposing a fine of ten pounds for failure to comply by May 14, 1765. 34 In May 1766 it followed suit with an act to recover any taxes collected on liquor, tea, and other items that had not been remitted. These funds were to be paid to committees in each town where they were recovered, loaned out, and the interest allocated to public schools. Monies received at the Treasury from towns that had remitted excises were given interest of 5 percent on the funds, with the interest returned to those towns for the support of schools. Collectors who failed to execute their responsibility could have their estates seized to secure any unpaid sum. 35 The account books of Talcott and Lawrence do not record any receipts from excises. Duties of 5 percent were levied on numerous goods in 1747 but were repealed the following year. In May 1768 the General Assembly again imposed duties of 5 percent, expressed as 5 per 100 worth of goods, wares, and merchandise (except lumber) imported by water or land carriage by non-residents. Rebates were granted on imported goods that were reexported within three months. An act of January 1769 extended the drawback to rum. Two years later, in May 1770, the General Assembly repealed the act. 36 Talcott’s account book records revenue from duties and tonnage in 1764 of 233 13s. 5d.; 1765, 230 15s. 81 ⁄2d.; 1766, 159 11s. 6d.; 1767, 138 4s. 7 3 ⁄2d.; and 1768, 205 9s. 10d. These amounts were insignificant. Lawrence’s books do not record any revenue from duties and tonnage.

Summary

T

axe s i n Connecticut were exceptionally light during 1763–75, less than a shilling a head and even a few pence lower than per capita taxes in Massachusetts. In a report submitted in October 1774 to the secretary of state, who inquired into the state and condition of the colony of Connecticut, Governor Jonathan Trumbull put the annual cost of civil administration at 6,000 sterling (8,000 LM) a year, arising from a 1d./ tax on polls and estates. One-third was appropriated for education and two-thirds for the general support of government, putting the cost of 34

Public Records of Connecticut, 12:268. Public Records of Connecticut, 12:463–64. No further legislation regarding excises appears in the legislative records through April 1775. 36 Public Records of Connecticut, vol. 13, From May, 1768, to May, 1772, Inclusive (1885), 72–74, 125, 299. 35

[ 784 ]

Taxation of the New England Colonies, 1763–1775

provincial government at about 4,000 sterling. The salaries of the governor, deputy governor, treasurer, and secretary totaled 600 with others compensated based on the time of their ser vice. Trumbull made no reference to revenue arising from duties or excises. 37

Taxation in Rhode Island, 1763–1775

B

e g i n n ing i n 1 7 5 1 , Rhode Island financed its provincial expenditures with bills of credit backed by pledges of taxation within the pa rameters of the British Currency Act. Because the bills were issued to support the colony’s role in the French and Indian War, the redemption period, two years in peacetime, was permitted to stretch over five years. The multiple issues of Lawful Money bills between 1758 and 1762 were scheduled for redemption with taxes between May 18, 1763, and November 1, 1767. Rhode Island began the postwar era with scheduled taxes of 68,747 LM during the four-and-a-half years beginning May 18, 1763. British reimbursement reduced actual collections to well below this level. Despite promises of taxation to redeem the bills, the colony’s issue of wartime paper brought a heavy depreciation, from 2,334.42 Old Tenor in 1756 to 3,119.29 OT in 1763 for 100 sterling, a loss of 25.2 percent against sterling. The amount of outstanding Lawful Money was about 40,000 in 1764, of which two-thirds was scheduled to be retired that year, leaving only about 13,000 to be redeemed by November 1, 1767. Under those favorable conditions, the General Assembly passed the Rhode Island Currency Act of 1763, which returned the colony to the standard of Lawful Money, the proclamation rate, in 1764. The law listed the values for the different coins in circulation including English shillings, Spanish milled dollars and pistoles, and many others. Another table in the law specified the conversion of OT—and, by a simple formula, NT— bills to the new standard for each year since 1750. Old Tenor debts were to be discharged by the value of the money when it came due according to the table, plus 6 percent interest while in arrears, in any form of Lawful Money the debtor could pay. The General Assembly also indicated its desire to redeem all its outstanding OT debt as quickly as possible and thus declared all those bills redeemable in silver according to the rate of depreciation. An act of September 1770 was passed to call in and sink all remaining OT bills of credit.38

37

Public Records of Connecticut, vol. 14, From October, 1772, to April, 1775, Inclusive (1887), 500–501. Trumbull put imports of British goods, direct or via Boston and New York, at 200,000 sterling, exports to Britain at 10,000, and trade with foreign plantations and Eu rope apart from Great Britain at 55,000. 38 John R. Bartlett, ed., Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968), 7:24. Volume 7 was fi rst published in Providence by A. C. Greene in 1862.

[ 785 ]

chap t er 26

Taxation in Rhode Island during 1763–75 consisted of levies on polls and estates to redeem the remaining stock of LM and OT paper and supply the provincial government with cash to meet its requirements. No duties or excises were levied during the final dozen years of the colonial era. Even though the taxes were modest, political disputes over their assessment and collection were intense, pitting different factions against each other. 39 Individual towns sought to shift the burden away from themselves to others. Disputes emerged over the valuation of estates. In 1761 different types of property were assessed at various rates for determining the amount of tax to be paid. Woodlands and cargo and vessels at sea were assessed at a third of their value, money at interest and commercial stocks at one-half, improved real estate at three-fifths, and livestock and slaves at full value. A change in political leadership in the Assembly in 1765 replaced this apportionment with one that reduced the levy on five Narragansett towns by 10 percent and increased the load on three others. Those in the three towns refused to pay and attempts to sue failed to recover the arrears.40 The newly elected Assembly of 1767 adopted a new, relatively comprehensive system of valuation, which declared all categories of property to be assessed at full value, except for manufacturing plants at three-quarters, and vessels and cargoes at sea at two-thirds. The new system more accurately tabulated the degree and distribution of wealth in the colony. Table 26.7 displays the amounts and purposes of provincial taxation during 1763–75 to the extent that information appears in the colonial records. Column 1 shows the date of each act. Column 2 lists the levy in Rhode Island LM and, in two instances, OT. Column 3 indicates the purpose of each levy, either to redeem bills of credit or finance the ordinary cost of provincial government. The 1763 act does not reveal what share of the levy was to settle outstanding debts of the provincial government and what amount was for general government expenditures. The 1764 act states that 2,000 LM was to go to the Treasury for general expenditures. The same 2,000 was similarly allocated to the Treasury in 1771, 1773, and 1774, and presumably also in 1772. No information is available that indicates how the 12,000 levy of 1770 was allocated. Larger levies of 12,468 15s. in 1765 and 6,000 in 1769 are markedly higher than the four 2,000 allocations to the Treasury. No levies were voted in 1767 or 1768. That of 1765 and British reimbursement were sufficient 39 The dispute that surrounded the assessment and collection of taxes appears in Sydney V. James, Colonial Rhode Island: A History (New York: Charles Scribner’s Sons, 1975), 301–8. 40 Seven deputies of the towns of Providence, Scituate, and Cumberland fi led a protest against the apportionment of the tax in December 1766. Bartlett, Rhode Island Records (New York: AMS Press, 1968), 6:518–19. Volume 6 was fi rst published in 1861 in Providence by Knowles, Anthony, and Company.

[ 786 ]

Taxation of the New England Colonies, 1763–1775 tabl e . Rhode Island Direct Tax Levies, 1763–1774 Date

Tax Levy ()

Purpose of Tax

August 1763

12,000 LM

September 1764

12,000 LM

October 1765 October 1766

12,468 15s. LM 6,000 LM 75,000 OT

1767 1768 February 1769

No levy No levy 6,000 LM 93,687 15s. 2d. OT

September 1770 August 1771

12,000 LM 12,000 LM

August 1772 August 1773 October 1774

12,000 LM 4,000 LM 4,000 LM

Pay colony’s debts and support general government expenditures 10,000 to sink March 1760 and May 1760 LM bills of credit 2,000 to Treasury for general government expenditures To Treasury, due March 10, 1766 6,000 LM to sink remainder of 1760 LM bills 75,000 OT redeem OT bonds plus 10 percent interest (equivalent to 3,246 15s. LM) (659 6s. 83 4⁄ d. new LM bills, out of 1,000 approved in February 1766 act, issued in March to redeem above bills) Use of British reimbursement to pay debts Use of British reimbursement to pay debts 6,000 LM to Treasury 93,687 15s. 2d. OT to redeem remaining OT bills (equivalent to 3,512 17s. LM) (2,000 new LM bills issued on February 28, 1767, approved in February 1767 act, to redeem above bills at 26.67 OT to 1 LM) To Treasury 10,000 to sink bills of 1762 and treasurer’s notes for 1762 bills 2,000 to Treasury No details in colonial records 2,000 LM to clear debts; 2,000 LM to Treasury 2,000 to redeem LM notes of 1767 given to sink OT bills 2,000 LM to Treasury

Notes: 1. In August 1763, an act was passed to empower the trea surer to dispose of 3,570 sterling, being part of the money granted by the Crown to the colonies for its participation in the war. 2. An act of October 1766 set 23.10 OT equal to 1 LM. 3. An act of February 1769 set 26.67 OT equal to 1 LM. 4. Gipson states that 12,000 LM voted in act of August 1772 was presumably for the same purpose as that of the preceding year (there are no details of its allocation in the Rhode Island Records). Lawrence Henry Gipson, The Triumphant Empire: Thunder-Clouds Gather in the West, 1763–1766, The British Empire before the American Revolution, vol. 10 (New York: Alfred A. Knopf, 1967), 71. Gipson does not speculate about the allocation of the 12,000 LM levy of 1770. Sources: The official records of the colony appear in John R. Bartlett, Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968). Vol. 6, fi rst published in Providence by Knowles, Anthony and Company in 1861, covers 1757–69. Vol. 7, fi rst published by A. C. Greene in 1862, covers 1770–76. Data in the table are from 6: 373, 405, 464, 507, 519, 605, 7: 24, 35, 54, 212, 258. Information on the two issues of bills of credit in 1766 and 1767 is from Eric P. Newman, Th e Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997), 388–89.

[ 787 ]

chap t er 26

to retire bills that came due and meet the ordinary cost of provincial government in those years. Between 1763 and 1775 the population of Rhode Island averaged about 55,000, rising from 49,289 in 1763 to 58,196 in 1770, thereafter falling to 55,571 in 1775. Regular levies of 2,000 allocated to the treasurer imply ordinary provincial government expenditures, net of sinking bills of credit, of about 10d. a head. Over the period 1763–75, direct taxes totaled 99,228 9s., an annual average of 8,269. Th is amounts to annual per capita taxes of about 3s., more than double the per capita taxes of the colony’s neighbors. The higher rate was the price of restoring a sound currency. Recall that the colony relied on interest income from loan office bills for more than a generation without levying any taxes. Some portion, perhaps substantial, of the nearly 100,000 was not collected, which may explain the relatively high levies of October 1765 and September 1770. A table showing total valuation for June 1767 of 2,111,295 10s. 7d., aggregated from valuations of woodland in each town, rents at twenty and fi fteen years, and total ratables for the twenty-eight towns in the five counties, was published in the colonial records in June 1769.41 Assuming relatively constant valuation during 1763–75, average annual tax of 8,269, and a maximum estimate that assumes no arrears would yield a tax rate of 0.39 percent on assessed valuation. This figure is too high because of arrears and undervaluation. The real figure is probably closer to one-fifth to one-third of 1 percent of real valuation.

Lotteries

I

n addi t ion to direct taxes, lotteries were the other principal source of revenue to provide public facilities (table 26.8). Between June 1763 and December 1774, the General Assembly approved thirty-nine lotteries, provided “that the colony incur no expense in consequence thereof.” The overwhelming majority financed streets, bridges, wharves, parsonages, churches, and schools. Several assisted individuals who suffered misfortune that warranted financial assistance or provided an important ser vice. Fifteen were authorized in Rhode Island Lawful Money, twenty-one in Spanish milled dollars (one Spanish dollar equals 6s. LM), especially from 1770, with the remaining three left to the discretion of those empowered to conduct the lottery. The reference to dollars from 1770 suggests a relative abundance of silver coins in the colony. The cost of each lottery was largely borne by the residents of the relevant town or community requesting a franchise. The maximum value of the lot41

Bartlett, Rhode Island Records, 6:576.

[ 788 ]

tabl e . Rhode Island Lotteries, 1763–1774 June 1763 June 1764 June 1767 August 1767 October 1767 June 1768 February 1769 September 1969 October 1770 October 1770 August 1771 October 1771 October 1771 October 1771 October 1771 October 1771 August 1772 August 1772 August 1772 August 1772 August 1772 August 1772 August 1772 October 1772 October 1772 October 1772 October 1772 December 1772 May 1773 October 1773 May 1774 May 1774 June 1774 June 1774 June 1774 June 1774

August 1774 December 1774 December 1774

100 for improving a street in Providence 106 for a bridge at Fulling Mills over Hunt’s River in Warwick $2,500 to erect a steeple on Trinity Church in Newport 150 to complete a parsonage house of Baptists in Warren 225 to pave Mill Street in Newport 200 to repair a road from Providence through Plainfield 1,350 to build out the Long Wharf in Newport and pave the road leading to it 120 to build a work house in North Kingstown $400 to repair Whipple Bridge over the Pawtucket River in Cumberland $300 to build a meeting house for Baptists in Cranston No sum mentioned to pave Main Street in Providence and build a public market on the town’s land $100 extra for the bridge in Cumberland 60 to repair a road in Smithfield $600 to build a steeple and buy a clock for the Episcopalian church in Providence 560 to build a parsonage for the Presbyterian church in Providence $150 for the abutments of the bridge over Hunt’s River in Warwick No sum mentioned to pave King Street in Providence 40 extra to repair the bridge over Pawtucket River between Smithfield and Cumberland $2,500 to replace a forge lost to fire in Coventry 165 to repair a Congregational meeting house in Barrington $1,500 to erect a Baptist meeting house in East Greenwich $500 to build a wharf on the highway to Warwick harbor No sum mentioned to pave Pelham Street in Newport $1,500 to build a Presbyterian church in East Greenwich $400 to build a bridge over Clear River in Gloucester $500 to finish a meeting house in Johnston $1,000 to pay for a steeple and clock for King’s Church in Providence $500 to amend and repair Wonscut Road from Uxbridge to Providence 700 to erect a tower and steeple of the Presbyterian church in Providence $500 to build a Baptist church in Coventry $500 for relief to Mr. Abial Brown of South Kingston for the loss of his house and furniture to fire $600 to purchase a lot and build a public school in East Greenwich $600 extra for rebuilding Greene’s Iron Works in Coventry 300 extra to purchase a lot and build a parsonage adjacent to the Baptist meeting house in Pawtuxet 2,000 to purchase a lot and build a Baptist church in Providence $1,200 to reimburse Gideon Almy following the loss of his sloop, Sally, that was seized by a French frigate and condemned as a lawful price in Port-au-Prince 50 to repair a dam on the Pawtuxet River erected by William Holden of Warwick at his own expense $600 to reimburse Nathaniel Stoddard following his loss of a one-third part of the sloop Sally $200 for Jeremiah Hopkins to purchase tools and instruments to carry on his trade to make guns given their need in the colony and the inability to import them from Great Britain

Source: John R. Bartlett, Records of the Colony of Rhode Island and Providence Plantations in New England (New York: AMS Press, 1968). Vol. 6, fi rst published in Providence by Knowles, Anthony and Company in 1861, covers 1757–69. Vol. 7, fi rst published by A. C. Greene in 1862, covers 1770–76. Data in the table are from 6:356–57, 398–99, 527, 530–31, 532, 545–46, 577, 598, 7:21, 36, 38–39, 48–49, 52–53, 193–95, 199, 206–7, 220–21, 242–45, 248–50, 256, 263, 271.

chap t er 26

teries stating limits was 6,126 LM and $16,650 (4,995 LM), a total of 11,121 LM, an annual average of 926 15s. Lotteries are not the equivalent of taxes in two respects. First, subscribers are volunteers, whereas taxpayers are coerced. Second, the benefits are more closely connected with the costs, akin to fees for ser vices rendered. Those who subscribed were the principal beneficiaries of the projects for which they purchased tickets. Even so, the annual per capita investment in lotteries was only a few pence.

Summary

T

he tax burden in Rhode Island during 1763–75 was extremely light compared with that in Britain, but double or more that in Massachusetts and Connecticut. If the prior years of no taxation are included in a longer average, the eighteenth century was a period of extremely low taxation in Rhode Island. Once the bills of credit were largely redeemed by 1772, taxes fell to a minuscule level of 4,000 LM a year, a burden of 19d. a head, less than in Massachusetts, more than in Connecticut.

Taxation in New Hampshire, 1763–1775

A

t t h e conclusion of the French and Indian War, the colonial government moved to put the colony on a specie basis.42 Despite votes of taxes to ensure timely redemption of its bills, New Hampshire paper steadily depreciated throughout the war, from 2,000.13 NT in 1756 to 3,111.29 against 100 sterling in 1763. The General Court voted to purchase gold and silver coins with its share of British reimbursement and use them to burn bills of credit. On June 23, 1764, it approved the sale of 1,000 sterling to redeem bills of 1761, 1762, and 1763. The value of New Hampshire currency appreciated to 2,666.71. On January 8, 1765, it voted to sell another 12,000 sterling to redeem bills due in 1764 and 1765. This remittance allowed the full abatement of the tax of 5,000 sterling due December 25, 1764, and another 5,000 due December 25, 1765. Three days later the court voted to apply another 505 18s. 6d. sterling it received as its share of an overpayment to 42 A general survey of taxation in New Hampshire appears in Maurice H. Robinson, A History of Taxation in New Hampshire, Publications of the American Economic Association, 3rd ser., no. 3 (New York: Macmillan, 1902). The proceedings of the House of Representatives, the Council, the General Court or General Assembly, the governor’s speeches and correspondence, and other important documents affecting the colony appear in Nathaniel Bouton, ed., Provincial and State Papers, vol. 7, Documents and Records Relating to the Province of New-Hampshire (1764 to 1776) (Nashua, NH: Orren C. Moore, 1873). The volume is not a complete record of provincial proceedings, but only those papers found in the office of the secretary of state of New Hampshire. To give but one example, the tax levy of 1769 is not recorded in the volume but appears in the treasurer’s records in the microfi lm series of Early State Records previously cited.

[ 790 ]

Taxation of the New England Colonies, 1763–1775

Pennsylvania to further assist the redemption of bills of 1760 and 1761. When New Hampshire established Lawful Money at the proclamation rate of 133.33 against 100 sterling, it set the exchange rate at 20 OT to 1 LM.43 On May 15, 1767, and again on March 18, 1768, it ordered that any remaining sterling in London be transferred to the colonial treasurer. It also resolved that no more paper bills should be issued from the Treasury and that all payments from it should be made in gold and silver.44 For 1764–66, the General Court instructed the treasurer to accept taxes in bills of credit, gold and silver coins, and in twenty-one different commodities at fi xed prices. For 1764 the list included bar iron at 6 LM per hundred pounds, hemp at 3s. per pound, Indian corn, rye, and barley at 10s. per bushel, and so on. Commodities were enumerated in 1765 and 1766, with some prices altered to reflect market conditions. A list of commodities accepted in payment of taxes does not subsequently appear in the records.45 An act of June 7, 1765, defined the value of coins in circulation in the colony in terms of New Hampshire Lawful Money. They included guineas, English crowns, half crowns, shillings, sixpence, half pence, and farthings, Spanish whole or partially milled pieces of eight (dollars), double and single johannes, moidores, and pistoles.46 From 1766 payment of taxes was authorized in specie or bills of credit. The goal was to complete the redemption and burning of all bills by the end of 1767. Most bills were retired on schedule, but some remained in circulation. As long as there were some bills outstanding, the treasurer was authorized to receive payment of taxes in both bills and specie. With some bills still outstanding, on December 18, 1770, the General Court empowered the treasurer to borrow money by giving “notes at hand” to redeem all the bills, and to continue to accept bills in payment of taxes. Only a trivial sum remained outstanding in 1772.47 43 Exchange rates are from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978), 135–36, 154. 44 Bouton, New Hampshire Records, 7:49, 51–53, 122–23, 153, 164. 45 Bouton, New Hampshire Records, 7:37–38, 80, 107. 46 Bouton, New Hampshire Records, 7:77–78. 47 Bouton, William Henry Fry, New Hampshire as a Royal Province, Studies in History, Economics, and Public Law, vol. 29, no. 2 (New York: Columbia University, 1908), 415–16, and Bouton, New Hampshire Records, 7:263. The provincial papers report the following value of bills burned before the General Court: April 1764, six issues of 1759, 1760, and 1761 (thereafter multiple issues for each burning), 1,747 8s. 1d. sterling (ST) (7:32); November 1766, 6,824 10s. ST and 11,920 1s. 2d. NT (7:117); February 1768, 5,414 16s. 8d. ST (7:150); October 1768, 1,504 18s. 10 1 ⁄2d. ST (7:193); March 1770, 1,398 0s. 6 3 ⁄4d. LM (7:241); March 1771, 1,697 4s. 4d. LM (7:279); and May 1773, 378 18s. (7:329). In most cases, the provincial papers itemize the value of each issue burned, from the fi rst though the ninth. In a few instances, only the total burned is recorded. The final citation refers to burning of treasurer’s notes, “notes at hand” that were authorized in January 1772 to call in bills of credit

[ 791 ]

chap t er 26

In Governor John Wentworth’s address to the House of Representatives of December 14, 1771, he announced that Parliament had generously granted the province another reimbursement of 6,009 sterling, which he hoped it would use to eliminate the deficit in the Treasury.48 As the following paragraphs indicate, these funds permitted further reductions in provincial taxes.

Direct Taxation

B

e t w een 1 7 63 and 1 7 75, most provincial tax revenue was collected from the tax on polls and estates, with the balance from excises.49 An act of 1742, followed by acts of 1753, 1760, 1761, and 1767, established the basis of assessment.50 Each town was required to compile an inventory of polls and estates in order to permit an equitable proportioning of the towns for collection of taxes. Individuals were valued at 18, land at 10s. an acre, horses and oxen at 3, cows from 40s. to 10s. depending on age, swine at 10s., two-story houses at 40s., single-story houses at 10s., and other dwellings in proportion to their size. Selectmen were to take an exact invoice in their town and in adjoining towns where there were no selectmen. Subsequent acts of 1770 and 1772 shifted the basis of taxation from the apportioning of towns to individuals.51 An invoice of polls and estates was prepared in eight columns: polls, improved lands, slaves, livestock, other real estate, money at interest or stock in trade, and income (faculty), with the eighth for the total. The invoice was to be revised and settled annually. The act of 1770 was valid for three years and that of 1772 extended it for three more years. Some changes were made in the ratings. Slaves over forty-five years of age were exempt, cattle and horses were exempt until they passed through two winters, improved land was valued on the basis of income received from specific agricultural products, mills, wharves, and ferries were rated at one-twelfth their annual income, and money at interest was reduced to one-half of 1 percent. A census of 1767 counted 11,964 polls and 419,331 LM of ratable estate; that of May 1773 revealed 15,504 polls and estates valued at 20,648 LM.52

remaining in circulation. No bills of credit were included in the paper notes to be burned that year. Gaps of periods between burnings were due to lengthy periods of prorogation by the governor, when little pressing business was required of the General Court. Th is explains why there is no reference to burning of notes between March 1771 and May 1773. 48 Bouton, New Hampshire Records, 7:287–88. 49 Robinson, Taxation in New Hampshire, 34–41, and New Hampshire Provincial Papers, vol. 7. 50 Bouton, New Hampshire Records, 7:143. 51 Bouton, New Hampshire Records, 7:258, and Robinson, Taxation in New Hampshire, 40–41. 52 Bouton, New Hampshire Records, 7:166–67, 326–29. The basis of valuation changed in 1772, which explains the lower number.

[ 792 ]

Taxation of the New England Colonies, 1763–1775

Indirect Taxation

N

e w h a m p s h i r e collected a small amount of revenue from excises on liquor. The act of 1732, with rates set in law, remained in force until 1792. The treasurer recorded his receipts of excises from the collectors on an annual basis, which often included the proceeds of prior years that were in arrears. Given the shortfall in collections, beginning in September 1767 the General Court voted to farm excises to bidders, a process it continued until the Revolution.53 The amounts remitted to the Treasury differ from the bids due to delays in remittance and allowances granted for extraordinary expenses of collection. Import duties were never renewed after 1721, although a bill to grant a duty on liquor was read three times in 1767 and sent to a conference of both houses for further consideration. The Council subsequently voted in the negative.54 Tonnage collected in powder is not quantified in the treasurer’s accounts, but appears to have been sufficient to meet the colony’s requirements. Table 26.9 itemizes direct tax levies, actual receipts of direct and indirect tax revenues, and arrears during 1764–75. The numbers in the table are taken from the provincial papers and treasurer’s accounts, the latter between 1766 and 1774. Taxes previously enacted that were due in 1764 and 1765 to redeem war issues of bills were fully abated with the receipt of British funds. Additional reimbursement from overpayment to Pennsylvania and that of 1771 permitted further relief. On January 16, 1772, when the General Court ordered the selling of 5,500 sterling in bills of exchange on its London agent, Barlow Trecothick, it concurrently suspended the power and authority of the treasurer to lay taxes on polls and estates to redeem the “notes at hand” that he had issued to draw in the remaining bills of credit.55 Taxes levied by the General Court appear in column 2. The levy enacted for 1765, the second entry in the table, was a tax 5,232 13s. 3d. NT (261 12s. 8d. LM) to redeem bills that were issued to finance military operations in Canada. The third entry is the levy for the support of the provincial government for 1765. Authorization was granted in July 1766 for the treasurer to send out warrants to collect the province tax for that year, but no sum is mentioned in the legislative proceedings. Tax receipts collected by constables, and by collectors from 1768, appear in column 3.56 These sums do not match the taxes stipulated in legislation owing to the use of British reimbursement of 1771 to abate some taxes, along with the perennial problem of arrears. 53

Bouton, New Hampshire Records, 7:139, 261, 302–3, 319. Bouton, New Hampshire Records, 7:130, 138. 55 Bouton, New Hampshire Records, 7:296. 56 For 1766 and 1768, see Bouton, New Hampshire Records, 7:58, 107, 150, 193. 54

[ 793 ]

chap t er 26 tabl e . New Hampshire Tax Levies, Revenues, and Arrears, 1764–1774 ( £.s.d.) Year

Direct Tax Levies

Direct Taxes Collected

1764 1765

1766

5,000 st. due (abated) 5,000 st. due (abated) 5,232.13.3 NT 1,350 LM levy no sum stated

1767 1768

no sum stated 2,200 LM levy

1769

3,000 LM levy

1770

2,032.16 LM levy

2,092.2.834⁄ LM

1771 1772 1773 1774

2,500 LM levy 2,024.14.0 LM levy 2,000 LM levy 1,042.6.012⁄ LM levy

1,697.4.4 LM

Excises

Tax Arrears

469.7.6 st. 4,253.6.9 NT 4,626.7.6 NT 598.12.9 NT arrears paid 27.6.9 st. arrears paid 9,206.12.214⁄ NT

892.8.2 LM 370.11.334⁄ LM 229.12.014⁄ LM 627.13.1 LM 54.5.5 LM

378.18.0 LM

1,134.4.412⁄ LM (includes 1669) 716 LM 800.2.0 LM included in 1774 388.1.7 LM

27.6.9 st. 598.12.9 NT 371 LM 312.19.814⁄ LM 122.16.0 LM 516.13.1114⁄ LM 382.6.314⁄ LM 353.9.1034⁄ LM 332 LM 300.15.534⁄ LM

Source: Nathaniel Bouton, ed., Provincial Papers: Documents and Records Relating to the Province of NewHampshire, vol. 7, From 1764 to 1776 (Nashua, NH: Orren C. Moore, 1873), 37–38, 51–52, 58, 68, 78–80, 83, 107, 123, 150, 192–93, 235, 241 258, 279, 283, 309, 325, 329, 365, 368. Excises and arrears are from the treasurer’s reports, microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950. The second entries for 1769 and 1774 are from the provincial records, which differ slightly from the handwritten treasurer’s accounts. Excises for 1767 include fi nes.

Each year a committee of the house reviewed the treasurer’s accounts. In addition to recording receipts of revenue from taxes and the proceeds of British funds, the accounts also state arrears of taxes, which typically dated back to 1760. Arrears were relatively large compared with excises and overall taxes. An audit of June 12, 1765, disclosed that excises for 1762 and 1763 were not accounted for and back taxes of 469 7s. 6d. sterling and 4,253 6s. 9d. NT should be included in the next annual account.57 The treasurer’s report of September 1766 included a list of back taxes in both NT and LM totaling 892 8s. 2d. LM for the years 1760–65 inclusive, with outstanding tax for 1766 of 370 11s. 5 3 ⁄4d. LM. Subsequent annual statements showed arrears, which appear in column 5.

Miscellaneous Revenue

R

e s ide n t s of New Hampshire paid few taxes other than a declining burden of direct taxes on polls and estates and modest excises on spirits. 57

Bouton, New Hampshire Records, 7:68.

[ 794 ]

Taxation of the New England Colonies, 1763–1775

The General Court did not authorize any provincial lotteries. The provincial papers disclose a handful of local lotteries without mentioning any sums: a highway between Rye and Portsmouth in May 1765; a highway in Rye in July 1766; a pier in Gosport in August 1767; a pier at the Isle of Shoals in September 1767; and a bridge over the Exeter River in March 1768.58 Numerous other hearings were granted to representatives of various towns requesting lotteries, but the records do not indicate whether approval was given. The towns were required to collect taxes to support public grammar schools, but many of them refused to vote the necessary taxes. Others made little effort to collect taxes. In 1771, in a message to the House of Representatives, Governor John Wentworth stated that nine-tenths of the towns of New Hampshire were without schools or only had vagrant teachers, “unknown in principle and deplorably illiterate.”59 In 1771 county taxes on polls and estates were authorized to support county courts of justice.60 Little was collected in the few years before the Revolution. The General Court approved some requests of the towns for a penny or two tax to build a road or church, but these yielded little revenue. The House of Representatives jealously guarded its right of appropriation. When Wentworth made his maiden speech to the General Court on July 2, 1767, he raised the issue of salary for himself and public officials.61 He often asked for an increase and repeated his request for a permanent salary, but the General Court declined, continuing to vote annual salaries of 700 LM for the governor, another 100 for other provincial officials, plus a small addition for the rent of the governor’s house. The House of Representatives refused the governor’s request to build a permanent residence. On one occasion it granted an extra 500 LM for his extraordinary services, a year after he announced a grant of 6,009 sterling reimbursement from Britain.62 Other expenses included per diem costs of attendance for members of the General Court during its sessions, printing the colony’s laws, supplies, the militia, and sundry items. The annual cost of provincial administration, apart from the redemption of paper bills and treasurer’s notes, was in the neighborhood of 1,000 LM (750 sterling).

Summary

O

n t h e e v e of the Revolution, the 75,000 residents of New Hampshire bore a per capita tax burden of about 3 1 ⁄4d. LM, just under 21 ⁄2d. sterling. The last year in which the colonists paid any significant amount of 58

Bouton, New Hampshire Records, 7:64, 113, 134, 144, 165. Bouton, New Hampshire Records, 7:287. 60 Robinson, Taxation in New Hampshire, 213–15. 61 Bouton, New Hampshire Records, 7:125. 62 Bouton, New Hampshire Records, 7:294. 59

[ 795 ]

chap t er 26

taxes was 1771. And yet, despite the fact that the grant from Britain substantially lightened the colony’s tax burden during 1772–74, it was nonetheless quick to join the Revolution.

Summary of the New England Colonies

I

n 1 7 75 the share of the national debt borne by each of his majesty’s more than eight million subjects in Great Britain amounted to 15 13s. sterling. In marked contrast, the more than 575,000 inhabitants of New England were debt free. Each Briton bore per capita tax of about 1 6s. sterling (about 34 1 ⁄2s. LM). Again in marked contrast, the respective burdens in New England were 2s. in Massachusetts, under 1s. in Connecticut, about 1 1 ⁄2s. in Rhode Island, and a meager 1 ⁄4s. in New Hampshire, all in Lawful Money. British taxes consumed almost a fifth of the country’s gross domestic output, compared with 1–2 percent in New England. The fiscal worlds on opposite sides of the Atlantic had diverged beyond toleration for Britain, which sought an American tax, and the colonists, who feared a British tax. The gap was irreconcilable. The colonists would not tolerate Parliament’s imposition of taxes on Americans without local consent. On this issue of taxation, more than any other, sprang the American Revolution.

[ 796 ]

c h ap t e r 2 7
Taxation of the Middle Colonies, 1763–1775

T

he middl e colonies continued their population growth. Between 1763 and 1775, New York expanded from 130,000 to surpass 186,000, a rise of 43 percent in the short span of twelve years. Pennsylvania’s population increased by 41 percent, from just over 200,000 to 283,000. Delaware and New Jersey grew at much slower rates, the former from 34,000 to 40,000, an increase of about 18 percent, and New Jersey from 100,000 to 128,000, an increase of 28 percent. The trade of all three was funneled through Philadelphia, making it the preeminent economic city in the middle colonies.

Money

P

ar liament passed the Currency Act of 1764 to regulate the issue and legal tender status of paper money in the middle and southern colonies.1 The act prohibited the use of paper bills of credit to pay private debts from September 1, 1764, banned the extension of bills beyond the dates called for in the acts specifying their dates of redemption, and provided a fine of a thousand pounds sterling on any governor who assented to any act or order of a local legislature that contravened the first two clauses. Insofar as New England was concerned, it let stand the Currency Act of 1751, but prohibited the extension of legal tender status to existing bills. Parliament abruptly revised the act in 1770, authorizing New York to issue 120,000 New York currency on loan, granting the bills legal tender status for all debts. A follow-on act of 1773 allowed other colonies to cover current and contingent costs by issuing certificates, notes, bills, or debentures on the security of taxes, granting legal tender status for the paper money in payment of taxes or other public debts. Pennsylvania and New Jersey, and several of the southern colonies, promptly issued large amounts of money on loan.2 1

See chapter 25. Joseph Albert Ernst, Money and Politics in America, 1755–1775: A Study in the Currency Act of 1764 and the Political Economy of Revolution (Chapel Hill: University of North Carolina Press, 2

[ 797 ]

chap t er 27

New York

N

e w yor k was the first to receive exemption from the 1764 act. As all its outstanding paper bills were due to be redeemed by November 1768, concern arose over the possible deflationary effects of the impending contraction in circulating currency. In anticipation of the problem, in December 1767 the Assembly approved an issue of 130,000 in legal tender bills on loan. Governor Henry Moore faithfully rejected it on the grounds that it carried legal tender status and failed to include the requisite suspending clause. In May 1769 the Assembly again tried to establish a land bank in the amount of 120,000, this time without legal tender status, but Moore again rejected it because it still lacked a suspending clause. On both occasions, Moore wrote to London asking for permission to approve the bills, but failed to receive a response by the end of 1769. He died before the next session of the Assembly in November 1769. Shortly after that session convened, the Assembly voted a bill similar to the measure under review in London. Moore’s successor, Lieutenant Governor Cadwallader Colden, signed it on January 5, 1770. The head of the American Department in the British government, Lord Hillsborough, recommended disallowance of the law because it violated the 1764 act in granting the notes legal tender at the loan office and for payment of taxes. The Privy Council formally rejected the law on February 7. On January 31, 1770, Lord North became Britain’s chief minister. Acknowledging that New York’s economy would benefit from an increase in paper currency, North urged Parliament to amend the 1764 Currency Act to enable New York to establish a land bank and issue 120,000 in legal tender bills acceptable for payment at the loan office and colonial Treasury. Parliament approved his request in May 1770, which was followed by an act in the colony of February 16, 1771, authorizing the issue of money on loan for fourteen years at 5 percent interest. South Carolina’s agent, Charles Garth, tried to secure the same privilege for all the colonies but the British government decided to observe the operation of the loan office in New York before relaxing the restrictions of the 1764 Currency Act in the remaining colonies. 3 The only other paper money issue in New York before the Revolution was 2,400 in promissory notes of New York City for water works on August 25,

1973), and Jack P. Greene and Richard M. Jellison, “The Currency Act of 1764 in ImperialColonial Relations, 1764–1776,” William and Mary Quarterly, 3rd ser., 18, no. 4 (October 1961): 485–518. The specifics of each paper money issue appear in Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). 3 Greene and Jellison, “Currency Act of 1764,” 511–13; Ernst, Money and Politics in America, 251–60, 264–81; and The Colonial Laws of New York from the Year 1664 to the Revolution (Albany, NY: J. B. Lyon, state printer, 1894), 5:24–53, 149–78.

[ 798 ]

Taxation of the Middle Colonies, 1763–1775

1774.4 As quantified later in this chapter, interest on loans became the largest source of provincial government revenue during 1772–74.

Pennsylvania

A

s f r e nc h and Indian War hostilities wound down, the stock of Pennsylvania paper currency in the colony declined from 408,972 in 1761 to 264,460 in 1763.5 To augment the supply of paper currency, on January 18, 1764 (three months before passage of the 1764 Currency Act), the colony issued 55,000 in new legal tender notes, valid through October 1, 1772, which increased the stock to 316,082. Thereafter, the supply of Pennsylvania paper declined every year, falling to 220,911 in 1769, 171,871 in 1771, and to a low of 135,006 in 1773. To ease the squeeze on liquidity stemming from the decline in the stock of paper currency circulating in the colony, in December 1766 a group of Philadelphia merchants issued 20,000 in promissory notes paying 5 percent interest, followed with a similar issue the following June, both of which were approved by the colonial legislature.6 Another five non–legal tender issues totaling 83,000 were struck between March 1769 and March 1773, two of which were for relief and employment of the poor in Philadelphia and for paving the city’s streets.7 The amount of specie in circulation in the colony remained relatively static in the range of 40,000–50,000 during 1765–69, after which it surpassed 90,000 in three of the next four years.8 Still, the total money supply in the colony was decreasing in the face of rising population and commerce. On two occasions in 1769 the Assembly tried to enact loan office bills for 120,000, but Governor Richard Penn refused his assent over the matter of who would control the interest money accruing to the provincial government and the establishment of separate loan offices in each county. The Privy Council’s rejection in 1770 of New Jersey’s loan office measure stalled Pennsylvania’s Assembly for two years. In July 1772, it tried again, but Governor Penn again objected to a provision in the bill to establish separate loan offices in each county. When the Assembly conceded the point in 1773, Penn signed a bill for 150,000, which was approved by the Board of Trade in February 1774 and received formal assent from the Privy Council the following July. No mention of legal tender status was included in the bill. Paper money in 4

Newman, Early Paper Money of America, 280. Greene and Jellison, “Currency Act of 1764,” 515–16; Ernst, Money and Politics in America, 207–15, 304–8, 313–15; and Farley Grubb, “The Circulating Medium of Exchange in Colonial Pennsylvania, 1729–1775: New Estimates of Monetary Composition, Per formance, and Economic Growth,” Explorations in Economic History 41 (2004): 329–60. 6 Newman, Early Paper Money of America, 339–40. 7 Newman, Early Paper Money of America, 341–45. 8 Grubb, “The Circulating Medium of Exchange in Colonial Pennsylvania, 1729–1775,” table 1: “The Amount of Currency in Circulation in Pennsylvania, 1729–1775,” 334–35. 5

[ 799 ]

chap t er 27

circulation expanded to 217,633 in 1774 and 318,613 in 1775, with specie concurrently increasing from 97,083 in 1773 to 314,528 in 1775, together more than tripling the colony’s money supply between 1772 and 1775.

Delaware

D

el awar e pr int ed its last issue of bills, in the amount of 4,000 Delaware currency, on May 31, 1760, which completed a series of war issues totaling 45,000 from May 1, 1756. Of the total, 25,000 financed war-related expenses, with the remainder replacing the entire 20,000 loan office issue of 1746, extending the authority to grant new loans until June 1, 1773. (No new paper money was struck until 1776.) Reimbursement from Parliament retired almost half the colony’s issue of 25,000 in war bills.9 The plan to redeem the remainder consisted of five years of taxes at rates of 3–9d./ on property. In fact, only one rate was collected at 3d. Interest income from the 1760 loan issue was largely sufficient to pay the operating costs of the provincial government until the Revolution.

New Jersey

A

bo ut a q uart er of New Jersey’s war time issues of paper currency amounting to 347,500 were reimbursed by Parliament. However, the General Assembly largely used the grants to relieve taxes rather than retire bills. Calls for a new land bank were motivated by fears that scheduled annual taxes of 12,500 from 1763 through 1773 would, by redeeming 137,500 in bills, steadily deflate the economy. In April 1768 the Assembly approved a loan office act, but Governor William Franklin refused his assent on the grounds that the notes carried legal tender status and the bill did not contain a suspending clause. Urged by the Council, Franklin wrote to London asking if he might sign a bill that excluded the legal tender provision and if the loan office interest was appropriated to governmental purposes. The Privy Council declined his request but indicated it was open to a measure that fully excluded legal tender status for the notes. On December 6, 1769, the Assembly approved a fresh bill for a land bank of 100,000 Proclamation Money, but tried to fudge the legal tender issue, omitting any mention of legal tender status except that loan offices could receive notes in repayment over the next twenty years. On June 6, 1770, the Privy Council disallowed the act stating that the narrowed legal tender provision still violated the 1764 act.10 9

See chapter 22 for details. Donald L. Kemmerer, “A History of Paper Money in Colonial New Jersey, 1668–1775,” Proceedings of the New Jersey Historical Society 74 (April 1956), republished by the New Jersey 10

[ 800 ]

Taxation of the Middle Colonies, 1763–1775

As previously mentioned, in May 1773 Parliament further relaxed the 1764 act by empowering colonial legislatures to issue certificates, notes, bills, and debentures on the security of taxes, granting these forms of paper money legal tender for payment of taxes or debts to the public treasurer, but not for private debts. In March 1774 New Jersey’s General Assembly approved a land bank for 100,000 that omitted any mention of legal tender status, followed in September by an act to lower the rate of interest to 6 percent.11 Governor Franklin advised the Assembly to proceed without the legal tender provision, as was the case in Pennsylvania, simply presuming that the bills would be accepted at the loan offices. Royal approval was granted in February 1775. On the eve of the Revolution, the restrictive features in the 1764 Currency Act had largely been relieved. The money supply in the middle colonies was in the hands of their respective legislatures. Loan office interest was, or was in the process of becoming, a major source of revenue, which relieved the colonial legislatures of the need to impose new or higher taxes on their constituents to finance provincial expenditure. A return to the interest financing of the era of salutary neglect implied regimes of low provincial taxes, a happy state of affairs for both elected representatives and taxpayers, in the years to come.

Taxation in New York, 1763–1775

N

e w yor k was subject to royal quitrents, the Navigation Acts, the newly enacted 1764 Sugar Act, the 1765 Stamp Act, and the 1767 Townshend duties, the latter two promptly repealed, but no other effective external British taxes.12 It is difficult to apportion the share of Sugar Act and tea taxes borne by New York residents. New York was a shipment center for goods in and out of the region, which makes it difficult to disentangle imports meant for consumption from those subsequently reexported. A report prepared by the chief customs officer in Boston dated March 22, 1774, itemized customs collections for forty-three ports and colonies in the Americas for the period November 20, 1767, through 1773 inclusive. Customs receipts collected in New York City during this period amounted,

Frontier Guard, 1996, http://www.frontierguard.org/ Research/ NJFG2B08.html, 12–17; Greene and Jellison, “Currency Act of 1764,” 514–15; and Ernst, Money and Politics in America, 246–51, 260–64, 285–93, 308–11, 316–18. The act of December 6, 1769, appears in Bernard Bush, ed., The Laws of the Royal Colony of New Jersey, vol. 4, 1760–1769, New Jersey Archives, 3rd ser. (Trenton: New Jersey State Library, Archives and History Bureau, 1982), 523–47. 11 Bush, Laws of New Jersey, vol. 5, 1770–1775 (1986), 212–34, 235–37. 12 Although quitrents represented external taxes imposed by the Crown, the funds were spent locally, and thus are better treated as an internal tax.

[ 801 ]

chap t er 27

respectively, to 72 7s. 11 1 ⁄2d. for the remaining weeks of 1767, and thereafter annual totals of 5,034 9s. 1 ⁄2d., 262 12s. 93 ⁄4d., 43 14s. 81 ⁄2d., 9 6s. 4 1 ⁄4d., and 11 10s., with none recorded for 1773. The falloff in 1769 reflects the repeal of the Townshend duties.13

Direct Taxes

A

s pr e v io usly noted in chapters 18 (table 18.1) and 22 (table 22.1), direct taxes were regarded as extraordinary revenue in New York, to be levied only in case of such emergencies as war. New York, as in other colonies, fi nanced its participation in the French and Indian War with bills of credit, scheduled for redemption in a timely manner, and with direct taxes on freeholders, residents, and sojourners. The last three issues totaling 260,000 New York currency in 1758, 1759, and 1760, were scheduled for redemption with annual direct taxes of 39,500 through the end of 1767. On October 20, 1764, the General Assembly voted to use its grant from Parliament to sell bills of exchange valued at 59,250 New York currency to redeem a similar amount of bills of credit by June 1765.14 Total direct taxes due for the three years 1763–65 inclusive amounted to 118,500. The appropriation of the grant to redeem bills of credit reduced by half to 59,250 the amount of direct taxes required to sink the remaining portions of the bills coming due those years. On that pace, only another 79,000 was scheduled in direct taxes to retire the remaining bills due in 1766–67.15 The cancellation of New York bills in 1763, 1764, and 1765 amounted, respectively, to 43,644, 43,279, and 77,383, totaling 164,306. This volume exceeded by 45,805 the sum required by law. During the next two years, 1766–67, another 56,740 was redeemed, bringing the total for the five years 1763–67 to 221,046, leaving 109,762 outstanding. That number contracted over the next three years to 81,555 in November 1770, after which the new loan issue raised the stock to 198,535 a year later, falling a few percentage points each year to 187,678 in November 1774.16 13 Public Record Office, Kew, United Kingdom, fi le T 1/452/225–35, “North America, Miscellaneous: General Report on the American Revenues by the Auditor General for the Plantations.” 14 Colonial Laws of New York, 4:801–4. 15 No further mention of the use of grants from Parliament appears in the Colonial Laws of New York through April 1775. 16 Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld.com/colonial _currency.htm (June 3, 2003), table, “New York: Bills of Credit Outstanding,” inserted between pages 10 and 12.

[ 802 ]

Taxation of the Middle Colonies, 1763–1775

Each year the General Assembly ordered the colonial treasurer to present his annual accounts of revenue and expenditure. They are recorded in the Votes and Proceedings of the General Assembly of New York.17 For the period September 1, 1762, to September 1, 1763, his accounts show a sterling grant from Parliament in the amount of 20,026 16s. 2d., and a portion of an overpayment to Pennsylvania due New York for 4,368 2s. 6d. ( jointly valued at 41,810 9s. 7 1 ⁄2d. New York currency), along with direct taxes and arrears totaling 20,586 9s. 8 1 ⁄4d. These numbers were encompassed in the report for the following year ending September 1, 1764. The next year ending September 1, 1765, shows receipts of taxes and arrears of 48,042 10s. 3d. from collectors and county treasurers, and the corresponding sinking of 54,269 5s. in bills of credit. It also shows receipt of another 1,212 14s. 1d. New York currency as a portion of the colony’s share of the overpayment to Pennsylvania. For 1765/66, 17,829 6s. 2 1 ⁄2d. was received in direct taxes, and another 5,604 2d. in New York currency from bills of exchange sold on further portions of the parliamentary grant and Pennsylvania overpayment. The next report encompassed September 1, 1766, through November 17, 1768, following the death of the old treasurer and the appointment of a new one. The accounts revealed another 810 New York currency from the sterling grant, 11,135 2s. 8 1 ⁄4d. in arrears collected that was due from 1746 through 1760, and back interest of 3,947 10s. from outstanding loan office money. Over the next two years through the end of 1770, several thousand more pounds were collected in arrears, along with 6,541 15s. 8 3 ⁄4d. recovered from the late treasurer’s estate due the colony. Apart from the modest reduction in arrears, the annual accounts do not reveal any further collection of direct taxes for the years 1770–74. Table 27.1 displays the outstanding stock of New York bills of credit, annual cancellations, annual receipts of direct taxes, and the New York currency equivalent of grants received from Parliament between 1763 and 1775. The entry for 1770 represents the collection of tax arrears and funds due the colony from the estate of the deceased trea surer. The table excludes revenue from loan office interest and repayment of principal, which would be applied to redeem bills of credit. It also excludes the use of bills to pay indirect taxes of duties, excises, and tonnage, which, apart from the portion of indirect taxes appropriated to fi nance the general support of government, would also be retired on receipt in the hands of the treasurer. 17

Microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950.

[ 803 ]

chap t er 27 tabl e . New York Bills of Credit Outstanding, Annual Cancellations, Direct Taxes, and British Reimbursement, 1763–1774 ( £.s.d. New York Currency) Year

Outstanding Bills of Credit

Annual Cancellations

Direct Taxes (Including Arrears)

Parliament Grants (New York Currency)

1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774

287,163 243,885 166,502 134,032 109,762 87,311 82,822 81,555 198,535 194,404 190,384 187,678

43,644 43,279 77,383 32,470 24,270 25,447 4,489 1,267 3,020 4,131 4,040 2,686

included in 1764 20,586.9.8 1⁄4 48,042.10.3 17,829.6.2 1⁄2 included in 1768 11,135.2.8 1 ⁄4 728.3.0

included in 1764 41,810.9.7 1⁄2 1,212.14.1 5,064.0.2 included in 1768 810.0.0 6,541.15.8 3⁄4 a

a Recovered from late treasurer’s estate. Sources: Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld .com/colonial _currency.htm (June 3, 2003), table, “New York: Bills of Credit Outstanding,” inserted between pages 10 and 12, and Votes and Proceedings of the General Assembly of New York, microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950.

Indirect Taxes

I

ndir ect taxe s funded the regular costs of civil administration, consisting of government salaries and other government expenses. The principal sources remained regular and special duties, tonnage, excises, and licensing of hawkers and pedlars. The amounts from each source were itemized in the treasurer’s annual accounts tabled in the General Assembly.

Duties Dut ie s cont in ued to be imposed on imports of wine, rum, molasses, salt, cacao, dry goods, and tea. Extended on an annual basis up to the Revolution, the rates remained unchanged at 30s. per pipe of wine, 2d. per gallon of rum, brandy, and distilled liquors, 4s. per hundredweight (112 pounds) of cacao, 5 percent on European (non-British) goods or East Asian goods imported from Britain, and 2 for each slave over four years of age from Africa, double from other places.18 18 Colonial Laws of New York, 4:689, 765, 846–47, 908–9, 951, 1023–24, 5:9, 133, 265–66, 450–51, 603–4, 714–15. The amounts collected appear in table 27.2.

[ 804 ]

Taxation of the Middle Colonies, 1763–1775

Tonnage

B

e t w e e n 1 7 63 and 1775, regular tonnage due to expire on January 1, 1765, was extended through the end of 1769. The charge was 3s. per ton on foreign-built and foreign-registered vessels, with exemption for locally built, locally owned, and British-owned vessels plying their trade along coast between Cape Henlopen and New Hampshire, and all whaling vessels. In addition, a special tonnage rate was enacted on December 20, 1763, to support the maintenance of a lighthouse at Sandy Hook, applying a charge of 3d. per ton, exempting vessels under eighty tons. It was renewed on an annual basis through 1771, with the rate reduced to 2 1 ⁄2d. per ton, thereafter extended through the end of 1774 with a further reduction to 1 1 ⁄2d. per ton.19

Excises

T

he g eneral Assembly renewed excises on liquor every year. Specific sums were apportioned among the counties, with New York city and county to collect 954, Albany 127, and the remaining nine counties to collect amounts of 10–125. The commissioners entrusted with collection were allowed, county by county, a total of 180 10s. for incidental charges and commissions. The target revenue was set at 1,500 for 1764 and 1765. It was lowered to 1,276 for the next three years through 1768. No amount was set for 1769, 1770, 1771, or 1772, with the commissioners to determine the sum for each county. Beginning in 1773, renewed through 1775, New York city and county was to pay at least 1,000 in excises, of which 800 was to support a public hospital, with the other counties to be determined by the excise commissioners. 20

Licenses: Hawkers and Pedlars

T

h e c ol ony required a license of itinerant traders known as hawkers or pedlars. Entries in the treasurer’s annual accounts show receipts in 1764, 1765, and 1766, after which the requirement lapsed. After a lapse of two years, from 1769, continuing on an annual basis through 1774, this source of revenue was replaced with new duties on goods sold at auction (vendue). 19

Colonial Laws of New York, 4:741, 766, 860, 921, 956–57, 1,039, 5:280. The amounts collected appear in table 27.2. 20 Colonial Laws of New York, 4:699–702, 779–81, 852–55, 916–18, 984–86, 1028–30, 5:1–8, 134–42, 272–79, 300–310, 367–68, 605–6, 715–16. The amounts transmitted to the treasurer appear in table 27.2.

[ 805 ]

chap t er 27

Interest

I

n t e r e st was collected on the outstanding stock of earlier loan office money along with the proceeds of the 120,000 issue enacted on February 16, 1771.21 Table 27.2 itemizes receipts from indirect taxes, licensing, and interest, along with the annual appropriation of these funds by the General Assembly for the routine costs of civil administration. Total indirect taxes and loan office interest for fiscal years 1764 to 1774 inclusive amounted to 93,363 as against 94,524 in appropriations for general and extraordinary government expenditures, augmented by a small unspecified sum for per diem grants and supplies during sessions of the General Assembly. The unusually large expenditure in 1774 was due to a special grant of 5,000 to Governor Tryon for losses suffered as a result of a fire in his residence. This generosity indicates the health of the provincial accounts.

Lotteries

T

he g eneral assembly occasionally resorted to lotteries to underwrite specific expenditures. On December 10, 1763, it authorized a lottery for 3,000 to pay a bounty on hemp at 20s. for every hundredweight, which was extended to May 1, 1765.22

Local Taxes

B

e t w een december 13, 1763, and January 1, 1775, the General Assembly authorized New York City to impose fourteen taxes, and the city and county combined another three, in amounts ranging from a low of 61 19s. in 1764 for the coroner to a high of 2,000 in 1775 for lamp lighting and night watchmen. Eleven were for the latter, five assessed at 1,400 between 1764 and 1768, four at 1,600 between 1769 and 1773, 1,800 in 1774, and 2,000 in 1775. Another was for the coroner of New York City for 123 in 1766. An undetermined tax was approved on October 20, 1764, for the repair of wells and pumps, with another of 200 for 1770. Another 1,000 was authorized on December 19, 1766, with no specified purpose. Apart from the indeterminate tax, approvals for New York city and county totaled 18,584 19s.23 Other cities and counties were granted the power to tax, but the authorizations were much smaller. Albany led the list, empowered to tax 1,690 on nine separate occasions, mostly for lighting lamps and night 21

The proceeds of interest appear in table 27.2. Colonial Laws of New York, 4:737–39, 796. 23 Colonial Laws of New York, 4:717–19, 754–55, 821–22, 823–25, 866–68, 870–71, 929–31, 936– 37, 970–72, 1044–46, 5:53–55, 87–88, 268–70, 453–55, 607–9, 720–22. 22

[ 806 ]

Taxation of the Middle Colonies, 1763–1775 tabl e . New York Indirect Taxes, Interest Income, and Annual Government Support, 1764–1775 ( £ New York Currency)

Year

Duties

Tonnage Vendue (1770+)

1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

7,459 4,840 4,811

994 850 407

7,449 4,231 4,814 3,615 3,875 5,078 5,200

244 138 643 60 1,168 674 323

Excises

1,535 1,294 742 1,448 1,486 1,457 57

Hawkers

Interest

Total Indirect Tax

278 305 135

1,791 1,800 1,375

10,522 7,795 6,728

3,947 157

13,175 5,820 6,394 5,532 13,376 12,609 11,412

195 409 345 228

6,502 5,400 5,604

Extraordinary Appropriations

2,618

3,000 2,475 3,600 2,000 2,000 2,000 1,000 7,000 4,000

General Government Appropriations

Total General Government Appropriations

5,136 3,840 6,043 6,160 7,092 5,342 5,834 9,633 6,938 6,177 6,636 6,260

7,754 3,840 6,043 9,160 9,567 8,942 7,834 11,633 8,938 7,177 13,636 10,260

(Notes continued on next page)

watchmen. Other counties were granted a handful of local taxes: two in Tryon County totaling 2,500, one of 400 in Ulster County, eight totaling 4,900 in Orange County, one of 40 in Schenectady Town, and one of 21 10s. jointly for Orange and Ulster counties. Specific uses of the revenue included constructing and repairing courthouses and jails, repairing watch houses, clearing land, and draining ponds. 24 In addition, the General Assembly frequently authorized justices of the peace to assess residents for the construction and repair of roads through whose land the roads passed.

Quitrents

A

r ep ort on quitrents from the Auditor General for the Plantations Office, Robert Cholmondeley, dated November 12, 1766, disclosed collection of 2,171 2s. 6d. sterling for the period September 29, 1762, through September 29, 1765, an annual average of just under 725 sterling. 25 This was an improvement over the average of about 483 during the prior twelve years. Excluding the one-time much higher collection of 1,657 7s. 4d. in 1761, the average over the eleven remaining prior years is a much lower 376.

24 Colonial Laws of New York, 4:720, 822–23, 829–30, 883, 978–79, 998, 1049–50, 5:56–58, 145– 47, 241–42, 294–96, 331–33, 428–32, 459–61, 483–86, 486–87, 491–92, 611–12, 667, 698–70, 722–24, 777–78, 781–82, 863–65, 872–73. 25 Public Record Office, Kew, United Kingdom, fi le T 1/437/206, “North America, Miscellaneous: Abstract of the receipt and discharge of the New York Quit Rents 29 Sept. 1750–29 Sept. 1765.”

[ 807 ]

chap t er 27 Notes: 1. The General Assembly enacted excise taxes of 1,500 in 1764 and 1765 and 1,276 in 1766 and 1767, but the treasurer’s accounts for those years show no receipt of excise taxes. Indirect taxes and interest in the table are restricted to information in the annual accounts reproduced in the Votes and Proceedings of the General Assembly of New York, microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950. If the excise taxes were wholly or partially collected, there is no evidence in the accounts of their allocation to specific or general expenditures. Total indirect tax for 1772–74 should be reduced by the amount of interest income received in the Treasury during those years. Subtracting interest from total indirect taxes in column 7 results in actual indirect taxes for 1772–74, respectively, of 6,874, 7,209, and 5,808. For convenience in presentation, interest was included in indirect tax to compare revenue with appropriations. 2. The fiscal year for the treasurer ran from September 1 of each year to September 1 of the following year. For example, the year 1764 in column 1 runs from September 1, 1763, to September 1, 1764. An exception occurred with the death of the treasurer, Abraham De Peyster, and his replacement with a new trea surer, Abraham Lott, which resulted in a delay of more than one year in reporting the accounts. Lott’s fi rst account, presented to the General Assembly on November 17, 1768, encompassed the twenty-four-and-a-half months from September 1, 1766. The numbers for 1768 include receipts for that entire period. The year 1769 runs from November 17, 1768, to December 8, 1769. The year 1770 runs from December 8, 1770, to December 31, 1771. Thereafter each fiscal year corresponds to the calendar year, with the exception that the excise year was for twelve months beginning February 1. General and extraordinary appropriations for calendar year 1775 were approved before April 18, 1775, the start of the Revolution, but there are no reports of revenue for the period January 1, 1775, to April 18, 1775. 3. Extraordinary appropriations listed in column 8 largely consist of funds voted for quartering British troops. The entry for 1764 is to reimburse individuals for wagons and horses lost in the war and other military expenses. The large entry for 1774 includes an appropriation of 5,000 for Governor William Tryon for losses he sustained from a fi re in his residence. General government appropriations include salaries for government officials, the colony’s agent in London, and such special expenditures for military supplies, drawing and settling the boundary with New Jersey, and clearance of past debts for ser vices rendered the colony. The numbers exclude per diem costs of clerks and others providing ser vices and goods during sessions of the General Assembly. The low numbers for 1772 and 1773 in column 10 were due to the absence of a resident governor, thus reducing the appropriation by 2,000, his annual salary, during those two years. 4. The entry for duties in column 2 is net produce, gross duties minus drawbacks of imported goods that were reexported within the allotted period. 5. The last set of entries in each year’s accounts present a general picture of the colony’s public fi nances. The left-hand side of the ledger shows the balances due the colony. Th is is a list of each of the separate accounts for the different sources of revenue that remained after expenditures were charged against each of them (e.g., the balance in the interest of the loan office after burning a specific quantity of bills of credit, the balance in the excise account, the balance in the duties account, the balance in the tonnage account, and so forth). The right-hand side of the ledger shows the balances due the treasurer, that is, the money in his possession or which he received from new appropriations (e.g., for 1774, a grant of the General Assembly to settle the New Jersey line, for bills of credit sunk from the receipt of direct taxes from the years 1746–60, for the grant of 5,000 to Governor Tryon, and the remaining balance in his hands of 20,079 7s. 2 3 ⁄4d.). On December 31, 1774, there remained in the Trea sury 20,079 available for use beginning January 1, 1775. 6. The colonial Treasury ended each year with a positive balance. The balance on September 1, 1764, was 4,005 9s. 3 1 ⁄4d. In succeeding years it stood at 2,460 3s. 5 3 ⁄4d. (1765), 295 7s. 11 1 ⁄2d. (1766), 13,008 12s. 1 1 ⁄4d. (1768), 14,847 8s. 3 1 ⁄2d. (1769), 19,275 8s. 5 3 ⁄4d. (1770), 8,014 13s. 31 ⁄2d. (1771), 21,650 18s. 6d. (1772), 22,526 6s. (1773), and 20,079 7s. 23 ⁄4d. at the end of 1774. Only at the end of fi scal 1766 was the Treasury close to empty. The strong balance in the Trea sury every year from the end of 1768 indicates, as seen in table 27.1, why there was no need to enforce collection of, or enact any new, direct taxes, especially with the annual receipt of more than 5,600 in loan office interest beginning in fiscal year 1772. Sources: For general and extraordinary appropriations for the support of the colonial administration, The Colonial Laws of New York, from the year 1664 to the Revolution (Albany, NY: J. B. Lyon, State printer, 1894), 4:731–36, 786–95, 797–800, 847–51, 909–14, 947–51, 960–69, 1022–28, 1078, 5:23–24, 58–63, 178–85, 271–72, 336–42, 493–99, 613–14, 680–87, 724–31. All indirect taxes and interest are from the annual trea surer’s accounts recorded in the Votes and Proceedings of the General Assembly of New York.

[ 808 ]

Taxation of the Middle Colonies, 1763–1775

A report of the provincial revenues for 1767 disclosed quitrents of 1,806 7s. 9d., with arrears of 18,888 16s. 10d. 26 The report concluded with the following sentence: “The owners of Lands in this province have ever been so backward in the Payment of their Quit Rents that the sum collected has never been sufficient to pay off the above mentioned salaries, and some other orders which were formerly granted to different people by the Lords of the Treasury.” Receipts from quitrents were used to finance provincial expenditures that could not secure the approval of the Assembly. Quitrents were used to pay the salaries of officials who provided specific ser vices for the royal administration that were of less interest to, or opposed by, elected delegates in the Assembly. These included the secretary for Indian affairs (100 sterling), the auditor general (100), a deputy auditor (no sum mentioned), the receiver-general (200), and topping off the salary of the provincial secretary with another 60 after the Assembly reduced his salary. 27 Quitrents were occasionally used to meet special exigencies when the Assembly withheld funds, typically to support a royal official if he was not properly compensated in the civil list. For example, quitrents provided temporary support of the chief justice and when the Assembly limited the salaries of public officials to not more than one year, thus jeopardizing the independence of the supreme court in the conduct of its duties. The balance in the quitrent account in 1765 stood at 531 10s. 5 1 ⁄2d., a small fraction of the total of 7,966 4s. 4 1 ⁄2d. collected between 1750 and 1765. 28 On occasion, the British government waived royal quitrents in New York. In 1760 the Privy Council exempted quitrents for ten years for settlers in the vicinity of Lake Champlain and for soldiers who fought in the French and Indian War. 29 26

Public Record Office, Kew, United Kingdom, fi le T 1/452/273–74, “North America, New York: General State of the Public Funds in New York Province and the uses to which they are applied,” 1766. 27 These sums were paid in 1767. Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 280n3. 28 Bond, Quit-Rent System in the American Colonies, 277. The quitrent accounts for New York were practically complete until a fi re in 1911 rendered them illegible. It is thus impossible to present a list of annual receipts between 1766 and 1775. Bond writes that “[a]mong the items offered at the Phillipps sale in 1913 was a large folio volume entitled, ‘the General Accounts of His Majesty’s Quit-Rents and fines for the Province of New York, stated by the Receivers-General constituted thereto by his Majesty’s Letters Patent for the Years 1763 to 1773.’ The volume was purchased by Sabin, the bookseller, but since his death has been either lost or mislaid and cannot now (1918) be found” (178n5). The treasurer’s accounts laid before the General Assembly, routinely printed in The Votes and Proceedings of the General Assembly of New York, did not list the proceeds of quitrents. 29 Bond, Quit-Rent System in the American Colonies, 256.

[ 809 ]

chap t er 27

Summary

A

s t h e Revolution approached, taxation reverted to the pattern that preceded the French and Indian War. In the fi rst six postwar years 1763–68 inclusive, direct taxes and the application of a grant from Parliament reduced by two-thirds the stock of bills of credit. No direct taxes were collected between 1770 and 1774. A fresh loan office issue of 120,000 in early 1771 more than doubled the stock of bills to 198,535 from 81,555 in 1770. The interest income it generated enabled the colonial government to finance its expenditures, which included several extraordinary items, without any need to increase duties or excises. With the abolition of direct provincial taxes, indirect provincial taxes averaged 6,206 (about 3,500 sterling) for the six years 1769–74 inclusive. The annual per capita tax burden during this period averaged about 8 3 ⁄4d., of which some portion was borne by visitors and traders to the colony. Residents of New York city and county were subject to additional annual direct taxes of about 1,500 for lamp lighting and night watchmen. Outside the city, residents of other towns and counties paid little in locally imposed direct taxes. The lack of data on quitrents apart from 1767 precludes their inclusion in estimating the colony’s tax burden. It seems reasonable to suppose that annual quitrents may have been on the order of a thousand pounds of so. During 1714–39, per capita taxes in New York were 25–30d. This burden tripled during the four costliest years of the French and Indian War. With peace came a marked reduction in provincial debt and a reduction in taxes to the lowest levels of the eighteenth century. On the eve of the Revolution, per capita taxes in New York had fallen to minuscule levels, on the order perhaps of 1 percent of per capita income.

Taxation in Pennsylvania, 1763–1775

I

n t h e several decades prior to the French and Indian War, Pennsylvania financed its civil administration with the proceeds of loan office interest and small excises on liquor. To underwrite its participation in the war, Pennsylvania issued 485,000 in bills of credit between 1755 and 1760. The first tranche of property taxes was collected in 1757, thereafter collected annually through 1762. Taxes enacted to sink war bills were scheduled to continue through 1769, at 36,333 in each of 1764 and 1765, and 33,333 for each of the four years 1766–69 inclusive. Property taxes continued up to and beyond the Revolution, augmented with excises on liquor, an import duty on Negro slaves, and tonnage on vessels to build and maintain a lighthouse on Cape Henlopen. With the burning of loan office bills, interest to the Treasury fell, reaching a low of 158 in

[ 810 ]

Taxation of the Middle Colonies, 1763–1775

An Explanation of the Public Accounts in Pennsylvania

T

he accounts varied from year to year in their scope and thoroughness. The tax collection system worked as follows. Each of the eight counties of the colony had its own collector of excises. He received a commission for his work, set at 5 percent for Philadelphia County and 10 percent in the other seven. When a collector was replaced mid-year, the audit report typically included the receipts of both accounts. The same arrangement applied to property taxes. Each county had its own treasurer who was responsible for receiving property taxes. His commission was set at 5s./100 of revenue, a much smaller rate of 0.25 percent. The collector of Negro duty and tonnage, often the same individual, also received a commission. In some years, the gross collections of all property and excise taxes in every county, minus commissions, defaults, and the balances retained by county treasurers for later remittance to the provincial treasurer, were recorded in full detail. For these years, total taxes on excises and property can be calculated (assuming no mistakes in the data). In other years, property tax payments were not published in full for each county, which prevents the aggregation of total property taxes paid in those years. Excise taxes were published in full every year, which permits the addition of total excises. Collectors and treasurers remitted to the provincial treasurer less than the full amount of revenue collected, deducting commissions, allowing for defaults due to bankruptcy and other harsh economic conditions, and withholding portions for later remittance for a variety of reasons. The collector of tonnage and Negro slave duty invariably remitted the full sum collected minus his commission. Each county treasurer maintained his own set of double-entry accounts. On the credit side of the ledger was listed the entire amount of taxes he received. On the debit side was listed deductions for the charges entailed in collection. These included a provision for deficiencies due to insolvencies, that is, those who could not pay their assessed taxes, and deductions for the fees of collectors, county commissioners, county assessors, township and ward assessors, clerks, and stationary and sundry disbursements. Debits also included the cash he remitted to the provincial treasurer and his commission on all of the above. If all of the taxes were collected and equaled the charges, there was no outstanding balance due the province (the provincial treasurer). If some of the taxes were not collected, the amount was noted as “balance due the province, said to be outstanding.” Alternatively, an amount could be listed as “balance due the province,” which meant that the county treasurer had not fully remitted the taxes he received to the treasurer. The county treasurer maintained separate accounts for each property tax due. For example, in the 1772 State of the Public Accounts, the county treasurer reported separate accounts for the fourteenth and fi fteenth eighteen-penny taxes. The 1767 accounts record separate receipts for the fi fth, sixth, seventh,

[ 811 ]

chap t er 27

An Explanation of the Public Accounts in Pennsylvania (continued) eighth, ninth, and tenth eighteen-penny taxes. To the extent that any year’s county records were incomplete, the next year’s accounts required a settlement of outstanding balances between county treasurers and the Committee of Accounts. In the 1770s, the annual State of the Public Accounts ran about twenty pages in length. Property taxes were typically in arrears, which means that the accounts of each county treasurer had to be reconciled every year. Continuous arrears required periodic writing off of back taxes as uncollectible, and the accounts were adjusted accordingly. An especially poignant example of the difficulty in tabling fully reconciled accounts between the county treasurers and collectors and the provincial treasurer appears in the 1766 accounts printed in the Votes and Proceedings on September 18, 1766. “On the foregoing Accounts your Committee beg Leave to observe, that although by this State of them, continued in from the Balance struck from Year to Year, in former settlements, it appears, that the Province is in Debt to the Loan Office the Sum of 6359 10 8, yet by a general Account, exhibited by the Trustees, comparing what Money they have received and paid since the Year 1751 to this Time, there appears a Balance due from them to the Province of the Sum of 12955 10 6, which we have taken great Care and Pains to examine into, and reconcile, but hitherto without Success; wherefore we think a true State of these Accounts cannot be ascertained, without a Re-examination of all former Settlements for the Reasons assigned in our Report of the Eighth Instant, in which Opinion we are further confirmed, by our Examination of the Reports of the Committee in 1761, 1762 and 1763, in the two last of which there appear very material Omissions.” On this comment, the members of the Committee of Accounts stated their belief that the accounts of 1766 were in error to the tune of 19,315 1s. 2d., a rather large sum against direct taxes in the neighborhood of 22,000 that year. Lesser amounts were questioned in other years. In presenting the 1770 accounts, the committee comments that “on a par ticu lar Examination of Mortgage Deeds, we find there still remains considerable Sums unpaid on several of them on Account of the Quotas [the amount of the loans] and Interest and on some others there has been no Payment made since the Date of Them.” To summarize, the total tax burden is the sum of all payments of taxes received by the county treasurers and collectors and the collector of duty and tonnage. Th is sum was always more than the recorded receipts of the provincial treasurer, which he surrendered to the trustees of the General Loan Office, who, minus their commission, burned the bills paid in taxes. The figures in table 27.3 represent total taxes paid where the data permit their calculation. Where the information of county treasurers and collectors is incomplete, the figures are the slightly lower receipts of the provincial treasurer. The largest

[ 812 ]

Taxation of the Middle Colonies, 1763–1775

An Explanation of the Public Accounts in Pennsylvania (continued) percentage difference appears for excises given the relatively large commissions taken by the collectors. The differences are smaller for direct taxes because provincial treasurers received much smaller commissions as a share of receipts. The numbers in the table differ somewhat from those in Robert A. Becker, Revolution, Reform, and the Politics of American Taxation, 1763–1783 (Baton Rouge and London: Louisiana State University Press, 1980), appendix, tables 8 and 9, 237, 241. Becker used net revenue received by the provincial treasurer surrendered to the General Loan Office. In those instances where my summation of the four sets of revenue received by the provincial treasurer differs from the summation in Becker’s table, I present my own numbers. We agree on the figures in the years where the data were available from the provincial treasurer but not from the separate counties for 1764, 1765, 1768, and 1771. The notes to the table identify which entries reflect total receipts in the eight counties and those that rely on the provincial treasurer’s receipts. Table 13 (241) in Becker displays some arrears in property taxes during 1769–73, ranging from a low of 8,992 in 1770 to a high of 12,736 in 1773. I have separately verified these figures. My own calculation of arrears, the balance said to be outstanding, in 1775 amounts to 26,234, which is larger than actual collections for that year. This condition doubtless reflects the difficulty of collection in Revolutionary circumstances. These arrears exemplify the problems facing the Committee of Accounts in reconciling the balances carried from one year to the next in providing an accurate state of the colony’s public finances. Still, it must be noted, the accounts were among the most thorough and transparent in the thirteen colonies.

1775. It recovered sharply to 6,097 in 1776 with the lending of 99 percent of the 1774 loan office issue of 150,000. 30 Table 27.3 displays the stock and annual changes in bills of credit, receipts from the colony’s several taxes, and interest for 1763–75. The figures are based on the annual Report of the Committee of the Assembly on the State of the Public Accounts, set before the House of Representatives in the second half of September and published in the Votes and Proceedings of the House of Representatives. The total direct tax burden of the colony’s property owners for the thirteen years 1763–75 inclusive amounted to about 330,000, an annual average of about 25,400. The figure is derived by adding back the various fees and commissions to the provincial treasurer’s reported receipts for 1763–67. Total excises came to 79,601, annual average of 6,123. Total tonnage sums to 30

Votes of the Assembly, September 26, 1776.

[ 813 ]

chap t er 27 tabl e . Pennsylvania Bills of Credit Outstanding, Annual Cancellations, Property Taxes, Excises, Tonnage, Negro Duties, Total Taxes, and Interest, 1763–1775 (£ Pennsylvania Currency)

Year

Outstanding Bills of Credit

Annual Changes in Stock of Bills

Direct Taxes

Excises

Tonnage

Negro Duties

Total Taxes

Interest

1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

264,460 316,082 305,095 281,431 258,420 233,934 220,911 201,173 171,871 149,115 135,006 217,633 318,613

56,216 (−51,622) 10,987 23,664 23,011 24,486 13,023 19,738 29,302 22,756 14,109 (−82,627) (−100,980)

20,900 18,419 23,032 22,175 28,061 26,317 22,906 27,378 24,491 27,817 26,399 27,681 24,509

3,894 4,089 4,289 3,376 4,357 5,432 5,677 5,316 5,372 7,481 11,021 10,086 9,121

1,510 860 n.e. 914 2,432 1,324 1,449 1,413 1,566 1,666 1,768 1,857 2,095

1,510 738 671 548 989 428 269 290 249 101 348 112 67

27,814 24,106 27,992 27,013 35,839 33,501 30,301 34,397 31,678 37,065 39,536 39,736 35,792

6,311 1,470 408 263 474 362 336 537 285 472 211 525 158

Notes: 1. Direct taxes in column 4 are the sum of total taxes paid by assessed individuals to their respective county treasurers for 1768–75. The numbers for 1763–67 are the smaller amounts, excluding the deductions permitted county trea surers, recorded by the provincial treasurer. The State of the Public Accounts does not itemize the fi nancial records of county treasurers for 1763–67 in the published Votes and Proceedings. Direct taxes in those five years should be increased by about 10 percent, the difference between county collections and remittances to the provincial trea surer, to estimate the total payments of property taxpayers. Every number for excises is total taxes paid by consumers of liquor and retail licenses granted for its sale. Every number for tonnage and Negro duty is total taxes paid by owners of vessels and importers of slaves. 2. A negative number in column 3 indicates an increase in the stock of bills. A positive number is a reduction. 3. As stated in the boxed text on pages 811-13, property tax arrears were substantial. Arrears of 12,736 in 1773 represented over half of actual receipts. During the five years 1769–73 inclusive, outstanding arrears averaged 11,121, based on the partial figures reported in Robert A. Becker, Revolution, Reform, and the Politics of American Taxation, 1763–1783 (Baton Rouge and London: Louisiana State University Press, 1980), appendix, table 13, 241. In 1775, arrears of 26,234 exceed actual collections of 24,509. Arrears up to half of annual property taxes during 1769–73, and likely also in other years given the comments of the Committee of Accounts, indicates that the House of Representatives did not feel any need to strengthen enforcement. 4. On October 1, 1773, Pennsylvania revived the loan office system with an issue of 150,000. The measure was approved by the Board of Trade in February 1774. Of this, 94,196 was loaned out by September 17, 1774, and 148,000 by September 29, 1775. Late interest due September 29, 1775, and interest (not shown in the table) on 679 mortgages from that date to August 31, 1776, amounted to 6,097, a sharp rise from 158 collected in the prior year. Four further note issues in 1775 totaled 162,000, the last for 80,000 on December 8, which is not included in the outstanding stock in 1775. The loan office issue of 150,000, which appears in the outstanding stock in 1774, and the three other issues in 1775 of 82,000, minus the December printing, total 232,000. Subtracting 46,750 in cancellations in 1774–75 from 232,000 in new issues placed in circulation equals 185,250, which is close to the increase of 183,607 in the stock indicated in the table. The annual State of the Public Accounts documents the routine practice of relending some of the principal (what the accounts call quota) repayments, which slowed the reduction in the stock of bills on loan. The process of relending rapidly declined after 1768. 5. Property taxes excludes county property taxes. From the analysis of county taxes presented in chapter 22, it seems reasonable to estimate that county taxes added another tenth or so to provincial property taxes, which amounts to 2,000–3,000 a year. (continued)

[ 814 ]

Taxation of the Middle Colonies, 1763–1775 6. Tonnage revenue was earmarked for the building and support of a light house on Cape Henlopen. It was not incorporated in the credits and debits of the provincial treasurer in his accounts with the province and the loan office. The General Assembly enacted legislation to establish a separate set of commissioners for tonnage expenditure beginning in 1772. 7. Repayment of loan principal, property taxes, excise, and Negro slave duty was generally transmitted to the loan office for the burning of bills. 8. Interest is not included in total taxes. The reason is that interest represents payment by individuals for the use of loan funds for their private benefit, not for public purposes. 9. The excise year ran from July of one year to the July of the following year. The figures presented in the accounts are stated for the year of the following July, even though they are the proceeds of the second half of the preceding year and the fi rst half of the stated year. The tax year for property taxes are those set in the laws that were enacted to sink bills. 10. During the French and Indian War, the Penns agreed to the taxation of their estates in the colony. The rates were extremely favorable to the Penns, which resulted in minor taxes on their vast holdings. In the 1769 accounts, the agreed upon taxes of the proprietor were calculated at 8,205 12s. 11 1 ⁄4d. for the ten years 1760–69 inclusive. The proprietors were credited with 5,000, an abatement of quitrents arrears called “their free gift” to the people of Pennsylvania, and remitted 1,000 in cash, leaving the balance due the province. Property tax figures in the table incorporate the proprietor’s taxes from 1769. Payment was made of 1,600 in 1770, 455 in 1771, 2,348 19s. 8 3 ⁄4 d. in 1772, 867 in 1773, 919 in 1774, and 1,944 12s. 11 1 ⁄2 d. in 1775. With the exception of 1775, the proprietary share of provincial property taxes was only a few percentage points, a small fraction of their annual quitrents. The imposition of property tax on the proprietors was largely symbolic, putting them on the same plane as other property owners, rather than a desire to collect money. 11. In the four years 1772–75 preceding the Revolution, the State of the Accounts included a section on debts outstanding due to the province. It listed the total arrears of property taxes, excises, and other miscellaneous debts due the province at 18,979, 20,421, 27,199, and 37,603. Total arrears exceeded total taxes in 1775. Sources: Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld .com/colonial _currency.htm (June 3, 2003), table, “Pennsylvania: Bills of Credit Outstanding,” inserted between pages 10 and 12, and Votes of the Assembly, September 30, 1763, September 22, 1764, September 21, 1765, September 18, 1766, September 21, 1767, September 19, 1768, September 21, 1769, September 22, 1770, September 21, 1771, September 17, 1772, September 27, 1773, September 26, 1774, and September 29, 1775.

17,994, an annual average of 1,384. Negro duty totaled 6,320, an annual rate of 486. The total tax burden for the thirteen years adds to about 434,000, an annual average of about 33,400. A small additional burden, county taxes for local expenditure, added perhaps another 10 percent, about 2,500, to annual direct taxes. 31 From the end of the war in 1763, more than 90 percent of the bills in circulation were backed with taxes. The small and shrinking share of bills on loan brought in a modest 9,288 in interest to the loan commissioners between 1763 and 1768, 68 percent of that in 1763 alone, thereafter falling to a meager 211 in 1773 as the stock of loan office bills contracted to a minuscule 3,217.32 Between March 1769 and March 1773 the stock was augmented with five non–legal tender issues totaling 83,000. Of the approved issue of 150,000 in loan office money, borrowers signed up for 97,844 in 1774 and a substantial 151,563 (includes some relending) by September 1775, which 31

The numbers that are rounded reflect the fact that direct taxes for 1763–68 include an estimate of fees and commissions that cannot be precisely quantified. 32 Becker, Politics of American Taxation, 48.

[ 815 ]

chap t er 27

produced a marked rise in interest to 6,097 in 1776. The total stock of bills rose by 183,607 in those two years. Apart from war- and other defense-related expenditures, the annual cost of the provincial administration was extremely modest. The category of “incidental spending,” which included all official salary and supplies, averaged 3,484 for the ten years in the period for which the data were included in the accounts. In seven years, of which only five encompass the incidental spending category, annual provincial expenditures averaged 6,581. The relatively heavy taxes of the colonists in the era between the French and Indian War and the Revolution were largely allocated to retiring the colony’s war debts, with no more than a fifth required to meet the cost of provincial administration.

Quitrents

Q

uit r ent s, an annual property tax payable in Pennsylvania to the proprietor rather than the Crown, were in addition to the property taxes levied to redeem bills of credit and support provincial and county public ser vices. These rents were not compensated with ser vices, but were an artifact of the terms under which residents acquired land from the proprietor. Quitrents, the private income of the Penn family, gradually rose from a few hundred pounds sterling in the 1730s to reach 3,453 4s. 8 1 ⁄4d. in 1762. They reached 4,595 13s. 7 1 ⁄2d. in 1769, more than doubling to 10,204 7s. 3 ⁄4d. (approximately 16,325 Pennsylvania currency) in 1776. A picture of total taxes borne by Pennsylvania residents during 1763–75 would have to add an annual sum of 3,500–10,000 sterling (5,600– 16,000 Pennsylvania currency) to the total of all other provincial and county taxes. Extrapolating a rise in yields on a linear basis for the inbetween years, using the three reported figures over the thirteen-year period, suggests a average annual yield of about 9,000 Pennsylvania currency. The average of 1763–69 is a lower 6,575, and that of 1770–75 a much higher 11,840 Pennsylvania currency. Although the yield was rising, especially from 1770, the receiver-general, Edmund Physick, calculated that arrears, excluding interest, amounted to 118,569 4s. 6 1 ⁄2d. by 1779. Only a third, 63,679 8s. 31 ⁄2d., was actually remitted of the total of 182,248 12s. 10d. due for 1700–1779. 33 33 Bond, Quit-Rent System in the American Colonies, 161. A small portion of the proprietor’s income, profits, was lumped in with recorded quitrents. Following the overthrow of British rule, Penn’s proprietary rights were divested in an act of the state assembly. However, “in remembrance of the enterprising spirit of the founder, and of the expectations and dependence of his successors,” the Assembly compensated the Penn family for the loss of their proprietary rights with a gift of 130,000. The act eliminated all quitrents and

[ 816 ]

Taxation of the Middle Colonies, 1763–1775

Summary

I

n t he period between the war and the Revolution, the colony’s population averaged about 250,000, rising from just over 200,000 to surpass 280,000 in 1775. The foregoing calculations suggest a total annual burden encompassing all taxes and quitrents in the neighborhood of 44,000 Pennsylvania currency, about 31 ⁄2 s. (2s. 2d. sterling) a head. Britons paid almost twelve times as much as did residents of Pennsylvania. Only the residents of Massachusetts bore an equally heavy per capita burden. Moreover, the major portion of the colony’s debt in 1775 consisted of interest-earning loan office bills that were self-redeeming.

Taxation in Delaware, 1763–1775

D

el awar e ’s shar e of reimbursement from Parliament enabled it to burn almost half its war bills of credit. Just over 12,500 remained in circulation on the formal conclusion of the French and Indian War in February 1763. As part of a war issue of June 1759, the striking of 27,000 included 20,000 for new loans to be granted until January 1, 1773. It was intended to replace the February 1746 issue, even though the latter was not fully retired.34 The colonial Treasury was set to receive a steady flow of interest income. The General Assembly in Delaware consisted of the Assembly, also called the House of Representatives, with members elected to one-year terms. The Council, the upper house, had lapsed into political irrelevance with only one or two appointees, transforming the legislature into a de facto unicameral body. The president of the Council could serve as acting governor if a deputy governor died or left his position, but he had no authority as acting governor to approve legislation. Local interests dominated proceedings in the Assembly. The governor’s salary, the common governor with Pennsylvania who came to Delaware to attend the brief sessions of the General Assembly, and other incidental administrative expenses depended on the approval of the elected representatives. John Penn served as governor during 1763–71. He was succeeded by Richard Penn, who arrived in October 1771, with John resuming the governorship in the fall of 1773. In the five years preceding the Revolution, the available evidence suggests that they rejected only five bills. One would have made the county levy courts elective, replacing justices of the peace with elected officials more responsive to voters. Residents urging this measure complained that county taxes were heavy. Th is charge probably reflects arrears, but confi rmed the family’s reserved manors and manorial rights. The gift helped make whole the century-long accumulation of quitrent arrears due the Penn family (162). 34 Newman, Early Paper Money of America, 120.

[ 817 ]

chap t er 27

the fact that residents did not pay any provincial direct taxes and did not want to pay any county taxes either, rather than any statement of fact. 35 Fiscal accounts of the colony are somewhat complete only for 1765 through 1768. Partial numbers for revenue exist for 1769 and 1771, and partial expenditures for 1769–71, and 1773. The accounts printed in the proceedings of the Assembly itemize payments authorized by its members, along with receipts and outlays of the trustees of the loan offices in New Castle, Sussex, and Kent counties, which served as the colony’s effective treasuries.36 There is one reference in the accounts to excises, showing receipts of 310 17s. 4d. in New Castle County through October 20, 1763, based on the 1760 excise act, with a balance of 1,093 3s. 7 3 ⁄4d. remaining in the hands of the trustees. No excise figures appear in the accounts for Sussex and Kent counties, which may have had comparable balances. Thereafter, no further reference appears to any source of revenue other than loan office interest. The records do not confirm any collection of the previously scheduled direct taxes that were enacted to redeem the remaining war bills. Robert Becker cites the application of one possible 3d. levy that cannot be confirmed in the extant records.37 Table 27.4 sets forth interest received in the three loan offices and expenditures for which annual figures appear comprehensive. Interest is recorded separately for the loans of the 1746 and 1759 issues, and, in most cases, expenditures are charged separately against the two different sources of interest. It is likely that interest in 1769 and 1771 accrued from the 1759 loans. Annual expenditures included per diem and direct costs of legislative sessions, official salaries and incidental expenses, and fees and expenses of the loan offices. Each office paid its proportional share of the cost of legislative sessions, civil administration, and its trustees. For the four years 1765–68 displayed in the table, interest totaled 444 1s. 10 1 ⁄4d., 247 10s. 8 1 ⁄4d., 575 5s. 3 1 ⁄2d., and 474 5s. 10d. Given the wide variation in annual figures, it is likely that remission of interest was

35 John A. Munroe, History of Delaware, 4th ed. (Newark: University of Delaware Press, and London: Associated University Presses, 2001), 49–50, and Munroe, Colonial Delaware: A History (Millwood, NY: KTO Press, 1978), 242–43. Another rejected bill entailed extending and altering excises on liquor, but the lack of minutes in the Assembly precludes knowledge of any details surrounding the measure and its veto. 36 The accounts of revenue and expenditure appear in the Votes and Proceedings of the Government of the Counties of New-Castle, Kent, and Sussex upon Delaware, microfi lm, Early State Records. The accounts are inconsistent. Substantial gaps appear in the accounts and no reports appear in the Votes and Proceedings for 1774 and up through April 1775. The accounts separate repayment of principal, which resulted in the burning of bills or their relending, and receipt of interest, with its assignment to approved expenditure. Relending of principal kept bills in circulation longer than originally intended, providing additional interest for the Treasury. There are insufficient data to determine the amount of principal that was reloaned. 37 Becker, Politics of American Taxation, 46.

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Taxation of the Middle Colonies, 1763–1775 tabl e . Delaware Interest Income and Expenditures, 1765–1771 ( £.s.d. Delaware Currency) Year

1765 (46) 1765 (59) 1766 (59) 1767 (46) 1767 (59) 1768 (46) 1768 (59) 1769 1771

Interest New Castle

136.17.91 ⁄4 183.11.61 ⁄2 200.16.9 3 ⁄4 103.9.9 212.9.3 76.19.2 176.10.11

Outlays New Castle

Interest Sussex

Outlays Sussex

Interest Kent

Outlays Kent

388.11.2 294.1.2

56.19.9 46.13.101 ⁄2

140.13.10

66.12.91 ⁄2

207.14.41 ⁄2

278.7.5

122.0.41 ⁄2 5.2.9 65.17.111 ⁄4

146.18.7

99.18.3 137.5.11

479.4.103⁄4

149.15.01 ⁄2 161.12.11 ⁄2

218.11.0 89.6.0

340.8.101 ⁄4

163.18.111⁄2

142.2.12

Source: Votes and Proceedings of the Government of the Counties of New-Castle, Kent, and Sussex upon Delaware, microfi lm, Early State Records, prepared by the Library of Congress in association with the University of North Carolina, collected and compiled under the direction of William Summer Jenkins, 1950.

irregular. Some due in 1766 was probably received in 1767. The accounts do not show any interest received in 1766 from the 1746 loans. Annual interest over the four years averaged about 435. It seems reasonable to extrapolate similar figures through 1775. Comprehensive expenditures only appear for 1765, 1767, and 1768. Only New Castle County reported its expenditures for 1766, and only Kent County for 1769. During 1770 and 1771, only the expenses of legislative sessions are presented. Annual expenditures for the four years 1765–68 amounted to 736 19s. 4 1 ⁄2d., 294 1s. 2d., 904 10s. 10 3 ⁄4d., and 722 18s. 9 3 ⁄4d. Annual outlays averaged about 665, a few hundred pounds more each year than interest income. Several thousand pounds in excises could have made up this difference.

Summary

F

or t he t w elv e y e ars preceding the outbreak of the Revolution, some 30,000–40,000 residents of Delaware paid no direct provincial taxes. There is no evidence of ongoing payment of excise taxes, nor do the extant records indicate any figures on county taxes. All expenditures of civil administration were financed with interest and excises. Delaware was a fiscal paradise.

Taxation in New Jersey, 1763–1775

R

e c al l t h at New Jersey was scarcely taxed between 1732 and 1752, its civil administration financed with loan office interest and other minor levies. The French and Indian War changed this regime. The General

[ 819 ]

chap t er 27 tabl e . New Jersey Bills of Credit Outstanding, Changes in the Stock of Bills, and Taxes Due in the 1769 Act, 1763–1775 (£ New Jersey Currency)

Year

Outstanding Bills of Credit

Changes in Stock of Bills

Taxes Due in 1769 Act

1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

246,916 243,426 255,112 244,195 230,094 220,069 227,539 218,878 207,512 197,176 184,821 176,603 168,333

(−10,434) 3,490 (−11,686) 10,917 14,101 10,025 (−7,470) 8,661 11,366 10,366 12,355 8,218 8,270

12,500 12,500 12,500 12,500 15,000 15,000

Sources: Figures on bills of credit are derived from Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld.com/colonial _currency.htm (June 3, 2003), tables, “Pennsylvania: Bills of Credit Outstanding” and “New York: Bills of Credit Outstanding,” inserted between pages 10 and 12. Annual taxes stipulated in the December 6, 1769, act are in Bernard Bush, ed., Laws of the Royal Colony of New Jersey, vol. 4, 1760–1769, New Jersey Archives, 3rd ser. (Trenton: New Jersey State Library, Archives and History Bureau, 1982), 547–64.

Assembly approved paper bills totaling 307,500 New Jersey currency, backed with taxes through 1780 to guarantee their redemption (see table 22.6). Annual payments of 12,500 were due every year for the ten years 1764–73, thereafter in the range of 5,500–15,000 over the remaining seven years. Five rounds of British reimbursement totaling 79,668 0s. 2 3 ⁄2d. were used to relieve residents of the taxes that were enacted to sink bills of credit. Following the last issue of 25,000 in April 1764, the stock of bills peaked at 255,112 in 1765, falling by 27,573 to 227,539 at the end of 1769, far less than required by law and less than a third of the funds received from Britain. 38 (Table 27.5 presents the stock of currency in circulation and its annual increase or decrease.) Th is left considerable money in the hands of the treasurers, which was more than sufficient to pay the salaries and 38

The stock of and increases or decreases in bills of credit are derived from Brock, “Colonial Currency, Prices, and Exchange Rates,” tables, “Pennsylvania: Bills of Credit Outstanding” and “New York: Bills of Credit Outstanding,” inserted between pages 10 and 12.

[ 820 ]

Taxation of the Middle Colonies, 1763–1775

incidental expenses of the civil establishment of about 2,000 a year. 39 No taxes were required in the 1760s to redeem bills or support the civil administration.40 Keeping the bulk of its bills in circulation had the dual attraction of maintaining a larger stock of currency to facilitate commerce and abate taxes for a decade. As the currency retained its value against sterling, little pressure emanated from Britain or inside the colony to reduce the supply of paper. Specie also circulated in the colony but there are no accurate figures on the amounts. 39

In correspondence dated August 24, 1768, with Lord Hillsborough, secretary of state for the Southern Department, the agency in the British government dealing with the American colonies, Governor William Franklin wrote that the salaries of the civil administration amounting to 1,725 New Jersey currency, along with some incidental charges and daily wages during sessions of the General Assembly, were met, and had been met since his appointment in August 1762, “by a Surplusage of Money struck for his Majesty’s Ser vice during the later War.” The use of British funds obviated the need to collect taxes to redeem bills during Franklin’s tenure. He further noted the absence of any locally imposed duties. Frederick W. Ricord and Wm. Nelson, eds., Documents Relating to the Colonial History of the State of New Jersey, vol. 10, Administration of Governor William Franklin, 1767–1776 (Newark: Daily Advertiser Printing House, 1886), 48–53. In a message to the Assembly of April 23, 1771, urging it to provide 1,200 for support of the troops, Franklin stated that cash in hand at the disposal of the two treasuries along with debts due the colony for which security had been taken amounted to 8,289 2s. 11d. Of this, 2,250 was reserved for the support of the government, leaving 6,039 2s. 11d. available for immediate appropriation. Moreover, the tax due to sink the 12,500 in bonds due that year amounted to a meager 4d./ on land holdings compared with 4s./, twelve times greater, in Britain. If Franklin was supplied with accurate data, it meant that the resources available to the treasurers in April 1771 were sufficient to meet the cost of civil administration for several years without any need to enforce tax collection. Indeed, as noted later in the text, arrears of taxation, voted for the support of government in 1773, amounted to 72 percent two years later (243–51). Franklin repeatedly complained to the Assembly and to London that he was inadequately compensated. 40 Given the historic division of the colony into East and West New Jersey, the unified royal colony continued to maintain separate treasurers for the two divisions. The accounts of both treasurers were recorded each year in the proceedings of the General Assembly. Separate accounts were maintained for war funds, listing on the left side the debits, the bills given to each treasurer, and, on the right side, per contra, credits, the paid out, inspected, allowed, and endorsed expenditures of the committees of the General Assembly. Another set of accounts was presented in the same manner for ordinary revenue and expenditure of the civil administration. Odd accounts for various items were sometimes commingled with more comprehensive accounts, with receipts lumped together rather than segregated into their separate sources. From time to time, accounts would be presented for longer periods of time to show the bigger picture of issues and redemptions of bills of credit and the allocation of grants from Parliament to retire bills and relieve taxes. The treasurers did not reconcile actual taxes collected with the amounts stated in the levies, or show a balance of cash receipts against cash expenditures. The accounts do not enable the compilation of actual tax receipts or their matching with redemption of bills and expenditures. In the instances where the treasurers stated actual cash receipts, these were generally arrears from previous legislation, dating as far back as 1722. Th is explains some cash receipts from taxes in the 1760s even though the taxes scheduled for payment in that decade were abated. There are no extant comprehensive treasurers’ accounts in the New Jersey State Archives prior to 1776.

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chap t er 27

On December 6, 1769, the General Assembly agreed to take steps to sink its declared outstanding stock of 190,000 of war bills. It established quotas on the thirteen counties to collect 190,000 in direct taxes over fourteen years.41 Payments were set at 12,500 for 1770–73, 15,000 for 1774–82, with a final installment of 5,000 in 1783. The act specified rates on householders, merchants, shopkeepers, sawmills, gristmills, and fulling mills, furnaces and forges, liquor-distilling glass houses, brew houses, ferries, vessels, single men working for hire, slaves, a large variety of vehicles, hawkers, itinerant traders, animals, and tracts of land. A form listing twenty-three categories of ratable items was designed for use by assessors in each county.42 The stock of bills fell 50,936 from January 1, 1770, through December 31, 1774, an annual average of 10,187, or a fifth less than the mandated reduction in the 1769 act. If the ratio of specie to paper in circulation in New Jersey paralleled that of Pennsylvania, the amount of specie would have doubled, in which case the money supply would have remained largely unchanged during those years. The colony’s attempts to establish a new loan office for 100,000 in 1768 and 1769 were both disallowed by the Privy Council. Finally, one of 1774 was approved on February 20, 1775, with conditions, which were deemed void when the Revolution broke out. The reduction of bills during 1770–74 implies that taxpayers were remitting about 10,000 a year, with annual arrears of 2,500 that would have accumulated to 12,500 by the end of 1774. The accounts do not state total arrears, only some small sums due from prior years. As explained below and as elaborated in the footnotes, the information presented in the accounts does not permit an accurate compilation of actual receipts of taxes and their precise allocation for the redemption of bills or the general support of government. From 1770 onward the annual accounts of the two treasurers credited the tax due each year in the December 1769 legislation. Stephen Skinner of the Eastern Division, succeeded by John Smyth in February 1774 in the wake of the discontent of more than 6,000 stolen from Skinner’s possession, reported income of 6,220 7s. for each of 1770, 1771, 1772, and 1773 (no report for 1774). Samuel Smith of the Western Division reported 6,279 13s. for 1770, 1771, and 1772, bringing the total for each of 1770, 1771, and 1772 exactly to the 12,500 stated in law. Smyth reported a lesser 1,256 in 1773 and a higher 7,464 8s. with arrears of 1,177 12s. 11 1 ⁄2d. in 1774. The annual accounts after passage of the 1769 act were accrual, reflecting what was due the two treasurers, rather than their actual receipts of taxes. 41 The sum of 190,000 in outstanding bills at the end of 1769 stated in the act differs from the actual total in table 27.5. The number appears to have been selected to set levels of taxation in the coming years. 42 Bush, Laws of New Jersey, 4:547–64.

[ 822 ]

Taxation of the Middle Colonies, 1763–1775

Occasional entries of cash receipts appear in the accounts. Those of Skinner include 2,567 18s. 8d. received from the county collectors “to complete the fund for 1767 to redeem bills due that year,” and 5,968 9s. 6d. in 1768 from sundry taxes received from the county collectors. These were not necessarily the taxes enacted for collection in those respective years, but were likely receipts from taxes due in prior years that could be combined with British funds to meet the level of redemptions due in those years.43 Other examples include 716 15s. 11d. in 1771 of arrears due in 1769, and 977 7s. 1d. in 1773 of arrears due in 1770. Arrears of taxes voted for the general support of government were extremely large. In 1775, two years after the fact, Skinner cited arrears of 1,256, an astonishing 72 percent of the tax of 1,741 15s. voted for the general support of the government for 1773. In the accounts dated February 3, 1775, Smyth reported receipt of 1,213 10s. 7d. of arrears for 1772, and 1,256 for 1773, the latter the same as his Western Division counterpart. The fact that the two numbers are identical indicates that they are bookkeeping entries, not actual cash receipts. Large arrears also suggest that the treasurers could readily meet the annual costs of civil administration without pressing for timely compliance of tax payments.44

43 On December 21, 1771, the General Assembly voted to collect arrears due the two treasuries from taxes enacted in 1722, 1730, 1731, 1738, 1752, and 1753. Bush, Laws of New Jersey, 5:64–68. 44 To illustrate the accounting commentaries in preceding footnotes and in the text, the February 3, 1775, statement of Smyth lists 1,213 10s. 7d. to cash received of arrears of for 1772 and 7,464 8s. to the sinking fund tax directed to be raised for the year 1774, for a total of 8,677 18s. 7d. Th is entry of income received or due the treasurer is balanced against 4,237 6s. in burned bills with certificate dates of redemption of May 1774 with part of the tax due for payment in 1771, 1,776 2s. 5d. in arrears of taxes not paid in for 1774, and a balance of 2,664 10s. 2d. to the current account (the term for funds due the colony or to be placed at the disposal of the legislature). Several of these numbers represent anticipated, not actual, revenue. A second entry on the same page of the legislative records shows actual receipt of arrears of 1,256 due in 1773, along with 1,741 15s. to a tax ordered to be levied for support of the government for the year 1774, for a total of 2,997 15s. Th is is balanced against deficiencies of 1,177 12s. 11 1 ⁄4d. in taxes, the year not specified, with a balance of 1,820 2s. 0 3 4⁄ d. carried to the account current. Other balancing items in the accounts displayed old arrears of 220 3s. 3d. ordered to be levied in 1773, against old arrears of 82 11s. 0 1 ⁄2d. received from Middlesex County and balance due the province of 137 12s. 2 1 ⁄2d. The accounts dated January 24, 1775, of Skinner show a similar mix of burned bills dated May 1773 valued at 2,741 3s. 6d. charged in full against taxes for 1770, another 1,679 5s. of similarly dated bills against part of the tax for 1771, and 1,213 10s. 7d. in outstanding arrears for 1772. These sums are balanced against the previous balance dated September 2, 1772, an allowance for 6,570 9s. 4d. of money stolen from the Treasury on July 21, 1768, with the remainder charged to the balance of the sinking fund, a small amount to the support of government, 5,000 for the exchange of ragged bills, and a small sum for the fi ne of a pedlar.

[ 823 ]

chap t er 27

The cost of the civil establishment consisted of the governor’s salary, which remained unchanged at 1,200 a year during 1673–75, 60 rent for his house, 250 for the chief justice and his two associate justices, roughly another 250 for other official salaries, miscellaneous court costs, per diem for members of the Assembly, and the expenses of legislative sessions.45 In some years funds on the order of 80–100 were appropriated for an agent, in some years special appropriations were made to pay members of the New Jersey regiment, and acts in 1774 provided an extra 1,135 for incidental charges and 1,400 for quartering troops. From 1772, the annual cost of government rose to about 3,500. In addition to provincial taxes, the General Assembly approved numerous acts authorizing justices of the peace to tax residents for roads passing through their lands, for constructing bridges, for building jails, for draining land, and for other improvements. Most were valid for up to two years but did not specify amounts. A handful authorized amounts, for example, 450 for completing a bridge over Raritan Landing to be met by a tax on the residents of Somerset and Middlesex counties.46 Most others fi xing taxes were on the order of a few hundred pounds. A lottery of 1,050 was authorized to complete a highway.47 On June 24, 1767, the General Assembly voted a duty of 10 Proclamation Money (PM), valid for two years and from then to the end of its next session, on slaves imported into New Jersey.48 On November 11, 1769, the duty was raised to 15 PM and extended for ten years. The total Negro population in the colony increased from 7,724 in 1767 to 9,340 in 1775, but there are no data distinguishing what share stemmed from natural reproduction or imports. A birthrate of 2 percent implies that most was due to natural reproduction, suggesting that little revenue was raised from the duty. Proceeds of duty are not presented in the accounts.

Summary

D

ur ing t h e twelve years before the outbreak of the Revolution, New Jersey’s more than 100,000 residents, reaching 128,500 in 1775, paid insignificant direct taxes between 1763 and 1769. It is likely they paid no more than 11,000–12,000 a year to redeem bills and support the civil 45

The annual appropriations for the general support of the government appear in Bush, Laws of New Jersey, 4:191–95, 273–76, 309–12, 358–88, 427–31, 453–56, 505–58, 5:25–28, 53–58, 115–19, 171–76, 301–6. 46 Bush, Laws of New Jersey, 5:158–59. Other examples are found in 4:328–29, 402–4, 484–86, 489, 491, 5:87–88. 47 Bush, Laws of New Jersey, 5:161–62. 48 Bush, Laws of New Jersey, 4:435–36.

[ 824 ]

Taxation of the Middle Colonies, 1763–1775

administration from 1770 through 1774. The per capita burden in those latter years would amount to about 22d., less than 2s. a head. If the burden is averaged over the entire period, it would have been about 8 1 ⁄2d. Both figures are trivial. Estimating per capita income on the low side of just 10 suggests that the Garden Colony’s average annual tax burden for the period was onethird of 1 percent, and no more than 1 percent in the years direct taxes were actually remitted.

Summary of the Middle Colonies

O

n t h e e v e of the Revolution, the four middle colonies enjoyed excellent fiscal health. Debts were largely or entirely alleviated, and tax burdens were extremely light. In local currencies, with exchange rates at 160–170 to 100 sterling, the estimated annual per capita tax burden in New York amounted to about 9d., markedly less after 1770, just over 2s. in Pennsylvania, none in Delaware on the basis of extant records, and about 8d. in New Jersey. The greatest five-year flow of immigrants from Great Britain and Ireland to the American colonies took place in 1771–75, a period of increasing turbulence between the mother country and its colonies. Perhaps the difference in tax burdens on the western side of the Atlantic was an important factor drawing Old World residents to the New World. Resettlement in the American colonies carried the promise of private property in place of tenancy, and low taxes in place of heavy taxes.

[ 825 ]

chap t er 28
Taxation of the Southern Plantation Colonies, 1763–1775

T

h e d om i n a n t feature of the southern economy remained the production of a handful of crops, tobacco, rice, and indigo, that rested on the backbreaking work of slaves. By 1775, the Negro populations of the five southern colonies surpassed 73,000 in Maryland, 204,000 in Virginia, 80,000 in North Carolina, 86,000 in South Carolina, and 15,000 in Georgia. In order, Negroes constituted 32, 41, 34, 56, and 40 percent, respectively, of the population of the southern colonies. Virginia and South Carolina were most heavily dependent on slave labor, and even Georgia, which began its trusteeship period with a ban on imported slaves, quickly evolved into a slave-based plantation economy. Charleston was the only urban center of any size in the south. The heavy, almost exclusive, dependence on a handful of primary exports made the southern colonies more subject to the vagaries of international finance and trade than the more self-sufficient, smallfarming communities and shipping centers of New England and the more diversified middle economies, each with two major urban centers of trade and finance.

Money

T

h e cur r e nc y ac t of 1764 regulated the issue and legal tender status of paper money in the southern colonies.1 Each found ways to

1

The stock of paper money in Virginia is from Leslie V. Brock, “The Colonial Currency, Prices, and Exchange Rates,” Essays in History Published by the Corcoran Department of History at the University of Virginia, vol. 34, 1992, http://www.studyworld.com/colonial _currency .htm (June 3, 2003), table, “Virginia: Bills of Credit Outstanding,” inserted between pages 14 and 15. Exchange rate and currency values are from John J. McCusker, Money and Exchange in Europe and America, 1600–1775: A Handbook (Chapel Hill: University of North Carolina Press, 1978). Details of specific paper money issues are from Eric P. Newman, The Early Paper Money of America, 4th ed. (Iola, WI: Krause Publications, 1997). Money in the southern colonies is discussed in Joseph Albert Ernst, Money and Politics in America, 1755–1775: A Study in the Currency Act of 1764 and the Political Economy of Revolution (Chapel Hill: University of North Carolina Press, 1973). For Maryland, see Kathryn L. Behrens, Paper Money in Maryland, 1727–1789, Johns

[ 826 ]

Taxation of the Southern Plantation Colonies, 1763–1775

augment their stock of paper currency after 1764, principally by excluding legal tender status from their respective issues.

Virginia

B

e t w een may 1755 and March 1762, Virginia issued 537,962 10s. in provincial treasury notes designated as current money. Of this, 99,962 10s. of June 1757 was exchanged for notes of prior issues, leaving net war issues at 438,000. The entire amount was to be sunk with a final payment of taxes due October 20, 1769. 2 On May 24, 1763, a committee of the House of Burgesses, which was established to examine the state of treasury notes and the taxes enacted for their redemption, presented its report to the full chamber. It listed eight issues of notes between June 1757 and March 1762 totaling 392,962 10s. (excluding three earlier issues of June and December 1755 and March 1756). The committee tabulated 85,655 6s. 6d. in burned notes received in taxes between July 1760 and November 1762, with notes in the Treasury awaiting burning amounting to another 49,874 13s. 1d. In addition was 10,625 in notes in the Treasury from two issues not yet placed in circulation. The report then listed annual taxes of 39,919 due in 1763, 1764, and 1765, 41,895 due in 1766, 1767, and 1768, and 32,817 15s. in 1769. All these summed to 424,414 14s. 7d., leaving a projected balance of 11,452 4s. 7d. in taxes, assuming full collection, in excess of the value of all issued notes. Timely redemption of war notes was forestalled by “the Robinson affair.”3 In June 1763, 251,935 in treasurer’s notes was outstanding. Four years later, 206,727 remained outstanding. The difference, 45,208, was far less than the roughly 160,000 that should have been burned during the four years. John Robinson, who served as speaker of the House of Burgesses and treasurer of the colony for twenty-five years preceding his death on May 11, 1766, was among the most prominent and wealthy Virginians. As treasurer, he was legally required to burn notes as he received them in taxes. Disregarding the law, but perhaps with good intentions, he loaned many of them to friends and others in financial difficulty. Taxes on lands and slaves scheduled through 1769 threatened to harm the colony’s leading families. Given the small amount of specie circulating in the colony, burning paper money Hopkins University Studies in Historical and Political Science, ser. 41, no. 1 (Baltimore: Johns Hopkins Press, 1923). 2 Table 23.4 links the issue of treasury notes with redemption dates, and the schedule and amounts due each year of four different deferred taxes on polls, land, hogsheads, and slaves. 3 The story of the Robinson affair appears in David J. Mays, Edmund Pendleton, 1721–1803: A Biography (Cambridge, MA: Harvard University Press, 1952), 1:174–223.

[ 827 ]

chap t er 28

on schedule would leave planters with a diminishing supply of Virginia currency with which to pay taxes and private debts. Robinson believed that a quick return to prosperity would enable borrowers to repay their loans and that he could square his accounts. In loaning instead of burning the notes, Robinson felt he could spare the colony from financial depression. It took several years for Robinson’s financial maneuvers to be fully disclosed. Suspicions that he had been lending treasury funds to his friends had not been documented in any of the audits made before his death. On December 10, 1762, Edmund Pendleton submitted a report to the House of Burgesses that showed the Treasury in good order. David Mays describes Pendleton’s report as “perfunctory,” similar to those undertaken by burgesses in previous years.4 Pendleton, who accepted the task of settling the debts of Robinson’s estate to the colony, later discovered that the accounts had not been in balance for years. The previously cited report of May 1763 recorded in the Journal of the House of Burgesses stated no irregularities in the redemption of paper currency. A committee formed in December 1764 issued another perfunctory report in May 1765. Members of the Council and House of Burgesses urged Pendleton to accept the task of administering Robinson’s estate, which entailed repaying its debts to the colony and collecting the funds owed it. Pendleton examined ledgers and other papers in the Treasury and interviewed Robinson’s debtors. His found debts owed the estate in excess of 130,000, of which Robinson had loaned over 100,000 from treasury notes that should have been burned. The colony’s leading figures were among the largest culprits. Councillors owed Robinson nearly 15,600 and burgesses more than 37,000. Some of the largest debtors had served on the several committees that perfunctorily approved Robinson’s accounts over the previous few years. Robinson failed to take collateral from his borrowers or keep comprehensive records of the loans. Many treasury records were missing and others were muddled. Finding a number of errors in the land and poll tax accounts, Pendleton reviewed the entire period of war issues and taxes back to April 1755. Sheriffs presented receipts proving that they had surrendered tax money to the Treasury, some portion of which had not been entered in the accounts. The House of Burgesses also appointed a separate committee to investigate the Treasury. On November 25, 1766, Pendleton presented his findings to the burgesses. His report was referred to the larger house committee, which reported its conclusions on December 12. Robinson’s estate owed the colony 100,761 7s. 5d., about 3,500 in private debts, and perhaps another 20,000 in surety he gave to others for their loans.

4

Mays, Edmund Pendleton, 176.

[ 828 ]

Taxation of the Southern Plantation Colonies, 1763–1775

After a lengthy prorogation, the General Assembly reconvened on March 31, 1768. A committee appointed to reexamine Virginia’s claim on Robinson’s estate reported that its debt to the colony, with the addition of interest, had risen to 109,335 9s. 2d. Pendleton was instructed to call in the debts due Robinson’s estate and use the proceeds, along with liquidating the estate’s assets, to repay the colony. On June 23, 1781, more than thirteen years later in the midst of the Revolution, the matter was finally settled. The stock of treasury notes declined from 213,771 at the end of 1766 to 170,420 a year later, a reduction almost as large as those of the three prior years. It steadily fell to a meager 43,377 in December 1774 as notes received in taxes were burned in a timely manner. The only source of new paper currency was two non–legal tender issues. One of November 7, 1769, authorized 10,000 in treasury notes, redeemable by November 20, 1771. The other of July 11, 1771, approved 30,000 due for retirement by December 10, 1775. The colony’s money depreciated from an exchange rate of 127.55 Virginia currency to 100 sterling in 1754 to a low of 160.73 in 1765. In 1766 Virginia reestablished its former official valuation of 125 to 100 sterling. Its currency promptly appreciated to 123.75 in March of that year. Thereafter until the Revolution, the rate fluctuated between 118.00 and 130.30, with the par rate remaining at 125. The illegal recirculation of over 100,000 in treasury notes did not retard the restoration of the colony’s money to its prewar par value against sterling. The explanation lies largely in the events of 1765 and 1766. In protest against the Stamp Act of 1765 the courts began to shut down. Many remained closed for a year, which provided for a moratorium on debts. The demand for sterling bills of exchange to repatriate British assets and investments or pay for British imports, which fell drastically during the Stamp Act, sharply declined. Declining demand for sterling bills resulted in the appreciation of Virginia currency to its lawful setting. When the courts reopened in 1766, British credit gradually returned and the Eu ropean market for American wheat had turned favorable.5

Maryland

T

h e 1 7 3 3 act that established a public loan office was due to expire with the final redemption of all paper bills in 1764–65. The colony’s bills were fully backed with sterling securities in Britain that had been purchased with funds from an export duty of 15d. sterling on each hogshead of tobacco for a period of thirty-one years ending September 29, 1764. The bills were fully retired on time at the proclamation rate of 133.33.

5

Ernst, Money and Politics in America, 192–96.

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The dispute between the lower house and the Council over the payment of the clerk of the latter had blocked the approval of money bills from 1756 until 1765, leaving public creditors without payment for nearly a decade. The dispute was resolved when the Council agreed to waive its right to amend money bills, retaining only the power of rejection. The journal of accounts, the list of public debts, was approved. The lack of money in the Treasury required an act of the General Assembly to create the money with which to settle public claims. On November 1, 1766, the government passed an “Act for the payment of the Public Claims, for emitting Bills of Credit, and for Other Purposes therein mentioned.” It authorized the issue of $173,733 in bills without legal tender status, thus satisfying the 1764 Currency Act.6 Dated March 1, 1767, each dollar was payable at 4s. 6d. sterling in bills of exchange between June 25 and December 25, 1777. The notes were secured with the colony’s ability to draw sterling bills of exchange on its Bank of England stock, along with the use of the notes in payment of all public obligations to the Treasury. The public debt of the colony amounted to 5,623,499 pounds of tobacco and 19,841 1s. 2d. Maryland currency, which together totaled 32,992 15s. 2d. sterling according to lower house estimates. By May 1767, the new paper money office had disbursed $145,801 to claimants.7 With creditors paid, the government approved a new loan office in December 1769, authorizing $318,000 in bills without legal tender status. Dated March 1, 1770, the bills were to be repaid between October 10, 1781, and April 10, 1782. The new bills, together with those of 1767 and coins, were declared lawful tender for all loan office obligations. Loans required collateral double their value, with amounts ranging between $100 and $4,000. Interest was set at 4 percent. Cash received in the loan office, save the 1767 notes, could be reloaned for eleven of the twelve years of the period of the original loan. Bank of England stock not required to redeem the 1767 issue was to be sold and converted into sterling bills for remission to Maryland for purchase on the open market as backing. Well over half the bills was loaned out within a year.8 The two houses of the General Assembly resumed their confl ict over such contentious issues as the exclusive right of the lower house to regulate fees and any residual role of the Council in the annual budget process. The

6

Maryland’s issue of dollar-denominated currency was the earliest governmental use of the dollar as an official unit of monetary value in the world. Newman, Early Paper Money of America, 167. 7 Aubrey C. Land, Colonial Maryland: A History (White Plains, NY: KTO Press, 1981), 253. At $1 equals 54d. sterling, $145,801 amounts to 32,805 4s. 6d. sterling. The total issue of $173,333 comes to 38,999 18s. 6d. sterling. 8 Ernst, Money and Politics in America, 165–68.

[ 830 ]

Taxation of the Southern Plantation Colonies, 1763–1775

lapse on October 22, 1770, of the tobacco inspection law removed tobacco notes from the colony’s money supply. To compensate for the loss of tobacco notes, a new loan issue was proposed in the fall session of 1771, but it was rejected by the Council as a violation of its customary precedent in the budget process. The Council was seeking to maintain some role in the construction of money bills. With the death of Lord Baltimore, the legislature remained in abeyance for nearly two years, and did not meet again until mid-1773. In the session of November 1773, the lower house achieved all its objectives of fi xing the fee schedule for officials and eliminating any right of the upper house to amend money bills. In return, the lower house agreed to a final payment for the clerk of the Council. An act to issue $480,000 in non–legal tender bills was quickly approved. The bills were scheduled for redemption between October 10, 1785, and April 10, 1786, at 4s. 6d. per dollar. Of the total, $266,6662 ⁄3 was for mortgages, $80,000 for public expenses, mostly to pay the journal of accounts and a small sum of about $1,500 to cover the new state house in Annapolis with copper roofing, with the balance to replace worn bills.9 Principal and interest were payable in any of the bills of credit, gold, silver, bills of exchange, and the new notes. Some $40,000 of expected interest was to support public education and an institution of learning.10 Loans began to be made in summer 1774.

North Carolina

N

ort h c ar ol i n a , in conjunction with several other colonies, sought relief from the 1764 Currency Act. Its House of Commons received the support of Governor William Tryon, who wrote to the Earl of Shelburne, the secretary of state for the Southern Department, in support of a new paper issue.11 The commons and the Council appointed a committee to petition the Crown for permission to issue 100,000 in paper money to circulate for sixteen years, promising that it would not be made legal tender for debts

9

Ernst, Money and Politics in America, 318–29, and Newman, Early Paper Money of America, 169. 10 The Votes and Proceedings of the Lower House of Assembly of the Province of Maryland includes periodic accounts of the trustees in London charged with managing the colony’s holdings of stock in the Bank of England and other funds matched against bills of exchange drawn on those funds for payment in the colony. A committee of nine members representing both houses, which was appointed by law to inspect the office and proceedings of the commissioners for emitting bills of credit, presented accounts on November 26, 1767, May 31, 1768, October 30, 1770, and November 27, 1773. Accounts of the colonial treasurer do not appear in the Votes and Proceedings. 11 Robert M. Weir, “North Carolina’s Reaction to the Currency Act of 1764,” North Carolina Historical Review 40, no. 2 (Spring 1963): 183–99, and Ernst, Money and Politics in America, 220–30, 293–300.

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due the Crown or British merchants. Tryon indicated that the General Assembly would make any necessary modifications in the proposed issue to satisfy British interests. Lord Hillsborough, who had been recently appointed to the post of secretary of state for the colonies, taking over Shelburne’s duties, adamantly opposed any legal tender issue in the colonies, even if it contained clauses protecting the interests of the Crown and British merchants. The commons, supported by Tryon, continued to press for a new legal tender paper currency issue, but met with failure. On December 5, 1768, Tryon assented to an act to issue 20,000 in non– legal tender debenture bills to pay the forces raised to suppress a rebellion known as the Regulators in the western counties of the province. The bills were not declared lawful for public obligations, but would attain a degree of legal tender beginning June 10, 1772, when they were designated payable in Proclamation Money. From that day, the debentures were redeemable at the Treasury for whatever lawful currency was on hand in paper or specie. The House of Commons also sought to maintain the circulation of notes of the 1760 and 1761 issues for 32,000 by suspending the collection of poll taxes levied for their redemption. Although Tryon refused his formal assent to this bill, in 1770 he consented to a law that indemnified sheriffs who had not collected taxes since 1769. The result was that the Treasury received no revenue from the 3s. 10d. poll tax due in 1770. Tryon took up the governorship of New York a few weeks following the bloody suppression of the Regulators in May 1771. His successor, Josiah Martin, was less sympathetic to the currency and tax concerns of the commons. Both recognized the need to pay the men who put down the rebellion but differed on how to raise the funds. Martin understood that 66,000 in taxes was in the possession of collectors, of which at least 50,000 could be promptly brought into the Treasury. He wanted to use these funds to retire the estimated 43,000 in legal tender notes of the 60,000 issued in 1748 and 1754 remaining in circulation preceding any new debenture issue. The commons resolved on December 6, 1771, in evident disregard of the evidence, that 53,000 of the 60,000 of those two issues had already been burned and that another 13,000 in the custody of collectors would yield a surplus of 4,000 over the remaining bills. On these numbers, the commons proposed repeal of the poll taxes and duties on spirits levied for their redemption. On December 23, the General Assembly presented Martin with bills for a debenture of 120,000 and repeal of the sinking tax, which he promptly vetoed. At the last minute, before dissolving the legislature, he consented to an issue of 60,000, to be sunk within ten years by an annual 2s. Proclamation Money poll tax payable in the notes of issue. The Crown promptly ratified the measure, but the taxes were never received in the Treasury. The act became void with the outbreak of the Revolution. [ 832 ]

Taxation of the Southern Plantation Colonies, 1763–1775

The House of Commons continued to press for more paper currency and to pass bills to discontinue the collection of sinking taxes. Martin and the Council resisted these various entreaties. The legislature held its final session in March 1774, reaching no agreement with Martin on taxes or currency. The house largely succeeded in halting the sinking of existing notes or the collection of taxes. Poll taxes of 5s. to 7s. 6d. during 1771–73 were never paid into the Treasury.

South Carolina

T

h e c ur r e nc y of South Carolina consisted of coins, bills of credit, tax anticipation certificates, and public orders.12 At the conclusion of the French and Indian War, some 106,500 in bills of credit issued in 1731 was lawfully permitted to circulate as the authorizing law failed to include taxes for its redemption. Many of these notes became worn out or were lost with the passage of time. To restore the full volume to circulation, an act of August 23, 1769, approved 106,500 in new notes to replace all prior bills remaining in circulation, which were declared invalid after August 23, 1771. To the chagrin of the colonists, the Privy Council disallowed the act more than a year later in November 1770. By the time news of the veto reached Charleston in February 1771, the colony’s public treasurers had already put 25,000 of the new notes in circulation, destroying only 7,000 in old bills. Despite its illegality, most of the 25,000 remained outstanding in 1774. Confl ict between the commons and imperial authorities over a grant of colonial funds to John Wilkes, a severe critic of the British government, blocked passage of all tax acts after 1769. The absence of tax legislation halted the former practice of the issue of annual tax anticipation certificates, thereby removing a source of paper money from the colony’s money supply. A third kind of paper money was public orders. An issue of 70,000 dated April 7, 1770, was declared receivable for taxes until March 25, 1775. Its purpose was to finance the construction of courthouses, jails, and other buildings. The Crown disallowed the issue in January 1772, but the funds were already spent and the buildings were nearing completion. At the time of its scheduled redemption in March 1775, some 35,000 continued to circulate as local merchants agreed to accept the currency in trade. In early 1774 the colony’s rebellious House of Commons completely rejected royal and parliamentary interference in its monetary affairs. On April 10, under its own authority, it struck promissory notes, formally designated Certificates of Audited Accounts, as legal tender for all public obligations. 12

Chapter 23 explains the different paper currencies of South Carolina.

[ 833 ]

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The notes were payable out of the next taxes to be levied.13 On April 18, 1775, the day of Paul Revere’s midnight ride that signaled the start of the Revolution, five prominent citizens issued private promissory notes to finance war expenditures, with repayment to become the responsibility of the colony. Despite the odd mix of paper currencies, the colony’s currency remained stable against sterling between 1763 and April 1775, fluctuating around 700 South Carolina currency to 100 sterling. It fell to 800 in July 1775 several months after the Revolution broke out.

Georgia e or g i a’s mone tary standard conformed to sterling.14 Between 1763 and 1775, the colony augmented its currency with several issues of paper money. One of 650 in certificates dated July 8, 1765, declared receivable for taxes until September 30, 1768, was for a fort, guard house, and barracks. Another of 1,815 dated 1766–67, receivable for taxes until March 1, 1771, consisted of 1,115 to encourage settlers and 700 to rebuild the Savannah Court house. The issue was disallowed by the Crown, in part to discourage emigration of Britons to Georgia, fearing that the loss of potential workers to British manufacturers would damage the mother country. However, the Georgia legislature made no effort to remove the notes from circulation. Another round of certificates amounting to 2,200 was struck in May 1769, receivable for taxes until May 1, 1772, to rebuild the lighthouse on Tybee Island and make a coastal survey. It was disallowed by the Crown on the grounds that the authorizing act contained no suspending clause and made the currency legal tender for public debts. By the time news of the disallowance reached the colony, the lighthouse was nearly finished and the notes

G

13 Ernst, Money and Politics in America, 215–20, 334–50, and Leila Sellers, Charleston Business on the Eve of the American Revolution (Chapel Hill: University of North Carolina Press, 1934), 67–78. To remedy a growing shortage of money in the colony, in 1771 traders in Charleston agreed to accept both milled and unmilled gold and silver coins at an “advanced rate” of about 3.2 percent over their legal value, a reversion to the previous century’s practice of “crying up” coinage to attract and retain it in the colonies. The acceptance of unmilled money resulted in the passing of debased cut and clipped coins (69). The Certificates of Audited Accounts contained the following inscription: “In pursuance of the Resolution of the Commons House of Assembly of the 4th March 1774, I do hereby certify [amount stated] appears to be due to [name specified] and that the same will be provided in the next Tax Bill.” Newman, Early Paper Money of America, 412. 14 Ernst, Money and Politics in America, 169–73, 304; Milton Sydney Heath, Constructive Liberalism: The Role of the State in Economic Development in Georgia to 1860 (Cambridge, MA: Harvard University Press, 1954), 60–63; and Percy Scott Flippin, “The Royal Government in Georgia, 1752–1776. IV: The Financial System and Administration,” Georgia Historical Quarterly (September 1925): 187–245.

[ 834 ]

Taxation of the Southern Plantation Colonies, 1763–1775

had attained customary status of acceptability. Efforts to extend the colony’s loan office system were not successful. Tax anticipation certificates, made lawful for public debts, were issued for 3,375 4s. 1d., 3,046 16s. 8d., and 3,355 9s. 01 ⁄4d. in acts of April 11, 1768, December 24, 1768, and May 10, 1770. The Board of Trade allowed these measures to stand, but warned against future issues. A replacement issue of 4,299, receivable for taxes or exchangeable until September 29, 1776, to redeem all previous issues and meet expenses of the colonial administration, was authorized in an act of September 29, 1773. The collection of taxes had largely broken down during the troublesome years of 1770 to 1773. To clear past debts, the legislature allocated a portion of the replacement issue to that end. A final pre-Revolution issue of 800 in certificates approved on March 12, 1774, receivable in taxes until December 31, 1777, was to protect settlers within the new land obtained from Indians in 1773. Despite its sterling status, the rate of exchange of Georgia’s currency on London during 1763–75 averaged about 108 Georgia currency to 100 sterling. Some Georgia paper circulated in East Florida, a British colony from 1763 until its return to Spain in 1783, but this loss was more than offset by the circulation of South Carolina currency in Georgia. In any case, Georgia relied heavily on British subsidies to finance its civil administration up to the Revolution.

Taxation in Virginia, 1763–1775

T

axat ion i n v ir g i n i a in the twelve years preceding the Revolution continued with a mix of imperial and provincial impositions. The former consisted of British duty on tobacco, royal quitrents, and the modest 1d. tax on intercolonial shipments. The latter entailed the 2s. hogshead export duty on tobacco, the poll tax, and several miscellaneous duties. The biggest change in provincial taxation was the marked reduction in burdens from the heavy war years of 1754–63.

Imperial Taxes: British Import Duty, Quitrents, and 1d. Tax on Intercolonial Shipments

V

irg inia and mary l an d remained the largest source of imperial revenue from the American colonies during the eleven full years leading up to the Revolution. Tobacco imported by England from Virginia and Maryland ranged between a low of 33,552,000 pounds in 1769 and a high of 56,888,000 in 1771, with an annual average of 46,255,000 pounds for the eleven years 1764–74 inclusive. Virginia and Maryland tobacco constituted 98.6 percent of recorded imports from the American colonies during this period, but a smaller percentage of total British tobacco imports. [ 835 ]

chap t er 28 tabl e . British Imports and Reexports of Virginia and Maryland Tobacco, 1764–1774 (Pounds of Tobacco) col u m n 1

Year

1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 Total

colum n 2

c olum n 3

c olum n 4

column 5

column 6

Britain Imports

Britain Exports

British Net Imports

Net Imports Share of Total Imports

VA and MD Imports

80,743,537 82,196,158 75,482,676 68,525,982 68,807,135 69,704,893 78,413,391 107,391,329 95,241,937 100,414,151 96,505,982

79,960,506 72,500,624 64,709,995 65,271,920 63,348,079 58,507,902 71,736,959 89,928,067 92,590,557 93,945,069 84,363,387

783,031 9,695,534 10,772,681 3,254,062 5,459,056 11,196,991 6,676,432 17,463,262 2,651,380 6,469,082 12,142,595

0.010 0.118 0.143 0.047 0.079 0.161 0.085 0.163 0.028 0.064 0.126

53,662,000 47,600,000 43,193,000 39,096,000 35,457,000 33,552,000 38,986,000 56,888,000 50,667,000 54,915,000 54,785,000 508,801,000

Notes: The figures for Virginia and Maryland tobacco are for recorded imports into England. The figures for total tobacco imported and exported are for both England and Scotland. Scottish imports of tobacco during 1764–74 grew from about half those of England in 1764 to about 80 percent in the mid-1770s. However, Scotland reexported 98 percent of its tobacco imports, and thus little duty was collected from retained Scottish imports. Sources: Statistics on tobacco imported by England from Virginia and Maryland are derived from data in the Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), which includes a chapter on colonial statistics. See table Eg1038–45: “Tobacco Imported into England, by Origin: 1697 to 1775,” S-752–54. Statistics on imports and reexports of tobacco for England and Scotland (Great Britain) are from Lewis Cecil Gray, History of Agriculture in the Southern United States to 1860, vol. 1 (Gloucester, MA: Peter Smith, 1958), table 5, “Imports and Reexports of Tobacco, England and Scotland, 1761–1775,” 214.

Table 28.1 estimates the value of British duty collected on American tobacco consumed in Britain. It presumes that the proportion of American leaf smoked in Britain was similar to that of total imported tobacco locally consumed. On this basis, Virginia tobacco, about two-thirds of the total imported from Virginia and Maryland, imported into England supplied the Crown with a total duty of 1,082,269 during the eleven years 1764–74, an annual average of 98,388 (147,582 including Maryland).15 The table reveals large fluctuations from year to year, which also reflects the ups and downs of Virginia’s 15

Adding tobacco imported from North Carolina, Georgia, and other foreign countries would increase British revenue by several more tens of thousands of pounds. An estimate of average net duty for 1771–74 comes to about 204,000. Lewis Cecil Gray, History of Agriculture in the Southern United States to 1860 (Gloucester, MA: Peter Smith, 1958), 1:257. Originally published in 1933 by the Carnegie Institution in Washington.

[ 836 ]

c ol u m n 7

c olum n 8

c olum n 9

column 1 0

column 1 1

Retained VA and MD Imports

Retained Tobacco Duty at 8.33d. per Pound

Retained Tobacco Total Duty ( Sterling)

Retained Tobacco Duty (Virginia 2/3 Total)

Retained Tobacco Duty (Maryland 1/3 Total)

520,401 5,614,708 6,164,387 1,856,534 2,813,106 5,389,599 3,319,425 9,250,747 1,410,487 3,537,844 6,893,169

4,334,939.5 46,770,516.9 51,349,341.9 15,464,927.3 23,433,171.1 44,895,362.1 27,650,811.1 77,058,725.2 11,749,352.9 29,470,243.5 57,420,099.8

18,062.2 194,877.2 213,955.6 64,437.2 97,638.2 187,064.0 115,211.7 321,078.0 48,955.6 122,792.7 239,250.4 1,623,322.9

12,042.1 129,924.6 142,644.2 42,960.3 65,095.4 124,715.6 76,811.6 214,062.7 32,638.7 81,865.9 159,508.3 1,082,269.4

6,020.1 64,952.6 71,311.4 21,476.9 32,542.8 62,348.4 38,400.1 107,015.3 16,316.9 40,926.8 79,742.2 541,053.5

plantation economy. The annual average during 1764–74 was somewhat less than that of the previous quarter century, which reflected the diversification of the colony’s economy into wheat and other crops. Still, the annual average duty collected on Virginia leaf consumed in Britain greatly exceeded the total annual cost of civil administration in the thirteen colonies. As discussed in chapter 23, it is difficult to apportion the burden of the duty between Virginia planters and British consumers and the benefits to Virginia of a network of British merchants who provided credit to colonial planters and supplied extensive marketing links to European markets. Indeed, after the Revolution, total exports of American tobacco fell from a yearly average of 100,249,615 during 1771–75 to 99,665,656 during 1790–94, 70,625,518 during 1795–99, and, after a rise to 85,935,913 during 1800–1804, to a yearly average of 53,035,050 during 1805–15. The loss of the English and

A report of the London Customs Inspector General dated January 26, 1778, of net plantation tobacco import duty for 1761–76 permits another estimate of tobacco duty on retained imports from all the American colonies. The total for the eleven years 1764–74 inclusive comes to 2,672,948, an annual average of 242,995. Public Record Office, Kew, United Kingdom, fi le T 64/276B/333, “1760 Xmas–1776 Xmas Quantity of British Plantation Tobacco imported and exported annually, with gross and net produce of duties.” The annual average during 1764–74 in the 1778 inspector general’s document exceeds the estimate derived in table 1, even when all of the tobacco-producing provinces in the British American colonies are included. The annual average duty imposed on imports from Virginia and Maryland is perhaps higher by as much as another 90,000 or so, apportioned two-thirds to Virginia and one-third to Maryland.

[ 837 ]

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Scottish networks of credit and European markets suggests that colonial planters did not suffer any appreciable loss of income owing to British import duty or the enforcement of the Navigation Acts.16 A second source of imperial taxes was royal quitrents. Quitrents received in 1763 and 1764 amounted to 7,040 8s. 7d. and 7,267 7s. 6d. Virginia currency, respectively. Of this, the amount discharged in local outlays was 2,624 5s. 5d. and 2,695 14s. 6d., respectively.17 Net revenue to the Crown after local use of some of the funds amounted to just over 4,500 in each of the two years. Figures on quitrents are sparse for the remainder of the colonial period. Net returns in excess of collection in 1771 were 3,885 16s., with arrears reported at 3,954 8s. 4d., and the total balance in the quitrent account stated at 14,863 19s. 10d. Annual revenue fell by half between 1764 and 1771, which suggests that enforcement was becoming more difficult. Th ree to four thousand pounds in annual quitrents from 1770–75 amounted to about 3d. per white resident, a relatively modest sum. As quitrents were remitted to London, the balance in the account fell to 8,068 19s. 10d. at the end of 1773 and 2,316 6s. on April 25, 1775. In 1775 7,420, consisting of most of the balance and that year’s collection, was sent to England.18 Quitrents were transferred from the Crown to the province in 1776 and abolished three years later in 1779. The remaining external tax of 1d. per pound on intercolonial shipments of tobacco yielded several hundred pounds of revenue a year, which was allocated to the College of William and Mary.

Domestic Taxes: Ordinary Levies, 1763–1775

T

he t wo main sources of general support for the colonial administration were the 2s. hogshead export duty and the poll tax, supplemented with several minor revenues.

Tobacco Export Duty

T

h e 2 s. hogshead duty was reported every six months in the years for which data are available. For the period April 25, 1763, to October 25,

16

Oliver M. Dickerson, Th e Navigation Acts and the American Revolution (New York: Octagon Books, 1978), 34–39. First published in 1951 by the University of Pennsylvania Press. 17 Public Record Office, Kew, United Kingdom, fi le T 1/452/213–24, “North America, Virginia: Observations and accounts of the Auditor General of Plantations relating to quit rents and the two shillings per hogshead revenue in Virginia 1750–1766.” 18 Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 248–49.

[ 838 ]

Taxation of the Southern Plantation Colonies, 1763–1775

1763, the first full half year following the conclusion of the Seven Years’ War, duty amounted to 5,188 17s. 11d. Virginia currency. Figures for the next three six-month periods were, respectively, 2,840 1s. 4d., 4,256 6s. 7d., and 2,363 11s. 3d., about 14,650 total for the two years in question.19 The May 24, 1763, treasurer’s reports in the Journal of the House of Burgesses itemized tax receipts for 1763, listing 5,000 from exports of 50,000 hogsheads of tobacco at 2s. per hogshead. This appears to be a rough estimate as actual receipts for the twelve months October 25, 1762, to October 25, 1763, were recorded by Robert Cholmondeley, receiver-general of revenue in the colony, at 7,607. Revenue from the 2s. hogshead duty in the May 1763 report was projected to supply 5,000 a year for 1764–69. The Journal does not include any treasurer’s reports, estimates, or actual receipts after May 1763 up to the Revolution.20 To accommodate the decline in the price of tobacco during the eighteenth century, the weight of a hogshead, initially fi xed at five hundred pounds, was redefined at nine hundred pounds, a 44 percent reduction in the effective rate of tax. Effective January 1, 1770, the standard rate of 2s. per hogshead was reduced to 1s. 6d. until October 25, 1771. From that date, to compensate planters whose tobacco was lost in damaged or burned warehouses, for which the colonial government was responsible, a charge of 3s. per hogshead was levied for four years. 21 The revenue from the 3s. duty was primarily to reimburse planters after which any balance would be available to finance general spending. Using Virginia naval office records, it is possible to estimate the duty on tobacco exports for the four years 1768, 1769, 1772, and 1773. 22 Excluding tobacco exported in Virginia-owned vessels, which was duty free, multiplying the number of exported hogsheads by the duty of 2s. in 1768 and 1769 yields revenue of 3,764 18s. and 4,710 18s., and by 3s. in 1772 and 1773 of 8,819 17s. and 9,644 17s. Estimated duty per white resident of Virginia comes to about 4–5d. in 1768–69 and a higher 9–10d. in 1772–73. 19

Public Record Office, Kew, United Kingdom, T 1/452/213–24. The General Assembly held its last pre-Revolution session in March 1773. The next meeting, the Convention of 1775, was that of Virginia’s Revolutionary assembly after the war began. 21 William Waller Hening, ed., The Statutes at Large; Being a Collection of all the Laws of Virginia, from the First Session of the Legislature, in the Year 1619 (Richmond, VA: Franklin Press, 1821), 8:342–48, 493–503. Volume 8 covers 1764–73. 22 Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), table Eg1135–41: “Tobacco Exported from Virginia, by Port: 1745–1773,” S-760. 20

[ 839 ]

chap t er 28

Poll Tax

T

he massiv e war issues of treasury certificates during the French and Indian War were accompanied by poll, land, and hogshead duty taxes to provide for their redemption. The cumulative annual poll tax was set at 5s. for 1764–66; 3s., 1767; 5s., 1768; and, 4s., 1769. Pendleton’s disclosure of the muddled condition of the treasurer’s accounts precludes any accurate analysis of revenue from the poll tax during 1764–75. The May 24, 1763, treasurer’s report projected poll tax on 120,000 tithes at 24,000, but there are no surviving records of actual receipts. That report projected poll tax receipts of 24,000 in each of 1764 and 1765, 30,000 in 1766, and 24,000 in each of 1767, 1768, and 1769. Again, there are no surviving records of actual receipts. Poll taxes and land taxes due in 1768 and 1769 were repealed in March 1768 and not collected, and it is likely that receipts in previous years fell well below the treasurer’s optimistic estimates in the May 1763 report. 23 Apart from the special charges imposed during the French and Indian War, the General Assembly routinely voted poll tax for the general support of government. Total poll tax was set at 46 pounds per tithable for the two years November 1, 1762, to October 30, 1764 (23 pounds a year). The portion of the 46 pounds that was for the use of the provincial militia in each county was payable in cash at the rate of 12s. 6d. per hundred pounds, a rate of about 11 ⁄2d. per pound of tobacco. The tax was reduced to much lower rates of 8 pounds for the two years October 30, 1764, to November 1, 1766 (4 pounds a year), 9 pounds for the three years November 6, 1766, to November 7, 1769 (3 pounds a year), and 6 pounds for November 7, 1769, to February 6, 1772 (somewhat less than 3 pounds a year). At 3 pounds of tobacco imposed on 153,000 tithables, William Ripley estimated that it supplied 1,275 in 1772. 24

Land Tax

L

and taxe s were an integral part of the backing for the war issues. They were enacted to run through 1769, but those of 1768 and 1769 were repealed and not collected. Estimates of land tax revenue in the May 1763 report were 10,000 in each of 1763–68 and 6,250 in 1769. It is unlikely that anywhere near the full amounts were collected. 23

Hening, Virginia Statutes, 8:295–98. Hening, Virginia Statutes, 8:38–41, 273–74, 340–42, 535–36. The revenue estimate for 1772 is from William Z. Ripley, The Financial History of Virginia, 1609–1776, Studies in History, Economics, and Public Law, vol. 4, no. 1 (New York: Columbia College, 1893), 104. The public levy of 1772 was the last approved in the colony before the Revolution. 24

[ 840 ]

Taxation of the Southern Plantation Colonies, 1763–1775

Import Duties

D

u t i e s on l iq uor were routinely extended for periods of two or more years, the last pre-Revolutionary renewal in February 1772 to run for seven years to June 1780. The rates remained constant. The only changes were the repeal of the 1d. per gallon on beer and ale in 1769 and the allocation of the 1d. per gallon on distilled liquors to the support of the College of William and Mary. 25

Slave Duty

T

he addit ional 10 percent duty on slaves enacted in May 1755 to run through 1767 and another 10 percent in April 1757 to run through 1765, respectively, were repealed in 1760 and 1761. This left in place the 5 percent rate to finance settlement near the Mississippi River, and a 20 percent surcharge on slaves imported from Maryland, Carolina, and the West Indies to continue until April 20, 1767. The additional duty was renewed in 1766 and 1769, but at a lower rate of 10 percent to run until 1773. The 5 percent charge and the heavy duty on importations from Maryland, Carolina, and the West Indies was extended to 1769. The act of 1769 removed from the list of tithables free Negro, mulatto, and Indian women, and wives of free Negro, mulatto, and Indian men, thereby exempting them from all provincial, county, and parish levies.26 In 1772 the House of Burgesses petitioned the Crown to end the importation of slaves into Virginia by removing any inhibitions imposed by Britain.

Miscellaneous Taxes

T

o prov ide for the redemption of an issue of 10,000 in trea sury notes in an act of November 7, 1769, the General Assembly approved an extra 5 percent slave duty, a charge of 20s. on each fourwheeled carriage, 10s. on each chair, 20s. for an ordinary license, 2s. 6d. per legal writ, and the previously mentioned 1s. 6d. hogshead duty until October 25, 1771. To support an issue of 30,000 as compensation to planters who lost tobacco in damaged public warehouses, the foregoing taxes, save the extra 5 percent slave duty, were reenacted through October 25, 1775, with the hogshead duty doubled to 3s. 27 To promote the 25

Hening, Virginia Statutes, 8:38, 190, 335–36, 529–30. W. E. B. Du Bois, The Suppression of the African Slave-Trade to the United States of America, 1638–1870 (1896; repr., Baton Rouge: Louisiana State University Press, 1969), 220–22; Hening, Virginia Statutes, 8:190–91, 336–37, 530–32. 27 Hening, Virginia Statutes, 8:342–48, 493–503. 26

[ 841 ]

chap t er 28

production of dressed hides and skins for export, the export duty was removed in 1765. 28

Tonnage

T

o e r e c t and maintain a lighthouse on Cape Henry, the General Assembly voted tonnage of 4d. per ton on outbound vessels, except to Maryland, until 6,000 was collected for its construction, after which a continued charge of 11 ⁄2d. was allocated for its support. 29

Taxation in Maryland, 1763–1775

I

n t h e final years of the colonial era, Marylanders experienced a reduction in the levels and manner of taxation from those of the French and Indian War. The 40,000 in bills placed in circulation on July 14, 1756, to finance the colony’s participation in the confl ict was fully redeemed in 1765, thus ending the war taxes levied to that end. The additional 15d. sterling export duty on each hogshead of tobacco, which was levied for a period of thirty-one years to guarantee the colony’s currency, expired on September 29, 1764, with the full redemption of 90,000 in paper bills issued in 1733. Remaining taxes included British import duty on Maryland tobacco along with quitrents and other levies due the proprietor.

External Taxes

M

ary l and tobacco, about a third of that imported from Virginia and Maryland, was dutiable on retained imports in England and Scotland. Estimates of the duty on Maryland tobacco consumed in Great Britain displayed in table 28.1 varied widely from year to year. The total for the eleven years 1764–74 inclusive comes to 991,135, an annual average of 90,103. As explained in the segment on Virginia, it is difficult to apportion the burden of the duty and any loss imposed on Maryland that was partly, wholly, or more than offset by the benefits of British credit and marketing networks.

Proprietary Revenues and Other Internal Taxes

I

n 1 7 6 8 the proprietor established a board of revenue to administer quitrents and other proprietary income. Its records provide comprehensive 28 29

Hening, Virginia Statutes, 8:142–43. Hening, Virginia Statutes, 8:539–41.

[ 842 ]

Taxation of the Southern Plantation Colonies, 1763–1775 tabl e . Maryland Proprietary Income, 1768–1774 ( £ Maryland Currency)

Year

Quitrents

Land Office Income

1768 1769 1770 1771 1772 1773 1774

7,416 7,119 7,067 6,231 7,604 7,604 7,440

1,548 2,771 2,428 2,590 2,222 1,977 1,939

Manor Rents

Alienation Fines

Hogshead Duty

Tonnage

Minor Revenues

79 1,467 987 1,037 345 345 323

86 142 317 198 169 169 187

1,204 1,197 1,185 1,458 1,675 1,675 1,565

1,108 1,328 1,394 1,383 1,474 1,474 1,624

21 137 132 31 52 52 67

Notes: 1. Bond reports the annual gross value of quitrents at 7,399 for 1760–65, at 8,297 in 1770, and 8,518 in 1774. The latter two numbers differ from net quitrents in the table by the cost of collection. Beverly W. Bond, Jr., The Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 216. 2. Quitrents were abolished in an act of 1780 with the declaration of the colony’s independence from British control. Claims of the proprietary heir, Henry Harford, in 1783 were rejected by both houses of Maryland’s legislature. Source: Charles A. Barker, The Background of the Revolution in Maryland (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1940), appendix table 2: “Proprietary Income: Revenues from Land,” and table 3, “Proprietary Income: Duties and Minor Revenue,” 380–81.

data for 1768–74 inclusive. Proprietary income consisted of quitrents, land office income, miscellaneous rents, alienation fees, tonnage, some minor revenues, and the shilling per hogshead duty. The one shilling per hogshead duty, although formally proprietary income, was allocated to the colonial administration for provincial expenditure and was, in fact, a provincial tax. Table 28.2 displays these revenues. Annual average income from quitrents during 1768–74 was 7,212. From this, the proprietor paid the governor’s salary, the largest single component of provincial administration, and several other petty expenses. Land office income reflects new purchases of land, and thus does not constitute a tax. Manor rents, a small number, represent tenant payments and alienation fines and failure to honor land purchase agreements. Tonnage was levied on importers with the evidence suggesting that the charge was largely passed on to consumers in the form of higher prices. It was thus a specific, not a general, tax. The two regular sources of annual provincial revenue thus consisted of the proprietor’s payments of the governor’s salary and other miscellaneous expenditures from his quitrents and the proceeds of the shilling hogshead export duty. Together these supplied several thousand pounds a year.

[ 843 ]

chap t er 28

Negro Slave Duty

O

n nov ember 26, 1763, Maryland imposed an additional duty of 2 on imported Negro and mulatto slaves, doubling the rate to 4. In the session ending November 29, 1771, it added another 5, upping the rate to a prohibitive 9.30

Land and Poll Taxes

B

e t w e e n 1 7 63 and 1775 Maryland did not impose any provincial land or poll taxes. As explained below, invoices presented to the provincial treasurers for payment were met from new paper money issues. Poll taxes were levied to support the Anglican clergy, typically at 30 pounds of tobacco paid by all residents over sixteen save white women. County poll taxes paid for such purely local expenditures as poor relief. One estimate put clerical poll taxes in 1766 at 8,000 sterling.31 In the session ending November 29, 1771, the governor signed legislation authorizing seven counties to levy poll taxes for religious and other purposes. Specified amounts in four of the counties totaled 544,000 pounds of tobacco, with acts for the other three leaving the amounts unstated. 32

Paper Money in Lieu of Provincial Taxes

A

s expl ained in chapter 23, creditors of the colony were paid on the basis of the journal of accounts. The issue of $173,733 in paper bills dated March 1, 1767, underwritten with the sale of Bank of England stock, cleared the outstanding journal of accounts of claims presented to the commissioners of the new paper money between February 21 and June 10, 1767. The journal of accounts amounting to $150,769 and office expenses of around $3,330 came to $154,099, leaving $19,634 available for later appropriation. Some of this was used in 1768 to pay several persons for their ser vices during the war, to reimburse Governor Horatio Sharpe for certain supplies given to the Indians, for some land purchases, and for a gift to the new governor, Robert Eden, the proprietor’s brother. The issue eliminated any need for public levies in 1767 and 1768. The next issue of $318,000 dated March 1, 1770, allocated $300,000 to a new loan office that generated 4 percent interest, with the rest to replace worn bills. Funds from ordinary and pedlars’ licenses were to be paid to the 30

Du Bois, African Slave-Trade, 14–15, 219–21. Robert A. Becker, Revolution, Reform, and the Politics of American Taxation, 1763–1783 (Baton Rouge and London: Louisiana State University Press, 1980), 79, 92–93. 32 Votes and Proceedings of the Lower House of Assembly of the Province of Maryland, November 29, 1771. No provincial levy is included in the list of acts. 31

[ 844 ]

Taxation of the Southern Plantation Colonies, 1763–1775

commissioners of the loan office and, along with any gold and silver at their disposal, could also be loaned out. An act of 1768, renewed in 1771, that licensed ordinary keepers, hawkers, pedlars, and petty chapmen directed that these funds were used to defray provincial expenditures. 33 By October 30, 1770, the commissioners had lent 83,407 14s. 7d. sterling ($370,701) in bills of credit, bills of exchange, and gold and silver. Bills used to pay principal were to be reloaned, which meant that 4 percent interest, if fully and promptly remitted, could supply about $15,000 (7,110 Maryland currency) in annual revenue. The House of Delegates sought to issue more paper money in 1771. The Council offered amendments to the house proposal, which the latter refused to accept, insisting that the Council could only accept or reject money bills. This dispute delayed the final pre-Revolution issue of $480,000, over half for the loan office, until 1774.34 Money was taken from the unappropriated part of the final issue to pay the outstanding journal of accounts of 1773 and 1774 and for covering the state house with a copper roof. Interest from the two loan office issues generated sufficient funds to eliminate any need for land or poll taxes.

Taxation in North Carolina, 1763–1775

N

ort h c ar ol ina approached the Revolution with a diminishing tax burden.35 Neither external nor internal taxes seriously burdened the colony’s inhabitants.

Imperial Taxes: Quitrents

R

e c a l l i n chapter 23 that Governor Arthur Dobbs enjoyed little success in collecting quitrents. Only the equivalent of 455 sterling (865 North Carolina currency) was collected in 1761, less than a sixth of an estimated value of quitrents of 3,000 sterling. 36 Many settlers in the border territory with South Carolina refused to pay quitrents to either North or South Carolina until a definitive boundary line was drawn in 1769. 33

Newton D. Mereness, Maryland as a Proprietary Province (New York and London: Macmillan, 1901), 360–61. 34 Behrens, Paper Money in Maryland, 1727–1789, 52–55. 35 An overview of taxation in North Carolina appears in Coralie Parker, The History of Taxation in North Carolina during the Colonial Period, 1663–1776 (New York: Columbia University Press, 1928). Concrete data for the period 1763–70 are found in William K. Boyd, “Some North Carolina Tracts of the 18th Century,” North Carolina Historical Review 3, no. 3 (July 1926): 475–76, plus the following table. Marvin L. Michael Kay uses Boyd’s fi gures and other data to estimate the overall tax burden in “The Payment of Provincial and Local Taxes in North Carolina, 1748–1773,” William and Mary Quarterly, 3rd ser., 26, no. 2 (April 1969): 218–40. 36 Bond, Quit-Rent System in the American Colonies, 309n3.

[ 845 ]

chap t er 28

Opposition to feudal claims of quitrents in the Granville Grant frustrated collection in other counties, which led Governor Josiah Martin to propose to Lord Hillsborough in 1772 the purchase of the Granville tract to eliminate this source of friction. Fragmentary accounts of the receiver-general of revenue, John Rutherford, make it difficult to specify the periods for which figures are available. The account of March 25, 1766, which does not indicate the period covered, stated revenue of 3,236 12s. 81 ⁄4d. Proclamation Money. The next account dated June 23, 1768, presumably for the next twenty-seven months, showed 3,130 13s. 61 ⁄2d. PM (about 1,100 sterling a year). 37 The governors of North Carolina, from the beginning of Arthur Dobbs’s administration in 1754 through those of William Tryon and Josiah Martin down to 1780, were paid 1,000 sterling a year directly by the Crown, from the duty of 4 1 ⁄2 percent collected on exports from the Leeward Islands.38 The sums collected in quitrents were generally consumed by the cost of collection and the accumulated arrears of official salaries apart from the governor. Rutherford’s account for the period March 25, 1773, to March 25, 1774, showed 1,417 3s. 43 ⁄4d. in revenue. Of this, two-thirds represented a credit on the account of Henry McCulloch, a royal commissioner sent from Britain to investigate and remedy the colony’s quitrent system. Less than a third consisted of cash receipts, all of which was used to pay the cost of collection. Residents in ten of the colony’s sixteen counties paid no quitrents at all. With the rent roll estimated at 7,000–8,000, and net receipts after expenses at zero, quitrents failed to supply any significant revenue to the royal administration.39

Internal Revenues

I

n t e r n al r e v e n ue s derived from the poll tax and relatively insignificant duties on liquor, tonnage, and county and parish taxes. With the poll tax suspended from 1770, the five years preceding the Revolution were a period of exceptionally light taxation.

Direct Taxes

A

s de sc r ibed in chapter 23, John Burgwyn, clerk of the court of chancery and secretary of the Council, issued several reports on the colony’s monetary and fiscal conditions. One disclosed that sheriffs’ arrears to the colonial treasurers during 1754–70 amounted to 64,013 North 37

Bond, Quit-Rent System in the American Colonies, 313n2. Kay, “Provincial and Local Taxes in North Carolina,” 233. 39 Bond, Quit-Rent System in the American Colonies, 314nn1, 2. Quitrents were abolished at the outbreak of the Revolution. 38

[ 846 ]

Taxation of the Southern Plantation Colonies, 1763–1775

Carolina currency, a larger number than the 56,616 actually collected from poll taxes during 1748–70. Extrapolating the arrears for the extra six years 1748–53 inclusive implies that only 44.9 percent of the taxes collected by the sheriffs was actually remitted to the provincial treasurers. On these figures, the sheriffs embezzled over half the colony’s poll taxes. Another report indicated that the taxes collected by the sheriffs exceeded the amount of currency that was scheduled for redemption with these taxes. The third showed the list of taxables, poll tax rates, and taxes paid by the counties. Ten years earlier in 1760, in a letter to the Board of Trade, Governor Arthur Dobbs pointed to the jumbled accounts of the treasurers of both the Northern and Southern districts of the colony. Dobbs complained that the accounts of the Northern District were not property audited before their approval by the House of Commons and those of the Southern District contained an imperfect list of taxables, a jumbled account of arrears, and an imperfect manner of accounting.40 Governor William Tryon complained in 1767 of collusion between sheriffs, treasurers, and elected members of the Commons, and gross corruption in the mishandling of public funds, stating that over half of the public funds voted in the General Assembly had been embezzled by the sheriffs.41 In December 1769 the House of Commons resolved to eliminate some of the poll taxes to keep the remaining outstanding paper money in circulation. The currency issue of 21,350 in 1748 and issues from 1754 to 1761 amounting to 93,156 were set for redemption by 1767 from poll taxes and import duties on liquor. The embezzlement and non-remittance of tax revenues by the sheriffs resulted in a large part of these issues remaining in circulation, when debenture notes for 60,000 were issued in December 1771 to replace them. The action of the Commons, in the wake of Burgwyn’s reports, resulted in no poll tax revenue collected from 1770.42 40 Marvin L. Michael Kay, “Provincial Taxes in North Carolina during the Administrations of Dobbs and Tryon,” North Carolina Historical Review 42, no. 4 (October 1965): 446–47. 41 Kay, “Provincial Taxes in North Carolina during the Administrations of Dobbs and Tryon,” 448. Tryon, for his part, was reluctant to take tough measures to remedy the problem, as he was dependent on the Commons for 15,000 North Carolina currency, the cost of an official mansion to house him and his family on which construction began in August 1767 and into which he moved in June 1770. Tryon’s palace, which also provided chambers for the legislature, was considered to be the fi nest government house in the thirteen colonies. In January 1773, the Journal of the House of Assembly recorded an estimate of arrears from an examination of the accounts of the sheriffs of the Northern and Southern districts through the year 1771. Presenting figures county by county, the arrears of the Northern District stood at 27,399 2s. 2d., with those of the Southern District at 25,055 19s. 5d., for a total of 52,455 1s. 7d. The 1773 audit indicates that the colony made little progress in reducing arrears in 1771. 42 Despite the failure to collect poll taxes after 1769, the Journal of the House of Assembly recorded that on December 23, 1771, the governor assented to a bill imposing a tax of 2s. Proclamation Money per poll on all taxable persons in the province. On the same date he rejected a

[ 847 ]

chap t er 28 tabl e . North Carolina Poll Tax Rates, Revenue, and White Per Capita Taxes, 1764–1769 (North Carolina Currency) Year

1764 1765 1766 1767 1768 1769 1770 1771–73

Poll Tax Rates (s.d.)

Revenue (.s.)

White Per Capita Taxes (d.)

7.2 6.0 4.4 7.0 6.6 5.10 3.10 (5.0 to 7.6)

8,117.4 8,215.0 8,762.6 9,338.12 2,336.8 2,573.3

20.0 19.3 19.6 19.9 4.8 5.0

Notes: The poll tax is the legislated rate. Revenue is actual money received by the two treasurers. Sources: For 1764–70, poll rates and revenue are from William K. Boyd, “Some North Carolina Tracts of the 18th Century,” North Carolina Historical Review, no. 3 (July 1926): 475–76, plus following table, and Robert A. Becker, Revolution, Reform, and the Politics of American Taxation, 1763–1783 (Baton Rouge and London: Louisiana State University Press, 1980), appendix, table 14, “North Carolina Colony Poll Taxes, 1763–1773,” 241.

Table 28.3 displays poll tax rates, revenue, and white per capita taxes in North Carolina between 1764 and 1769.43 White per capita poll taxes declined from 20d. North Carolina currency in 1764 to 5d. in 1769. There are no recorded figures on the amount of poll taxes collected from 1770 onward. With poll taxes having supplied about three-quarters of the colony’s provincial revenue until its suspension, little money was available for civil administration in the five years preceding the Revolution. Only the governor could count on his annual salary from British funds. The January 1773 session of the Journal of the House of Assembly recorded the audit of a committee of the house of the accounts of the treasurers of the Northern and Southern districts of the colony through 1771. The audit did not identify the years in which revenues were collected. Revenues were segregated into sinking funds to retire bills of credit, and contingent funds to meet ongoing expenses of government. Poll taxes allocated to the sinking funds amounted to 6,897 11s. 10d. in the Southern District and 2,278 12s. bill that would have discontinued the poll tax of 1s. per poll and duties of 4d. per gallon on rum, wine, and other spirits. Disallowance of the proposed repeal meant continuation of duties from 1772. The General Assembly did not meet in 1772. No general tax bills were signed in 1773, 1774, or 1775 prior to the Revolution. On March 6, 1773, the governor signed several pieces of legislation that authorized collecting arrears from the estate of a deceased sheriff, constructing a public road, building a bridge, building a court house, and building a jail in several of the counties, but no explicit taxes were voted for those purposes. 43 For a discussion of the data presented by John Burgwyn, clerk of the Council, who investigated poll taxes and receipts for 1748–70, see chapter 23, fn. 76.

[ 848 ]

Taxation of the Southern Plantation Colonies, 1763–1775

in the Northern District, for a total of 9,176 3s. 10d. Poll taxes to meet contingent expenses of government totaled another 15,575 7s. 101 ⁄4d., bringing total poll taxes in the audit to 24,751 11s. 81 ⁄4d. The failure to specify the years of collection precludes comparing this smaller audited number from the larger total in table 28.3.

Indirect Taxes

T

he pr incipal source of indirect tax revenue was import duties on liquor, which supplied about 13 percent of provincial revenue in 1768, some 2,500.44 Liquor duties were levied to provide funds for the colony’s participation in the French and Indian War. An additional duty of 1d. a gallon was levied in 1767 to benefit a school, above the regular 6d. per gallon that was carried over from the war. The January 1773 audit recorded liquor duties through 1771, entirely allocated to the sinking fund, of 3,009 9s. 10d. received by the Southern treasurer and 561 11s. 3d. by his Northern counterpart. Again, no time period is specified. The audit disclosed that revenue to meet contingent expenses included the tax on legal proceedings of 301 17s. 113 ⁄4d. and 303 17s. 1d., respectively, by the Northern and Southern treasurers. No other statements of duties or tonnage were tabled before the General Assembly. It is likely that annual receipts from duties gradually rose from the 2,500 in 1768, reflecting the increase in population to 1775.45 Smuggling and embezzlement reduced by some unknown amount the duties that should have been collected. Tonnage continued from the prior era. It was reenacted in 1762 for five years on a progressive scale at 6s. on vessels of five tons, 12s. on those between fifty and one hundred tons, and 20s. on all above one hundred tons. The 1773 audit reported tonnage on powder and lead of 48 9s. 111 ⁄2d. in the Southern District. Tonnage revenue was minimal, disappearing with the Revolution.46

County and Parish Taxes

T

he l ac k of comprehensive county and parish records precludes systematic analysis of local taxes in North Carolina. Although county court records list directions to build, repair, and maintain county roads, there is no way to verify whether county taxes were levied to perform these 44

Becker, Politics of American Taxation, 77. One source states that the House of Commons voted to eliminate collection of liquor duties after 1772. Lawrence Henry Gipson, The Coming of the Revolution, 1763–1775 (New York and Evanston, IL: Harper and Row, 1954), 146. 46 Parker, Taxation in North Carolina, 94–95. 45

[ 849 ]

chap t er 28

tasks. Nor is it possible to determine whether taxes approved by the General Assembly for the counties were actually levied. Between 1748 and 1771, the General Assembly approved or directly levied poll taxes in twenty-nine of the thirty-four counties that existed as of 1771. Some three-quarters, an annual average of 5d. per poll, was levied in the postwar years. Rates varied considerably among the counties, with the largest in the Piedmont counties.47 Estimates of parish taxes are even more difficult to determine. Some parishes lacked functioning vestries able to levy taxes. The few sources that Marvin L. Michael Kay cites indicate higher annual poll rates than those levied by the counties, at 3s. 61 ⁄2d. per poll in Chowan County during 1763–75, with similar levels in Orange, Christ Church, and Craven counties after 1768.48

Taxation in South Carolina, 1763–1775

T

h e m ix of levies imposed on South Carolinians continued from the prior era, although, as in North Carolina, the burden of taxation fell sharply in the five years preceding the Revolution.

External Taxes

I

n 1 7 63 Parliament extended the 1730 provision, which allowed the colony to ship rice directly to European countries south of Cape Finisterre, to include rice shipped from South Carolina and Georgia to any part of America south of the two colonies. The extension enabled planters to retain markets they had developed in the West Indies, subject to the same export duties charged on direct shipments to southern Europe. The 1730 act required payment in Great Britain of an equivalent amount of British duty less the drawback, which generated about 3,000 sterling in 1763. Colonial rice was granted duty-free status in Britain in 1767, which was extended in December 1768, and duty was permanently removed in 1772.49 The cessation of duty on rice imported into Britain also removed duty on rice shipped to southern Europe and the West Indies. 47

Kay, “Provincial and Local Taxes in North Carolina,” 229–30. Kay, “Provincial and Local Taxes in North Carolina,” 230–31. For members of the Anglican Church, parishioners received ser vices in exchange for their taxes, similar to the fees that public officials charged for private ser vices. Only dissenters and non-believers could be said to be victims of compulsory taxation in this regard. Despite the evidence from the minutes of the vestries in the four cited counties, Governors Dobbs, Tryon, and Martin failed to place the funding of the Church of England on a firm foundation, failing to collect the full amount of taxes due the parishes. 49 Robert M. Weir, Colonial South Carolina: A History (Columbia: University of South Carolina Press, 1997), 166. 48

[ 850 ]

Taxation of the Southern Plantation Colonies, 1763–1775

Indigo, the colony’s second largest crop, received British bounties until the Revolution. To the further benefit of Carolina planters, Britain raised the duty on other foreign imported indigo from 2d. to 6d. a pound. Indigo exported from Charleston rose from 404,083 pounds in 1763 to 794,150 pounds in 1773, with estimates of more than a million pounds in 1774 and 1775. Annual average exports for the eleven years 1763–73 inclusive came to 519,925 pounds, reflecting steady growth in output over the two prior decades. It is difficult to estimate to what extent bounties fueled higher production than would have otherwise taken place, but the point is that Britain subsidized, not taxed, Carolina indigo.50 The previously lucrative trade in deerskins contracted with the shift in the trade to newly acquired British West Florida in 1763. Deerskins still remained third in export value after rice and indigo, but fell to 18,422 sterling in 1769, about half the annual average during 1748–63.51

Quitrents

T

h e q ui t r e n t system in South Carolina was little changed from 1763 until the Crown decided in 1773 that it would sell, rather than lease, royal lands in the American colonies. Its objectives were to raise additional revenue, halt what it regarded as reckless land-granting policies by the governors in New York and Virginia, and discourage emigration from Great Britain to America by raising the cost of land. The new regime reached South Carolina in May 1774, too late to affect the quitrent system. The collection of quitrents was halted in April 1775 with the outbreak of the Revolution. Table 28.4 displays the amount of quitrents that was collected, the acreage on which quitrents was due, the acreage reported for quitrent payments, and the percentage of land reported for quitrents for the years for which data are available during 1764–74. The table shows relatively stable revenues during 1764–70, a substantial rise in 1771 and 1772, followed by a sharp decline through mid-1774. Quitrents were used to pay the salaries of some royal officials, especially the chief justice, but also on occasion lesser officials whom the Commons House would not support or would have subjected to its strict control as a condition of support. Most of the quitrents were absorbed by the arrears of salary of 6,200 sterling due Henry McCulloch, commissioner for supervising, inspecting, and controlling crown revenues and grants of land in the two Carolinas, and 12,000 sterling to the heirs of Governor Gabriel Johnston 50 51

Sellers, Charleston Business on the Eve of the American Revolution, 166–67. Sellers, Charleston Business on the Eve of the American Revolution, 170.

[ 851 ]

chap t er 28 tabl e . South Carolina Quitrents, 1764–1774

Year

Quitrent Revenues Proclamation Money (.s.d.)

1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774

2,612.5.7 1,776.17.6 2,432.19.10 2,372.4.8 2,682.18.3 2,510.2.0 2,417.8.0 3,042.3.7 5,139.19.7 1,336.15.7 491.4.4

Acreage on Which Quitrents Were Due

Acreage Reported for Quitrent Payments

Percentage Reported

3,614,683 3,676,975 3,761,924 3,935,380 4,000,526 4,127,078 4,264,371 4,461,286 4,750,602

667,030 595,105 735,596 672,587 581,223 578,113 582,958 559,931 912,393

18 16 20 17 15 14 14 13 19

Notes: Each year covers the period for twelve months beginning March 26. For example, 1770 encompasses March 26, 1770, to March 26, 1771. The figure for 1773 covers March 26, 1773, to June 24, 1774, and that for 1774 encompasses June 24, 1774, to July 19, 1774. Sources: Figures for 1764 through 1772 are from Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976), table 1, “A Comparison of Quitrents Revenues and Provincial Tax Revenues, 1736–1772,” 192–93, and table 2, “The Percentage of Land on Which South Carolinians Paid Quitrents, 1734–1772,” 201. Figures for 1773 and 1774 are from Beverly W. Bond, Jr., Th e Quit-Rent System in the American Colonies (New Haven: Yale University Press, and London: Humphrey Milford and Oxford University Press, 1919), 346. For 1771, Watson reports 3,042 3s. 7d., while Bond reports 3,104 7s. The two agree on 1770 and 1772. Bond’s fi gures for earlier years consist of five-year averages for 1760–65 and 1765–70.

(1734–52) of North Carolina, who was not fully compensated by quitrents in that colony during his tenure in office. There is no evidence that South Carolina quitrent revenues were ever remitted to Britain. Between 1764 and 1770, the approximately 60,000 white settlers of the colony paid annual quitrents of about 10d. PM (71 ⁄2d. sterling) a head. The figures were higher in 1771 and 1772, but diminished sharply in the last few years before the Revolution.

Internal Taxes: Direct and Indirect Taxes

R

e c a l l t hat the system of public finance in South Carolina was altered in 1733 when revenue acts were passed for charges already incurred rather than for anticipated expenses. Creditors of the government turned in accounts to the legislature, which were examined for validity and accuracy, and allowable payments were attached to the tax act. The public treasurer then issued certificates of indebtedness to the creditors in those amounts, which were receivable in payment of taxes and duties and canceled on return to the Treasury. [ 852 ]

Taxation of the Southern Plantation Colonies, 1763–1775

Internal taxes in the twelve years before the Revolution are divisible into two periods. The first, 1763–69, followed the historical practice of prior decades. It consisted of annual tax acts that imposed direct taxation on polls, property, faculties (income), interest, and annuities, along with duties on liquor and other goods. The second, 1770–75, was a period without any tax acts, thus suspending all direct taxes, leaving reliance on duties. The second period was known as the Wilkes fund controversy.52 John Wilkes, a celebrated British political radical popularly associated with the cause of liberty, had criticized King George III’s speech from the throne in North Briton number 45 on April 23, 1763. Wilkes, forced into exile in France, returned to Britain in 1768 and was elected to Parliament from Middlesex. Wilkes was convicted on June 8, 1768, for various misdemeanors, including libel against the government, and sentenced to prison, becoming a symbol of liberty against royal authority. Wilkes’s circumstances mirrored the concerns of many South Carolinians about potential British usurpation of their liberty. Leading figures in the Commons House of Assembly endeavored to show their support of Wilkes with money to help pay his sizable debts. On December 8, 1769, the Commons House approved a proposal to order Treasurer Jacob Motte to advance 1,500 sterling (10,500 South Carolina currency) out of surplus funds in the Treasury to the Bill of Rights Society in London to support Wilkes. The transfer of funds was carried out without the consent of the Council and Lieutenant Governor William Bull II. The Commons House planned to repay Motte on passage of the next tax act. The transfer of funds on the sole order of the Commons violated longstanding British rules dating from the seventeenth century, which stipulated that money could be issued from colonial treasuries only upon warrants signed by the governors. Since 1750 this requirement had been largely overlooked in South Carolina. However, the transfer of colonial funds to a critic of the British Crown was intolerable to Bull, the Council, and the British government. On April 14, 1770, the Board of Trade transmitted a letter to Governor Bull with a royal instruction that restricted the use of all money bills to local ser vices, threatening the governor with removal on violation of the instruction, and the treasurer to permanent exclusion from public office and a fine triple the value of any sum issued from the Treasury solely on the order of the Commons. Before the new instruction reached Bull, the Council had already rejected a tax act approved in the Commons that included repayment of the 52 The Wilkes fund controversy is treated at length in Jack P. Greene, ed., The Nature of Colony Constitutions: Two Pamphlets on the Wilkes Fund Controversy in South Carolina by Sir Egerton Leigh and Arthur Lee (Columbia: University of South Carolina Press, 1970), 1–55. The treatment in the text follows Greene.

[ 853 ]

chap t er 28

1,500. The Council insisted that the Commons could not order money paid from the Treasury without the Council’s consent and the governor’s signature. The Commons replied with a position to which it thereafter strictly adhered. As representatives of the people the Commons alone had the power to appropriate money and could grant funds for “the Just and Constitutional Rights and Liberties for the People of Great Britain and America.” This exchange of positions during April 7–10, 1770, followed by Bull’s receipt of the new instruction, further deepened the hostility between the Commons and the two appointed branches of colonial government. The Commons repeatedly tried to pass tax acts that included repayment of the 1,500. The Council and/or Bull rejected each attempt. The remaining years before the Revolution witnessed a succession of prorogations, new elections, new assemblies, the arrest and release of the treasurer, a change in the meeting place of the General Assembly, the arrival and departure of absentee governor Lord Charles Greville Montague between September 1771 and March 1773, the reappointment of Bull, and the replacement of Hillsborough as colonial secretary with the Earl of Dartmouth. These measures failed to break five years of deadlock. No tax bill was enacted during 1770–75 and there was no legislation at all after February 1771. From 1770 to the Revolution the public finances rested on a small amount of duties until its expiration, and an April 10, 1774, issue of paper money engraved Certificates of Audited Accounts approved by the Commons House of Assembly, payable against new taxes to be levied.

Direct Taxes

T

able 28.5 displays the record of direct provincial taxes in South Carolina during 1764–69. The reduction in direct tax revenues in 1766 reflected an epidemic of whooping cough in 1765, which discouraged many residents of the colony from traveling to Charleston to pay taxes or transact business. Accumulated surpluses during 1764–67 in excess of approved payments to creditors listed in the tax acts, coupled with continued collection of duties, enabled the Treasury to pay bills after 1769. Only in 1774 did it become necessary to issue a source of paper money to pay the colony’s creditors. Maurice Crouse used the accounts of 1765 to illustrate the composition and volume of appropriations and taxes.53 Of the 133,198 appropriated in the act, 102,927 12s. 3d. was to be raised by direct taxation. The remaining 30,270 8s. 9d. was to be met with various funds in the Treasury. Of the total, 75,048 12s. 6d., about three-fourths of the new taxes to be raised, was to

53 Maurice A. Crouse, The Public Treasury of Colonial South Carolina (Columbia: University of South Carolina Press, 1977), 69–73. I derived the rates in the following paragraph.

[ 854 ]

Taxation of the Southern Plantation Colonies, 1763–1775 tabl e . South Carolina Expected versus Actual Tax Collections, 1764–1769 ( £.s.d.) Year Levied

Expected Revenue S.C. Currency

Actual Revenue S.C. Currency

Actual Revenue Proclamation Money

Surplus (Deficit) S.C. Currency

1764 1765 1766 1767 1768 1769

220,307.7.3 102,927.12.3 35,529.17.3 85,950.2.5 105,773.9.6 70,326.7.2

246,396.17.1 115,029.12.3 50,842.10.0 105,443.3.2 100,890.0.5 64,833.6.7

24,265.6.0 22,622.19.5 9,406.11.11 20,361.15.6 18,685.4.0 12,193.5.11

26,089.9.10 12,102.0.0 15,312.12.11 19,493.0.0 (4,883.9.1) (5,493.0.7)

Notes: No tax act was passed in 1763. The act of 1764 was for the expenses of the two years 1763–64. Watson’s figure for 1764 is exactly half the total actual receipts of 48,530 12s. collected for the two years 1763–64. Multiplied by five, the ratio Watson used to convert South Carolina currency to Proclamation Money, yields actual revenue in 1764 of 121,326 10s., slightly more than Crouse’s figure of estimated revenue for 1764 set forth in the tax act. The figures for 1763 appear in table 23.4. Sources: Figures in South Carolina currency are from Maurice A. Crouse, The Public Treasury of Colonial South Carolina (Columbia: University of South Carolina Press, 1977), table 4, “Expected versus Actual Tax Collections, 1761–69,” 83. Figures in Proclamation Money are from Alan D. Watson, “The Quitrent System in Royal South Carolina,” William and Mary Quarterly, 3rd ser., 33, no. 2 (April 1976): table 1, “A Comparison of Quitrents Revenues and Provincial Tax Revenues, 1736–1772,” 193. The figures in both are cited from “Records of the Public Treasurers of South Carolina, General Tax, Receipts and Payments, 1761–1769,” held in the South Carolina Department of Archives and History.

sink the two issues of public orders in 1760, the rest to pay the colony’s creditors. The audited accounts of July 22, 1769, disclosed total available funds of 145,339 9s. 9d. for 1765. The larger number reflected some payment of arrears and revenues in excess of expectations. The 1765 act set the following rates of tax: Negroes and other slaves at 17s. 6d.; land, except for town lots, 17s. 6d./100 acres; town lots, wharves, buildings, and other town lands, 8s. 9d. per 100 value (0.4 percent); bonds and money lent at interest, 8s. 9d. per 100 (0.4 percent); annuities, 1 15s. per 100 (1.75 percent); profits from faculties, professions, and handicrafts, 8s. 9d. per 100 (0.4 percent). Lands of new settlers who had been in the province less than ten years and religious and charitable property were exempt. The tax on slaves, paid by their owners, generated about 63,500, almost 58 percent of the scheduled taxes. In descending order, the tax on county lands yielded about 24,300; money at interest, 11,800; lots in towns, 10,635; faculties, professions, and stock in trade, 4,800; value of country stores, 410; and free Negroes, 103 5s. Residents of Charleston paid 43 percent of the total tax.

Indirect Tax: Slave Duty

S

l av e d u t y continued to provide a major source of revenue to the colonial administration up to the Revolution. The only slave duty enacted

[ 855 ]

chap t er 28 tabl e . South Carolina Slave Duties, Other Duties, Direct Taxes, and Total Taxes, 1764–1775 (£.s.d. South Carolina Currency)

Year

Net Slave Duty

All Other Duties

1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775

28,403.15.0 57,681.2.0 23,956.17.6 155.0.0 200.0.0 41,358.5.0 530.0.0 28,245.0.0 46,115.0.0 66,168.15.0 35,086.5.0 7.10.0

57,022.12.11 57,112.16.1 47,087.10.9 74,995.5.7 88,321.11.3 51,532.17.9 63,065.9.3 36,477.14.11 59,726.12.2 53,304.5.8 45,507.15.8 34,454.15.8

Total Duties

Actual Direct Taxes

Total Taxes (Proclamation Money)

White Per Capita Taxes (Shillings PM)

85,426.7.11 114,793.18.1 71,044.8.3 75,150.5.7 88,521.11.3 92,891.2.9 63,595.9.3 64,722.14.11 105,841.12.2 119,473.0.8 80,594.0.8 34,462.5.8

123,198.8.1 115,029.12.3 50,842.10.0 105,443.3.2 100,890.0.5 64,833.6.7 0 0 0 0 0 0

41,734.19.0 45,964.14.0 24,377.7.8 36,109.12.7 37,882.7.0 31,564.18.0 12,719.3.1 12,944.10.4 21,168.3.5 23,894.2.10 16,118.3.6 6,892.3.2

20.0 21.4 11.0 16.0 16.2 13.2 5.2 5.0 7.6 8.0 5.2 2.1

Notes: All other duties in 1765 include 5,000 for Fort Johnson and fortifications. All other duties in 1767 and 1768 includes 30,000 and 30,180 1s. 4d, respectively, which explains the marked higher duties in those two years, for a fund to finance new settlers. Actual direct taxes in 1764 is half the number presented in column 3 in table 28.5. Sources: The figures for slave duty, except 1766, are from W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967), 260–64. Slave duty numbers in ledger B are entered as gross duty and do not exclude drawbacks that Higgins presented in his thesis. The figures for all other duties for 1764–70 and for slave duty for 1766 are from South Carolina, “Ledger B: Accounts Approved, 1735–1773,” microfi lm, Early State Records, compiled in the 1940s by the Library of Congress and the University of North Carolina. Figures for all other duties for 1771–75 are from “Publick’s Ledger, Duties and Special Funds, 1771–1776: Annual Receipts and Disbursements, Henry Peronneau and Benjamin Dart, Joint Public Treasurers of South Carolina,” Columbia, South Carolina Archives Department, April 1964, microfi lm. Direct taxes are from table 28.5.

during 1763–74 was an act of 1764 that imposed an additional 100. The volume of revenue varied widely (see table 28.6). Net annual slave duties for the years 1764–75, excluding 1766, averaged 27,325 South Carolina currency.54 The burden of slave duty fell on the slave owners in proportion to their ownership of slaves. The residents with few to no slaves paid little to no direct tax.

Indirect Taxes: Import and Export Duties

A

part f r om slave duty, the remaining duties encompassed the categories of general duty on sundry merchandise, additional duty on wine, rum, bread, and flour to build an exchange, a watch house, a poorhouse, and a hospital, a new additional duty on flour to pay a bounty on 54 W. Robert Higgins, “The South Carolina Negro Duty Law” (Master’s thesis, University of South Carolina, 1967), 260–64. Higgins does not present any figures for 1766.

[ 856 ]

Taxation of the Southern Plantation Colonies, 1763–1775

locally produced flour, export duty on deerskins and tanned leather, and duty on goods imported by transient persons. Table 28.6 displays net annual duty on slaves (gross receipts minus drawbacks on reexportation), all other duties, and total duties collected in South Carolina during 1764–75. It shows that indirect taxes of 527,927 roughly approximated direct taxes of 560,237 during the six years 1764–69 inclusive. Beginning in 1770, public spending relied on revenue from indirect taxes, drawing down the remaining surplus in the Treasury, and, Certificates of Audited Accounts after April 10, 1774. Average annual taxes during 1764–69, when direct taxes were collected, amounted to 36,272 Proclamation Money. Total receipts fell sharply in 1770, picked up in 1772–73, and dropped to a minuscule level in 1775 due to the cessation of slave imports on the outbreak of the Revolution. Annual average revenue during 1770–74 was 17,368 16s. 5d., less than half that of the previous six years. Per capita taxes on white South Carolinians fell from 11–21.4s. a head to a much lower 5–8s. in the two periods. In 1774, the year before the Revolution, the rate had fallen to a quarter that of the start of the period.

Taxation in Georgia, 1763–1775

G

eor g ia was unique among the thirteen colonies in its heavy reliance on British subsidies to finance its civil administration.55 The salaries of royal officials, paid by the British Parliament, amounted to 2,400 sterling (Georgia was on a sterling standard) in 1773. Funds granted by Parliament for the expenses of civil administration were considered royal revenues, to be discharged by the Council and governor. Taxes voted by the General Assembly were considered provincial revenues, to be spent in accordance with the appropriations specified in the act. The provincial treasurer was accountable to the Commons House, not the governor. Apart from 1771 and 1772, when a dispute between the Commons House and the governor blocked passage of provincial tax acts, relations between royal officials and local representatives were generally cordial, and the division of revenue and expenditure between the two sources of funds was orderly and stable.56

Imperial Taxes

G

eor g ia was subject to imperial taxes on its foreign trade, with the funds to be allocated to royal officials for their use. Although Governor James Wright (1760–76) denied the existence of smuggling and

55 56

Heath, Economic Development in Georgia, 61–63. Flippin, “Royal Government in Georgia,” 213.

[ 857 ]

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widespread illegal trade as early as 1761, chiefly with vessels sailing to and from the West Indies, royal customs officials met with limited success in attempting to enforce imperial trade laws. The collector of customs in Savannah, in a report submitted to Wright in 1773, estimated the average annual loss in customs duties for the three years 1769–72.57 He calculated that the failure to collect the 4 1 ⁄2 percent export duty from the British Windward Islands on exports to Georgia of 90,746 gallons of rum and 5,000 gallons of brandy, gin, and cordials resulted in lost revenue of 161 11s. Other categories of smuggled and illegal goods and lost duties included 18,407 gallons of molasses at 76 13s. 11d., 12,058 pounds of smuggled tea at 150 14s. 6d., 2,496 hundredweight of sugar at 429, 676 hundredweight of coffee at 301 2s., and 26 5s. on port and Madeira wine. The total of lost annual duties was 293 11s. from failure to collect the export duty from the West Indies and 1,157 16s. 5d. on goods brought into Georgia.58 The loss of royal duties in Georgia meant that Parliament would have to compensate the colony for the shortfall in revenues in determining the level of its annual grant. As seen in table 28.7, lost duties were a significant share of provincial tax bills. Georgia received British bounties to encourage the production of silk.59 Indeed, silkworms were represented on the first corporate seal of the colony. To support Georgia’s silk industry, Parliament provided an annual grant of 1,000 until 1768, when it reduced the bounty to 100. Sales of silk in 1765 disclosed that the bounty for silk exceeded its selling price by more than 60 percent and was almost exactly equal to the selling price in 1766. The cultivation of silk, despite its high quality, was a losing proposition. Its financial losses resulted in declining production after 1766. A reduction in the annual grant to 100 in 1768, followed with cancellation in 1771, led to the abandonment of silk production and closing of the filature in Savannah. Wright, who personally invested 1,577 8s. 3d. from his private funds in 1764 in silk production, failed in his quest for Britain to continue its support of the enterprise (and recover his investment).

57

Flippin, “Royal Government in Georgia,” 219–22. The collector was referred to as “The Collector of His Majesty’s Customs,” and was appointed by the Commissioners of Customs in London, later transferred with the comptroller and searcher to the supervision of the Board of Commissioners in America with headquarters in Boston. 58 All the records of the Savannah customs office were destroyed as a result of military action in February 1776. Complete export and import figures exist only for trade with the British Isles. There is no way to know how much of the colony’s trade went via land or water to or from Charleston and is thus included in records of that port. Nor do figures recorded in the Georgia Gazette after 1763 give the original source of imports or fi nal destination of exports. Thus there is no way to know with any degree of accuracy how much imperial revenue should have been collected on the colony’s trade. Kenneth Coleman, Colonial Georgia: A History (New York: Charles Scribner’s Sons, 1976), 220. 59 Flippin, “Royal Government in Georgia,” 237–45.

[ 858 ]

Taxation of the Southern Plantation Colonies, 1763–1775

Internal Taxes

G

e or g i a’s f i r st general tax law, enacted in 1755, set rates on property at 1s. per slave or one hundred acres of land, and 7s. per 100 value (0.35 percent) of urban property, merchandise, and money on loan. Rates were doubled in 1757, and further increased by 25 percent on slaves and lands in 1760. In 1762 rates were reduced 45 percent on general urban property and 60 percent on urban commercial improvements, with a slight reduction in the rate on loaned money. A poll tax of 10s. was imposed on free colored persons. All rates were reduced 25 percent in 1768, partly offset with a rise to 15s. in the poll tax on free colored persons. A further reduction of 25 percent in 1770 restored rates to the level of the original law. No tax law was passed and no taxes were collected in 1771 and 1772 owing to a dispute between the governor and the Commons House.60 The final pre-Revolution tax statute raised rates by 67 percent and imposed a 1 percent income tax on all salaries paid by legislative appropriation, on all business profits, and on all incomes of professional persons, exempting ministers. The increase in rates was directed at covering

60 Coleman, Colonial Georgia, 258–68. The dispute was over the lack of representation in four southern parishes that were created in 1765. The four were “excused” as “not being represented” until the session of October 1770, when the Commons House refused to enact a tax bill until Governor Wright issued writs of election for the four parishes. Another matter involved the refusal of the deputy secretary of the colony to take an oath when giving testimony to the Commons House, resulting in his arrest and imprisonment in the public jail. The governor’s repeated dissolution of the legislature over these issues resulted in the absence of any legislation and a tax bill for 1771 and 1772. Finally, in 1773, after the governor received permission from London to approve representation in any parish with a hundred families or voters, the southern parishes were represented and taxed. Wright left in July 1771 for Britain for two years. His deputy, senior councillor James Habersham, who served as acting governor, fought with the Commons House until December 1772, when he and the elected representatives put their differences aside and passed the fi rst new legislation since 1769. With peace restored between the Commons House and the royal executive, Wright returned to Georgia in February 1773. When the legislature met in late June 1773, both houses thanked Wright for securing the recently ceded Indian lands. Harmony was shortlived, shattered by the Boston Tea Party of December 1773 and the British reaction. Georgia’s legislators debated, but rejected, sending delegates to an intercolonial congress, but the settlers were sharply divided over the question of loyalty to Britain. The controversy, fueled by the Intolerable Acts, put aside passage of tax bills for 1774 and 1775. The old royal colonial government was dissolved and replaced with an embryonic state government in the summer of 1775. Deliberations of the Georgia Provincial Congress in July 1775 created the Council of Safety, which had the power to issue paper money and authorize expenditure. It commenced with an issue of 10,000 in July 1775 to be redeemed three years after peace between America and Britain. No specific record remains concerning either tax legislation or tax collection from the takeover of the machinery of government by Revolutionary forces on January 18, 1776, prior to May 4, 1778. The new state government largely reenacted the former colonial tax structure. Heath, Economic Development in Georgia, 120–22.

[ 859 ]

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a treasury deficit of 1,350 and sinking a portion of the tax anticipation certificates that was issued in response to the absence of tax collection during 1771– 72. From time to time, surtaxes were levied to fund such specific purposes as the maintenance of pilotage, lighthouses, courts, and other activities. By 1765 grants had been registered in Georgia for 546,770 acres, in addition to another 89,400 acres on the boundary with South Carolina that had been granted by its governor. Of this Governor Wright had eleven plantations totaling 10,000–15,000 acres, Lieutenant Governor John Graham 25,000 acres, senior councillor James Habersham over 10,000 acres, with most planters owning 2,000–5,000 acres.61 Within ten years after the establishment of royal government in 1752, quitrents were reduced from 4s. to 2s. per hundred acres. Casual reports suggested that quitrents were collected to some reasonable degree of compliance, but no statements were published on the amount that was collected or discharged. One report of Governor Wright to the Earl of Dartmouth dated December 20, 1773, cited a salary of 100 paid from the quitrents to the receiver-general of quitrents. Given the small size of the provincial population, annual quitrents are likely to have been no more than several hundred pounds. In addition to direct taxes, several indirect taxes were levied during the remaining years of the colonial period.62 In 1764, for example, these included tonnage (83 7s. 3d.), powder charge (105 9s. 21 ⁄2d.), tax on transient trade (105 8s. 4d.), duty on imported Negro slaves (66 10s.), and tax on deerskins and beaver skins (2 2s. 91 ⁄2d.). In 1764 indirect taxes amounted to less than a quarter of direct tax receipts of 1,289 8s. 83 ⁄4d., augmented with 58 17s. 6d. in arrears from the prior year. Licenses generated another 119. The amount to be borrowed or derived from the sale of land was included in the tax act (e.g., 700 for September 1764 to September 1765). The annual tax bill appropriated funds for the courts of oyer and terminer, the usual expenses of the General Assembly, and various contingent expenses itemized for the preceding year. The tax bill of 1763, for example, itemized the expected sources of revenue from land (500), Negroes (540), improved lots (22 10s.), unimproved lots (27), imported goods (169 10s.), money at interest (6), arrears of 20 from the previous year, and 500 from the sale of town lots in Savannah to be loaned to the government. The amounts appropriated ranged from a low of 4 (clerk of the courts) to a high of 250 (repairing the courthouse). Thirteen categories of general expenditure included, among others, the work house, fortifications, gun carriages, an agent in London, shot for the fort, and seven court officials. Seven categories provided for the costs of the General Assembly. The list also 61

Coleman, Colonial Georgia, 213. The numbers in this and the following paragraphs are from Flippin, “Royal Government in Georgia,” 197–99. 62

[ 860 ]

Taxation of the Southern Plantation Colonies, 1763–1775 tabl e . Georgia Annual Tax Bills, 1763–1773 ( £.s.d. Georgia Currency) Year

Tax Bill

Per Capita Provincial Taxes

1763 1764 1765 1766 1767 1768 1769 1770 1773

1,934.4.0 2,118.5.0 1,599.7.0 1,925.6.0 1,843.11.4 3,375.4.1 3,046.16.8 3,355.9.0 5,171.15.10

57.8 58.4 40.9 46.0 41.3 71.1 60.6 63.2 63.7

Notes: The tax year ran from September of one year to September of the next. For example, the tax year 1763 encompasses September 1762 to September 1763. Source: Percy S. Flippin, “The Royal Government in Georgia 1752–1776. IV: The Financial System and Administration,” Georgia Historical Quarterly (1925): 197–99.

included thirty contingent ser vices (e.g., hanging Negroes, arresting offenders, repairing public buildings, registering land grants, maintaining a lighthouse, housing French prisoners). Categories of expenditure in subsequent years added or deleted items. Annual tax bills for the support of the government appear in table 28.7. The relatively large tax bill of 1773 was to take account of debts that accrued during 1771–72 when no provincial tax bills were passed. However, the marked rise in population in the few years preceding the Revolution meant that the substantially larger tax bill of 1773 did not raise per capita taxes; indeed, the burden peaked in 1768, thereafter falling by about 8d. a head to the lower level of 63–64d. (51 ⁄4s.), where it remained until a year before the Revolution. The vestry was empowered to levy taxes on parish citizens for poor relief and church expenses. It produced minimal funds, only 30 annually in Christ Church or St. Paul and 10 in other parishes lacking a church. The vestry was the only local government body in Georgia.63

Summary

T

h e t r e n d of internal taxation in the southern plantation colonies was affected by British attempts to levy an American tax. The Stamp Act, which briefly closed the courts and ports of the colonies, the 63

Coleman, Colonial Georgia, 231.

[ 861 ]

chap t er 28

Townshend duties, which fueled a boycott and non-importation agreement of British goods, and the Tea and Intolerable acts, which virtually terminated cooperation with royal officials, affected the ebb and flow of tax legislation, and the composition and collection of revenue, in the southern colonies. From 1763 to 1775, Virginia continued to finance the lion’s share of its civil administration with annual revenue from the 2s. hogshead duty of 10,000–20,000 Virginia currency. All other revenues from quitrents, land tax, general import duties, slave duty, and tonnage generated perhaps another several thousand pounds. The only significant extraordinary tax was enacted to reimburse planters for the destruction of their tobacco stored in damaged public warehouses. On the eve of the Revolution, the burden of internal taxes for white Virginians was on the order of 18d. Virginia currency, about one-and-one-half shillings (1s. 3d. sterling). Marylanders paid somewhat heavier taxes than their Virginia counterparts, but most was in proprietary levies of quitrents, hogshead duty, and tonnage, which amounted to about 10,600 Maryland currency in 1774. A portion of the hogshead duty continued to supply the civil administration with some 1,500 a year. The prudential policy of creating a currency backed with British assets purchased with thirty-one years of an export duty on tobacco provided the means to finance new paper money without any need to impose taxes as surety for its redemption. Payment of provincial debts with new paper money underwritten with sterling assets repatriated from Britain eliminated the need to levy any provincial land or poll taxes during 1763–75. The only other internal levies were an indeterminate amount of county and clerical poll taxes. The burden of proprietary, provincial, and local taxes on the white Marylanders came to about 2–3s. (1 1 ⁄4–2s. sterling) a head. Nor did the colony have any public debt in April 1775, when Paul Revere set out on his midnight ride. North Carolina was affl icted with an internal dispute over the conduct of sheriffs in collecting and embezzling tax money in the western counties. The dispute, which gave rise to the Regulators, halted the collection of poll taxes from 1770 to the Revolution. Poll taxes provided considerable revenue during 1764–67, falling sharply in 1768–69 before their suspension. The governor was fortunate in receiving his salary from British funds. Liquor duties, which were diminished by smuggling and embezzlement, tonnage, and county and parish taxes produced only a few thousand pounds of revenue a year. Excluding indeterminate parish levies, all other internal taxes appear to have totaled about a shilling local currency (7d. sterling) a head in the five years preceding the Revolution. The five years preceding the Revolution in South Carolina were marked by the Wilkes fund controversy, which resulted in passage of the final colonial tax act in 1769. Beginning in 1770, the civil administration depended [ 862 ]

Taxation of the Southern Plantation Colonies, 1763–1775

largely on slave duty, which provided a steady stream of revenue through 1774, other duties, and an issue of paper money in 1774. The cessation of direct taxes from 1770 markedly reduced the tax burden of the colony’s inhabitants. Compared with white per capita taxes of about 16s. during 1764–69, the burden fell to a much lower 6s. during 1770–74. Georgia remained heavily dependent on grants from Parliament. In the few years preceding the Revolution, white settlers bore a tax burden of about 51 ⁄4s. Georgia currency (sterling). Given the colony’s small population and limited period for development, it was the most heavily taxed of the southern colonies. The light burdens in the five southern colonies stand in marked contrast to the much heavier burden in Great Britain, estimated at about 1 6s. sterling a head. Britons bore from five (Georgia) to as much as forty-five times (North Carolina) heavier tax burdens. Moreover, British taxpayers faced the long-run prospect of supporting and redeeming a massive public debt in contrast with the colonies, which were largely free of debt. The prospect of an American tax of 100,000 sterling, perhaps rising in future years, threatened a massive rise in the tax burden of the American colonists. If enforced, an American tax would dramatically alter the peacetime colonial history of low taxes and limited government.

[ 863 ]

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conc lusion


F

r om t h e first settlement at Jamestown to the midnight ride of Paul Revere, the British colonies in North America grew from a few hundred adventurous souls, most of whom failed to survive the fi rst winter in the New World, to nearly two million free colonists whose leaders chose to rebel against the strongest military power in the world. Many British subjects must have sensed a promising future in the New World. Despite the prospect of civil war between Britons and Americans, the largest numerical migration from the British Isles to the American colonies during any fiveyear period of the colonial era occurred in 1771–75. The millennial edition of Historical Statistics of the United States: Earliest Times to the Present includes a survey by John J. McCusker on the economic story of the American colonies revealed in the numbers on economic growth, income and wealth distribution, agricultural activity, capital, and expansion.1 In his review of scholarly research, McCusker states that the economy of the thirteen colonies grew at the fastest rate of all known contemporary economies and afforded its citizens on average the highest standard of living in the world on the eve of the Revolution.2 The long-term rate of growth of colonial America, although slow by modern standards and experiencing some thirty short-term cycles of expansion and contraction, exceeded, perhaps doubled, that of Great Britain. Even the poorest colonists enjoyed a steady rise in their standard of living. Colonial families married earlier and had more children than did their British counterparts. Of the 2,360,000 inhabitants of the thirteen colonies in 1775, only 97,500, a mere 4 percent, lived in the principal port cities of Boston, Newport, New York, Philadelphia, and Charleston. Another 15 percent or so resided in communities numbering up to a few thousand people. The remaining four-fifths were engaged principally in agriculture. 1

Historical Statistics of the United States: Earliest Times to the Present, vol. 5, Part E, “Governance and International Relations,” edited and with an introduction by John J. McCusker (Cambridge: Cambridge University Press, 2006), S-627–50. 2 McCusker notes that a portion of this prosperity, especially in the southern plantation colonies, was at the expense of Negro slaves.

[ 865 ]

conc lusion

Agriculture was the dominant factor in the economy. Apart from domestic consumption, it provided numerous commodities for export, such as tobacco, wheat, corn, timber, rice, indigo, livestock, animal foodstuffs, and rum. Agricultural commodities fostered the development of grain and lumber mills. The growth of commerce was reflected in shipbuilding and investment in colonial cargoes that carried colonial products to Europe, Africa, and the Caribbean. Clearances and tonnage of vessels from colonial ports rose substantially during the third quarter of the eighteenth century. The supply of domestic investment capital, which was augmented with credit from British merchants, grew at an annual estimated rate of 1.6 percent between 1730 and 1770, a full percentage point faster than the 0.6 percent annual growth rate of the economy during the same years. Capital underwrote manufacturing and trade and the acquisition of land for the children of colonial farmers setting out on their own. The franchise was limited to white, free, adult males, qualified to vote on the basis of property or the amount of taxes they paid. Representatives elected to lower houses of colonial legislatures carefully deliberated every farthing raised in taxes and carefully examined every farthing approved for spending. By the mid-eighteenth century, the lower houses were largely in charge of the public finances in most of the colonies. Royal governors and their aides depended on elected assemblies for appropriations for their salaries, rent, and other provincial expenses. The Boston Tea Party is perhaps the most famous event preceding the American Revolution, symbolizing a refusal to pay a tax on tea. A mere three pence in the pound, the tax pales against modern levels of taxation, but it was not minuscule in the light of provincial taxes paid in peacetime in the colonies. The Americans only endured three episodes of heavy taxes in the colonial era, which took place during the Pequot and King William’s wars in the last quarter of the seventeenth century, Queen Anne’s War of 1702–13, and the two-decade-long war that began with Spain in 1740 and ended with the French surrender in Quebec in 1760. The Swedish botanist Pehr Kahn, who visited the colonies in 1750, recorded the following comment: “There is such an amount of good land yet uncultivated that a newly married man can, without difficulty, get a spot of ground where he may comfortably subsist with his wife and children. The taxes are very low, and he need not be under any concern on their account. The liberties he enjoys are so great that he considers himself a prince in his possessions” (emphasis added).3 The colonists were inventive. British law banned the minting of coins and the issue of official government money in America. To circumvent this

3 Historical Statistics of the United States, vol. 5, Part E, “Governance and International Relations,” S-640n67.

[ 866 ]

conc lusion

restriction, the colonies issued quasi-official paper money called “bills of public credit,” which fell outside the legal definition of official money. Bills of credit were backed with pledges of taxation to ensure their redemption or were loaned to individuals against security of land and property. Loan office bills generated sufficient interest in several of the colonies in the fi rst half of the eighteenth century such that no direct taxes were levied for up to thirtyeight years in Rhode Island, Pennsylvania, Delaware, and New Jersey, and helped keep taxes low in New York and other colonies. To halt the issue of new paper money in the colonies, Parliament passed the Currency Acts of 1751 and 1764. Many colonial assemblies continued to issue one or another form of non–legal tender paper money that was accepted in payment of taxes and between private merchants, which limited the need for postwar tax levies. Between 1770 and April 1775, every colony reduced its tax levies, some to the point of enacting no new taxes at all. The situation in the colonies was in marked contrast to that in Great Britain. British tax burdens were ten or more times heavier than those in the colonies. Whereas the colonists had largely cleared their public debts, British national debt reached record levels, meaning heavy taxes for years to come. To reduce the burden on Britons, especially the cost of maintaining British troops in America to prevent uprisings among the defeated French and Indian tribes, a succession of British administrations set out to levy an American tax. Of these, the Sugar Act of 1764, which lowered duty to the customary rate of bribery, produced considerable revenue in the decade preceding the Revolution. The Stamp and Townshend acts, in contrast, failed miserably, costing more to implement than they collected in revenue. America’s great friend and supporter William Pitt warned his colleagues in Parliament that they put two million pounds sterling in trade at risk for a hundred thousand pounds of taxes, which they were unable to collect. To paraphrase Shakespeare, for a failed tax, an empire was lost. The composition of internal taxes varied across the colonies. The economies of New England consisted of small farmers and traders in the port cities and towns. Massachusetts, Connecticut, and New Hampshire collected the bulk of their revenues from direct taxes on polls and property, including professional income, business inventory and turnover, and interest. These taxes were supplemented with small amounts of revenue from duties, excises, and tonnage. Between 1715 and 1753, Rhode Island financed its public expenditures almost entirely from loan office interest, which obviated any need for substantial amounts of direct or indirect taxes. Apart from modest sums collected from duties and excises in the middle colonies, Pennsylvania, New Jersey, and Delaware relied largely on interest from the first issue of loan office bills until the outbreak of the French and Indian War required new sources of revenue that took the form of direct taxes on polls and property. New York relied on indirect taxes, resorting to direct taxes in wartime to support its issue of paper bills. [ 867 ]

conc lusion

Maryland, Virginia, and South Carolina, the latter collecting considerable revenue from duties on Negro slaves, extracted most of their revenue from export duties on tobacco, rice, furs, lumber, and other commodities. Quitrents generated considerable revenue in these three colonies. North Carolina, an economy of small farmers, relied on poll taxes. The composition of taxes in the colonies reflected the structure of their economies. The small farming communities of New England developed a comprehensive system of local assessment and collection of taxes on polls and property, with direct taxes on the income and wealth of urban dwellers in Boston, Newport, Providence, New London, and other port towns. The staple-exporting colonies of Virginia, Maryland, and South Carolina, along with the trading colonies of New York and Pennsylvania, relied on export or import duties, which were relatively straightforward to collect at the point of loading or unloading. Quitrents were easy to impose on large landholdings in the middle and southern colonies, although compliance was often difficult to enforce. Internal politics also played a role in choosing what to tax. Rivalries between countryside and town, large plantations and small farmers, farmers and traders, and other social and economic divisions were reflected in tax burdens and levels of representation in colonial assemblies. Tax revolts, such as the Regulators in North Carolina, demonstrated that backcountry residents, who lived self-sufficient lives on the frontier, were discontent with taxes levied on them by low-country legislators. It is important to state once again that Negro slaves, more than a fi fth of the American population in 1775, had little say over their lives and surroundings. Slave owners reaped the economic rewards of slavery.4 On the eve of the Revolution, free whites in the southern colonies were twice as wealthy as their counterparts in the middle colonies and three times richer than those in New England. Save in wartime, internal taxes in the colonies were light. Despite low taxes, noncompliance and arrears were a chronic fact of fiscal life. The American Revolution was no accident, stumbled into by both sides on the basis of minor disagreements and misunderstandings. It was a tax revolt, first and foremost. Historians have written that taxes in the new American nation rose and remained considerably higher, perhaps three times as much, than they were

4

McCusker’s statement on this point is pertinent: “Under the law and in any contemporary accounting of the economy, slaves occupied a status similar to that of horses and cattle. They were categorized as property owned by their masters. As a consequence, economic historians regularly treat them as part of the wealth of their owners. . . . Their labor was expropriated by their owners, and their income credited as income of the owners; the data presented herein reflect that sad reality.” (Historical Statistics of the United States, vol., Part E, “Governance and International Relations,” S-632)

[ 868 ]

conc lusion

under British rule. More money was required for national defense than previously needed to defend the frontier from Indians and the French, and the new nation faced other expenses. Nevertheless, reflecting its colonial antecedents, the scope of the federal government remained small, consuming only 3 percent of the national income as recently as 1929. The states remained the principal source of taxing and spending, consuming 7 percent of national income in 1929. It took the legislative measures enacted during the Great Depression to change the compact between the American people and their government, raising the share of taxes levied at all levels of government from a tenth to a third of the national income in peacetime, higher during wartime. The colonial roots of American taxation were lost in the transformation that took place in the twentieth century.

[ 869 ]

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appendix

tabl e a. Estimated Population of the American Colonies, 1610–1780 y e ar

1610 1611 1612 1613 1614 1615 1616 1617 1618 1619 1620 1621 1622 1623 1624 1625 1626 1627 1628 1629 1630 1631 1632 1633 1634 1635 1636

mass

506 1,349 2,191 3,034 3,876 4,719 5,562

ply m

102 131 160 188 217 246 275 304 332 361 390 453 516 579 642 705 768

conn

ri

nh

500 556 611 667 722 778 833

ny

350 508 666 824 982 1,140 1,298

nj

penn

de l

m ary

v i rg

350 535 720 905 1,090 1,275 1,460 1,645 1,830 2,015 2,200 2,230 2,260 2,290 2,320 2,350 2,380 2,410 2,440 2,470 2,500 3,294 4,088 4,883 5,677 6,471 7,265

no c ar

so c ar

g eorg

total

350 535 720 905 1,090 1,275 1,460 1,645 1,830 2,015 2,302 2,361 2,420 2,478 2,537 2,596 2,655 2,714 2,772 2,831 4,246 6,159 8,073 9,986 11,899 13,813 15,726

1637 1638 1639 1640 1641 1642 1643 1644 1645 1646 1647 1648 1649 1650 1651 1652 1653 1654 1655 1656 1657 1658 1659 1660 1661 1662 1663 1664 1665

6,404 7,247 8,089 8,932 9,443 9,953 10,464 10,974 11,485 11,995 12,506 13,016 13,527 14,037 14,642 15,246 15,851 16,455 17,060 17,664 18,269 18,873 19,478 20,082 21,074 22,066 23,057 24,049 25,041

831 894 957 1,020 1,075 1,129 1,184 1,238 1,293 1,348 1,402 1,457 1,511 1,566 1,607 1,649 1,690 1,732 1,773 1,814 1,856 1,897 1,939 1,980 2,315 2,651 2,986 3,321 3,657

1,472 1,739 2,005 2,272 2,539 2,805 3,072 3,339 3,606 3,872 4,139 4,523 4,907 5,291 5,675 6,060 6,444 6,828 7,212 7,596 7,980 8,442 8,905 9,367 9,829 10,291

300 349 397 446 494 543 591 640 688 737 785 860 936 1,011 1,087 1,162 1,237 1,313 1,388 1,464 1,539 1,601 1,662 1,724 1,785 1,847

889 944 1,000 1,055 1,080 1,105 1,130 1,155 1,180 1,205 1,230 1,255 1,280 1,305 1,330 1,355 1,380 1,405 1,430 1,455 1,480 1,505 1,530 1,555 1,580 1,605 1,630 1,655 1,680

1,456 1,614 1,772 1,930 2,149 2,367 2,586 2,804 3,023 3,242 3,460 3,679 3,897 4,116 4,198 4,280 4,362 4,444 4,526 4,608 4,690 4,772 4,854 4,936 5,018 5,100 5,181 5,263 5,345

185 221 256 292 327 363 398 434 469 505 540 556 572 588 604 620

583 975 1,367 1,759 2,151 2,544 2,936 3,328 3,720 4,112 4,504 4,896 5,288 5,681 6,073 6,465 6,857 7,249 7,642 8,034 8,426 8,906 9,386 9,866 10,346 10,826

8,059 8,854 9,648 10,442 11,271 12,100 12,929 13,758 14,586 15,415 16,244 17,073 17,902 18,731 19,560 20,389 21,218 22,047 22,876 23,704 24,533 25,362 26,191 27,020 27,849 28,678 29,507 30,336 31,165

1,000 1,285 1,570 1,855 2,140 2,425

17,639 19,552 21,466 25,734 28,079 30,424 32,769 35,114 37,459 39,803 42,148 44,493 46,838 49,368 51,837 54,306 56,775 59,244 61,713 64,182 66,651 69,120 71,589 75,058 78,626 82,193 85,761 89,329 92,897 (continued)

tabl e a. (continued) y e ar

mass

ply m

conn

ri

nh

ny

1666 1667 1668 1669 1670 1671 1672 1673 1674 1675 1676 1677 1678 1679 1680 1681 1682 1683 1684 1685 1686 1687 1688 1689 1690 1691 1692 1693

26,033 27,025 28,016 29,008 30,000 30,975 31,950 32,926 33,901 34,876 35,851 36,826 37,802 38,777 39,752 40,727 41,702 42,678 43,653 44,628 45,603 46,578 47,554 48,529 49,504 50,148 50,791 51,435

3,992 4,327 4,662 4,998 5,333 5,440 5,536 5,632 5,728 5,824 5,920 6,016 6,112 6,208 6,400 6,502 6,595 6,687 6,779 6,871 6,963 7,056 7,148 7,240 7,424

10,754 11,216 11,678 12,141 12,603 13,067 13,532 13,996 14,460 14,924 15,389 15,853 16,317 16,782 17,246 17,686 18,126 18,566 19,006 19,446 19,885 20,325 20,765 21,205 21,645 22,078 22,510 22,943

1,909 1,970 2,032 2,093 2,155 2,241 2,327 2,414 2,500 2,586 2,672 2,758 2,845 2,931 3,017 3,138 3,258 3,379 3,500 3,620 3,741 3,862 3,983 4,103 4,224 4,391 4,558 4,725

1,705 1,730 1,755 1,780 1,805 1,829 1,853 1,878 1,902 1,926 1,950 1,974 1,999 2,023 2,047 2,259 2,470 2,682 2,894 3,105 3,317 3,529 3,741 3,952 4,164 4,243 4,323 4,402

5,427 5,509 5,590 5,672 5,754 6,162 6,569 6,977 7,384 7,792 8,200 8,607 9,015 9,422 9,830 10,238 10,646 11,054 11,462 11,869 12,277 12,685 13,093 13,501 13,909 14,429 14,949 15,468

nj

1,000 1,240 1,480 1,720 1,960 2,200 2,440 2,680 2,920 3,160 3,400 3,860 4,320 4,780 5,240 5,700 6,160 6,620 7,080 7,540 8,000 8,601 9,202 9,803

penn

de l

m ary

v i rg

680 1,757 2,834 3,911 4,988 6,065 7,142 8,219 9,296 10,373 11,450 12,100 12,750 13,400

636 652 668 684 700 731 761 792 822 853 883 914 944 975 1,005 1,053 1,100 1,148 1,196 1,244 1,291 1,339 1,387 1,434 1,482 1,581 1,680 1,778

11,306 11,786 12,266 12,746 13,226 13,694 14,162 14,629 15,097 15,565 16,033 16,501 16,968 17,436 17,904 18,516 19,128 19,740 20,352 20,964 21,576 22,188 22,800 23,412 24,024 24,582 25,140 25,698

31,993 32,822 33,651 34,480 35,309 36,138 36,966 37,795 38,624 39,452 40,281 41,110 41,939 42,767 43,596 44,541 45,486 46,431 47,376 48,321 49,266 50,211 51,156 52,101 53,046 53,597 54,149 54,700

no c ar

2,710 2,995 3,280 3,565 3,850 4,008 4,166 4,324 4,482 4,640 4,798 4,956 5,114 5,272 5,430 5,647 5,864 6,081 6,298 6,515 6,732 6,949 7,166 7,383 7,600 7,912 8,224 8,536

so c ar

200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,470 1,740 2,010 2,280 2,550 2,820 3,090 3,360 3,630 3,900 4,136 4,372 4,608

g eorg

total

96,464 100,032 103,600 107,167 111,935 115,824 119,703 123,581 127,460 131,338 135,217 139,095 142,974 146,852 151,507 157,394 163,270 169,146 175,022 180,899 186,775 192,651 198,528 204,404 210,372 207,798 212,647 217,497

1694 1695 1696 1697 1698 1699 1700 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710 1711 1712 1713 1714 1715 1716 1717 1718 1719 1720 1721 1722

52,079 52,722 53,366 54,010 54,654 55,297 55,941 56,586 57,231 57,876 58,521 59,166 59,810 60,455 61,100 61,745 62,390 65,252 68,114 70,975 73,837 76,699 79,561 82,423 85,284 88,146 91,008 93,319 95,630

23,375 23,808 24,240 24,673 25,105 25,538 25,970 27,318 28,666 30,014 31,362 32,710 34,058 35,406 36,754 38,102 39,450 41,388 43,326 45,264 47,202 49,140 51,078 53,016 54,954 56,892 58,830 60,500 62,170

4,892 5,059 5,226 5,393 5,560 5,727 5,894 6,062 6,230 6,398 6,566 6,733 6,901 7,069 7,237 7,405 7,573 7,984 8,394 8,805 9,216 9,626 10,037 10,448 10,859 11,269 11,680 12,207 12,734

4,482 4,561 4,640 4,720 4,799 4,879 4,958 5,030 5,103 5,175 5,247 5,320 5,392 5,464 5,536 5,609 5,681 6,050 6,420 6,789 7,159 7,528 7,897 8,267 8,636 9,006 9,375 9,513 9,651

15,988 16,508 17,028 17,548 18,067 18,587 19,107 19,359 19,611 19,862 20,114 20,366 20,618 20,870 21,121 21,373 21,625 23,154 24,684 26,213 27,743 29,272 30,801 32,331 33,860 35,390 36,919 38,087 39,254

10,404 11,005 11,606 12,207 12,808 13,409 14,010 14,596 15,182 15,769 16,355 16,941 17,527 18,113 18,700 19,286 19,872 20,867 21,861 22,856 23,850 24,845 25,840 26,834 27,829 28,823 29,818 30,587 31,356

14,050 14,700 15,350 16,000 16,650 17,300 17,950 18,600 19,250 19,900 20,550 21,200 21,850 22,500 23,150 23,800 24,450 25,101 25,752 26,404 27,055 27,706 28,357 29,008 29,660 30,311 30,962 33,037 35,111

1,877 1,976 2,075 2,174 2,272 2,371 2,470 2,588 2,705 2,823 2,940 3,058 3,175 3,293 3,410 3,528 3,645 3,819 3,993 4,167 4,341 4,515 4,689 4,863 5,037 5,211 5,385 5,764 6,142

26,256 26,814 27,372 27,930 28,488 29,046 29,604 30,918 32,231 33,545 34,859 36,173 37,486 38,800 40,114 41,427 42,741 45,080 47,419 49,759 52,098 54,437 56,776 59,115 61,455 63,794 66,133 68,631 71,129

55,252 55,803 56,354 56,906 57,457 58,009 58,560 60,155 61,751 63,346 64,941 66,537 68,132 69,727 71,322 72,918 74,513 75,837 77,162 78,486 79,811 81,135 82,459 83,784 85,108 86,433 87,757 90,381 93,006

8,848 9,160 9,472 9,784 10,096 10,408 10,720 11,160 11,600 12,040 12,480 12,920 13,360 13,800 14,240 14,680 15,120 15,735 16,350 16,965 17,580 18,195 18,810 19,425 20,040 20,655 21,270 22,143 23,016

4,844 5,080 5,316 5,552 5,788 6,024 6,260 6,664 7,068 7,472 7,876 8,280 8,684 9,088 9,492 9,896 10,300 11,103 11,906 12,708 13,511 14,314 15,117 15,920 16,722 17,525 18,328 19,495 20,662

222,346 227,196 232,046 236,895 241,745 246,594 251,444 259,036 266,627 274,219 281,810 289,402 296,994 304,585 312,177 319,768 327,360 341,370 355,381 369,392 383,402 397,413 411,423 425,433 439,444 453,454 467,465 483,663 499,861 (continued)

tabl e a. (continued) y e ar

mass

1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1735 1736 1737 1738 1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750

97,940 100,251 102,562 104,873 107,184 109,494 111,805 114,116 117,866 121,615 125,365 129,115 132,865 136,614 140,364 144,114 147,863 151,613 155,252 158,890 162,529 166,168 169,807 173,445 177,084 180,723 184,361 188,000

ply m

conn

ri

nh

63,840 65,510 67,180 68,850 70,520 72,190 73,860 75,530 76,935 78,340 79,745 81,150 82,555 83,960 85,365 86,770 88,175 89,580 91,750 93,920 96,090 98,260 100,430 102,600 104,770 106,940 109,110 111,280

13,261 13,788 14,315 14,842 15,369 15,896 16,423 16,950 17,778 18,605 19,433 20,260 21,088 21,915 22,743 23,570 24,398 25,225 26,025 26,825 27,625 28,425 29,225 30,026 30,826 31,626 32,426 33,226

9,789 9,927 10,065 10,203 10,341 10,479 10,617 10,755 12,005 13,255 14,505 15,755 17,006 18,256 19,506 20,756 22,006 23,256 23,681 24,106 24,531 24,956 25,381 25,805 26,230 26,655 27,080 27,505

ny

40,422 41,589 42,757 43,924 45,092 46,259 47,427 48,594 50,101 51,608 53,115 54,622 56,129 57,637 59,144 60,651 62,158 63,665 64,968 66,271 67,574 68,877 70,180 71,484 72,787 74,090 75,393 76,696

nj

32,126 32,895 33,664 34,433 35,202 35,972 36,741 37,510 38,896 40,283 41,669 43,055 44,442 45,828 47,214 48,600 49,987 51,373 53,375 55,377 57,379 59,381 61,383 63,385 65,387 67,389 69,391 71,393

penn

de l

m ary

v i rg

37,186 39,260 41,335 43,409 45,484 47,558 49,633 51,707 55,100 58,493 61,886 65,279 68,672 72,065 75,458 78,851 82,244 85,637 89,040 92,443 95,846 99,249 102,651 106,054 109,457 112,860 116,263 119,666

6,521 6,899 7,278 7,656 8,035 8,413 8,792 9,170 10,240 11,310 12,380 13,450 14,520 15,590 16,660 17,730 18,800 19,870 20,753 21,637 22,520 23,404 24,287 25,170 26,054 26,937 27,821 28,704

73,627 76,125 78,623 81,121 83,619 86,117 88,615 91,113 93,611 96,109 98,607 101,105 103,603 106,101 108,599 111,097 113,595 116,093 118,591 121,089 123,587 126,085 128,583 131,081 133,579 136,077 138,575 141,073

95,630 98,254 100,879 103,503 106,127 108,751 111,376 114,000 120,600 127,200 133,800 140,400 147,000 153,600 160,200 166,800 173,400 180,440 186,064 191,688 197,312 202,936 208,561 214,185 219,809 225,433 231,057 236,681

no c ar

so c ar

23,889 24,762 25,635 26,508 27,381 28,254 29,127 30,000 32,176 34,352 36,528 38,704 40,880 43,056 45,232 47,408 49,584 51,760 53,882 56,005 58,127 60,250 62,372 64,494 66,617 68,739 70,862 72,984

21,830 22,997 24,164 25,331 26,498 27,666 28,833 30,000 32,420 34,840 37,172 39,504 41,766 44,027 46,232 48,438 50,598 54,200 56,180 58,160 60,140 62,120 64,100 66,080 68,060 70,040 72,020 74,000

g eorg

5,200

total

516,059 532,257 548,455 564,653 580,851 597,049 613,247 629,445 657,728 686,010 714,205 742,400 770,524 798,648 826,716 854,784 882,807 912,712 939,562 966,411 993,261 1,020,110 1,046,960 1,073,810 1,100,659 1,127,509 1,154,358 1,186,408

1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776 1777 1778 1779 1780

189,460 190,920 192,380 193,840 195,300 196,760 198,220 199,680 201,140 202,600 205,871 209,142 212,412 215,683 218,954 222,225 225,496 228,766 232,037 235,308 238,640 241,972 245,304 248,636 251,967 255,299 258,631 261,963 265,295 268,627

114,399 117,518 120,637 123,756 126,875 129,994 133,113 136,232 139,351 142,470 146,611 150,752 154,893 159,034 163,176 167,317 171,458 175,599 179,740 183,881 186,163 188,445 190,727 193,009 195,291 197,573 199,855 202,137 204,419 206,701

34,451 35,675 36,900 38,124 39,349 40,573 41,798 43,022 44,247 45,471 46,744 48,016 49,289 50,561 51,834 53,106 54,379 55,651 56,924 58,196 57,671 57,146 56,621 56,096 55,571 55,046 54,521 53,996 53,471 52,946

28,664 29,823 30,981 32,140 33,299 34,458 35,617 36,775 37,934 39,093 41,423 43,754 46,084 48,414 50,745 53,075 55,405 57,735 60,066 62,396 64,937 67,477 70,018 72,558 75,099 77,640 80,180 82,721 85,261 87,802

80,740 84,784 88,829 92,873 96,917 100,961 105,005 109,050 113,094 117,138 121,716 126,294 130,873 135,451 140,029 144,607 149,185 153,764 158,342 162,920 167,682 172,444 177,206 181,968 186,731 191,493 196,255 201,017 205,779 210,541

73,635 75,877 78,119 80,361 82,603 84,845 87,087 89,329 91,571 93,813 96,175 98,537 100,898 103,260 105,622 107,984 110,346 112,707 115,069 117,431 119,651 121,870 124,090 126,309 128,529 130,749 132,968 135,188 137,407 139,627

126,070 132,473 138,877 145,281 151,684 158,088 164,492 170,896 177,299 183,703 189,338 194,974 200,609 206,245 211,880 217,515 223,151 228,786 234,422 240,057 248,782 257,507 266,231 274,956 283,681 292,406 301,131 309,855 318,580 327,305

29,159 29,613 30,068 30,522 30,977 31,432 31,886 32,341 32,795 33,250 33,475 33,699 33,924 34,148 34,373 34,598 34,822 35,047 35,271 35,496 36,485 37,474 38,463 39,452 40,441 41,429 42,418 43,407 44,396 45,385

143,192 145,312 147,431 149,551 151,670 153,789 155,909 158,028 160,148 162,267 166,300 170,333 174,367 178,400 182,433 186,466 190,499 194,533 198,566 202,599 207,135 211,671 216,207 220,743 225,279 229,815 234,351 238,887 243,423 247,959

246,986 257,290 267,595 277,899 288,204 298,508 308,813 319,117 329,422 339,726 350,455 361,184 371,913 382,642 393,371 404,100 414,829 425,558 436,287 447,016 456,115 465,214 474,312 483,411 492,510 501,609 510,708 519,806 528,905 538,004

76,730 80,476 84,221 87,967 91,713 95,459 99,205 102,950 106,696 110,442 119,118 127,794 136,469 145,145 153,821 162,497 171,173 179,848 188,524 197,200 204,493 211,787 219,080 226,373 233,666 240,960 248,253 255,546 262,840 270,133

76,007 78,015 80,022 82,030 84,037 86,044 88,052 90,059 92,067 94,074 97,091 100,108 103,125 106,142 109,159 112,176 115,193 118,210 121,227 124,244 129,820 135,395 140,971 146,546 152,122 157,698 163,273 168,849 174,424 180,000

5,638 6,076 6,513 77,951 7,389 7,827 8,265 8,702 9,140 9,578 10,958 12,337 13,717 15,097 16,477 17,856 19,236 20,616 21,995 23,375 26,645 29,914 33,184 36,453 39,723 42,993 46,262 49,532 52,801 56,071

1,225,130 1,263,851 1,302,573 1,341,295 1,380,017 1,418,738 1,457,460 1,496,182 1,534,903 1,573,625 1,625,274 1,676,924 1,728,573 1,780,223 1,831,872 1,883,521 1,935,171 1,986,820 2,038,470 2,090,119 2,144,217 2,198,315 2,252,414 2,306,512 2,360,610 2,414,708 2,468,806 2,522,905 2,577,003 2,631,101

tabl e a. Estimated White Population of the American Colonies, 1610–1780 y e ar

1610 1611 1612 1613 1614 1615 1616 1617 1618 1619 1620 1621 1622 1623 1624 1625 1626 1627 1628 1629 1630 1631 1632 1633 1634 1635 1636

mass

506 1,349 2,191 3,034 3,876 4,719 5,562

ply m

102 131 160 188 217 246 275 304 332 361 390 453 516 579 642 705 768

conn

ri

nh

500 556 611 667 722 778 833

ny

340 476 612 747 883 1,019 1,155

nj

penn

de l

m ary

v i rg

350 535 720 905 1,090 1,275 1,460 1,645 1,830 2,015 2,200 2,230 2,260 2,290 2,320 2,350 2,380 2,410 2,440 2,470 2,450 3,234 4,018 4,803 5,587 6,371 7,155

no c ar

so c ar

g eorg

total

350 535 720 905 1,090 1,275 1,460 1,645 1,830 2,015 2,302 2,361 2,420 2,478 2,537 2,596 2,655 2,714 2,772 2,831 4,186 6,067 7,948 9,829 11,710 13,592 15,473

1637 1638 1639 1640 1641 1642 1643 1644 1645 1646 1647 1648 1649 1650 1651 1652 1653 1654 1655 1656 1657 1658 1659 1660 1661 1662 1663 1664 1665

6,404 7,247 8,089 8,782 9,278 9,774 10,269 10,765 11,260 11,756 12,251 12,747 13,242 13,742 14,334 14,927 15,520 16,113 16,706 17,299 17,892 18,486 19,079 19,660 20,678 21,693 22,709 23,724 24,739

831 894 957 1,020 1,075 1,129 1,184 1,238 1,293 1,348 1,402 1,457 1,511 1,566 1,607 1,649 1,690 1,732 1,773 1,814 1,856 1,897 1,939 1,980 2,315 2,651 2,986 3,321 3,657

1,457 1,723 1,989 2,256 2,522 2,788 3,054 3,320 3,587 3,853 4,119 4,503 4,886 5,270 5,653 6,037 6,421 6,804 7,188 7,571 7,955 8,416 8,878 9,339 9,800 10,261

300 349 397 446 494 543 591 640 688 737 760 831 903 974 1,046 1,117 1,188 1,260 1,331 1,403 1,474 1,531 1,587 1,644 1,700 1,757

889 944 1,000 1,025 1,049 1,073 1,097 1,121 1,145 1,169 1,193 1,217 1,241 1,265 1,289 1,313 1,337 1,361 1,385 1,409 1,433 1,457 1,481 1,505 1,529 1,552 1,576 1,599 1,623

1,291 1,426 1,562 1,698 1,890 2,082 2,273 2,465 2,657 2,849 3,041 3,232 3,424 3,616 3,688 3,760 3,832 3,904 3,976 4,048 4,120 4,192 4,264 4,336 4,409 4,482 4,554 4,627 4,700

170 204 238 272 306 340 374 408 442 476 510 525 540 555 570 585

563 927 1,291 1,655 2,019 2,384 2,748 3,112 3,476 3,840 4,204 4,550 4,897 5,243 5,590 5,936 6,282 6,629 6,975 7,322 7,668 8,105 8,542 8,978 9,415 9,852

7,939 8,724 9,508 10,292 11,095 11,899 12,702 13,506 14,309 15,112 15,916 16,719 17,523 18,326 19,100 19,875 20,649 21,424 22,198 22,972 23,747 24,521 25,296 26,070 26,794 27,518 28,242 28,966 29,690

980 1,252 1,524 1,796 2,068 2,340

17,354 19,235 21,116 25,137 27,386 29,634 31,882 34,130 36,378 38,626 40,874 43,122 45,370 47,768 50,107 52,447 54,788 57,128 59,468 61,809 64,149 66,489 68,829 72,138 75,553 78,966 82,378 85,791 89,203 (continued)

tabl e a. (continued) y e ar

mass

ply m

conn

ri

nh

ny

1666 1667 1668 1669 1670 1671 1672 1673 1674 1675 1676 1677 1678 1679 1680 1681 1682 1683 1684 1685 1686 1687 1688 1689 1690 1691 1692 1693

25,754 26,770 27,785 28,801 29,840 30,814 31,788 32,763 33,737 34,711 35,685 36,659 37,634 38,608 39,582 40,534 41,486 42,439 43,391 44,343 45,295 46,247 47,200 48,152 49,104 49,708 50,311 50,915

3,992 4,327 4,662 4,998 5,333 5,440 5,536 5,632 5,728 5,824 5,920 6,016 6,112 6,208 6,400 6,502 6,595 6,687 6,779 6,871 6,963 7,056 7,148 7,240 7,424

10,723 11,184 11,645 12,107 12,568 13,031 13,494 13,956 14,419 14,882 15,345 15,808 16,270 16,733 17,196 17,621 18,046 18,471 18,896 19,321 19,745 20,170 20,595 21,020 21,445 21,853 22,260 22,668

1,814 1,870 1,927 1,983 2,040 2,120 2,200 2,281 2,361 2,441 2,521 2,601 2,682 2,762 2,842 2,955 3,068 3,182 3,295 3,408 3,521 3,634 3,748 3,861 3,974 4,136 4,298 4,460

1,646 1,670 1,693 1,717 1,740 1,763 1,786 1,810 1,833 1,856 1,879 1,902 1,926 1,949 1,972 2,181 2,390 2,600 2,809 3,018 3,227 3,436 3,646 3,855 4,064 4,140 4,217 4,293

4,773 4,846 4,918 4,991 5,064 5,421 5,777 6,134 6,490 6,847 7,204 7,560 7,917 8,273 8,630 8,991 9,352 9,713 10,074 10,434 10,795 11,156 11,517 11,878 12,239 12,700 13,161 13,623

nj

940 1,166 1,392 1,618 1,844 2,070 2,296 2,522 2,748 2,974 3,200 3,635 4,070 4,505 4,940 5,375 5,810 6,245 6,680 7,115 7,550 8,112 8,674 9,236

penn

de l

m ary

v i rg

655 1,708 2,760 3,813 4,865 5,918 6,970 8,023 9,075 10,128 11,180 11,814 12,448 13,082

600 615 630 645 660 689 718 747 776 805 834 863 892 921 950 995 1,040 1,085 1,130 1,175 1,220 1,265 1,310 1,355 1,400 1,494 1,587 1,680

10,289 10,726 11,162 11,599 12,036 12,462 12,887 13,313 13,739 14,164 14,590 15,016 15,442 15,867 16,293 16,850 17,407 17,964 18,521 19,078 19,634 20,191 20,748 21,305 21,862 22,314 22,765 23,217

30,413 31,137 31,861 32,585 33,309 34,038 34,766 35,495 36,224 36,952 37,681 38,410 39,139 39,867 40,596 40,907 41,217 41,528 41,838 42,149 42,459 42,770 43,080 43,391 43,701 43,548 43,395 43,242

no c ar

2,612 2,884 3,156 3,428 3,700 3,852 4,004 4,156 4,308 4,460 4,612 4,764 4,916 5,068 5,220 5,428 5,636 5,844 6,052 6,260 6,468 6,676 6,884 7,092 7,300 7,601 7,901 8,202

so c ar

170 253 336 419 502 585 668 751 834 917 1,000 1,140 1,280 1,420 1,560 1,700 1,840 1,980 2,120 2,260 2,400 2,486 2,572 2,658

g eorg

total

92,616 96,028 99,441 102,854 107,400 111,048 114,685 118,323 121,960 125,598 129,235 132,872 136,510 140,147 144,536 149,447 154,347 159,248 164,148 169,049 173,949 178,850 183,750 188,651 193,643 189,904 193,589 197,275

1694 1695 1696 1697 1698 1699 1700 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710 1711 1712 1713 1714 1715 1716 1717 1718 1719 1720 1721 1722

51,519 52,122 52,726 53,330 53,934 54,537 55,141 55,735 56,334 56,933 57,532 58,131 58,730 59,329 59,928 60,527 61,080 63,858 66,636 69,413 72,191 74,969 77,747 80,525 83,302 86,080 88,858 91,106 93,360

23,075 23,483 23,890 24,298 24,705 25,113 25,520 26,838 28,156 29,474 30,792 32,110 33,428 34,746 36,064 37,382 38,700 40,604 42,508 44,412 46,316 48,220 50,124 52,028 53,932 55,836 57,737 59,367 60,998

4,622 4,784 4,946 5,108 5,270 5,432 5,594 5,754 5,915 6,075 6,236 6,396 6,556 6,717 6,877 7,038 7,198 7,592 7,986 8,380 8,774 9,167 9,561 9,955 10,349 10,743 11,137 11,554 11,970

4,370 4,446 4,522 4,599 4,675 4,752 4,828 4,898 4,969 5,039 5,109 5,180 5,250 5,320 5,390 5,461 5,531 5,898 6,266 6,633 7,001 7,368 7,735 8,103 8,470 8,838 9,205 9,340 9,475

14,084 14,545 15,006 15,467 15,929 16,390 16,851 17,047 17,244 17,440 17,636 17,832 18,029 18,225 18,421 18,618 18,814 20,051 21,287 22,524 23,760 24,997 26,233 27,470 28,706 29,943 31,179 32,235 33,291

9,798 10,360 10,922 11,484 12,046 12,608 13,170 13,707 14,244 14,781 15,318 15,855 16,392 16,929 17,466 18,003 18,540 19,429 20,319 21,208 22,097 22,986 23,876 24,765 25,654 26,544 27,433 28,140 28,847

13,716 14,350 14,984 15,618 16,252 16,886 17,520 18,056 18,603 19,150 19,697 20,244 20,791 21,338 21,885 22,432 22,875 23,484 24,092 24,701 25,310 25,919 26,527 27,136 27,745 28,353 28,962 31,112 33,263

1,774 1,867 1,961 2,054 2,148 2,241 2,335 2,416 2,497 2,578 2,659 2,740 2,821 2,902 2,983 3,064 3,145 3,299 3,453 3,607 3,761 3,915 4,069 4,223 4,377 4,531 4,685 5,086 5,486

23,668 24,120 24,571 25,023 25,474 25,926 26,377 27,219 28,061 28,903 29,745 30,587 31,428 32,270 33,112 33,954 34,796 36,680 38,564 40,447 42,331 44,215 46,099 47,983 49,866 51,750 53,634 55,660 57,686

43,089 42,936 42,782 42,629 42,476 42,323 42,170 43,469 44,769 46,068 47,367 48,667 49,966 51,265 52,564 53,864 55,163 55,766 56,370 56,973 57,577 58,180 58,784 59,387 59,991 60,594 61,198 63,478 65,758

8,502 8,803 9,103 9,404 9,704 10,005 10,305 10,697 11,088 11,480 11,871 12,263 12,654 13,046 13,437 13,829 14,220 14,625 15,030 15,435 15,840 16,245 16,650 17,055 17,460 17,865 18,270 18,843 19,416

2,744 2,830 2,916 3,002 3,088 3,174 3,260 3,394 3,528 3,662 3,796 3,930 4,064 4,198 4,332 4,466 4,600 4,790 4,980 5,170 5,360 5,550 5,740 5,930 6,120 6,310 6,500 6,850 7,200

200,960 204,645 208,330 212,015 215,701 219,386 223,071 229,230 235,406 241,582 247,757 253,933 260,109 266,284 272,460 278,636 284,662 296,076 307,490 318,903 330,317 341,731 353,145 364,559 375,973 387,387 398,798 412,771 426,750 (continued)

tabl e a. (continued) y e ar

mass

1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1735 1736 1737 1738 1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750

95,614 97,868 100,122 102,376 104,630 106,885 109,139 111,336 115,060 118,787 122,514 126,241 129,967 133,694 137,421 141,148 144,875 148,578 152,113 155,647 159,182 162,717 166,252 169,786 173,321 176,856 180,390 183,925

ply m

conn

ri

nh

62,628 64,258 65,889 67,519 69,149 70,779 72,410 74,040 75,334 76,640 77,945 79,250 80,555 81,861 83,166 84,471 85,777 86,982 89,111 91,240 93,368 95,497 97,626 99,755 101,884 104,012 106,141 108,270

12,387 12,803 13,220 13,636 14,053 14,469 14,886 15,302 16,054 16,813 17,572 18,331 19,090 19,849 20,608 21,367 22,126 22,817 23,523 24,229 24,936 25,642 26,348 27,054 27,760 28,467 29,173 29,879

9,610 9,745 9,880 10,015 10,150 10,285 10,420 10,555 11,775 12,995 14,215 15,435 16,656 17,876 19,096 20,316 21,536 22,756 23,176 23,596 24,016 24,436 24,856 25,275 25,695 26,115 26,535 26,955

ny

34,347 35,403 36,459 37,514 38,570 39,626 40,682 41,638 43,031 44,324 45,617 46,910 48,203 49,497 50,790 52,083 53,376 54,669 55,770 56,872 57,973 59,074 60,175 61,277 62,378 63,479 64,581 65,682

nj

penn

de l

29,554 30,261 30,968 31,674 32,381 33,088 33,795 34,502 35,753 37,003 38,254 39,504 40,755 42,005 43,256 44,506 45,757 47,007 48,910 50,813 52,717 54,620 56,523 58,426 60,329 62,233 64,136 66,039

35,413 37,564 39,714 41,864 44,015 46,165 48,316 50,466 53,778 57,089 60,401 63,712 67,024 70,336 73,647 76,959 80,270 83,582 86,903 90,224 93,546 96,867 100,188 103,509 106,830 110,152 113,473 116,794

5,887 6,288 6,689 7,089 7,490 7,891 8,291 8,692 9,709 10,725 11,742 12,758 13,775 14,791 15,808 16,824 17,841 18,835 19,672 20,510 21,347 22,184 23,022 23,859 24,696 25,533 26,371 27,208

m ary

59,712 61,738 63,764 65,789 67,815 69,841 71,867 73,893 75,710 77,527 79,344 81,161 82,978 84,794 86,611 88,428 90,245 92,062 92,618 93,174 93,730 94,286 94,843 95,399 95,956 96,512 97,068 97,623

v i rg

68,039 70,319 72,599 74,879 77,159 79,440 81,720 84,000 87,600 91,200 94,800 98,400 102,000 105,600 109,200 112,800 116,400 120,440 121,354 122,268 123,182 124,096 125,011 125,925 126,839 127,753 128,667 129,581

no c ar

so c ar

19,989 20,562 21,135 21,708 22,281 22,854 23,427 24,000 25,676 27,352 29,028 30,704 32,380 34,056 35,732 37,408 39,084 40,760 42,794 44,037 45,279 46,522 47,764 49,006 50,249 51,491 52,734 53,184

7,550 7,900 8,250 8,600 8,950 9,300 9,650 10,000 10,500 11,000 11,412 11,824 12,166 12,507 12,792 13,078 13,318 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000

g eorg

4,200

total

440,728 454,707 468,686 482,665 496,644 510,623 524,602 538,424 559,979 581,455 602,842 624,230 645,548 666,865 688,126 709,388 730,604 753,488 771,945 789,610 807,276 824,941 842,606 860,271 877,937 895,603 913,268 934,340

1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776 1777 1778 1779 1780

185,336 186,752 188,168 189,583 190,999 192,415 193,831 195,247 196,662 198,034 201,286 204,538 207,790 211,042 214,294 217,546 220,798 224,050 227,302 230,554 233,880 237,205 240,530 243,855 247,181 250,506 253,831 257,156 260,481 263,805

111,312 114,353 117,395 120,437 123,479 126,520 129,562 132,604 135,645 138,687 142,637 146,586 150,536 154,485 158,435 162,385 166,334 170,284 174,233 178,183 180,446 182,710 184,973 187,236 189,500 191,763 194,026 196,289 198,553 200,816

31,091 32,305 33,519 34,732 35,946 37,159 38,373 39,587 40,800 42,003 43,246 44,489 45,733 46,976 48,219 49,462 50,705 51,949 53,192 54,435 54,019 53,603 53,187 52,771 52,355 51,939 51,523 51,107 50,691 50,275

28,109 29,263 30,416 31,570 32,724 33,878 35,032 36,185 37,339 38,493 40,818 43,143 45,468 47,793 50,118 52,442 54,767 57,092 59,417 61,742 64,294 66,846 69,398 71,950 74,501 77,053 79,605 82,157 84,709 87,261

69,194 72,705 76,217 79,728 83,240 86,752 90,263 93,775 97,286 100,798 105,099 109,400 113,701 118,003 122,304 126,605 130,906 135,207 139,509 143,808 148,376 152,344 156,312 160,280 164,248 168,215 172,183 176,151 180,119 189,487

68,160 70,280 72,401 74,522 76,643 78,763 80,884 83,005 85,125 87,246 89,443 91,639 93,836 96,032 98,229 100,425 102,622 104,818 107,015 109,211 111,207 113,202 115,198 117,193 119,189 121,185 123,180 125,176 127,171 129,167

123,044 129,294 135,544 141,794 148,044 154,294 160,544 166,794 173,044 179,294 184,794 190,294 195,795 201,295 206,795 212,295 217,795 223,296 228,796 234,296 242,811 251,327 259,842 268,358 276,873 285,388 293,904 302,419 310,935 319,450

27,639 28,070 28,501 28,932 29,362 29,793 30,224 30,655 31,086 31,517 31,731 31,946 32,160 32,374 32,588 32,803 33,017 33,231 33,446 33,660 34,533 35,406 36,279 37,152 38,025 38,897 39,770 40,643 41,516 42,389

99,187 100,751 102,315 103,879 105,443 107,007 108,571 110,135 111,699 113,263 115,815 118,367 120,918 123,470 126,022 128,574 131,126 133,677 136,229 138,781 141,399 144,017 146,634 149,252 151,870 154,488 157,106 159,723 162,341 164,959

141,622 148,014 154,407 160,800 167,193 173,585 179,978 186,371 192,763 199,156 205,182 211,207 217,233 223,258 229,284 235,309 241,335 247,360 253,386 259,411 265,212 271,013 276,814 282,615 288,416 294,218 300,019 305,820 311,621 317,422

55,554 57,925 60,295 62,666 65,036 67,406 69,777 72,147 74,518 76,888 81,959 87,030 92,102 97,173 102,244 107,315 112,386 117,458 122,529 127,600 132,753 137,907 143,060 148,213 153,366 158,520 163,673 168,826 173,980 179,133

26,173 27,346 28,519 29,692 30,865 32,038 33,211 34,384 35,557 36,730 37,947 39,181 40,414 41,648 42,881 44,115 45,349 46,582 47,816 49,066 52,459 55,843 59,226 62,610 65,993 69,376 72,760 76,143 79,527 83,000

4,380 4,560 4,740 4,920 5,100 5,280 5,460 5,640 5,820 6,000 6,675 7,350 8,025 8,700 9,375 10,050 10,725 11,400 12,075 12,750 14,999 17,248 19,497 21,746 23,995 26,244 28,493 30,742 32,991 35,240

970,800 1,001,618 1,032,436 1,063,255 1,094,073 1,124,891 1,155,709 1,186,527 1,217,346 1,248,109 1,286,631 1,325,170 1,363,709 1,402,248 1,440,787 1,479,326 1,517,865 1,556,404 1,594,943 1,633,497 1,676,389 1,718,670 1,760,950 1,803,231 1,845,512 1,887,792 1,930,073 1,972,354 2,014,634 2,062,404

tabl e a. Estimated Negro Population of the American Colonies, 1630–1780 y e ar

1630 1631 1632 1633 1634 1635 1636 1637 1638 1639 1640 1641 1642 1643 1644 1645 1646 1647 1648 1649 1650 1651 1652 1653 1654 1655 1656

mass

150 165 180 195 210 225 240 255 270 285 295 308 319 330 342 353 365

conn

15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23

ri

25 29 33 37 41 45 49

nh

ny

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

10 32 54 77 99 121 143 165 188 210 232 259 286 312 339 366 393 420 446 473 500 510 520 530 540 550 560

nj

penn

de l

15 17 18 20 21 23 24

m ary

v i rg

20 48 76 104 132 160 188 216 244 272 300 346 392 437 483 529 575

50 60 70 80 90 100 110 120 130 140 150 176 201 227 252 278 303 329 354 380 405 460 514 569 623 678 732

no c ar

so c ar

g eorg

total

60 92 124 157 189 221 253 285 318 350 597 693 790 887 984 1,081 1,177 1,274 1,371 1,468 1,600 1,730 1,859 1,987 2,116 2,245 2,374

1657 1658 1659 1660 1661 1662 1663 1664 1665 1666 1667 1668 1669 1670 1671 1672 1673 1674 1675 1676 1677 1678 1679 1680 1681 1682 1683 1684 1685

376 387 399 422 396 372 349 325 302 278 255 231 208 160 161 162 163 164 165 166 167 168 169 170 193 216 239 262 285

24 24 25 25 26 27 28 29 30 31 32 33 34 35 37 38 40 41 43 44 46 47 49 50 65 80 95 110 125

53 57 61 65 70 75 80 85 90 95 100 105 110 115 121 127 133 139 145 151 157 163 169 175 183 190 198 205 213

47 48 49 50 52 53 55 56 58 59 61 62 64 65 66 67 68 69 70 71 72 73 74 75 78 80 83 85 88

570 580 590 600 609 618 627 636 645 654 663 672 681 690 741 792 843 894 945 996 1,047 1,098 1,149 1,200 1,247 1,294 1,341 1,388 1,435

60 74 88 102 116 130 144 158 172 186 200 225 250 275 300 325

25 50 74 99 123 148

26 27 29 30 31 32 33 34 35 36 37 38 39 40 42 43 45 46 48 49 51 52 54 55 58 60 63 66 69

621 666 712 758 801 844 888 931 974 1,017 1.060 1.104 1.147 1,190 1.232 1.274 1.316 1.358 1.400 1.443 1.485 1,527 1,569 1,611 1,666 1,721 1,776 1,831 1,886

787 841 896 950 1,055 1,160 1,265 1,370 1,475 1,580 1,685 1,790 1,895 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700 2,800 2,900 3,000 3,635 4,269 4,904 5,538 6,173

20 33 46 59 72 85 98 111 124 137 150 156 162 168 174 180 186 192 198 204 210 219 228 237 246 255

30 47 64 81 98 115 132 149 166 183 200 330 460 590 720 850

2,502 2,631 2,760 2,920 3,073 3,228 3,383 3,538 3,693 3,849 4,004 4,159 4,314 4,535 4,776 5,017 5,258 5,499 5,741 5,982 6,223 6,464 6,705 6,971 7,947 8,923 9,898 10,874 11,850 (continued)

tabl e a. (continued) y e ar

mass

conn

ri

nh

ny

nj

penn

de l

m ary

v irg

no c ar

so c ar

1686 1687 1688 1689 1690 1691 1692 1693 1694 1695 1696 1697 1698 1699 1700 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710 1711 1712 1713

308 331 354 377 400 440 480 520 560 600 640 680 720 760 800 851 897 943 989 1,035 1,081 1,126 1,172 1,218 1,310 1,394 1,478 1,562

140 155 170 185 200 225 250 275 300 325 350 375 400 425 450 480 510 540 570 600 630 660 690 720 750 784 818 852

220 228 235 243 250 255 260 265 270 275 280 285 290 295 300 308 315 323 330 338 345 353 360 368 375 392 409 425

90 93 95 98 100 103 106 109 112 115 118 121 124 127 130 132 134 136 138 140 142 144 146 148 150 152 154 156

1,482 1,529 1,576 1,623 1,670 1,729 1,787 1,846 1,904 1,963 2,022 2,080 2,139 2,197 2,256 2,312 2,367 2,423 2,478 2,534 2,589 2,645 2,700 2,756 2,811 3,104 3,397 3,690

350 375 400 425 450 489 528 567 606 645 684 723 762 801 840 889 938 988 1,037 1,086 1,135 1,184 1,234 1,283 1,332 1,437 1,543 1,648

172 197 221 246 270 286 302 318 334 350 366 382 398 414 430 545 648 751 854 957 1,060 1,163 1,266 1,369 1,575 1,618 1,660 1,703

71 74 77 79 82 87 93 98 103 108 114 119 124 130 135 172 208 245 281 318 354 391 427 464 500 520 540 560

1,942 1,997 2,052 2,107 2,162 2,269 2,375 2,482 2,588 2,695 2,801 2,908 3,014 3,121 3,227 3,699 4,171 4,642 5,114 5,586 6,058 6,530 7,002 7,473 7,945 8,400 8,856 9,311

6,807 7,442 8,076 8,711 9,345 10,050 10,754 11,459 12,163 12,868 13,572 14,277 14,981 15,686 16,390 16,686 16,982 17,278 17,574 17,870 18,166 18,462 18,758 19,054 19,350 20,071 20,792 21,513

264 273 282 291 300 312 323 335 346 358 369 381 392 404 415 464 512 561 609 658 706 755 803 852 900 1,110 1,320 1,530

980 1,110 1,240 1,370 1,500 1,650 1,800 1,950 2,100 2,250 2,400 2,550 2,700 2,850 3,000 3,270 3,540 3,810 4,080 4,350 4,620 4,890 5,160 5,430 5,700 6,313 6,926 7,538

g eorg

total

12,826 13,802 14,777 15,753 16,729 17,893 19,058 20,222 21,387 22,551 23,715 24,880 26,044 27,209 28,373 29,806 31,221 32,637 34,053 35,469 36,885 38,301 39,717 41,133 42,698 45,295 47,892 50,488

1714 1715 1716 1717 1718 1719 1720 1721 1722 1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1735 1736 1737 1738 1739 1740 1741 1742

1,646 1,730 1,814 1,898 1,982 2,066 2,150 2,213 2,270 2,326 2,383 2,440 2,496 2,553 2,610 2,667 2,780 2,806 2,828 2,851 2,874 2,897 2,920 2,943 2,966 2,989 3,035 3,139 3,243

886 920 954 988 1,022 1,056 1,093 1,133 1,172 1,212 1,252 1,292 1,331 1,371 1,411 1,450 1,490 1,601 1,701 1,800 1,900 2,000 2,099 2,199 2,299 2,398 2,598 2,639 2,680

442 459 476 493 509 526 543 654 764 875 985 1,096 1,206 1,317 1,427 1,538 1,648 1,724 1,792 1,861 1,929 1,998 2,066 2,134 2,203 2,271 2,408 2,502 2,596

158 160 162 164 166 168 170 173 176 179 182 185 188 191 194 197 200 230 260 290 320 350 380 410 440 470 500 505 510

3,983 4,276 4,568 4,861 5,154 5,447 5,740 5,852 5,963 6,075 6,186 6,298 6,410 6,521 6,633 6,744 6,956 7,070 7,284 7,498 7,712 7,926 8,140 8,354 8,568 8,782 8,996 9,198 9,400

1,753 1,858 1,964 2,069 2,174 2,280 2,385 2,447 2,510 2,572 2,634 2,697 2,759 2,821 2,883 2,946 3,008 3,144 3,280 3,415 3,551 3,687 3,823 3,959 4,094 4,230 4,366 4,465 4,564

1,745 1,788 1,830 1,873 1,915 1,958 2,000 1,924 1,848 1,772 1,696 1,620 1,545 1,469 1,393 1,317 1,241 1,322 1,404 1,485 1,567 1,648 1,729 1,811 1,892 1,974 2,055 2,137 2,218

580 600 620 640 660 680 700 678 656 633 611 589 567 545 522 500 478 532 585 639 692 746 799 853 906 960 1,035 1,081 1,127

9,767 10,222 10,677 11,133 11,588 12,044 12,499 12,971 13,443 13,915 14,387 14,860 15,332 15,804 16,276 16,748 17,220 17,901 18,582 19,263 19,944 20,625 21,307 21,988 22,669 23,350 24,031 25,973 27,915

22,234 22,955 23,675 24,396 25,117 25,838 26,559 26,903 27,247 27,591 27,935 28,279 28,624 28,968 29,312 29,656 30,000 33,000 36,000 39,000 42,000 45,000 48,000 51,000 54,000 57,000 60,000 64,710 69,420

1,740 1,950 2,160 2,370 2,580 2,790 3,000 3,300 3,600 3,900 4,200 4,500 4,800 5,100 5,400 5,700 6,000 6,500 7,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 11,000 11,088 11,968

8,151 8,764 9,377 9,990 10,602 11,215 11,828 12,645 13,462 14,280 15,097 15,914 16,731 17,548 18,366 19,183 20,000 21,920 23,840 25,760 27,680 29,600 31,520 33,440 35,360 37,280 39,200 40,180 41,160

53,085 55,681 58,278 60,875 63,471 66,068 68,667 70,892 73,112 75,331 77,550 79,769 81,988 84,207 86,426 88,645 91,021 97,749 104,556 111,363 118,170 124,976 131,783 138,590 145,397 152,204 159,224 167,616 176,801 (continued)

tabl e a. (continued) y e ar

mass

conn

ri

nh

ny

nj

penn

de l

m ary

v irg

no c ar

so c ar

1743 1744 1745 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 1770

3,347 3,451 3,555 3,659 3,763 3,867 3,971 4,075 4,124 4,168 4,213 4,257 4,301 4,345 4,389 4,433 4,478 4,566 4,585 4,604 4,622 4,641 4,660 4,679 4,698 4,716 4,735 4,754

2,722 2,763 2,804 2,845 2,886 2,928 2,969 3,010 3,087 3,165 3,242 3,319 3,397 3,474 3,551 3,628 3,706 3,783 3,975 4,166 4,358 4,549 4,741 4,932 5,124 5,315 5,507 5,698

2,690 2,784 2,878 2,971 3,065 3,159 3,253 3,347 3,359 3,370 3,381 3,392 3,403 3,414 3,425 3,435 3,446 3,468 3,497 3,527 3,556 3,585 3,615 3,644 3,673 3,702 3,732 3,761

515 520 525 530 535 540 545 550 555 560 565 570 575 580 585 590 595 600 605 611 616 622 627 632 638 643 649 654

9,601 9,803 10,005 10,207 10,409 10,610 10,812 11,014 11,547 12,079 12,612 13,144 13,677 14,210 14,742 15,275 15,807 16,340 16,617 16,894 17,171 17,448 17,725 18,002 18,279 18,556 18,833 19,112

4,662 4,761 4,860 4,959 5,058 5,156 5,255 5,354 5,475 5,597 5,718 5,839 5,961 6,082 6,203 6,324 6,446 6,567 6,732 6,898 7,063 7,228 7,394 7,559 7,724 7,889 8,055 8,220

2,300 2,382 2,463 2,545 2,627 2,709 2,790 2,872 3,026 3,179 3,333 3,487 3,640 3,794 3,948 4,102 4,255 4,409 4,544 4,679 4,815 4,950 5,085 5,220 5,355 5,491 5,626 5,761

1,173 1,219 1,265 1,312 1,358 1,404 1,450 1,496 1,520 1,543 1,567 1,591 1,615 1,638 1,662 1,686 1,709 1,733 1,743 1,754 1,764 1,774 1,784 1,795 1,805 1,815 1,826 1,836

29,857 31,799 33,741 35,682 37,623 39,565 41,507 43,450 44,005 44,561 45,116 45,672 46,227 46,782 47,338 47,893 48,449 49,004 50,485 51,967 53,448 54,930 56,411 57,892 59,374 60,855 62,337 63,818

74,130 78,840 83,550 88,260 92,970 97,680 102,390 107,100 105,364 109,276 113,187 117,099 121,011 124,923 128,835 132,746 136,658 140,570 145,274 149,977 154,681 159,384 164,088 168,791 173,495 178,198 182,902 187,605

12,848 13,728 14,608 15,488 16,368 17,248 18,128 19,800 21,175 22,551 23,926 25,302 26,677 28,052 29,428 30,803 32,179 33,554 37,159 40,763 44,368 47,972 51,577 55,182 58,786 62,391 65,995 69,600

42,140 43,120 44,100 45,080 46,060 47,040 48,020 49,000 49,834 50,669 51,503 52,338 53,172 54,006 54,841 55,675 56,510 57,344 59,144 60,927 62,711 64,494 66,278 68,061 69,844 71,628 73,411 75,178

g eorg

total

1,000 1,258 1,516 1,773 2,031 2,289 2,547 2,805 3,062 3,320 3,578 4,283 4,987 5,692 6,397 7,101 7,806 8,511 9,216 9,920 10,625

185,985 195,170 204,354 213,538 222,722 231,906 241,091 252,068 254,330 262,233 270,137 278,040 285,944 293,847 301,751 309,654 317,558 325,516 338,643 351,754 364,864 377,974 391,085 404,195 417,306 430,416 443,526 456,622

1771 1772 1773 1774 1775 1776 1777 1778 1779 1780

4,760 4,767 4,773 4,780 4,787 4,794 4,801 4,807 4,814 4,822

5,717 5,735 5,754 5,773 5,791 5,810 5,829 5,848 5,866 5,885

3,652 3,543 3,434 3,325 3,216 3,107 2,998 2,889 2,780 2,671

643 631 620 609 598 586 575 564 552 541

19,306 20,100 20,895 21,689 22,483 23,277 24,071 24,866 25,660 21,054

8,444 8,668 8,892 9,116 9,340 9,564 9,788 10,012 10,236 10,460

5,970 6,180 6,389 6,599 6,808 7,017 7,227 7,436 7,646 7,855

1,952 2,068 2,184 2,300 2,416 2,532 2,648 2,764 2,880 2,996

65,736 67,654 69,573 71,491 73,409 75,327 77,245 79,164 81,082 83,000

190,903 194,200 197,498 200,796 204,094 207,391 210,689 213,987 217,284 220,582

71,740 73,880 76,020 78,160 80,300 82,440 84,580 86,720 88,860 91,000

77,360 79,552 81,745 83,937 86,129 88,321 90,513 92,706 94,898 97,000

11,646 12,666 13,687 14,707 15,728 16,749 17,769 18,790 19,810 20,831

467,828 479,646 491,463 503,281 515,098 526,916 538,733 550,551 562,368 568,697

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Printed Contemporary Mercantilist Writings Barbon, Nicholas A. A Discourse concerning Coining the New Money Lighter. London, 1696. ———. A Discourse of Trade. London, 1690. Reprinted and edited by J. H. Hollander. Baltimore: Johns Hopkins University Press, 1905. Cary, John. Discourse on Trade. London, 1695. ———. An Essay on the State of England in Relation to its Trade, its Poor, and its Taxes for carrying on the Present War against France. Bristol, 1695. [Matson says London; Magnusson and Buck say Bristol.] ———. An Essay Towards Regulating the Trade and Employing the Poor of this Kingdom. London, 1717. ———. An Essay towards the Settlement of a National Credit. London, 1696. Child, Sir Josiah. Brief Observations concerning Trade and Interest of Money. London, 1668. ———. Trade and the Interest of Money Considered. London, 1669. Clement, Samuel. A Discourse of the General Notions of Money, Trade & Exchanges. London, 1695. Coke, Roger. A Discourse of Trade. London, 1670. ———. England’s Improvements. London, 1675. ———. Treatise. London, 1671. Cotton, Sir Robert. “A speech made by Sir Robert Cotton, knight and baronet, before the Lords of his Majesties most Honorable Privy Council at the Council Table.” (First published in 1651.) In Select Tracts and Documents Illustrative of English Monetary History, ed. W. A. Shaw. London: Clement Wilson, 1896. Davenant, Charles. Discourses on Public Revenue in The Political and Commercial Works of that Celebrated Writer Charles D’Avenant, ed. Sir Charles Whitworth. 5 vols. 1697. Repr., London, 1771. (Buck says London, 1698.) ———. An Essay upon the Probable Methods of Making the People Gainers in the Balance of Trade. London, 1699. In Works, vol. 2.

[ 912 ]

bibl io g raphy Locke, John. Further Considerations concerning Raising the Value of Money. London, 1696. ———. Some Considerations on the Consequences of the Lowering of Interest and Raising the Value of Money. London, 1691. Maddison, Ralph. England’s Looking In and Out: Presented to the High Court of Parliament now Assembled. London, 1640. Malynes, Gerrard. The Center of the Circle of Commerce. ———. Consuetudo, vel, Lex Mercatoria. London, 1636. ———. The Maintenance of Free Trade. London, 1622. ———. A Treatise of the Canker of England’s Commonwealth. London, 1601. Misselden, Edward. The Circle of Commerce or the Balance of Trade, in defence of Free Trade. London, 1623. Repr., New York: A. M. Kelley, 1971. ———. Free Trade or the Meanes to make Trade Flourish. London, 1622. Mun, Thomas. A Discourse of Trade from England unto the East Indies. [London, 1621]. Repr., New York: A. M. Kelley, 1971. ———. England’s Treasure by Forraign Trade [speculated as having been written in 1623 or about 1630; fi rst published posthumously in 1664]. Repr., New York: A. M. Kelley, 1986. North, Sir Dudley. Discourses upon Trade. 1691. Reprinted and edited by J. H. Hollander. Baltimore: Johns Hopkins University Press, 1907. Petty, Sir William. The Economic Writings of Sir William Petty. Vols. 1 and 2. [Edited by Charles Henry Hull, Cambridge, Cambridge University Press, 1899.] New York: A. M. Kelley, 1986 (wrote in 1690s). Pollexfen, John. A Discourse of Trade, Coyn, and Paper Credit. London, 1697. Robinson, Henry. Certain Proposals in Order to the Peoples Freedom and Accommodation in some Particulars, with the Advancement of Trade and Navigation of this Commonwealth in Generall. London, 1652. ———. England’s Safety in Trades Encrease. London, 1641. Temple, Sir William. Observations upon the United Provinces of the Netherlands [London, 1673]. Repr., Cambridge: Cambridge University Press, 1932. Wheeler, John. A Treatise of Commerce, Wherein are Shewed the Commodities Arising by a Well Ordered and Ruled Trade. (Middelburg, 1601 according to Magnusson; also London, 1601 according to Buck.)

Dissertations, Theses, Manuscripts Anderson, Samuel K. “Taxation in Colonial New York, 1691–1775.” M.A. thesis, University of Wisconsin, 1953. Grubb, Farley. “The Circulating Medium of Exchange in Colonial Pennsylvania, 1729–1775: New Estimates of Monetary Composition and Economic Growth.” Mimeo, July 3, 2001. Higgins, W. Robert. “The South Carolina Negro Duty Law.” Master’s thesis, University of South Carolina, 1967. Jellison, Richard M. “Paper Currency in Colonial South Carolina, 1703–1764.” Ph.D. thesis, Indiana University, 1952. Kinnaman, John Allen. “The Internal Revenues of Colonial Maryland.” Ph.D. thesis, Indiana University, 1955.

[ 913 ]

bibl io g raphy MacInnes, John Blanchard. “Rhode Island Bills of Public Credit, 1710–1755.” Ph.D. thesis, Brown University, 1952. Ready, Milton LaVerne. “An Economic History of Colonial Georgia, 1732–1754.” Ph.D. thesis, University of Georgia, 1970. Staley, Robert Ross. “The Economy of the Holy Experiment: Pennsylvania, 1681– 1713.” M.A. thesis, Stanford University, 1948. Tanner, Edwin P. “The Province of New Jersey, 1664–1738.” Ph.D. thesis, Columbia University, 1908.

[ 914 ]

index


Note: Figures and tables are indicated by f or t, respectively, following the page number. Abenaki Indians, 479 Abercrombie, James, 667 Acadia, 327, 358 accounting practices, 299, 486–89 Act Establishing the Coronation Oath (1689), 280n6 Act for Preventing Frauds and Regulating Abuses in the Plantation Trade. See Navigation Act (1696) Act for the Encouragement of Trade. See Navigation Act (1663) Act for the Encouraging of Shipping and Navigation. See Navigation Act (1660) Act for the Imperial Administration of Justice (1774), 748 Act of Cohabitation (Virginia, 1680), 249 Act of Security (Scotland), 293 Act of Settlement (1701), 288–90, 293 Act of Union (1707), 5n1, 273, 292–94 Acts and Orders (Rhode Island, 1647), 128 Acts and Resolves, Public and Private, of the Province of the Massachusetts Bay, The, 460, 488–89 Acts of Parliament, force of, 625n3 Adams, John, 730, 733n, 740, 741 Adams, Samuel, 733n administration, colonial, 105–9 administration, royal, 75, 78–80 Administration of the Colonies, The, (Pownall), 724 Admiralty, 316–17 admiralty courts, 108, 315, 740. See also viceadmiralty courts advances, 284n African Americans. See Negroes

agio, 200n2 agriculture: Connecticut, 474, 575; Delaware, 202–3; Massachusetts, 459; New England colonies, 575; New Jersey, 203; Rhode Island, 149; significance of, 865–66 Albany Plan of Union (1754), 721n Albemarle, 141–42, 262–63, 352 alcoholic beverages, taxation of: British policy on, 447; collection process, 505n50; Connecticut, 182–83, 386–87, 476, 607; Delaware, 650; Dominion of New England, 329; Massachusetts, 172, 379, 463–64, 587–88, 599n; New Hampshire, 393, 619–20; New Jersey, 518; New Netherland, 207, 209, 211, 214, 220, 227; New Sweden, 219; New York, 402–3, 406–8, 501, 504–5, 635, 637; North Carolina, 543–44, 693, 849; Pennsylvania, 411, 509, 510; South Carolina, 435; Sugar Act and, 737; Virginia, 245, 255, 424, 536, 536n35, 672, 841 alcohol use, 202, 207, 220, 407 Algonkian tribes, 209 Alien Act (1705), 293 alienation fines, 44 Allen, Jeremiah, 487 Allen, Samuel, 340, 341, 390 Allen, Thomas, 341 Almy, Christopher, 339 Alrichs, Jacob, 219 America, post-independence taxation in, 868–69 American Economic Association, 2 “American” identity, 721n American Revolution: British money wages/ tax revenues ratio and, 448n6; colonial legislatures and, 731n; Navigation Acts and, 733n; prelude to, 748; taxation and, 1, 4, 716, 796, 868

[ 915 ]

index American tax: acts comprising, 751–58; “American” identity and, 722n5; American view of, 733–34; British view of, 730–32; context for, 715–17, 720–21, 867; failure of, 758, 764; pros and cons of, 729–34; southern plantation colonies and, 861–62 Amherst, Jeff rey, 566, 722, 734 Anabaptists, 126 Andrews, Charles McLean, 739n39 Andros, Edmund: and Connecticut, 179, 182, 184, 386; and Delaware, 220–21; and Dominion of New England, 120n, 125, 136, 192, 306, 328–29; imprisonment of, 325, 330n5, 342; and New Hampshire, 192–94; and New Jersey, 224; and New York, 132, 135, 212–14, 224, 341; and quitrents, 164, 213–14; and Rhode Island, 189; and Virginia, 350 Anglican Church: in Maryland, 430–31; Test Act and, 277; in Virginia, 244. See also Church of England Anglo-Dutch wars, 87, 93n, 202. See also First Anglo-Dutch war (1652–54); Second Anglo-Dutch war (1665–67); Third AngloDutch war (1673–74) Anjoy, Philip, 288 Annapolis, 327, 352 Anne, Princess of Denmark, 281, 288 Anne, Queen of England, 2; and colonies, 341; death of, 273; and money regulation, 6–7, 11, 359, 370–71, 371n28, 749; rule of, 275, 291–97, 310. See also Queen Anne’s War (1702–1713) Antigua, 99–100 Antinomians, 126 apportionment, of tax assessment and collection, 89, 89n50, 166 Archdale, John, 417–18, 433 Archdale’s Laws, 418 Arnold, Benedict, 8, 148n12 arrears, 13 Assize, courts of, 79 Associators, 351 attorneys general, 317 Atwood, William, 316 auditors, 242 auditors general, 167 Audley End, Essex, England, 81n28 Auld Alliance, 293 Azores, 737

Bahamas, 631 Baltimore, Lord. See Calvert, Cecilius; Calvert, Charles; Calvert, George; Leonard, Benedict; Leonard, Charles Baltimore (city), 228 Bancroft, Edward, 733n Bank Act (North Carolina, 1712), 420 Bank Bills, 420 bank money, 200n2 Bank of England, 283, 286–87, 297–300, 454 banks and banking: in England, 284–87, 297–300; land banks, 420, 455; in Massachusetts, 454–55. See also loans Baptists, 126, 281, 477 Barbados, 99–100, 104, 142, 265 Barbon, Nicholas, 93n Barclay, David, 629, 651 Barclay, Robert, 224n81 barques, 145n4 barrel, 146n6 barter, 7, 158 beavers, 207n16 Becker, Robert, 818 Belcher, Jonathan, 456–57, 459, 461, 498, 614–15, 651 Belcher, Thomas, 480–82 Bellomont, Richard Coote, Lord, 341, 343, 400, 406 Bennett, James, 429n43 Berkeley, John, 54, 134–35, 223 Berkeley, William, 51, 111, 111n24, 139, 141–42, 239, 243, 245, 247, 248, 252 Bermuda, 23, 99–100, 311, 631 Bernard, Francis, 768 Bill of Rights Society, London, 853 Bill of Rights (1689), 280–81, 281n7 bills of credit: British prohibition of, 561, 571, 610; colonial issuance of, 867; Connecticut, 602–3, 602n23, 780t ; Delaware, 494, 514; explanation of, 7; Georgia, 665; governors’ instructions regarding, 626n8; Massachusetts, 360–65, 361f, 362f, 578; New England colonies, 454, 457t; New Hampshire, 480–82, 615–16, 621; New Jersey, 495, 515–16, 653t, 820t ; New York, 490–91, 626–27, 632, 633t ; North Carolina, 432; Rhode Island, 389, 456, 611t, 785; South Carolina, 419–20, 529; uses of, 13. See also loans bills of exchange, 8, 160–63, 232–33

[ 916 ]

index Bishop Laud’s Commission, 98n9 Blackwell, John, 360n8 Bladen, Thomas, 681 Blakiston, Nathaniel, 352, 368 Blathwayt, William, 318, 424 Blommaert, Samuel, 48 Board of Trade, 105n16, 302–3, 317–19, 332, 368–69, 371–72, 449, 451, 483, 493, 497, 548, 553, 612, 722–23, 835, 853 Board of Trade and Plantations. See Board of Trade Body of Liberties (Massachusetts, 1641), 124–25 Bond, Beverly W., Jr., 680, 702n101 book credit, 7–8 bookkeeping, 9–10. See also public accounts borough, definition of, 76n17 Boscawen, Edward, 566 Boston: as commercial center, 144, 304, 356; New York and, 500; obelisk in, celebrating Stamp Act repeal, 742 f; population of, 148, 355, 624, 766; taxes in, 778–79; tax rebellion in, 744 f; vice-admiralty court in, 739–40, 741n43 Boston Gazette (newspaper), 733n Boston Port Act (1774), 748 Boston Tea Party, 1, 747–48, 747f, 758, 866 bounties: British, on colonial products, 758–63, 765t ; on British exports, 763–64, 765t; colonial America, 313–14; Connecticut, 184; Georgia, 858; on Indians, 177, 209; Massachusetts, 177, 375, 380; on naval stores, 528n; as negative taxation, 176n78; Rhode Island, 479; South Carolina, 528n; Virginia, 250, 250n71 boycotts, 743, 746, 748 Boyne, Battle of (1690), 4, 279, 279n, 288 Braddock, Edward, 561, 642 Bradford, Andrew, 9, 493n11 Bradford, William, 34n22, 35–36, 38, 143 Bray, Thomas, 452 bribes, 502 Bridger, John, 375 Bridgewater, Earl of, 318 Bristol, England, 624 Britain. See Great Britain British Calendar Reform Act (1751), 3 British East Florida, 56n1 British West Florida, 56n1 British West Indies, 735 Brock, Leslie, 528

Bruce, Philip, 238 bubonic plague, 87 Buck, Philip W., 93n Budd, Thomas, 226 Bull, William, II, 853–54 “Bull of Pope Alexander Conceding America to Spain 1493,” 25 burden of taxation. See tax burden Burghley House, England, 81n28 Burgwyn, John, 691, 846 Burke, Edmund, 730, 732 Burnet, William, 459, 496n20, 506, 515–16, 516n79 Burrington, George, 543 bushel, 146n6 Bute, Earl of, 568, 717, 720 butt (measurement), 172n52 Byllynge, Edward, 134–36, 225–26

Cabot, John, 23, 25, 27, 29, 98 Cabot, Lewis, 23, 27 Cabot, Sancius, 23, 27 Cabot, Sebastian, 23, 27 Caesar, Julius, 3 calendars, 3–4 Calvert, Cecilius (Second Lord Baltimore), 42–45, 60n14, 137, 140–41, 235, 257 Calvert, Charles (Third Lord Baltimore), 141, 258, 344, 349, 351–52, 427–29, 429n43, 450, 538 Calvert, George (First Lord Baltimore), 42–44 Calvert, Leonard, 140, 259 Calvert family, quitrents of, 679–82 Cambridge University Press, 17 Campbell, Neil, 225 Campbell v. Hall (1774), 104n Canada, 1, 23, 577, 580–81, 600–601, 684, 750n2 Canary Islands, 23n1, 737 Cape Breton, 177, 327, 566 Cape Fear, 142 Cape Fear Company, 52 capital, in colonial America, 866 Caribbean, 23, 146 Carlisle, Charles Howard, Lord, 102–3 Carolina: charter for, 50–52; currency in, 233, 235; development of, 232; division of, 137; government in, 141–43; legislature, 326; as proprietary colony, 141–43, 263–65; as royal

[ 917 ]

index Carolina (continued ) colony, 325–26, 443, 451; settlement of, 49–53; taxation in, 261–65. See also North Carolina; South Carolina Carr, Robert, 220 Carteret, George, 54, 134–36, 348 Carteret, John (Earl of Granville), 567, 688 Carteret, Philip, 222–24 Carver, John, 143 Cary, John, 93n Castell, Robert, 61, 451 Catholicism: Charles I and, 85; Charles II and, 88; Church of England’s separation from, 80; colonies and, 44n5, 62, 62n18; James II and, 88; and Maryland, 44, 44n5, 140, 429–30, 541n50, 681, 684, 687n64; Protestantism versus, in England, 71n, 83, 88, 276–81, 288–89; and Quebec, 748; and voting eligibility, 353 caution money, 44 Cavaliers, 86, 88 Cavendish, Thomas, 29 Cecil, Robert, 81n28 Cecil, William, 81n28 Certificates of Audited Accounts, 833, 834n13, 854 Chancery, 80 Channel Islands, 114–15 chapmen, 638, 655 Charles I, King of England: and colonies, 36, 42, 49–50, 98n9, 137, 138, 230–31, 237; overthrow of, 51; and politics, 82, 99; rule of, 84–86 Charles II, King of England: and colonies, 51, 53, 56–57, 100–101, 106–7, 127, 130, 133, 135–37, 139, 203, 221; death of, 125; and money, 153, 284–86, 298; and politics, 51, 90, 276–77, 276n3; and quo warranto, 49n19; rule of, 57n4, 87–88; and trade, 237, 302, 310 Charles VI, Holy Roman Emperor, 564 Charles Albert, Prince of Bavaria, 564 Charles Edward, Prince, 292n28 Charles the Sufferer, King of Spain, 288 Charleston: indigo exports from, 760; prosperity of, 545–46; as shipping/financial center, 697; southern significance of, 228, 545–46, 697, 826; and Spanish-English rivalry, 451; taxes in, 553; vice-admiralty court in, 739–40, 741n43. See also Charles Town

Charles Town, 61, 143, 416. See also Charleston Charter for the Province of Pennsylvania, 56 Charter of Carolina (1663), 51 Charter of Delaware—1701, 347 Charter of Freedoms and Exemptions, 45–46 Charter of Liberties and Privileges (New York, 1683), 132–33, 214 Charter of Liberty (Pennsylvania, 1682), 59, 137 Charter of Maryland, 42 Charter of Massachusetts Bay (1629), 34, 37 Charter of New England (1620), 34–36 Charter of Privileges (Pennsylvania, 1701), 341, 345, 347 Charter of the Colony of New Plymouth Granted to William Bradford and His Associates (1629), 34, 36 charters, 21–22; Carolina, 50–52; Connecticut, 127, 307, 325, 328n, 337, 477; Delaware, 347; Georgia, 62, 452, 571–72; Maryland, 42–43; Massachusetts, 22n, 35–37, 120n, 123–25, 307, 331, 336; New Amsterdam, 210; New Netherland, 39–40, 201, 208; New Sweden, 47–49; New York, 133; New York City, 216; Pennsylvania, 56–60, 57n3, 136–37, 203, 344–45; Rhode Island, 129, 188–89, 307, 325, 339; as royal authority instrument, 120; Virginia, 31–33, 137–38. See also constitution(s) Child, Josiah, 93n Child, Thomas, 689n68 Cholmondeley, Robert, 667, 669, 807, 839 Christianity, 26, 30 Christina, Queen of Sweden, 48 chronology, colonial, 3–4 Churchill, John. See Marlborough, John Churchill, Duke of Churchill, Sarah, 292 Church of England: Charles II and, 277; English colonization and, 30, 50; establishment of, 83; James II and, 88; versus other Protestant sects, 71n; separation of, from Catholic Church, 80; South Carolina and, 265. See also Anglican Church church taxes. See religion and taxation Civil List, 282, 290

[ 918 ]

index civil qualifications: British law on, for Protestants and Jews in America, 613–14; Connecticut, 127–28; Maryland, 141; Massachusetts, 123–26; New Hampshire, 129–30; New York, 343; Rhode Island, 128 Clarendon, 142 Clarke, George, 506 Clarke, John, 187 Clarke, Robert, 491–92, 506 class. See social class Clement, Samuel, 93n clergy: taxation for support of, 165, 184, 195, 423, 484, 686–87, 844; withdrawal of, from Parliament, 78. See also religion and taxation Clinton, George, 506, 640 cobs, 153–54 cod, 97, 146 Code of Laws (Connecticut, 1650), 126–27, 178–79, 182, 185 Coercive Acts, 748 coins: in England, 152–54; in Europe, 205; in middle colonies, 205; in New England colonies, 152–54; in southern plantation colonies, 235, 235n Coke, Roger, 93n Colden, Cadwallader, 798 Cole, Michael, 313 collectors, customs, 311–12 College of William and Mary, 422–23, 426, 534, 537, 658, 668, 672, 838 Colleton, James, 265 colonial America: “American” identity of, 721n; bills of rights in, 281n7; British government spending in, 723–29; British troops in, 715, 723, 730–31, 734; common law courts in, 315–17; constitution of (1607–1688), 118–43; Crown review of legislation of, 332–33; Crown’s relation to, 21, 25, 98–100, 118, 430–31, 563, 732, 744–45; customs ser vice in, 108–9, 303, 309–15, 737–38, 741n43, 746, 801; debt of, 623, 729; definition of, 1; economy of, 95–97, 865; English militias in, 107; fishing and, 97; founding of, 21–22; House of Commons and, 563; importance of, 723–29; land tenure in, 24–26; legislation of, Crown review of, 332–33; legislatures in, 326, 354t, 561, 572, 731n, 732, 734 (see also under individual states; General Assembly);

loyalty of, to England, 303; manufacturing in, 319–23; map of (1763), 718–19 f; mercantilism and, 95–96; money in, 5–8, 150–56, 196–98, 355, 359, 371–74, 395–98, 484, 485t; Parliament’s relation to, 21, 71, 98–100, 111–13, 119, 275, 296–97, 731, 744–45; Pitt and, 721; population distribution in, 865; population in, 67, 273, 443, 872–89t ; Privy Council and, 80, 106–8, 122, 316, 332, 649, 809; prosperity of, 731; selfgovernment in, 100, 303–4, 731–32, 734; self-support doctrine for, 89n49, 101, 108, 309, 323–24, 334, 497; in seventeenth century, 67–69; shipping and, 96–97; taxation differences in, 215n46; taxation in, 268–69t, 556, 557t, 558, 715–17, 720–21, 722n5, 729–34, 751–58, 764, 867–68; tax burdens (1714), 437, 438t ; trade to/from England, 314; trade to/from Great Britain, 746; and trade with Europe, 115; vice-admiralty courts opposed by, 315–18; and wars (1739–1763), 572, 574. See also individual colonies; imperial governance; middle colonies; Navigation Acts; New England colonies; southern plantation colonies colonial government: English government as model for, 119; Georgia, 62; Maryland, 43; Massachusetts, 35–37; New Jersey, 54; Pennsylvania, 57; Virginia, 31–32 colonial treasurers. See treasurers colonization: administrative issues and, 105–9; European, 23–31; first wave of, 31–41; of Indian lands, 26; land tenure and, 24–26; middle wave of, 42–55; self-support doctrine and, 89n49, 101, 108; third wave of, 56–63 Columbia University, 2 Columbus, Christopher, 26 Colve, Anthony, 212 commercial policy: American Revolution and, 733n; benefits of, 733, 733n, 743; early seventeenth-century, 110–11; Parliament and, 111–13; 1714–1739, 448–50; 1763–1776, 735–48; after Stuart Restoration, 113–17; vice-admiralty courts and, 739 Commissioners of Customs, 108, 310, 317, 733n, 737 Commission of John Cutt, 38, 130, 191, 340 commissions, governors’, 120–22, 328 Committees of Correspondence, 748

[ 919 ]

index commodity money, 6, 158–60, 204, 206, 233–35, 364, 528, 544, 569–71, 586, 619, 688, 696, 791. See also country pay; tobacco: as currency common law: basis of, 77; courts of, 80, 109n20, 315–17, 740; definition of, 77n18; growth of, 77n18; importance of, 72n2 common money, 359 Common Pleas, court of, 79 Company of Feltmakers, 449 comptrollers, 311 “Concessions and Agreement of the Lords Proprietors of the Province of New Caesarea, or New Jersey, to and With All and Every the Adventures and All Such as Shall Settle or Plant There—1664, The,” 54 Congregational Church, 71n, 382n51, 477 Connecticut: agriculture in, 474, 575; charter for, 127, 307, 325, 328n, 337, 477; civil qualifications in, 127–28; commerce in, 148–49, 474; currency in, 157; development of, 148–49; and Dominion of New England, 328n; elections in, 143, 573; finances of, 383–84, 456, 477, 601–4, 608–9, 768, 782–85; and French and Indian War, 607; General Assembly, 127, 185, 326, 338, 382–84, 476, 606, 608, 780, 782–84; General Court, 126–27, 178–79, 183–85, 185, 337–38, 382–84; government in, 119, 122, 126–28, 337–38; governors in, 326; Grand List in, 178–82, 186, 382, 474, 477, 601, 780; and King George’s War, 602n23; Lower House, 338; money in, 366–67, 384, 455–56, 576, 580, 602–3, 602n23, 606, 767; New Haven’s annexation by, 1, 127, 148, 331; public accounts in, 11, 604n29; selfgovernment in, 127; settlement of, 21, 38, 38n30, 120; tax collection in, 782–84; Upper House, 338. See also entries for taxation in Connecticut consent: Magna Carta provision on, 74; taxation and, 140, 734, 740, 765 consideration money, 44 Considerations on the Propriety of Imposing Taxes in the British Colonies (Dulaney), 733n constables, 81, 166 constitution(s): colonial, derived from British, 92, 326; colonial, developments in, 118–43,

325–54, 450–53, 571–74; definition of, 21; English, in seventeenth century, 80–89; English, pre–1607, 71–80; imperial governance and, 97–105, 301–4; of Jamaica, 101–5; middle colonies, 130–37, 341–49; New England colonies, 122–30, 331–41; royal colonies, 22n; southern plantation colonies, 137–43, 349–53. See also charters; government containers, 146n6 Continental Congresses, 748 Convention of El Pardo (1739), 564 Coote, Richard. See Bellomont, Richard Coote, Lord Copley, Lionel, 351 copper, 448n8 cordage, 764 Cornbury, Edward Hyde, Lord, 343, 371, 407, 412, 413, 413n38, 517 correspondence, official, 9, 122, 219n65, 312n11, 496n20 Corte-Real, Gaspar, 23n1 Corte-Real, Miguel, 23n1 Cortlandt, Stephen, 215 Cosby, William, 497, 506, 517 Cotton, Robert, 93n Council for Foreign Plantations, 106 Council for New England, 35–37, 164 Council for the Colonies, 107 Council for Trade, 106–7 Council for Trade and Plantations, 107, 302 Council of New Netherland, 208, 210 Council of Safety, 859n Council of State, 106 Council of Trade, 106 councils: composition of, 326; Massachusetts, 35–36; role of, 326; Virginia, 31–32 country pay, 6, 159, 364, 383. See also commodity money courts: admiralty, 108, 315; Assize, 79; common law, 80, 109n20, 315–17, 740; Common Pleas, 79; of Exchequer, 315; Gaol Delivery, 79; King’s Bench, 79; oyer and terminer, 79; vice-admiralty, 108–9, 315–18, 738–40 Courts of Exchequer, 315 Coxe, Daniel, 136, 226, 348 Cranfield, Edward, 191–94 Cranston, Samuel, 339 credit: definition of, 486; in England, 284–87, 284n, 297–300. See also bills of credit; loans

[ 920 ]

index Cromwell, Oliver, 71, 86–87, 100, 106, 137, 141 Cromwell, Richard, 71, 87 crop notes, 522, 658 Crouse, Maurice A., 707n, 854 Crown: administrative apparatus of, 75, 78–80; civil war and parliamentary conflict with, 57n4; colonies’ relation to, 21, 25, 98–100, 118, 430–31, 563, 732, 744–45; governing methods of, 301; income of, 277n; Magna Carta’s effect on, 74; Massachusetts’s relation to, 304, 325; ministers of, 567; power of, waning, 567–68; quitrents’ importance to, 702; and Royal African Company, 425n27; veto power of, 292; Virginia’s relation to, 423n22. See also royal prerogative Crown Point expedition, 610, 617 crusades, taxation for support of, 72, 73n8 crying up, of monetary value, 196, 204, 233, 368, 749, 834n13 Culloden, Battle of (1745), 292, 292n28 Culpeper, John, 142, 232, 262 Culpeper, Thomas, 249 Culpeper’s Rebellion, 262, 352 currency. See money Currency Act (Rhode Island, 1763), 785 Currency Act (1751), 561, 570–71, 610, 625n3, 750, 766, 780, 867 Currency Act (1764), 625n3, 750–51, 797–98, 801, 826, 830, 831, 867 currency exchange table, 767f Currency Reform Act (Massachusetts, 1749), 579–80, 598 current money, 6, 159, 200n2, 359, 370 customary rates, 521n5 customs: in colonial America, 108–9, 303, 309–15, 737–38, 801; definition of, 28; James I and, 83–84; in New York City, 801; shortcomings of, 741n43; Townshend Act and, 746 Customs Commissioners. See Commissioners of Customs Cutt, John, 38, 191, 193 Cutt Commission, 38, 130, 191, 340

dalers, 46n Dartmouth, Earl of, 854, 860 dating colonial events, 3–4

Daughters of Liberty, 746 Davenant, Charles, 93n deadweight tons, 146n4 debit, definition of, 486 debt: British, in eighteenth century, 273, 275, 287, 295, 447n6, 568–69, 622, 711, 725t, 726, 727n15, 729, 730, 796, 867; colonial, post–1763, 623, 729; and colonization of Georgia, 451–52, 530; English, in sixteenth and seventeenth centuries, 82n30, 87–88; New England colonies, post–1763, 768–69, 796 debtors, 56 “Declaration and Proposals of the Lord Proprietor of Carolina, A,” 52 Declaration of Independence (1776), 731n Declaration of Indulgence (1687), 278 Declaration of Rights (1774), 748 Declaratory Act (1766), 721, 744–45, 758 Deerfield, 327 deerskins, 699–700 Delaware: agriculture in, 202–3; Assembly, 411–12, 817; charter for, 347; Council, 817; development of, 202–3; finances of, 399, 818, 818n36; General Assembly, 817; government in, 133–34, 325, 346–47; and King George’s War, 629; money in, 494–95, 629, 650–51, 800; and New York, 45, 133; and Pennsylvania, 45, 60n14, 131, 133–34, 134n38, 221, 346–47, 408n16, 494; population of, 797; as proprietary colony, 347; settlement of, 23, 45–49, 131. See also entries for taxation in Delaware; New Sweden (1638–55) Delaware Act (1723), 494 De La Warr, Lord, 138 De Malynes, Gerrard, 93n denizenship, 30n11 Denmark, 23, 25 Denny, William, 649 De Razier, Isaac, 157 De Vries, David, 46 D’Hinoyossa, Alexander, 202 Dickerson, Oliver, 733n, 763–64 Dickinson, John, 730, 733n, 740 Diggs, Edward, 241 Dinwiddie, Robert, 674 Discovery (ship), 1 dissenters, 281–82, 295, 327, 477 divine right, 280 divisions, for tax collection, 80

[ 921 ]

index Dixon, Jeremiah, 58n6 Dobbs, Arthur, 664, 689, 696n87, 845–47, 850n48 dollar, 154 Dominica, 566 Dominion of New England, 327–31; constitution of, 327; establishment of, 120n, 125, 133, 136, 304, 306–7, 328; government of, 192, 329–30; jurisdiction of, 136, 225; overthrow of, 325, 330–31, 330n5; taxation in, 329 Dongan, Thomas, 132–33, 215, 216 Dowell, Stephen, 569 Drake, Francis, 29 drawbacks, 116, 763, 765t Drayton, William Henry, 733n Drummer, William, 459, 479 Drummer’s War (1722–25), 479, 481 Dudley, Joseph, 120n, 328, 334, 341 Duke’s Laws, 54, 132, 135, 211–12 Dulaney, Daniel, 730, 733n, 740 Dunbar, David, 480 Dutch East India Company, 38–39, 43 Dutch West India Company, 1, 39–41, 40n35, 45–47, 131, 200–201, 204, 210, 219 duties: components of, 28; Connecticut, 182–83, 386–87, 476, 606–8, 784; England, 291, 446; Maryland, 257, 428–30, 541; Massachusetts, 171–73, 374–75, 377–80, 460, 463–64, 464–65t, 586–87t, 587–88, 599–600, 599n, 774t, 775; New Hampshire, 193–94, 393–94, 482; New Jersey, 654–55; New Netherland, 206–7; New York, 402–7, 405n10, 500–504, 502t, 635, 637, 804; North Carolina, 690, 693–94, 849; Pennsylvania, 411, 510; Rhode Island, 389; South Carolina, 433–35, 702–5, 850–51, 856t; Virginia, 245–47, 255, 423–26, 423n22, 532–33, 536, 669, 670t, 671–73, 841. See also port duties Dyre, William, 213

earls, 84 Early State Records, 10 East India Company, 94, 290, 320, 747–48, 758 East New Jersey, 131, 135–36, 222–25, 325, 341, 348, 412–13, 516–17, 651n50, 821n40 Ecclesiastical Commission, 278

economy: agriculture and, 866; of colonial America, 865; colonialism and, 95–97; commercial policy and, 110–17; Pennsylvania, 492–93; southern plantation colonies, 826. See also mercantilism; public finances; trade Eden, Charles, 352 Eden, Robert, 844 Edict of Nantes, 278 education and taxation: Connecticut, 185, 477, 608; New Hampshire, 195, 394, 795; South Carolina, 704 Edward I, King of England, 76–77, 152 Edward II, King of England, 77 Edward III, King of England, 77 Edward VI, King of England, 28, 83 Edwards, Daniel, 604n29 effective use, doctrine of, 26 Eighth Bank (Rhode Island loans), 610 elections, 143, 573. See also voting Elizabeth I, Queen of England, 23, 28, 29, 31, 71n, 83, 110, 152–53 Elizabeth II, Queen of England, 76n14 Ellis, Welbore, 730 England: civil war in, 57n4, 71, 86–87; colonial trade to/from, 314; colonization by, 23, 29–30; constitution of, in seventeenth century, 80–89; constitution of, pre–1607, 71–80; debt of, 82n30, 87–88; exploration by, 23, 27, 29; exports (1701–75), 724t ; feudalism in, 24; finances of, 282–87, 297–300; and fishing, 96–97; fishing activity of, 29; France and, 88, 276, 278, 279n, 286–88, 294; Glorious Revolution in, 2, 21, 58n4, 71n, 278–83, 288–90; Holland and, 93n, 111, 276, 287–88; Indian dealings of, 26; and Ireland, 86, 98–99; and Jamaica, 100–105; New England as trade rival of, 304–7; population of, 291; prisons in, 61, 451–52; religion in seventeenth-century, 71n; as republic, 86; Restoration in, 57n4, 87–88; sea power of, 96; in seventeenth century, 67–69, 94; ships of, 111; social mobility in, 68; Spanish rivalry with, 29; taxation in, 89–91, 290–91, 295–96; tax reform and reduction in, 446; terminological considerations concerning, 5n1, 56n2; units of account in, 151. See also English government; Great Britain; imperial governance; Navigation Acts; trade; United Kingdom

[ 922 ]

index English Civil War: Crown-Parliament conflict in, 57n4; parliamentary intervention in colonies during, 71; summary of, 86–87 English government: colonial government modeled on, 119; Glorious Revolution and, 279–80; local, 80–81; royal government, 80; seventeenth-century, 80–89; 1688–1714, 275–97 enumerated commodities, 114, 114n30, 305, 313–15, 314n13, 448n8, 737 Episcopalians, 83 estate tax. See property tax Evans, John, 371 evasion. See tax evasion Exchequer, 79, 80, 107 Exchequer, Courts of, 315 excises: collection of, 12; Connecticut, 182–83, 386–87, 784; Massachusetts, 377–80, 460, 464–65, 588, 588n, 589t, 775, 778; New Hampshire, 193–94, 393–94, 482–83, 619–20, 793; New Netherland, 207; New York, 402–4, 405n10, 504–5, 637–38, 805; parliamentary imposition of, 87, 90; Pennsylvania, 411, 642n38 Exclusion Crisis (1678–81), 277 exemptions. See tax exemptions exploration, European age of, 23, 27, 29 export duties. See duties

faculty tax. See income tax farming. See agriculture farming (taxation), 172n58, 211, 505n50, 619–20, 793 Federal and State Constitutions, Colonial Charters, and Other Organic Laws of the States, Territories, and Colonies Now or Heretofore Forming the United States of America, The, 25–26 fees: Connecticut, 184; Maryland, 260; Massachusetts, 176–77, 380; taxes versus, 17, 176n78, 680n48; Virginia, 248 Fenwick, John, 135, 225 Ferdinand II, King of Aragon, 26 feudalism, 24, 53, 72 fifteenths, 73n8, 83 Fifth Bank (Rhode Island loans), 456 finances, public. See public finances fines, 248, 260

Finland, 47 firkin, 146n6 First Anglo-Dutch war (1652–54), 202, 210, 251 First Bank (Rhode Island loans), 456 First Charter of Virginia (1606), 31–32 First Continental Congress, 748 First Long Bills, 401, 491 First Purchasers, 58–59 Fishbourn, William, 511–12, 512n fishing: English colonization and, 29, 96–97; Massachusetts, 145–46, 174n65 Fitch, Thomas, 603, 608 flags of truce, 736 Flanders, 288 Fleet Prison, London, 451 Fleming, Klas, 48 Fletcher, Benjamin, 337, 343, 344, 346, 399, 408–9 Florida, 1, 56n1, 564, 566, 715. See also St. Augustine florins, 40n36 flute (ship), 111 flyboat, 111 foreign coin values, 6–7, 152, 154–55, 156n21, 196–97t, 196–98, 205, 367–74, 370t, 395–97, 396–97t, 398t forfeitures, 248, 260 Fort Ann, 456 Fort Frederica, 564 Fort George, 456, 610 Fort Johnson, 702 Fort Loyal, Maine, 169 Fort of William and Mary, 614 Fourth Bank (Rhode Island loans), 456 Fowler, William M., Jr., 566n Frame of Government (Pennsylvania, 1682), 59 Frame of Government (Pennsylvania, 1683), 59 Frame of Government (Pennsylvania, 1696), 341, 344 France: colonization by, 23, 25; England and, 88, 276, 278, 279n, 286–88, 294; Great Britain and, 565–67, 715, 720, 720n3; and King George’s War, 565; revenue collection in, 82n33; and Seven Years’ War, 561, 566–69; and trade, 305; and Treaty of Paris, 566; and War of the Austrian Succession, 565; and wars in colonial America, 326–27

[ 923 ]

index Franklin, Benjamin, 493, 493n11, 723–24, 733n Franklin, William, 800–801 free and common socage, 24–25 Free City, New York City as, 507 “Freedom and Exemptions for the Patroons, Masters or Private Persons who will Plant any Colonies in, and Send Cattle to New Netherland,” 201 freedom of conscience. See liberty of conscience “Freedoms and Exemptions for the Patroons and Masters” (New Netherland, 1629), 207 freemen: Connecticut, 126–28; Massachusetts, 123–26; New York, 343; Pennsylvania, 59–60; Rhode Island, 129 free trade: Massachusetts and, 304–6; writers contributing to, 93n French and Indian War (1754–63), 4, 569, 575, 725–26, 728t, 736, 866; Connecticut, 607; Maryland, 661–62, 683–86; New Hampshire, 617–18; New Jersey, 630, 652, 654, 656, 819; New York, 626–27, 634, 637, 639, 802, 810; North Carolina, 690–92; Pennsylvania, 628, 648–49, 810; Rhode Island, 610, 785; South Carolina, 664, 704, 706; Virginia, 522, 657–59, 661–62, 666, 671–78. See also Seven Years’ War (1754–63) French West Indies, 631 Fundamental Constitution (Carolina, 1669), 53, 142, 262 Fundamental Constitutions for the Province of East New Jersey in America, Anno Domini 1683, The, 136 Fundamental Orders of Connecticut (1639), 126–27 Fundamental Orders of New Haven (1639), 126 fur trade: in Maryland, 428; in Massachusetts, 146; in New Netherland, 206–7

gabelle, 82n33 Gage, Thomas, 722, 748 gallon, 146n6 Gaol Delivery, courts of, 79 Garth, Charles, 798 General Assembly: Connecticut, 127, 185, 326, 338, 382–84, 476, 606, 608, 780, 782–84; Delaware, 817; Georgia, 857, 860; Maryland, 259, 326, 351–52, 538–40, 661–62, 684, 830;

New Hampshire, 130, 326, 614, 616, 619–20; New Jersey, 497, 515, 517–18, 629, 651, 654–55, 800, 819–20, 822, 824; New York, 343, 400–401, 405–6, 491, 507, 631–32, 634, 639, 641, 802, 805–6; North Carolina, 544, 662, 847, 848n42, 850; Pennsylvania, 60–61, 137, 326, 510–11, 642–43, 646, 648–50; Rhode Island, 128–29, 188, 189, 326, 339, 388–89, 458, 478, 612, 785, 788; South Carolina, 353, 433–34, 548, 551, 553, 663–64, 704; typical, 326; Virginia, 138–39, 238–39, 241–46, 249, 253, 326, 419, 426, 536, 667, 673–74, 676, 840–41 General Court: composition of, 334; Connecticut, 126–27, 178–79, 183–85, 337–38, 382–84; Massachusetts, 123–26, 154–55, 157–59, 165–68, 172–78, 328, 331, 333–35, 360, 364, 365, 374, 376, 379–80, 455, 459, 461, 472, 486–89, 578, 586, 599, 768, 769, 771, 779; New Hampshire, 192, 341, 481, 790–91, 793, 795; Rhode Island, 129, 187, 187–90 general eyre, 79 General Laws and Liberties of New Hampshire (1681), 130 George, Prince of Denmark, 291 George I, King of England, 2; background of, 445; and colonies, 352; and politics, 295; rule of, 273, 445 George II, King of England: and colonies, 61, 514; and politics, 295, 567, 717; rule of, 445; and war, 563 George III, King of England: and colonies, 731n, 748; and politics, 568, 717, 721, 853; and war, 563 Georgia: Assembly, 710; charter for, 62, 452, 571–72; Commons House, 857, 859, 859n; Council, 710; finances of, 709–10, 860–61, 863; General Assembly, 857, 860; governmental disputes in, 859n; money in, 520, 530–32, 665, 834–35; population of, 711; public accounts in, 12; as royal colony, 572, 709–10; settlement of, 61–63, 443, 451–53, 530–31; slavery in, 452; and South Carolina, 452. See also entries for taxation in Georgia Georgia Provincial Congress, 859n Gilbert, Humphrey, 25, 29–30, 30n12, 49 Gilbert, Raleigh, 31 Gipson, Lawrence Henry, 634, 782 Glen, James, 664

[ 924 ]

index Glorious Revolution (1688): account of, 2, 89, 278–83; Act of Settlement and, 288–90; and parliamentary supremacy, 21, 58n4; religion and, 71n Godden v. Hales (1686), 278 Godspeed (ship), 1 gold: currency in, 153; silver versus, 521n5; value of money based on, 7, 153 gold money, 370 goldsmiths, banking ser vices of, 284 Goodyear, Stephen, 183 Gordon, Patrick, 493 Gordon, Thomas, 414, 515 Gorges, Ferdinando, 35–36, 124, 163, 177 governing councils. See councils government: Carolina, 141–43; colonial, overview of, 326; colonial administration issues in, 105–9; Connecticut, 119, 122, 126–28, 337–38; Delaware, 133–34, 325, 346–47; Jamaica, 101; Maryland, 140–41, 351–52; Massachusetts, 122–25, 325, 331, 333–37; middle colonies, 130–37, 341–49; New England colonies, 122–30, 331–41; New Hampshire, 123, 129–30, 340–41; New Jersey, 134–36, 348–49; New Netherland, 131–32; New Sweden, 133–34; New York, 132–33, 325, 341–43; North Carolina, 352; Pennsylvania, 136–37, 344–46; Rhode Island, 122, 128–29, 338–40; South Carolina, 353; southern plantation colonies, 137–43, 349–53; Virginia, 137–39, 350–51. See also colonial government; constitution(s); English government; imperial governance government stock, 287 Governor and Company of the Bank of England, 298 Governor and Company of the Massachusetts Bay in New England, 35, 37 governors: appointment of, 326; and colonial versus English interests, 303, 311, 323–24; correspondence of, 9, 122; elected, 119, 122, 326; instructions for, 121, 625n3, 626n8; and local elite, 138–39, 572; Massachusetts, 331, 333–34; powers of, 120–21, 333–34, 572; in proprietary colonies, 119; role of, 326; salaries of, 334, 572; and trade acts enforcement, 108–9, 302, 307; viceadmiralty powers of, 122; Virginia, 423n22 Grafton, Duke of, 721 Graham, John, 860 Granada, 23n1

Grand Deed of Albemarle, 432 Grand List system (Connecticut), 178–82, 186, 382, 474, 477, 601, 780 grants, 21, 282 Granville, Lord. See Carteret, John (Earl of Granville) Granville tract (Granville Grant or District), 451, 548, 688, 846 Great Britain: American tax imposed by, 715–17, 720–21, 722n5, 729–34, 751–58, 764, 861–62, 867; America’s importance to, 723–29; bounties, drawbacks, and subsidies from, 758–64; calendar in, 3; colonial trade to/from, 746; debt of, 273, 275, 287, 295, 447n6, 568–69, 622, 711, 725t, 726, 727n15, 729, 730, 796, 867; debt, spending and interest (1739–75), 725t ; expenditures of, in colonial America, 723–29; finances of, 447n6; formation of, 5n1, 273, 292–94; France and, 565–67, 715, 720, 720n3; and Indian question, 722–23; money regulation by, 6 (see also Currency Act [1751]; Currency Act [1764]); national income in, 726–27; politics in, 567–68, 717, 720–21; population of, 726; and Seven Years’ War, 561, 566–68, 666, 725–26; taxation in, 568–69; tax burden in, 14, 90–91, 91n52, 195, 437, 439, 447, 474, 558, 569, 622, 655–56, 726n15, 727n18, 729, 796, 863, 867; terminological considerations concerning, 5n1, 56n2; tobacco importation by, 836–37n, 836–37t, 836–38; and troops in colonies, 715, 723, 730–31, 734; voter eligibility in, 573; and War of the Austrian Succession, 564–65, 568; and War of the Right of Search, 443, 561, 563–64, 568; and wars (1739–1763), 563–74. See also England; Scotland; United Kingdom great council, 75–76 Great Deed of Grant (Carolina), 53 Great Depression, 869 Great Fire of London (1666), 87 Great Settlement, 89 Great Statute, 90 Greene, Jack P., 677, 684 Gregorian calendar, 3 Gregory XIII, Pope, 3 Grenada, 566 Grenadines, 566 Grenville, George, 568, 720, 736–37, 741, 743, 745 Grenville, Richard, 29

[ 925 ]

index Grey, Ford (Earl of Tankerville), 318 Gridley, Jeremiah, 733n ground rents, 24 Guadeloupe, 566, 715 guilders, 40n36, 205 Guilford, Lord, 450, 538 gunpowder, 763 Gustavus Adolphus, King of Sweden, 47

Habersham, James, 531, 860 Halifax, 725, 738–40 Hamilton, Andrew, 225, 348, 412–13 Hancock, John, 741 Hancock, Thomas, 459 Hanover, House of. See House of Hanover hard money, 370 Hardwicke, Lord, 567 Harris, Francis, 531 Hart, John, 450 Hartford, 126, 148 Harvard College: funding of, 455; lottery revenue for, 601; tax exemptions for, 2, 166, 173, 462–63, 583; tuition payments to, 160 Harvey, John, 99, 138–39, 237, 350 Hatfield House, Hertfordshire, England, 81n28 hawkers, 638, 655, 805 Hawkins, John, 29 headright system, 44, 52, 55, 549 head tax. See poll tax hearth tax, 87, 90, 290 Heath, Richard, 429n43 Heath, Robert, 50–51, 51n22 Henry II, King of England, 98 Henry III, King of England, 73n8, 7 5–76, 78 Henry IV, King of England, 78 Henry V, King of England, 78, 79 Henry VII, King of England, 23, 28, 79–80, 98, 152 Henry VIII, King of England, 28, 80, 82n30, 83, 315 Henry, Patrick, 733n highway tax, 195 Hill, Abraham, 318 Hillsborough, Earl of, 768, 798, 832, 846, 854 Hilton, Edward, 38n32 Historical Statistics of the United States: Colonial Times to 1957, 18

Historical Statistics of the United States: Earliest Times to the Present, 17, 865 hog reeves, 171n49 hogsheads, 146n6, 229n2 Holland: currency of, 205; English alliance with, 287–88; English rivalry with, 93n, 111, 276, 287; New England trade with, 305; shipping prowess of, 93n, 111; tobacco importation by, 230; William of Orange and, 278. See also Netherlands Holliday, James, 523 Hooker, Thomas, 126 Hopkins, Stephen, 733n House of Commons: and colonial affairs, 563, 629; colonial legislatures modeled on, 336, 543, 572; elections for, 445; formation of, 28, 76, 77; under James I, 82; knights in, 78; power of, 445–46, 563, 568; in Restoration England, 87; rise of, 78; and royal revenues, 28; and taxation, 78 House of Hanover, 289, 293, 445 House of Lords: under James I, 81; origins of, 76, 77 house tax, 291 Hovering Act (1763), 736 Howard, Charles. See Carlisle, Charles Howard, Lord Howard, Thomas, 81n28 Hudson, Henry, 38–39 Hudson River, 38–39, 131 Hudson’s Bay Company, 290 Huguenots, 50, 61, 278, 418 Hull, John, 167 Hull, Judith, 167 hundreds, for tax collection, 80 hundredweight, 146n6 Hunter, Robert, 343, 414, 505, 515–16, 518 Hutchinson, Thomas, 768 Hyde, Anne, 506 Hyde, Edward. See Cornbury, Edward Hyde, Lord Hyde, Edward (North Carolina governor), 506

immigration: factors in, 67–68, 82n31, 273, 825; greatest period of, 825, 865; to Maryland, 687n64; to South Carolina, 435 imperial governance: administrative issues and, 105–9; and commercial policy, 304–23; constitutional issues and, 97–105, 301–4;

[ 926 ]

index principles of, 92–97; 1714–1739, 448–50; 1763–1776, 735–48 imperial taxes: Georgia, 857–58; Massachusetts, 163–65; North Carolina, 688–89; Virginia, 237–40, 253–54, 421–23, 532–34, 665–68, 835–38 import duties. See duties imposts. See royal imposts incidence of taxation, versus burden of taxation, 15–16, 90n52, 238, 507n57 income tax: Connecticut, 182; Georgia, 859; Massachusetts, 169–71 indented Colony Bills, 360 indentured servants, 67n5, 416, 453 India, 47, 567 Indians: bounties on, 177, 209; colonial conflicts with, 145; colonization and, 26; English dealings with, 26; Indian question concerning, 722–23; land of, 26, 561, 623, 722; and New Netherland, 54n32, 209; and New Sweden, 216; Penn and, 203; rights of, Treaty of Paris and, 561, 623; as slaves, 418, 478, 552–53; taxation for defense against, 190n123, 225, 240–41 Indian wars, 67n3 indigo, 16, 697, 699, 759–60, 760n13, 762–63, 762t, 765t, 851 indigo notes, 7 Ingersoll, Jared, 727, 782 Ingoldsby, Richard, 343, 349, 373, 414 Innocent III, Pope, 72 inspection of ships, 741n43 intercolonial taxes, 175–76, 194 interest as revenue source: colonial America, 11; Delaware, 495, 514, 650, 800, 818–19, 819t; middle colonies, 490; New Jersey, 496, 498, 516–17, 651, 801; New York, 492, 799, 806; Pennsylvania, 493–94, 508–9, 511, 642; Rhode Island, 456, 478, 609 “Interest of Great Britain, The” (Franklin), 723–24 Intolerable Acts, 748, 859n, 862 Ireland: Battle of Boyne (1690), 279n; England’s relation to, 98–99; English trade policy and, 114, 114n31; Parliament in, 99, 142; rebellion of (1641), 86; and United Kingdom, 292n27 Irish Free State, 292n27 Iron Act (1750), 561, 569–70, 570n12, 572 iron and ironworks, 173–74, 174n65, 561, 569–70, 570n12, 761

Isabella, Queen of Castile, 26 Isle of Man, 114

Jacquette, Jean Paul, 219 Jamaica: constitution of, 101–5; government in, 101; self-support doctrine for, 101; taxation dispute in, 101–4 James, Duke of Monmouth, 277 James, Duke of York, 53–54, 57, 88, 109, 125, 130, 132–35, 202, 212–14, 221, 252, 277. See also James II, King of England James, the Old Pretender (son of James II), 289–90, 292, 293, 565 James I, King of England ( James VI, King of Scotland), 1; and colonies, 31–33, 35, 44, 50, 231; and money, 153; rule of, 81–84, 105 James II, King of England: children of, 289–91; and colonies, 133, 344; overthrow of, 2, 4, 278–80, 279n, 288, 330; rule of, 88–89, 276–78, 283; and trade, 302. See also James, Duke of York Jamestown, Virginia, 1, 44; settlement of, 32 Jefferson, Thomas, 733n Jenkins, Robert, 564 Jenkins, William Summer, 10 Jews: in England, 282, 290; in Rhode Island, 190, 613–14; tolerance for, in New York, 212n34 João, King of Portugal, 23n1 John, King of England, 72–74, 73n4, 98 Johns Hopkins University, 2 Johnson, Nathaniel, 265 Johnson, Robert, 353, 548–49 Johnston, Gabriel, 543, 688, 702, 851–52 Joint-Stock Association of Adventurers, 179 Jones, Richard, 238 Journal of Accounts (Maryland), 541 Journal of the Common House of Assembly (South Carolina), 554 Journal of the House of Deputies (Rhode Island), 11 journals (accounting), 486n53 Judiciary Act (Pennsylvania, 1701), 345 Julian calendar, 3 justices of the peace, 12, 80

Kahn, Pehr, 866 Kammen, Michael, 406–7 Kay, Marvin L. Michael, 695, 850

[ 927 ]

index keg, 146n6 Keith, William, 494, 508 Kennebec River, Maine, 35 Kennedy, Archibald, 503 ketches, 145n4 Kieft, Willem, 201, 208, 209 King George’s War (1744–48), 565, 575, 579, 602n23, 609, 615, 629, 630, 632, 652, 657, 663, 683 King Philip’s War (1675–76), 145, 167, 169, 177, 329 King’s Bench, court of, 79 King’s Counsel, 332 King William’s War (1689–97), 273, 287–88, 327, 344, 355, 357, 399–400, 417, 447n6, 866 Kinnaman, John, 261, 684, 687 knights: and House of Commons representation, 78; and military tenure, 24, 72n3; and scutages, 72–73, 73n3, 74 Kyrle, Richard, 265

labor contributions: Connecticut, 184; Massachusetts, 171; New York City, 507 Labrador, 23n1 Laconia Company, 38n32 Land, Aubrey, 680 land banks, 420, 455, 508, 800–801 landed gentry, 81–82 land grants: as compensation, 384; in South Carolina, 548–49; and speculation, 506 land speculation, 479, 506, 698 land taxes. See property tax land tenure in American colonies, 24–26 landwaiters, 311 Last Emission currency (Massachusetts), 11, 578, 594–95, 597–98 last (measurement), 146n6 Latin America, colonization of, 23 Laurens, Henry, 733n, 741 Lawful Money, 7, 749; Connecticut, 602; Massachusetts, 11, 577–79, 588, 598; New England colonies, 750, 766; New Hampshire, 621, 791; Rhode Island, 612, 785; terminology of, 359, 370 lawful silver money, 606 Lawrence, John, 604n29, 782–84 Lawrence, Thomas, 351 Lawrie, Gawen, 224–25 Laws and Liberties (Massachusetts, 1644), 124

League of Augsburg, 287 ledgers, 486n53 Lee, Arthur, 733n legislation: Crown review of colonial, 332–33; Parliament as body responsible for, 78; statute, 78 legislatures, colonial: outlines of, 326, 354t; Parliament versus, 731n; power of, 561, 572, 732, 734, 866. See also under individual states; General Assembly Leisler, Jacob, 342, 399 Lenni-Lenape (Delaware) Indians, 54 Lent, 96 Leonard, Benedict (Fourth Lord Baltimore), 450 Leonard, Charles (Fifth Lord Baltimore), 450, 539–40, 681, 684, 831 Lester, Richard, 491 letters patent, 21, 27, 120–21 Lewes Creek, Delaware, 46 liberty of conscience: Georgia, 452; Massachusetts, 336; New Jersey, 349 Library of Congress, 10 licenses, 12, 638, 805 lieutenant governors, 334 light money, 370 linen, 763–64 liquor. See alcoholic beverages, taxation of; alcohol use List of Grievances (1774), 748 livestock, 149 Livonia, 47 Lloyd, David, 410 Lloyd, Edward, 352 Lloyd, Thomas, 346 loan office bills, 7, 487n loans: definition of, 284n; Maryland, 523, 830–31; Massachusetts, 455; New Hampshire, 456; New Jersey, 495–97, 629–30; New York, 492; North Carolina, 528; Pennsylvania, 493, 508, 509n62; Rhode Island, 456, 478, 571; South Carolina, 529. See also banks and banking; bills of credit; debt local taxation: Connecticut, 184–85; Georgia, 711, 861; Maryland, 844; Massachusetts, 779; New Hampshire, 194–95, 795; New York, 806–7; North Carolina, 694–95, 849–50; Pennsylvania, 509, 509n62, 647–48; public accounts for, 13–14; Virginia, 427 Locke, John, 53, 93n, 142, 318 London, England, 82, 85n43, 87, 624

[ 928 ]

index London Company, 1, 32–34 London Customs Board, 309–10 London Customs House, 9 Londonderry, 766 Long Island, 130, 131, 132, 201, 210, 212 Long Parliament, 86, 97, 106, 113 Lopez, Aaron, 613–14 lord lieutenants, 80 Lords Commissioners of Trade. See Board of Trade Lords of Trade, 101–4, 116, 130, 133, 192, 328, 340, 344, 351, 516–17 lotteries: for colonial settlement, 33; Great Britain, 600; Massachusetts, 600–601, 601t, 779; New Hampshire, 620, 795; New Jersey, 655; New York, 639, 806; Rhode Island, 612, 613t, 788, 789t, 790; taxes versus, 790 Louis VIII, King of France, 74n8 Louis XIV, King of France, 88, 276, 278, 279n, 286–88, 289 Louisburg, 565, 616, 630, 682 Lovelace, Francis, 212, 213, 220 Lovelace, John, 413–14, 517 Ludwell, Philip, 416 lumber. See timber “lye by probationary” procedure, 332 Lynch, Thomas, 104 Lyon dollars, 7, 40n36, 401n4, 491n2, 491n3, 626n7

MacInnes, John, 478 Maddison, Ralph, 93n Madeira, 737 Magdalen College, Oxford, 88 Magna Carta, 21, 24, 28, 73–75 Magnusson, Lars, 93n Maine, 1, 124, 131, 177 Maltravers, Lord, 51 Manhattan Island, 200, 200n2 Mansfield, Lord, 104n manufacturing, regulation of colonial, 319–23 Marblehead, 766 Maria Theresa, Holy Roman Empress, 564 Markham, Robert, 344 Markham, William, 346, 408, 410 marks, 51n23 Marlborough, John Churchill, Duke of, 290, 292, 294 Martha’s Vineyard, 131 Martin, Josiah, 832–33, 846, 850n48

Martinique, 566, 715 Mary II, Queen of England, 2, 4, 28, 58n4, 88–89, 164, 278–82, 286, 288, 339 Maryland: Anglican Church in, 430–31; Catholicism in, 44, 44n5, 140, 429–30, 541n50, 681, 684, 687n64; charter for, 42–43; civil qualifications in, 141; Council, 830–31, 845; Council of State, 681–87; currency in, 233–35; and Delaware, 60n14; development of, 228–32; finances of, 862; and French and Indian War, 661–62, 683–86; General Assembly, 259, 326, 351–52, 538–40, 661–62, 684, 830; government in, 140–41, 351–52; House of Delegates, 351–52, 523, 538–39, 681–87, 830–31, 845; immigration to, 687n64; and King George’s War, 683; and MasonDixon line, 58n6; money in, 6, 419, 520, 523–27, 660–62, 829–31, 830n6, 844–45; as proprietary colony, 140–41, 257, 450, 842–43, 843t ; public accounts in, 11; rebellion in, 351; religion in, 140; as royal colony, 141, 325, 351, 427–28; settlement of, 42–45; and tobacco, 7, 116, 228–35, 249, 256, 416–17, 428–29, 519, 523, 540–41, 657–58, 660, 678, 835–38, 836–37t, 842. See also entries for taxation in Maryland Mary of Modena, 277 Mary of Orange. See Mary II, Queen of England Mason, Charles, 58n6 Mason, John, 38n32, 163, 340, 341 Massachusetts: agriculture in, 459; banks and banking in, 454–55; British action against (1775), 748; Canadian expedition and war (1750s), 600; charter for, 22n, 35–37, 120n, 123–25, 307, 331, 336; civil qualifications in, 123–26; commerce in, 147–48, 459; constitutional issues for, 336n; council, 334–35; Crown’s relation to, 304, 325; development of, 145–48; early settlements absorbed by, 1; elections in, 143; finances of, 363, 465, 466–71t, 472, 473t, 474, 589, 590–98t, 594–600, 621–22, 727, 768–71, 770t, 773, 776–77t, 778, 779; fishing in, 145–46; fur trade in, 146; General Court, 123–26, 154–55, 157–59, 165–68, 172–78, 328, 331, 333–35, 360, 364, 365, 374, 376, 379–80, 455, 459, 461, 486–89, 578, 586, 599, 768, 769, 771, 779; government in, 119, 122–26, 325, 331, 333–37; House of Representatives, 334–36, 336n; income tax in, 169–71; independence claims

[ 929 ]

index Massachusetts: (continued ) of, 98n9, 125; legislature, 326; and Maine, 177; Molasses Act and, 569; money in, 6, 11, 154–55, 157–60, 157n24, 162, 274, 300n, 355, 357–65, 361f, 362f, 368n24, 380, 455, 474, 570–71, 576–82, 579n6, 594–99, 749–50, 767, 769; New Hampshire and, 124, 129–30, 150, 191, 194, 340, 390–91, 614–15; and overthrow of Dominion of New England, 330, 330n5; politics in, 336–37; public accounts in, 10–11, 163n; as royal colony, 325, 331, 333, 459; salaries in, 165; self-government in, 124–25; settlement of, 34–38; social stratification in, 147–48; tax collection in, 166–68; timber in, 146–47; and trade, 304–7, 325; treasurer’s statements, 466–71t, 486–89, 589, 590–98t, 594–600, 776–77t. See also entries for taxation in Massachusetts Massachusetts Bay, 34 Massachusetts Bay Company, 98n9, 123, 124, 126, 145, 165 Massachusetts Bicameral Ordinance (1644), 124 Massachusetts Lawful Money, 577, 579, 588 Massachusetts Regulating Act (1774), 748 mast trees, 147, 322, 375–76 Mather, Increase, 337 Matson, Cathy D., 93n May, Carnelis Jacobsen, 201 Mayflower Compact, 35 Mayflower (ship), 34, 145 Mays, David, 828 McCulloch, Henry, 846, 851 McCusker, John J., 5n2, 17, 865, 868n Meadows, Philip, 318 measures, in colonial trade, 146n6 mercantilism, 92–97; and balance of trade, 94–96; colonies and, 95–96; definition of, 94; shipping and, 96–97; writers contributing to, 93n merchant marine, 96–97 Methuen, John, 318 middle colonies: constitutions of, 130–37, 341–49; definition of, xviii, 2; development of, 199–203, 399–400; finances of, 825; governments in, 130–37, 341–49; money in, 204–6, 359, 400–401, 490–98, 797–801; population of, 199, 399, 490, 624, 797; taxation in (1624–1688), 199–227; taxation in (1688–1714), 399–415; taxation in (1714–1739), 490–518; taxation in

(1739–1763), 624–56; taxation in (1763–1775), 797–825; varieties of taxation in, 867. See also individual states Middle Tenor, in Massachusetts, 11, 578, 578n4, 579n6, 594–95, 598 Middleton, Arthur, 529, 553 migration. See immigration Milborne, Jacob, 342 military: British troops in colonies, 715, 723, 730–31, 734; colonialism and, 107; parliamentary control of, 281. See also reimbursement of colonial military expenses military money notes, 531 military tenure, in feudalism, 24, 72n3 militias: colonial, 734; control of, 337, 339; English maintenance of, 107 ministers. See clergy ministers, king’s, 567 Minuit, Peter, 46, 48, 157, 201, 216 Miquelon, 566, 715, 736 Misselden, Edward, 93n Model Parliament of 1295, 76 molasses, 313 Molasses Act (1733), 443, 449, 454, 569, 572, 631, 715, 720, 731, 733, 735–37, 739, 740 monarchy. See Crown money: British regulation of, 6, 749–51, 866–67; colonial circumvention of British regulation of, 866–67; colonial systems of value for, 155, 156n20; Connecticut, 455–56, 576, 580, 602–3, 602n23, 606, 767; crop notes, 522; currency versus, 359; debasement of, 152, 368n24; Delaware, 494–95, 629, 650–51, 800; exchange values of, 6–7, 152, 154–55, 156n21, 196–97t, 196–98, 371–74, 395–97, 396–97t, 398t, 485t, 625n4, 767f; functions of, 151; Georgia, 520, 530–32, 665, 834–35; historical overview of, 5–8; Maryland, 6, 419, 520, 523–27, 660–62, 829–31, 830n6, 844–45; Massachusetts, 6, 11, 274, 300n, 355, 357–65, 368n24, 380, 455, 474, 570–71, 576–82, 579n6, 594–99, 749–50, 767, 769; mercantilism and, 94; middle colonies, 204–6, 359, 400–401, 490–98, 624–30, 797–801; Netherlands, 40n36; New England colonies, 150–62, 357–74, 454–59, 576–82, 766–69; New Hampshire, 366–67, 391–93, 456, 577, 580, 614–21, 767, 790–91; New Jersey, 495–98, 629–30, 800–801, 820–22; New York, 359, 400–401, 401n4, 490–92, 626–27, 798–99;

[ 930 ]

index North Carolina, 420, 520, 527–28, 662–63, 831–33; Pennsylvania, 368–69, 492–94, 496n20, 628–29, 799–800; preRevolutionary colonial America, 749–51; restoration and reform of, 152–53; Rhode Island, 366–67, 456–58, 571, 576–77, 580, 610–12, 785; South Carolina, 419–20, 520, 528–30, 663–64, 833–34; southern plantation colonies, 232–35, 418–20, 520–32, 657–65, 826–35; Spain, 6; Sweden, 46n; terminology of colonial, 369–70; transfer notes, 522; units of account for, 151, 154–56, 204; Virginia, 419, 520–22, 658–60, 827–29; wampum as, 156–57. See also bills of credit; commodity money; Currency Act (1751); Currency Act (1764); foreign coin values; paper money; public finances monopolies, 85, 86 Monopolies Act (1624), 85 Montague, Charles Greville, 854 Montfort, Simon de, 76, 76n14 Montgomerie, John, 496–97, 496n20, 506, 516–17 Montgomery, Robert, 61 Moore, Henry, 640, 798 Moore, James, II, 353 Morris, Lewis, 223–24, 514–15, 629 Morris, Robert Hunter, 642–43 Morton, Joseph, 264–65 Motte, Jacob, 853 movables, 73n8 Mun, Thomas, 93n Mutiny Act (1689), 281

Nairne, Thomas, 435 Nantucket, 131 Napoleon, 567, 715 National Expenditure, 282–83 naturalization, 30n11 naval stores, 313–14, 519, 519n3, 528n Naval Stores Act (1706), 322, 375 Navigation Acts, 4; amendments to, 571; American Revolution and, 733n; effect of, 756–57; enforcement of, 306–7, 330; loophole of, 115; Massachusetts and, 125; New England colonies and, 164; parliamentary involvement through, 21; posts created in, 242; precursors to, 27n5, 32; revenue from, 715, 755t, 756; scholarship on, 2, 756–57; shipbuilding industry aided by,

113; tobacco and, 16; Virginia and, 246–47. See also individual acts Navigation Act (1651): enforcement of, 112–13; passage of, 100; provisions of, 112; Virginia and, 139 Navigation Act (1660): collections provisions in, 108; and enumerated commodities, 737; observation of, 106; provisions of, 113–14 Navigation Act (1663): collections provisions in, 108, 306; commodities exempted from, 115; objective of, 115; prohibitions in, 164–65 Navigation Act (1696): anti-Scottish provision in, 348; background for, 304–7; and courts of authority, 738, 740, 746; customs ser vice established by, 117; objective of, 301; provisions of, 105n16, 308–9; purpose of, 308 navy. See Royal Navy “Negro,” terminology of, 5 Negro duties. See slavery: and taxation Negroes, population of, 355, 416, 454, 519, 552, 657, 697, 824, 826. See also slavery Netherlands: colonization by, 23, 25, 38–41, 45–46; currency of, 40n36, 151n16; money in, 200n2; and slave trade, 251–52. See also Holland; States-General of the United Provinces New Amstel, 219 New Amsterdam, 131, 200, 201n4, 207, 210–11 New Bern, 417 New Castle, 412 Newcastle, Thomas Pelham-Holles, Duke of, 566–68, 717, 717n2, 720–21, 720n2, 732 New England colonies: agriculture in, 575; bills of credit outstanding, 457t, 577t ; Canadian expedition and war (1750s), 577, 580–81; commerce in, 144, 164; constitutions of, 122–30, 331–41; currency in, 162; debt of, 768–69, 796; definition of, xviii, 2; development of, 144–50, 355–57; finances of, 575; fishing industry in, 97; governments in, 122–30, 331–41; and King George’s War, 565, 575, 579–80; money in, 150–62, 357–74, 454–59, 576–82, 766–69; population of, 144, 355, 454, 575, 766; rural character of, 355; and self-government, 106; settlement of, 34–38; taxation in (1620–1688), 144–98; taxation in (1688–1714), 355–98; taxation in (1714–1739), 454–89; taxation in (1739–1763), 575–623; taxation in (1763–1775), 766–96; town populations in, 766; and trade, 116, 304–7,

[ 931 ]

index New England colonies: (continued) 356; as trade rival of England, 304–7; varieties of taxation in, 867. See also individual states; Dominion of New England New England Company for a Plantation in Massachusetts-Bay, 35 New England Council. See Council for New England Newfoundland, 23n1, 29, 44, 96–97, 177, 327, 715, 720n3 New Hampshire: civil qualifications in, 129–30; Council, 390, 479, 481–82; development of, 150; finances of, 391–92, 480–83, 768–69; and French and Indian War, 617–18; General Assembly, 130, 326, 614, 616, 619–20; General Court, 192, 341, 481, 790–91, 793, 795; government in, 123, 129–30, 340–41; House of Representatives, 390, 393, 479–82, 614, 617, 795; and King George’s War, 615; legislature in, 341; and Massachusetts, 124, 129–30, 150, 191, 194, 340, 390–91, 614–15; money in, 366–67, 391–93, 456, 577, 580, 614–21, 767, 790–91; politics in, 620n76; prospering of (1714–1739), 479; public accounts in, 11–12; as royal colony, 130, 137, 340–41; settlement of, 38, 38n32. See also entries for taxation in New Hampshire New Haven, 1, 126, 127, 148, 179, 331 new impositions, 83 New Jersey: Assembly, 349, 414, 497, 515–17, 801; Council, 515–16, 629, 800; development of, 203; establishment of, 130–31, 134; finances of, 399, 515–17, 651–54, 824; and French and Indian War, 630, 652, 654, 656, 819; General Assembly, 497, 515, 517–18, 629, 651, 654–55, 800, 819–20, 822, 824; government in, 119, 134–36, 348–49; governor of, 515; and King George’s War, 630, 652; money in, 401, 495–98, 629–30, 800–801, 820–22; and New York, 514; population of, 797; as proprietary colony, 348; public accounts in, 11, 651n50, 822; residual division of, 516, 821n40; as royal colony, 325, 341, 348–49, 413; settlement of, 53–55. See also entries for taxation in New Jersey New London, 8, 148n12 New Netherland (1624–64), 1, 4, 21, 45; charter for, 39–40, 201, 208; and Delaware, 131, 219; development of, 200–202; elections in, 143;

English annexation of, 130; fur trade in, 206–7; government in, 131–32; Indian problems in, 54n32; New Sweden and, 133, 217n56; settlement of, 38–41, 131, 200; tax collection in, 206; trade in, 207nn14–15. See also New York; taxation in New Netherland (1624–1664) New Netherland Trading Company, 39 new new impositions, 85, 86 New New Tenor (Massachusetts), 11, 578, 594 New Plymouth, 126 Newport, 144, 355, 766 Newsletter, 454 New Sweden (1638–55), 1, 4; charter for, 47–49; currency in, 218n61; development of, 202–3; government in, 133–34; New Netherland and, 133, 217n56; settlement of, 45–49, 131; taxation in, 216–18. See also Delaware New Sweden Company, 1, 47–48, 48n14, 133, 216 New Tenor: Connecticut, 602n23, 606; Massachusetts, 11, 578, 579n6, 585; Rhode Island, 609 Newton, Isaac, 7, 369, 395 New York: and appropriations, 641; Assembly, 343, 491, 491n5, 498, 798, 809; charter for, 133; civil qualifications in, 343; Council, 342, 343; currency in, 214n42; and Delaware, 45, 133; development of, 200–202; Dutch occupation of, 212; elections in, 143; English annexation of, 130; finances of, 399, 406–7, 627, 631, 641, 727, 802–3; and French and Indian War, 626–27, 634, 637, 639, 802, 810; and French wars, 399–400; General Assembly, 343, 400–401, 405–6, 491, 507, 631–32, 634, 639, 641, 802, 805–6; government in, 132–33, 325, 341–43; and King George’s War, 632; Molasses Act and, 569; money in, 359, 400–401, 401n4, 490–92, 626–27, 798–99; and New Jersey, 514; politics in, 342, 343, 399, 498, 498n24; population of, 797; public accounts in, 632; as royal colony, 399, 402, 407; settlement of, 23, 38–41; shipping in, 399–400; and trade, 114, 631. See also entries for taxation in New York; New Netherland (1624–64) New York City: customs receipts in, 801–2; government of, 507; population of, 400, 624; slavery in, 416n2; taxes in, 215–16, 507, 634–35, 806

[ 932 ]

index New York State Library, 8 Nichols, R. C., 733n Nicholson, Francis, 342, 350, 351–52, 371 Nicolls, Richard, 53, 132, 133, 206, 211–12, 215, 223 nonconformists, 71n Norman conquest (1066), 72 Norris, John, 435 North, Dudley, 93n North, Francis, 104 North, Lord, 721, 798 North Briton ( journal), 853 North Carolina: Council, 352, 833; development of, 232, 417; establishment of, 137, 416; finances of, 432, 846–47, 862; and French and Indian War, 662, 690–92; General Assembly, 544, 662, 847, 848n42, 850; government in, 142, 352; House of Commons, 352, 543, 691, 831–33, 847; money in, 420, 520, 527–28, 662–63, 831–33; nickname of, 314n14; politics in, 352; public accounts in, 12; as royal colony, 542–43; settlement of, 141–42; tax collection in, 262, 846–47; and tobacco, 262, 694. See also entries for taxation in North Carolina; Carolina Northern Ireland, 56n2, 292n27 Northey, Edward, 317, 332, 369 Nott, Edward, 350 Nova Scotia, 23n1, 327, 358, 565, 616, 725

O’Brien, Patrick, 726 O’Callaghan, E. B., 503 Occasional Conformity Bill, 295 Ogle, Samuel, 523, 681 Oglethorpe, James Edward, 61–62, 451–52, 531, 564 Old Colony Bills, 360 Oldham, John, 145 Old Tenor: Connecticut, 602n23, 606; Massachusetts, 11, 578, 578n4, 579n6, 585, 594–99; Rhode Island, 785 opgelt, 200n2 order of baronets, 84 Orders (finance), 285–86, 298 orders-in-council, 122 “Ordinance and Constitution from the Treasurer and Company in England Calling for a Council and Assembly in Virginia, July 24, 1621, An,” 138

ordinary pay, 383 oronoco tobacco, 229n2 Osborne, Thomas, 81 Otis, James, 730, 733n, 740 Oxenstierna, Axel, 48 oyer and terminer, courts of, 79

Paine, Thomas, 730 Pakeman, Henry, 74n8 pamphlets, promoting immigration, 435 papal bulls, 25 paper money: advantages of, 364; bills of exchange, 160–63; British attitude toward colonial, 7, 496n20, 750–51; Canada, 358n7; in colonial America, 274; Connecticut, 384, 576, 767; Currency Act and, 570–71, 797–98; Delaware, 650; Georgia, 520, 531–32, 834–35; Maryland, 520, 523–24, 660–61, 829–30, 844–45; Massachusetts, 355, 357–65, 360n8, 361f, 362f, 570–71, 576–78, 749, 767; middle colonies, 490–98, 797; New England colonies, 357–67, 455–58; New Hampshire, 391–93, 577, 790–91, 791n47; New Jersey, 401, 495–97, 800–801, 820–21; New York, 400–401, 798; North Carolina, 420, 520, 527–28, 662, 831–33; Pennsylvania, 493–94, 496n20, 628, 799–800; printing of, 7; private forms of, 8; public finance affected by, 363–66; Rhode Island, 456–58, 576–77; silver and, 364–65, 366t; South Carolina, 520, 530, 663–64, 833–34, 854; Sweden, 358n7; taxation and, 363, 365–66; varieties of, 7–8; Virginia, 520, 658, 827–29. See also bills of credit parishes, for tax collection, 81 Parker, Coralie, 262, 543 Parliament: Acts of, their colonial impact, 625n3; Charles I and, 84–86; colonies’ relation to, 21, 71, 98–100, 111–13, 119, 275, 296–97, 731, 744–45; financial control by, 282–83, 286–87; frequency of meetings of, 281, 282; Irish, 99, 142; James I and, 82–84; legislation by, 78, 625n3; length of sessions of, 282; Long, 86, 97, 106, 113; origin of, 75–76; and religion, 83; rise of, various interpretations, 77n19; royal prerogative versus, 57n4, 78, 99–100, 302–3, 445; Rump, 86–87; Short, 86; strengthening of, 76–78, 87, 289; supremacy of, 21, 58n4, 71, 77, 275, 280, 445, 731n; and taxation, 77, 89–90; and Virginia, 139

[ 933 ]

index Parliament of 1265, 76, 76n14 par rates, 521n5 Parris, Alexander, 530n Partridge, William, 341 Patent of Plymouth Colony, 38 patronage, 81 patroons, 45–46, 201, 207–8 Patten, Matthew, 484 pay as money, 159 pedlars, 638, 655, 805 Pelham, Henry, 567, 717n2, 732 Pelham-Holles, Thomas, Duke of Newcastle. See Newcastle, Thomas Pelham-Holles, Duke of Pendleton, Edmund, 828, 840 Penhallow, Sam, 12 Penn, Hannah, 347 Penn, John, 817 Penn, Richard, 799, 817 Penn, Thomas, 513, 648–50 Penn, William, 56–61, 59n10, 63, 133, 136, 203, 227, 325, 344–47 Penn, William, Sr., 57 Penn family: and land taxation, 648–50; and quitrents, 816n33 Pennsylvania: Assembly, 344–46, 410–11, 493, 508–9, 510; charter for, 56–60, 57n3, 136–37, 203, 344–45; Council, 345, 410; and Delaware, 45, 60n14, 131, 133–34, 134n38, 221, 346–47, 408n16, 494; development of, 203; economy of, 492–93; elections in, 143; finances of, 399, 511, 641–46, 816; and French and Indian War, 628, 648–49, 810; and French wars, 400; General Assembly, 60–61, 137, 326, 510–11, 642–43, 646, 648–50; government in, 136–37, 344–46; House of Representatives (see Assembly); legislation in, 59–60; and Mason-Dixon line, 58n6; money in, 368–69, 492–94, 496n20, 628–29, 799–800; population of, 797, 817; Provincial Council, 344, 410; public accounts in, 11, 811–13; as royal colony, 408; settlement of, 56–61, 58n8; tax collection in, 12, 811. See also entries for taxation in Pennsylvania Pennsylvania money, 359 Pepperell, William, 565 Pequot Indian War, 126, 145, 178, 179, 866 per capita taxes, 14 Persia, 47 petitions, 78 Petty, William, 93n

Philadelphia, 624, 739–40, 741n43, 797 Philip V, King of Spain, 288 Phips, William, 122, 336n, 337, 339, 358–60, 362 Physick, Edmund, 816 pieces of eight, 152, 154–55, 196–98, 204, 578 Pierson, Abraham, 222, 222n73 Pierson, Abraham, Jr., 222n73 Pietersen, Cornelis, 209 Pilgrims, 34–35, 97 Pillar Dollars, 154 pinks, 145n4 pipe (container), 146n6 pirates, 150, 264–65, 306, 357, 399–400 Piscataqua, 124, 129 Pitt, William, 561, 566, 567–68, 623, 717, 720–21, 720n2, 730–32, 867 plague, bubonic, 87 Plains of Abraham, Quebec, 561, 566 plantation duty, 115, 254, 306, 307, 423, 715, 751–54, 752n, 752t plantations, in Caribbean, 146 Plymouth, 1, 34–35, 143, 145, 174, 331 points of collection, 15 Pollexfen, John, 93n, 318 poll tax: Connecticut, 179–80, 382, 780; England, 290; Georgia, 859; Maryland, 259–60, 430, 844; Massachusetts, 169, 374, 377, 583, 771; New Hampshire, 192, 391, 481, 792; New Jersey, 412–13; North Carolina, 544, 690–92, 692t, 846–49, 848t ; Pennsylvania, 408, 509; Rhode Island, 389; significance of, 90, 90n51; South Carolina, 434, 554; Virginia, 240, 243–44, 252–53, 254, 426–27, 535–36, 671, 671t, 840 Pomroy, William R., 604n29 Pontiac, 722 Pontiac’s rebellion, 722, 730, 734 population: colonies in eighteenth century, 273, 443; colonies in seventeenth century, 67; colonies (1610–1780), 872–89t ; Delaware, 797; distribution of, 865; England, 291; Georgia, 711; Great Britain, 726; middle colonies, 199, 399, 490, 624, 797; Negroes, 355, 416, 454, 519, 552, 657, 697, 824, 826; New England colonies, 144, 355, 454, 575, 766; New Jersey, 797; New York, 797; Pennsylvania, 797, 817; Rhode Island, 788; scholarly sources for, 18; slaves, 416; South Carolina, 697; southern plantation colonies, 228, 519, 657; Virginia, 427, 678

[ 934 ]

index port duties: collection of, 12; parliamentary grant of, 90; royal revenues from, 28. See also duties Porter, Edmund, 739n39 Port Royal, 142, 327, 358 Portsmouth, 766 Portugal, 23, 23n1, 25, 47 pound (currency), 151, 154 poundage, 28, 85, 237 powder duties, 174, 194, 412, 483. See also tonnage Pownall, Thomas, 724, 727, 779 Poynings, Edward, 98 Poynings’ Law, 98–100, 102–3, 142 precious metals, 94, 95, 152–54 preemption, 28 premiums, 537 Presbyterians, 71n, 83, 281 President and Council for Safety of the People and Conservation of the Peace (Massachusetts), 330, 358n7 Printz, Johan, 133, 217–18, 217n56 prisage, 28 prisons, in England, 61, 451–52 privateers, 150, 357, 399, 565 private merchant money, 8 Privy Council: Act of Settlement and, 289; and Bank of England, 286; and colonies, 80, 106–8, 122, 316, 332, 649, 809; Committee for Trade and Foreign Plantations of, 107, 302; importance of, 72n2, 449; and Jamaica dispute, 101–5; Lords of Trade committee of (see Lords of Trade); tasks of, 79 Proclamation Line, 722 Proclamation Money, 7, 749; Connecticut, 602; New Jersey, 629; North Carolina, 688, 690n72; terminology of, 359, 370. See also Lawful Money promissory notes, 8, 160 property. See land tenure in American colonies property tax: Connecticut, 180, 382, 780; England, 290; Georgia, 859; Massachusetts, 168, 374, 377, 583, 771; New Hampshire, 192–93, 481, 792; New Jersey, 412–13; New Netherland, 209–10; New York, 212, 499; Pennsylvania, 408, 509; Rhode Island, 786; valuation disputes concerning, 786; Virginia, 244–45, 255, 840 proprietary colonies: British opposition to, 118; Carolina, 137, 141–43, 263–65; Delaware, 347; government of, 119;

Maryland, 137, 140–41, 257, 450, 842–43; New Jersey, 134, 348 proprietary income, 680n48 Protestant Association, 351 Protestantism: versus Catholicism, in England, 71n, 83, 88, 276–81, 288–89; differences within, 71n; as England’s official religion, 71n; and Maryland, 351; and Parliament-Crown disputes, 83. See also individual sects Protestant Reformation, 3 Providence, 766 Provisions of Oxford (1258), 76 public accounts: and bookkeeping practices, 9–10; Connecticut, 604n29; interpretation of, 9–14; for local taxes, 13–14; Massachusetts, 163n; New Jersey, 651n50, 822; New York, 632; Pennsylvania, 811–13; quality of, state variation in, 10–12; timing of, 11–12; varieties of, 9 public finances: Connecticut, 383–84, 456, 477, 601–4, 608–9, 768, 782–85; Delaware, 399, 818, 818n36; England, 282–87, 297–300; Georgia, 709–10, 860–61, 863; Great Britain, 447n6; Maryland, 862; Massachusetts, 363, 379–80, 381t, 465, 466–71t, 472, 473t, 474, 589, 590–98t, 594–600, 621–22, 727, 768–71, 770t, 773, 776–77t, 778, 779; middle colonies, 825; New England colonies, 575; New Hampshire, 391–92, 480–83, 768–69; New Jersey, 399, 515–17, 651–54, 824; New York, 399, 406–7, 627, 631, 641, 727, 802–3; North Carolina, 432, 846–47, 862; paper money’s impact on, 363–66; Pennsylvania, 399, 511, 641–46, 816; Rhode Island, 390, 477–78, 610–12, 768; South Carolina, 433, 852–54, 857, 862–63; Virginia, 537, 658–60, 673–74, 675t, 676–78, 862. See also debt; money public orders, 7, 530, 530n Puritans: Church of England and, 83; in civil war, 86, 124; divisions within, 83; and Maryland, 140–41; and Massachusetts, 325, 327, 330 purveyance, 28

Quakers: in England, 281–82, 477; in Massachusetts, 126; and other Protestant sects, 71n; pacifism of, 344, 400, 583; in Pennsylvania, 56, 58n8, 344–45, 347, 400, 410; in Rhode Island, 149

[ 935 ]

index Quartering Act (1765), 745 Quartering Act (1766), 745 Quartering Act (1774), 748 Quary, Robert, 265, 311, 368 Quebec Act (1774), 748 Queen Anne’s War (1702–1713), 273, 288–91, 294–95, 327, 357, 399–400, 417, 447n6, 866 Queen’s Acceptance of the Surrender of Government, The (1702), 349 quint, 30n10 quintal, 146n6 quitrents: colonial America, 24–25, 163–64; Delaware, 222; Dominion of New England, 327; Georgia, 62n19, 860; Maryland, 45, 257–58, 538–40, 679–82; New York, 8, 213–14, 402, 505–6, 639–40, 640t, 801n12, 809; North Carolina, 432, 542–43, 689t, 845–46; origins of, 24; Pennsylvania, 514, 648–50, 816; royal, 2; scholarship on, 702n101; South Carolina, 433, 548–50, 700–702, 701t, 851–52, 852t ; Virginia, 236, 239–40, 254, 421–23, 422t, 533–34, 533n28, 534t, 667–68, 668t, 838 quo warranto, 49, 49n19, 125, 277, 278

Raleigh, Walter, 25, 30–31, 49 Randolph, Edward, 109n20, 116, 116n35, 188, 307, 310–11, 317, 328 ready money, 359 reales. See pieces of eight real estate, speculation in. See land speculation rebates, 116 Rebecca (ship), 564 receivers-general, 242 receivers of crown revenue, 732 refuse fish, 146 Registrar of Exports, 99 Regulations Respecting the British Colonies on the Continent of America Considered, The (Dickinson), 733n Regulators, 832, 868 reimbursement of colonial military expenses, 728t, 731, 750n2, 761n16; middle colonies, 627–30, 627n14, 634, 651, 654, 800, 817, 820; New England colonies, 565, 570–71, 575, 576, 579–81, 587, 602–4, 606, 609, 611–12, 616, 618, 620–23, 768, 785, 792; southern plantation colonies, 659, 662, 664, 674, 677 religion: and civil qualifications in Massachusetts, 123–26; and colony settlement, 36,

37, 62n18, 67n4; in England, during seventeenth century, 71n; James I and, 83; in New York, 212n34; Privy Council and, 79; in Rhode Island, 149; in South Carolina, 265; tolerance concerning, 140, 212n34, 281–82. See also individual sects; Anglican Church; Catholicism; Church of England; clergy; Protestantism; religion and taxation religion and taxation: Connecticut, 184, 382n51, 477; crusades, 72, 73n8; Georgia, 711; Maryland, 261, 431, 686–87, 844; Massachusetts, 165, 175; New Hampshire, 194–95, 394; New York, 212; North Carolina, 695n87, 850n48; and ser vices rendered, 681n48; South Carolina, 265, 704; Virginia, 250, 423 Repeal, or Funeral Procession, of the Stamp Act, 743 f residency requirements, 335, 335n Restoration, English, 57n4, 87–88 revenue collection: under Charles I, 85; colonialism and, 97; in colonies, 108–9; English, in sixteenth and seventeenth centuries, 89; in France, 82n33; under James I, 82–84; in Restoration England, 87 revenues. See royal revenues; tax revenues Revenue (Sugar) Act (1764). See Sugar Act (1764) Revere, Paul, 721, 748 Rhode Island: agriculture in, 149; charter for, 129, 188–89, 307, 325, 339; civil qualifications in, 128; Council, 610; development of, 149–50; duties not imposed in, 171; elections in, 143, 573; finances of, 390, 477–78, 610–12, 768; and French and Indian War, 610, 785; General Assembly, 128–29, 188, 189, 326, 339, 388–89, 458, 478, 612, 785, 788; General Court, 129, 187, 187–90; government in, 119, 122, 128–29, 338–40; governors in, 326; House of Deputies, 339, 610; and King George’s War, 609; livestock in, 149; money in, 366–67, 456–58, 571, 576–77, 580, 610–12, 785; population of, 788; prospering of (1714–1739), 477–78; public accounts in, 11; religion in, 149; self-government in, 128; settlement of, 21, 38, 38n31, 120; taxation in, 339. See also entries for taxation in Rhode Island rice, 313, 313n, 448, 519, 528, 546–47, 697–99, 850

[ 936 ]

index Richard I, King of England (“Lionhearted”), 72, 73n8 Richard II, King of England, 79, 110 Ridder, Peter Hollander, 217 Riggs, John, 342 right of conquest, 26 right of discovery, 25 right of search. See War of the Right of Search (1739–42) rights: of British subjects in colonies, 740, 740n41; of Virginia colonists, 32 Rights of the British Colonies (Otis), 733n riksdalers, 46n Ripley, William, 840 Rising, Johan Classon, 218 Roanoke Island, 30–31, 49 Robinson, Henry, 93n Robinson, John, 827–29 Robinson, Maurice, 483 Robinson affair, 13, 827–29 Rockingham, Marquis of, 720–21, 743–44 Rolfe, John, 33, 228 Ross, John, 686 Roundheads, 86, 88 Royal African Company, 252, 290, 425, 425n27 royal authority: colonial constitution based on, 100, 118; instruments of, 120–22 royal charters. See charters royal colonies: Carolina, 325–26, 443, 451; Georgia, 572, 709–10; Maryland, 141, 325, 351, 427–28; Massachusetts, 325, 331, 333, 459; New Hampshire, 130, 137, 340–41; New Jersey, 325, 341, 348–49, 413; New York, 399, 402, 407; North Carolina, 542–43; origin of, 22n; Pennsylvania, 408; South Carolina, 353, 546, 548–49; typical government of, 340–41; Virginia, 34, 137–38, 350–51 royal governors. See governors royal household, 80 royal imposts: definition of, 28; James I and, 83–84 royal letters, 121 Royal Navy: shipbuilding for, 147; significance of, 96 royal prerogative: colonial self-government versus, 100, 303–4; commercial policy and, 110–11; Parliament versus, 57n4, 78, 86, 99–100, 302–3, 445; strengthening of, by James II, 88; Triennial Act and, 86; veto power, 292 royal proclamations, 121

royal quitrents. See quitrents royal revenues, 28–29 royal sign manual, 120–21 royalties: Massachusetts, 174 Rudyard, Thomas, 224 Rump Parliament, 86–87 running cash notes, 299 Russell, Elmer Beecher, 332–33 Russell, James, 601n20 Russia, 47 Rutherford, John, 846

sailcloth, 763 salaries: British attitude toward, 558; Connecticut, 184, 383, 785; Georgia, 857; of governors, 334; Maryland, 685–86, 686n62; Massachusetts, 165; New Hampshire, 795; New York, 809; North Carolina, 689n68, 846; Rhode Island, 390; of royal officials, 685–86, 686n62, 732, 732n; South Carolina, 702 Salem, 766 Saltonstall, Gurdon, 338, 384 salutary neglect, era of, 443, 454, 456, 459, 472, 474, 477–79, 484, 490, 507, 514, 518, 544, 556, 572, 727n18, 732, 738, 764 schools. See education and taxation scire facias, 50n19 scot and lot, 60, 60n13 Scotland: Charles I and, 85–86; colonial trade with, 309; English trade policy and, 114; migration from, to New Jersey, 136; and taxation, 293–94; tax collection from, 556n3; terminological considerations concerning, 5n1, 56n2; and trade, 293; and union with England, 292–94 scutages, 72–73, 73n3, 74 sealed bank bills, 298–99 searchers, customs, 311 Second Anglo-Dutch war (1665–67), 87, 202, 285 Second Bank (New Jersey loans), 497 Second Bank (Rhode Island loans), 456 Second Charter of Virginia, 32 Second Continental Congress, 748 Second Long Bills, 491 Second New Tenor: Massachusetts, 578, 578n4 Secretary’s Guide, The, 9

[ 937 ]

index selectman: Massachusetts, 335 self-government, colonial, 100, 303–4, 731–32, 734 self-support, colonial, 89n49, 101, 108, 309, 323–24, 334, 497 separatists, 83 Septennial Act (1716), 445–46 servants: population of, versus slaves, 252; regulations concerning, 225, 243, 252, 379, 429, 434; sale of, 245; and taxation, 115, 259, 264, 377, 382, 414, 425, 429. See also indentured servants set, of bills of exchange, 161 Seven Years’ War (1754–63), 56n1, 448n6, 561, 566–68, 566n, 666, 728t. See also French and Indian War (1754–63) Seymour, John, 352, 429 Sharpe, Horatio, 683, 844 Shelburne, Earl of, 831–32 sheriffs, 80, 846–47 shield money. See scutages shipbuilding, 96, 113, 146–47, 149 ship money, 82, 85, 85n42, 86 shipping: commercial policy and, 110; mercantilism and, 96–97. See also tonnage; trade shipping tonnage, 145n4 ships: colonial, 145n4; commercial, 111; inspection of, 741n43 ship writs, 85n42 Shirley, William, 565, 588 Short Parliament (1640), 86 Shute, Samuel, 459 silk, 763, 858 silver: coin content of, 152; gold versus, 521n5; mercantilism and, 94; paper money and, 364–65, 366t ; price of, 625n4; value of, to England, 94, 151; value of money based on, 7, 154, 198, 359, 370t, 458–59, 578, 625n4 silver money colony, Massachusetts as, 768 Sixteenth Amendment, 169 Sixth Bank (Rhode Island loans), 456 Skinner, Stephen, 822–23 slavery: in Georgia, 452; Indians and, 418, 478, 552–53; scholarship on, 2; and slave rebellions, 704; slaves as property under, 868n; and slave trade, 251–52, 426n30, 566; in South Carolina, 435; southern reliance on, 416, 418, 519, 826, 868; and taxation, 251–53, 379, 389, 405, 411–14, 425–26, 430, 434,

478, 503–4, 510, 536, 551–53, 613, 635, 654–55, 671, 674, 676, 704–5, 824, 841, 844, 855–56; in Virginia, 252–53, 425–26, 426n30 sloops, 145n4 Sloughter, Henry, 342, 343 Smith, Adam, 93n Smith, John, 1 Smith, Samuel, 822 smuggling, 116, 116n35, 219n65, 389, 446, 533, 731, 736, 858 Smyth, John, 822–23 socage, 24–25 social class: and government, in seventeenthcentury England, 81–82; in Massachusetts, 147–48 Social Science Research, 18 sola bills, 531, 531n19 Sons of Liberty, 743, 746 Sophia, Princess, 289, 293 South America: money from, 153–54 South Carolina: Commons House of Assembly, 353, 529, 549, 707–8, 853–54; Council, 353, 707–8, 853–54; development of, 232, 417–18; establishment of, 137, 416; finances of, 433, 852–54, 857, 862–63; and French and Indian War, 664, 704, 706; General Assembly, 353, 433–34, 548, 551, 553, 663–64, 704; and Georgia, 452; government in, 143, 353; House of Commons, 833; immigration to, 435; importance of, 545–46; and indigo, 7, 16; and King George’s War, 663; money in, 419–20, 520, 528–30, 663–64, 833–34; population of, 697; as proprietary colony, 263–65; public accounts in, 12; religion in, 265; and rice, 313; as royal colony, 353, 546, 548–49; settlement of, 142–43; slavery in, 435; and War of Jenkins’ Ear, 663; wealth of, 698; Wilkes fund controversy in, 853–54. See also entries for taxation in South Carolina; Carolina South Company, 47 southern plantation colonies: constitutions of, 137–43, 349–53; definition of, xviii, 2; development of, 228–32, 416–18; economy of, 826; and French and Indian War, 657; governments in, 137–43, 349–53; and King George’s War, 657; money in, 232–35, 418–20, 520–32, 657–65, 826–35; population of, 228, 519, 657; slavery as central to, 416, 418, 519, 826; taxation in (1607–1688), 228–66; taxation in (1688–1714), 416–36; taxation in

[ 938 ]

index (1714–1739), 519–61; taxation in (1739–1763), 657–711; taxation in (1763–1775), 826–63; tax burden in, 711; and trade, 232–33; varieties of taxation in, 868; and War of Jenkins’ Ear, 657. See also individual states sovereign. See Crown Spain: colonization by, 23, 23n1, 25, 29, 61; currency of, 154; English rivalry with, 29, 276, 287; and Florida, 56n1, 566, 715; and Georgia, 451; money from, 6; New England trade with, 305; tobacco from, 231n9, 237–38; and War of the Right of Search, 443, 561, 563–64 Spanish milled dollars, 154 Spanish reales. See pieces of eight Spanish West Indies, 629, 650, 661, 682 specie: mercantilism and, 94 Speed’s notes, 299 Spotswood, Alexander, 350, 426, 427n37, 533, 535, 537, 667 Stamp Act (1765), 1, 2, 291n24, 720–22, 733n, 739–40, 742–45, 742f, 743f, 752, 754–56, 754t, 755t, 758, 761, 829, 861t, 867 Stamp Act Congress, 721n, 740, 740n42, 743 stamp duties: England, 291; Massachusetts, 576, 599–600, 599n; New York, 635, 638 Staple Act. See Navigation Act (1663) Star Chamber, 80 States-General of the United Provinces, 21, 45, 131, 201 statute legislation, 78 Statute of Drogheda, 98 Statute of Frauds (1662), 114 St. Augustine, 51, 61, 451, 564, 704 sterling money, 370 Stockholms Banco, 300n Stone, William, 140, 258 St. Pierre, 566, 715, 736 St. Simons Island, 564 Stuart, Charles, 752 Stuart Restoration: colonial administration after, 106–9; commercial policy after, 113–17 Stuyvesant, Peter, 48, 54n32, 133, 201–2, 204, 208, 210, 219, 407 St. Vincent, 566 subsidies: on British exports, 763–64; James I and, 83–84; parliamentary, 28 succession, royal, 88 Sugar Act (1764), 1, 569, 720, 731n, 733n, 736–39, 743, 752–54, 753t, 755t, 756, 758, 760, 763, 867

sumptuary taxes, 176; Connecticut, 183–84 supply, 78, 78n20 Supply Act (1759), 649 Surrender from the Proprietors of East and West New Jersey, of Their Pretended Right of Government to Her Majesty; 1702, 349 Surveyor-General of the Customs in America, 108 Surveyor-General of the King’s Woods in America, 735 surveyors, customs, 311–12 Susan Constant (ship), 1 Susquehannough Indians, 260 Swanendael, 46 Sweden: colonization by, 23, 25, 46–49, 133; currency of, 46n; and trading companies, 47 sweetscented tobacco, 229n2 Swift, John, 741n43

Tailer, William, 459 Talcott, Joseph, 11, 604, 607–8, 782, 784 tallies, 285, 298 Tasker, Benjamin, 523 taxation, 391, 569; in America after independence, 868–69; colonial differences in, 215n46; consent for, 140, 734, 740, 765; data on, accuracy and comprehensiveness of, 8–9; fees versus, 176n78; great council and, 75–76; House of Commons and, 78; information sources for, 9; JamaicaEngland dispute over, 101–5; levels of, 17; lotteries versus, 790; low/no, precedent of, 7; paper money and, 363, 365–66; Parliament and, 77, 89–90; periods of, 2, 4; political significance of, 1; representation and, 74; scholarship on, 2; for specific ser vices, 17; varieties of, 2. See also other entries beginning with taxation taxation in Connecticut (1634–1688), 178–86; bounties, 184; control of, 185; direct taxation (1651–1688), 181t; duties, 182–83; for education, 185; excises, 182–83; exemptions, 180, 182, 183; fees, 184; income tax, 182; labor contributions, 184; local taxes, 184–85; poll tax, 179–80; property tax, 180; for religion, 184; sumptuary taxes, 183–84; tonnage fees, 183; town taxes, 182 taxation in Connecticut (1688–1714), 380, 382–87; direct taxes, 385t ; duties, 386–87;

[ 939 ]

index taxation in Connecticut (continued ) excises, 386–87; exemptions, 382; poll tax, 382; property tax, 382; for religion, 382n51; tax burden, 387; tonnage, 387 taxation in Connecticut (1714–1739), 474–77; direct taxes, 475t ; duties, 476; for education, 477; exemptions, 476, 477; for religion, 477; tax burden, 476 taxation in Connecticut (1739–1763), 601–9; direct taxes, 605t ; duties, 606–8; for education, 608; exemptions, 606; tax burden, 622 taxation in Connecticut (1763–1775), 779–85; bills of credit, 780t ; direct taxes, 781t, 782–83; duties, 784; excises, 784; poll tax, 780; property tax, 780 taxation in Delaware (1638–1688), 216–22; Dutch rule, 219–20; English rule, 220–21; exemptions, 219; Penn and, 221–22; Swedish rule, 216–18 taxation in Delaware (1688–1714), 411–12; powder duties, 412; tax burden, 414 taxation in Delaware (1714–1739), 514 taxation in Delaware (1739–1763), 650–51; tax burden, 656 taxation in Delaware (1763–1775), 817–19; tax burden, 819 taxation in England: in 1702, 290–91 taxation in Georgia (1732–1739), 555 taxation in Georgia (1739–1763), 709–11; local taxes, 711; for religion, 711; tax burden, 711 taxation in Georgia (1763–1775), 857–61; annual tax bills, 861t ; direct taxes, 859–60; imperial taxes, 857–58; income tax, 859; indirect taxes, 860; local taxes, 861; poll tax, 859; property tax, 859; quitrents, 860; tax burden, 863 taxation in Maryland (1634–1688), 256–61; county taxes, 261; duties, 257; fines, forfeitures, and fees, 260; poll tax, 259–60; quitrents, 257–58; for religion, 261; tobacco, 258 taxation in Maryland (1688–1714), 427–32; assessments on taxables, 431t ; duties, 428–30; poll tax, 430; for religion, 431; slaves, 430; tax burden, 432, 439; tobacco, 429 taxation in Maryland (1714–1739), 538–42; assessments on taxables, 539t ; duties, 541; quitrents, 538–40

taxation in Maryland (1739–1763), 678–87; French and Indian War, 683–86; internal taxes, 682–83; journal of accounts dispute, 685–86, 686n62; officials’ salaries, 685–86, 686n62; quitrents, 679–82; tax burden, 687, 711; tobacco, 678 taxation in Maryland (1763–1775), 842–45; county taxes, 844; journal of accounts, 844; paper money and, 844–45; poll tax, 844; proprietary income, 842–43, 843t ; for religion, 844; slaves, 844; tax burden, 862; tobacco, 842 taxation in Massachusetts (1620–1688), 163–78; administration and enforcement, 166–68; bounties, 177; duties, 171–73; exemptions, 173–74; fees, 176–77; imperial taxes, 163–65; intercolonial taxes, 175–76; labor contributions, 171; Maine counties, 177; poll tax, 169; property/wealth tax, 168; provincial taxing power, 165–66; for religion, 175; royalties, 174; sumptuary taxes, 176; tax evasion, 167; tonnage fees, 174–75 taxation in Massachusetts (1688–1714), 374–79; assessment and enforcement, 376, 376n39; bounties, 375, 380; direct tax levies, 378t ; duties, 374–75, 377–80; excises, 377–80; exemptions, 374; fees, 380; poll tax, 374, 377; property tax, 374, 377; slaves, 379; tax burden, 329, 439; tax evasion, 376, 377n40; tonnage, 377–80 taxation in Massachusetts (1714–1739), 459–74; annual levies and receipts, 473t ; duties, 460, 463–64, 464–65t ; excises, 460, 464–65; exemptions, 462–63; legislation, 462–63t ; tax burden, 461n16, 474, 555; tonnage, 464–65t ; treasurer’s statements, 466–71t taxation in Massachusetts (1739–1763), 582–601; direct tax levies, 584–85t ; duties, 586–87t, 587–88, 599–600, 599n; excises, 588, 588n, 589t; lotteries, 600–601, 601t ; poll tax, 583; tax burden, 622; tonnage, 586–87t, 588; treasurer’s statements, 589, 590–98t, 594–600 taxation in Massachusetts (1763–1775), 769–79; Boston, 778–79; direct taxes, 771, 772t, 773; duties, 774t, 775; excises, 775, 778; local taxes, 779; lotteries, 779; poll tax, 771; property tax, 771; tax burden, 779; tonnage, 774t ; treasurer’s statements, 776–77t

[ 940 ]

index taxation in New Hampshire (1639–1688), 190–95; assessment and collection, 193; duties, 193–94; for education, 195; excises, 193–94; highway tax, 195; intercolonial duties, 194; local taxation, 194–95; poll tax, 192; property tax, 192–93; for religion, 194–95 taxation in New Hampshire (1688–1714), 390–94; duties, 393–94; for education, 394; excises, 393–94; poll tax, 391; for religion, 394; summary of, 392t ; tax burden, 394, 439; tax evasion, 391; tonnage, 394 taxation in New Hampshire (1714–1739), 479–84; duties, 482; excises, 482–83; poll tax, 481; property tax, 481; tonnage, 483 taxation in New Hampshire (1739–1763), 614–21, 623; excises, 619–20; lotteries, 620; tax burden, 621; taxes to redeem bills of credit, 617–19, 619t taxation in New Hampshire (1763–1775), 790–96; for education, 795; excises, 793; levies, revenues, and arrears, 794t ; local taxes, 795; lotteries, 795; poll tax, 792; property tax, 792; tax burden, 795–96; tonnage, 793 taxation in New Jersey (1665–1688), 222–27; East New Jersey, 222–25; tax burden, 226–27; West New Jersey, 225–26 taxation in New Jersey (1688–1714), 412–14; East New Jersey, 412–13; poll tax, 412–13; property tax, 412–13; slaves, 412–14; tax burden, 414; West New Jersey, 412 taxation in New Jersey (1714–1739), 514–18; system of, 518; tax burden, 517–18 taxation in New Jersey (1739–1763), 651–55; bills of credit, 653t ; duties, 654–55; lotteries, 655; slaves, 654–55; tax burden, 656 taxation in New Jersey (1763–1775), 819–25; arrears in, 823; bills of credit, 820t ; slaves, 824; tax burden, 824–25 taxation in New Netherland (1624–1664), 206–11; company-imposed taxes, 206–8; duties, 206–7; excises, 207; exemptions and inducements, 207–8; locally imposed taxes, 208–9; property tax, 209–10 taxation in New York (1664–1688), 211–16; New York City, 215–16; property tax, 212; provincial taxes, 213; quitrents, 213–14; for religion, 212 taxation in New York (1689–1714), 401–9; direct taxes, 402, 403t ; duties, 402–7, 405n10; excises, 402–4, 405n10; exemptions,

405n10; general revenue, 401, 404t, 406; slaves, 405; tax burden, 439 taxation in New York (1714–1739), 498–508; direct taxes, 499, 499n27, 500t ; duties, 500–504, 502t ; economic interests, 499; excises, 504–5; labor contributions, 507; New York City, 507–8; property tax, 499; quitrents, 505–6; slaves, 503–4; summary of, 508t ; tax burden, 507–8, 555; tonnage, 501, 504 taxation in New York (1739–1763), 631–41; bills of credit, 633t ; direct taxes, 631–35; duties, 635, 637; excises, 637–38; indirect taxes and interest income, 636t ; licenses, 638; loan office interest, 638; lotteries, 639; quitrents, 639–40, 640t ; slaves, 635; stamp tax, 638; tax burden, 655–56; tonnage, 637 taxation in New York (1763–1775), 801–10; bills of credit, direct taxes, and reimbursement, 804t ; direct taxes, 802–3; duties, 804; excises, 805; indirect taxes and interest income, 807t ; licenses, 805; local taxes, 806–7; lotteries, 806; quitrents, 807, 809; tax burden, 810; tonnage, 805 taxation in North Carolina (1663–1688), 262–63 taxation in North Carolina (1688–1714), 432 taxation in North Carolina (1714–1739), 542–45; duties, 543–44; internal revenues, 543–45; poll tax, 544; quitrents, 542–43; tax burden, 545 taxation in North Carolina (1739–1763), 688–97; county taxes, 694–95; duties, 690, 693–94; imperial taxes, 688–89; means of payment, 696–97; minor taxes, 694; poll tax, 690–92, 692t ; quitrents, 688–89, 689t ; for religion, 695n87; tax burden, 696n87, 697, 711; tonnage, 694; for War of Jenkins’ Ear, 690 taxation in North Carolina (1763–1775), 845–50; county taxes, 849–50; duties, 849; parish taxes, 850; poll tax, 846–49, 848t ; quitrents, 845–46; for religion, 850n48; tax burden, 845, 862; tonnage, 849 taxation in Pennsylvania (1682–1688), 227 taxation in Pennsylvania (1688–1714), 408–11; assessment and collection, 409–11; duties, 411; excises, 411; intercolonial duty on tobacco exports, 409t ; poll tax, 408; property tax, 408; slaves, 411; tax burden, 411, 414

[ 941 ]

index taxation in Pennsylvania (1714–1739), 508–14; county taxes, 509, 509n62; duties, 510; excises, duties, interest, and payments, 512–13t ; poll tax, 509; property tax, 509; quitrents, 514; slavery, 510 taxation in Pennsylvania (1739–1763), 641–50; county direct taxes, 647–48; excises, 642n38; excises, interest, and provincial payments, 643t ; exemptions, 648–50; Penn family land holdings, 648–50; provincial revenue during war, 644–45t ; quitrents, 648–50; tax burden, 646–47, 656 taxation in Pennsylvania (1763–1775), 810, 813–17; bills of credit, tax receipts, and interest, 814t ; quitrents, 816; tax burden, 813, 815, 817 taxation in Rhode Island (1636–1688), 186–90 taxation in Rhode Island (1688–1714), 387–90; direct tax levies, 388t ; duties, 389; poll tax, 389; slaves, 389; tax burden, 387 taxation in Rhode Island (1714–1739), 477–79; bounties, 479; duties, 478; slaves, 478, 613; tax burden, 479 taxation in Rhode Island (1739–1763), 609–14; bills of credit and tax levies for redemption, 611t ; exemptions, 614; lotteries, 612, 613t ; slaves, 613; tax burden, 622–23 taxation in Rhode Island (1763–1775), 785–90; direct tax levies, 787t ; lotteries, 788, 789t, 790; property tax, 786; tax burden, 790 taxation in South Carolina (1663–1688), 263–65 taxation in South Carolina (1688–1714), 433–35; duties, 433–35; poll tax, 434; quitrents, 433; slaves, 434; tax burden, 435 taxation in South Carolina (1714–1739), 545–55; duties, 550–53; legislation, 550; other provincial taxes, 553–55; poll tax, 554; quitrent and provincial tax revenues, 552t ; quitrents, 548–50; rice, 546–47; slaves, 551–53; tax burden, 555 taxation in South Carolina (1739–1763), 697–709; direct taxes, 705–6; duties, 698–700, 702–5; for education, 704; external taxes, 698–700; French and Indian War, 706; internal revenues, 702–3; quitrents, 700–702, 701t ; for religion, 704; slaves, 704–5; tax burden, 707, 711; total taxes, 706–7, 708–9t

taxation in South Carolina (1763–1775), 850–57; direct taxes, 854–55, 856t ; duties, 850–51, 856t ; expected versus actual tax collections, 855t ; quitrents, 851–52, 852t ; slaves, 855–56; tax burden, 850, 863 taxation in Virginia (1607–1688), 236–56; administration, 240–43; bounties, 250, 250n71; county taxes, 249–50; duties, 245–47, 255; exemptions, 241, 248–49; fines, forfeitures, and fees, 248; imperial taxes, 237–40, 253–54; internal imperial taxes, 238–40; laws, 236n16; plantation duty, 254; poll tax, 240, 243–44, 252–53, 254; property tax, 244–45, 255; quitrents, 239–40, 254, 667–68, 668t ; for religion, 250; slaves, 251–52; summary of, 253–56; tax evasion, 251; tobacco, 237–38, 245–46, 249, 253–55, 665–67; tonnage, 247–48 taxation in Virginia (1688–1714), 421–27; duties, 423–26, 423n22; imperial taxes, 421–23; local taxation, 427; poll tax, 426–27; quitrents, 421–23, 422t ; slaves, 425–26; tax burden, 427, 439; tax evasion, 427; tobacco, 421, 423–24 taxation in Virginia (1714–1739), 532–37; domestic tax revenue, 535t ; duties, 532–33, 536; exemptions, 537; imperial taxes, 532–34; poll tax, 535–36; premiums, 537; quitrents, 533–34, 533n28, 534t; slaves, 536; tax burden, 555; tobacco, 532–34, 536 taxation in Virginia (1739–1763), 665–78; duties, 669, 670t, 671–73; French and Indian War, 673–78; imperial taxes, 665–68; poll tax, 671, 671t ; slaves, 671, 674, 676; tax burden, 677–78, 711; tobacco, 669, 670; treasury certificates, tax rates, and schedule of payments, 675t taxation in Virginia (1763–1775), 835–42; duties, 838–39, 841; imperial taxes, 835–38; miscellaneous taxes, 841–42; poll tax, 840; property tax, 840; quitrents, 838; slaves, 841; tax burden, 835, 862; tobacco, 835–39; tonnage, 842 tax burden: American tax and, 863; Boston, 778–79; colonial, 14–15, 195, 437, 438t, 439, 866; Connecticut, 387, 476, 622; Delaware, 414, 656, 819; factors in, 15–16; Georgia, 711, 863; Great Britain, 14, 90–91, 91n52, 195, 437, 439, 447, 474, 558, 569, 622, 655–56, 697, 726n15, 727n18, 729, 796, 863, 867; incidence of taxation versus, 15–16, 90n52, 238, 507n57;

[ 942 ]

index Maryland, 432, 439, 555, 687, 711, 862; Massachusetts, 329, 439, 461n16, 474, 622, 779; of Navigation Acts, 757; New Hampshire, 394, 439, 621, 623, 795–96; New Jersey, 226–27, 414, 517–18, 656, 824–25; New York, 407, 439, 507–8, 555, 655–56, 810; North Carolina, 545, 696n87, 697, 711, 845, 862; Pennsylvania, 411, 414, 646–47, 656, 813, 815, 817; Rhode Island, 387, 479, 622–23, 790; South Carolina, 435, 555, 707, 711, 850, 863; southern plantation colonies, 711; Virginia, 427, 439, 555, 677–78, 711, 835, 862; during wars, 622, 655–56, 711, 728–29 tax certificates, 663–64 tax collection: Connecticut, 782–84; Massachusetts, 166–68; New Netherland, 206; North Carolina, 262, 846–47; Pennsylvania, 12, 811; points of, 15; seventeenth-century England, 80–81; Virginia, 241–42 tax evasion: Massachusetts, 167, 376, 377n40; New Hampshire, 391; Virginia, 251. See also tax resistance tax exemptions: Connecticut, 180, 182, 183, 382, 476, 477, 606; Delaware, 219; Harvard College, 2, 166, 173, 462–63, 583; London Company, 1; Massachusetts, 166, 173–74, 374, 462–63, 583; New England colonies, 144, 164; New Netherland, 207–8; New Sweden, 216; New York, 405n10; Pennsylvania, 648–50; Rhode Island, 614; Virginia, 241, 248–49, 427, 537. See also tax incentives tax incentives: Carolina, 51–52; for colonial settlement, 22; Delaware, 45–49; in founding and settlement of colonies, 64; Georgia, 62; Maryland, 43; Massachusetts, 37; New Jersey, 54; New Netherland, 41, 207–8; New Sweden, 45–49; Pennsylvania, 58–59; Virginia, 32–33. See also tax exemptions tax rates: Connecticut, 185, 383–85, 475, 604; Massachusetts, 168–70; New Hampshire, 193 tax resistance: colonial America, 11; New Hampshire, 193; Rhode Island, 187–89, 387–88. See also tax evasion tax revenues: collection of, 12; control of, 13 Tea Act (1773), 1, 747, 758, 862 tea taxation: British policy on, 446, 746, 758; imports and duty collected, 758, 759t; Massachusetts, 744f, 747–48, 747f; New Hampshire, 619–20; New York, 638

Temple, William, 93n Tenths, 83 terminology, 5 Test Acts, 88, 277–78 Thatcher, Oxenbridge, 733n Third Anglo-Dutch war (1673–74), 87, 202 Third Bank (New Jersey loans), 497 Third Bank (Rhode Island loans), 456 Third Charter of Virginia, 33 Thirty Years’ War (1618–1648), 47, 67n3, 83 Thomas, George, 629 Thorpe, Francis N., 26 tidewaiters, 311 tierce, 146n6 timber: Connecticut, 607; Massachusetts, 146–47, 376; New Hampshire, 150; New Jersey, 655; regulation of colonial, 322–23, 735. See also mast trees titles, selling of, 84 tobacco: British regulation of, pros and cons, 667; as currency, 233–35, 418, 428, 523, 535, 657–58, 660 (see also tobacco notes); inspection act(s) for, 521–22, 657–58, 660; Maryland and, 7, 116, 228–35, 249, 256, 416–17, 428–29, 519, 523, 540–41, 657–58, 660, 678, 835–38, 836–37t, 842; North Carolina and, 262, 694; production of, 229–31; shipping of, 229n2; Spanish, 231n9, 237–38; taxation of, 84, 116, 231, 237–38, 237n18, 245–46, 249, 253–55, 258, 421, 423–24, 429, 447n3, 532–34, 536, 543, 665–67, 669, 670t, 678, 694, 835–39, 836–37t, 842; trade policy on, 110–11; types of, 229n2; Virginia and, 7, 33, 111n24, 116, 228–35, 237–38, 245–46, 249, 253–55, 416–19, 421, 423–24, 519, 521–22, 532–36, 657–58, 665–67, 835–39, 836–37t tobacco notes, 7, 418, 521–22, 522n8, 658, 830 Tobago, 566 tolerance, religious, 140, 212n34, 281–82, 476–77 Toleration Act (England, 1689), 281–82, 476–77 Toleration Act (Maryland, 1649), 140–41, 282n9 ton, 146n6 tonnage: Connecticut, 183, 387; grants of, to sovereigns, 28, 85, 237; Massachusetts, 174–75, 377–80, 464–65t, 586–87t, 588, 774t; New Hampshire, 394, 483, 793; New York, 501, 504, 637, 805; North Carolina, 694, 849; shipping, 145n4; Virginia, 247–48, 842 Tonnage Act (1694), 286–87

[ 943 ]

index Tories, 275; and Glorious Revolution, 88, 278; political loyalties of, 277; and religion, 295; Whigs versus, 288, 292, 294 town meetings, 330, 748 Townshend, Charles, 721, 736 Townshend Acts (1767), 1, 721, 722n5, 723, 740–41, 741n43, 745–46, 752, 755–56, 755t, 758, 862, 867 Township Act (Massachusetts, 1692), 335 trade: Act of Union and, 293; balance of, 94–96; colonial-British, 746; colonialEnglish, 314; in Connecticut, 148; courts and, 315–18; early seventeenth-century, 110–11; English citizenship and, 112, 114; intercolonial, 738; in Massachusetts, 145–47; measures in, 146n6; in New England colonies, 164; in New York, 631; Parliament and colonial, 111–13; in southern plantation colonies, 232–33; after Stuart Restoration, 113–17; Walpole and, 446. See also commercial policy; duties; free trade; mercantilism; Navigation Acts; shipping; tonnage; trade acts trade acts: colonial responses to, 743; enforcement of, 108–9, 302, 307, 312–13, 315–18; passage of, 106, 111–12; purpose of, 307n5. See also Navigation Acts Traders and Plantation Bank, 530 transfer notes, 522 treasurers: appointment of colonial, 242; payment of, 167; public and private funds commingled by, 13, 550n74, 707n, 827–29; role of, 10 treasurer’s statements, Massachusetts, 466–71t, 486–89, 589, 590–98t, 594–600, 776–77t Treasury, British, 309–10, 450 treasury tax anticipation notes, 7 Treat, Robert, 384 Treaty of Aix-la-Chapelle (1748), 565 Treaty of Dover (1670), 276, 286 Treaty of Methuen (1703), 295 Treaty of Neutrality (1686), 305 Treaty of Paris (1763), 561, 563, 566, 715, 720, 751–52 Treaty of Ryswick (1697), 288, 327, 399–400, 417 Treaty of Seville (1729), 563–64 Treaty of Tordesillas, 23n1 Treaty of Utrecht (1713), 288, 294–95, 327 Treaty of Westminster (1674), 220 Trecothick, Barlow, 793

Trevor, Thomas, 317 trial by jury, denial of, 316, 738, 740, 741 Triennial Act (1641), 86, 616 Triennial Act (1664), 282 Troy scale, 152 Trumbull, Jonathan, 784–85 Tryon, William, 693, 696n87, 806, 831–32, 846–47, 847n41, 850n48 Tudor, house of, 28 tunnage, 28. See also tonnage Tuscarora bills, 420 Tuscarora Indians, 417, 420, 527 Tuscarora War, 420, 544

Undertakers of New England Ironworks, 173 United Kingdom: formation of, 292n27; informal constitution of, 21; terminological considerations concerning, 56n2. See also England; Great Britain; Scotland units of account: English, 151, 154; in middle colonies, 204; in New England colonies, 154–56; in southern plantation colonies, 233 University of North Carolina, 10 usance, 161 U.S. Bureau of the Census, 18 Usher, John, 341, 390, 393 Usselinx, William, 47

Van Dam, Rip, 506 Van Rensselaer, Kiliaen, 201 Van Tienhoven (secretary of New Netherland), 209 Van Twiller, Wouter, 201 Vaughn, Lord ( Jamaican governor), 102, 104 Veasey, Bernard, 686 Verhulst, Willem, 200–201, 200n2 Vernon, Edward, 564 vestries, tax collection by, 12 veto power, 292, 292n26 vice-admiralty courts, 108–9, 315–18, 738–41, 739n39 villeins, 24 Virginia: and Carolina, 49, 51; charter for, 31–33, 137–38; Council, 350, 828; Crown’s relation to, 423n22; currency in, 233–35; development of, 228–32; elections in, 143; English administration of, 105; finances of,

[ 944 ]

index 537, 658–60, 673–74, 675t, 676–78, 862; and French and Indian War, 522, 657–59, 666, 671–78; General Assembly, 138–39, 238–39, 241–46, 249, 253, 326, 419, 426, 536, 667, 673–74, 676, 840–41; government in, 137–39, 350–51; hogshead receipts and disbursements in, 425t; House of Burgesses, 240, 242, 350, 658, 827–28, 841; money in, 419, 520–22, 658–60, 827–29; and Navigation Acts, 246–47; Parliament and, 99–100, 139; politics in, 350–51; population of, 427, 678; public accounts in, 11–13; Robinson affair in, 827–29; as royal colony, 34, 137–38, 350–51; settlement of, 31–34; slavery in, 252–53, 425–26, 426n30; tax collection in, 241–42; and tobacco, 7, 33, 111n24, 116, 228–35, 237–38, 245–46, 249, 253–55, 416–19, 421, 423–24, 519, 521–22, 532–36, 657–58, 665–67, 835–39, 836–37t; trade policy and, 110–11; and War of Jenkins’ Ear, 672. See also entries for taxation in Virginia Virginia Company, 31, 34, 35, 43, 49, 49n19, 123, 138, 230 virtual representation, concept of, 734, 745 viscounts, 84 Votes and Proceedings of the General Assembly of New York, 803 Votes and Proceedings of the House of Representatives (Pennsylvania), 510 Votes of the General Assembly (New York), 505 voting: eligibility for, 143, 335, 337–38, 353, 573, 866; exclusion from, 573; turnout for, 353–54, 573–74. See also elections

wages, 68. See also salaries Wales, 56n2 Walloons, 45 Walpole, Horace, 449 Walpole, Robert, 443, 446–47, 449–50, 484, 533, 561, 563–64, 567, 588, 717n2, 727n18, 732, 764 wampum, 6, 156–57, 156n23, 157n24 Ward, Edward, 339 War of Jenkins’ Ear (1739–42), 564, 657, 663, 672, 690. See also War of the Right of Search (1739–42) War of the Austrian Succession (1740–48), 561, 564–65, 567, 568, 866 War of the League of Augsburg (1689–97). See King William’s War (1689–97)

War of the Right of Search (1739–42), 443, 561, 563–64, 568, 866. See also War of Jenkins’ Ear (1739–42) War of the Roses (1455–85), 28, 80, 98 War of the Spanish Succession. See Queen Anne’s War (1702–1713) warrants, 121 wars: economics of, 561, 666, 728–29, 728t; reimbursement of colonies after (see reimbursement of colonial military expenses); tax burden during, 622, 655–56, 711, 728–29. See also individual wars; military Warwick, Earl of, 105–6 War with Spain (Right of Search) (1739–1742). See War of Jenkins’ Ear (1739–42); War of the Right of Search (1739–42) Washington, George, 748 Waterloo, Battle of (1815), 567, 715 Watson, Alan D., 702n101 Ways and Means Act (1694), 286, 297 wealth tax, 168. See also property tax Weare, Nathaniel, 192 Wellington, Lord, 567, 715 Wentworth, Benning, 615, 617 Wentworth, John, 479, 481, 792, 795 West, Joseph, 143, 264 West Indies, 1, 305, 311, 312, 566, 569, 668, 715, 723, 724, 858. See also British West Indies; French West Indies; Spanish West Indies Westminster Abbey, 76 West New Jersey, 131, 135–36, 222, 225–26, 325, 341, 348, 412, 516, 651n50, 821n40 Weston, Thomas, 34 Wethersfield, 148 Wheeler, John, 93n Whigs, 275; ascendancy of, 443, 445–47, 563, 568; and Exclusion Crisis, 277; and Glorious Revolution, 88, 278; infighting of, 717; Tories versus, 288, 292, 294 white pine acts, 735 Wilkes, John, 833, 853 Wilkes fund controversy, 853–54 William, Duke of Gloucester, 288 William III, King of England, 2; accession of, to English throne, 4, 58n4, 88–89, 273, 278–79; and colonies, 164, 325, 330, 331, 342, 344, 351; death of, 288; rule of, 279–91; and trade, 105n16, 302; and wars, 287–90 William of Orange. See William III, King of England

[ 945 ]

index Williams, Ezra, 782 Williams, Roger, 38n31, 128, 186, 190 William the Conqueror, 24 Wilmington, Earl of, 717n2 Windsor, 148 wine. See alcoholic beverages, taxation of; alcohol use Winthrop, Fitz-John, 337, 384 Winthrop, John, 143, 145 Winthrop, John, Jr., 127, 183 women, political/economic role of, 5 Woodbridge, John, 360n8 wood reeves, 171n49 Woolen Act (1699), 307, 320 woolen industry, 320, 322

woolen products, definitions of, 321–22 Wright, James, 857–58, 859n, 860 Wyatt, Francis, 139

Yale College: founding of, 222n73; tax exemptions for, 180, 182, 476 Yamasee War (1715–17), 529, 554 York, Duke of. See James, Duke of York Yorktown Customs House, 525f, 526f, 527f Young, Samuel, 523

Zubly, John Jacob, 733n

[ 946 ]