Economic Causes of the American Revolution
What brought about the American Revolution? Like most military conflicts, the
Revolution was spurred by a web of complex social, political, and economic factors.
However, economic concerns were arguably paramount when colonists finally decided to
wage war against the British monarchy. Indeed, the era’s most famous rallying cry
remains “No taxation without representation!”
Following the French and Indian War (or Seven Years War), the previously prosperous
British government found that its debt had nearly doubled. Parliamentarians soon
proposed that the prosperous American colonists shoulder more of the monarchy’s
expenses. Several new laws were then passed to benefit the Crown and squeeze the
The trend began with the Currency Act of 1764. This forbade the colonists’ printing of
paper currency. Colonists were not mining precious metals for coins, and they were now
even more dependent upon Britain for capital. The Currency Act significantly reduced
the colonists’ options for economic self-determination, and this was particularly resented
in light of their existing trade deficit with Great Britain.
Next, the Sugar Act of 1764 aimed to enforce laws related to molasses importation. Prior
to the French and Indian War, the wealthy British Empire could afford to be lax with its
colonial customs laws. American merchants became accustomed to circumventing trade
tariffs. In effect, they had enjoyed a relatively independent economic system. But when
the King became concerned about his coffers, enforcement of existing tax laws became a
top priority. As taxes on molasses climbed higher, the colonial rum industry atrophied.
The loss of the valuable rum trade meant that associated trade for raw materials, like
lumber from the Caribbean, dwindled. The Sugar Act also added tariffs to non-sugary
goods like coffee and calico fabric. Taxation without representation began to permeate
more and more aspects of the colonial economy.
Finally, the Stamp Act of 1765 assessed fees for stamps. These stamps were to appear not
only on mail, but on every colonial newspaper, legal document, playing card, mortgage,
and other printed materials. This final wide-sweeping act was designed to raise revenue
for the salaries of British troops and government elites. In many colonists’ opinions, the
Stamp Act most clearly and illegally disconnected taxation from representation.
To oppose the Stamp Act, most colonies sent representatives to a special session in New
York City. The delegates shed their traditionally humble acquiescence to British rule and
asserted that “no taxes… can be constitutionally imposed… but by their respective
legislatures.” American public opinion supported these delegates’ refusal to accept the
Stamp Act. Popular new leaders like Samuel Adams and Patrick Henry emerged to
endorse mob resistance, and by 1765 many American merchants had subscribed to a
However, the British continued to resist colonial demands for increased self-rule. The
colonists’ verbal protest ultimately became militant. In Massachusetts, for example,
farmers’ political groups rose in rebellion. Armed and angry, farmers’ militias filled
Worcester County’s village green, prevented the opening of traditional British courts and
forcing the resignation of royally-appointed judges. The Worcester County Committees
of Correspondence proposed a convention “of the people” that would design new
institutions of local governance. Locally-grown militias in Virginia and Pennsylvania
Some American colonists attempted a compromise in 1774. Joseph Galloway, a self-
proclaimed “man of loyal principles”, presented a plan to the First Continental Congress.
Galloway’s peace plan combined a royally-appointed colonial governorship with the
transfer of legislative and taxation powers to the colonists. However, Galloway’s plan
was no match for many colonists’ suspicions of the British. The compromise was rejected
by a single vote.
At last, in the spring of 1775, the British government ordered the royal governor Thomas
Gage to suppress public assembly in Concord, Massachusetts. When Gage attempted to
seize supplies of the local militia, the Patriot “minutemen” – ready to fight at a minute’s
notice – inflicted heavy casualties upon his British troops. The colonists, now self-
identified as sons and daughters of America, saw little possibility of reconciliation with
Great Britain. The American Revolution had begun.
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