Sugar and Molasses Act
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Sugar and Molasses Act of March 1733 was an Act of the Parliament of Great Britain (citation 6 Geo II. c. 13), which imposed a tax of sixpence per gallon on molasses from non-British colonies. Parliament passed the act largely at the insistence of large plantation owners in the British West Indies.[1] The Act was not passed for the purpose of raising revenue, but rather to regulate trade by making British products cheaper than those from the French West Indies.
Historian Theodore Draper described British intent on the tax as it would effect the American colonies:
Bladen [Col. Main Bladen who was a longtime member of the British Board of Trade] had conceived of the strategy of inflicting a prohibitive duty on imports from the French West Indies instead of simply disallowing them. When he was confronted with the argument that the proposed bill would result in the ruin of the North American colonies, he replied, “that the duties proposed would not prove an absolute prohibition, but he owned that he meant them as something that should come very near it, for in the way the northern colonies are, they raise the French Islands at the expense of ours, and raise themselves also [to]o high, even to an independency.”[2]
A large trade had grown between the New England and Middle colonies and the French, Dutch, and Spanish West Indian possessions. Molasses from the British West Indies, used in New England for making rum, was priced much higher than its competitors and they also had no need for the large quantities of lumber, fish, and other items offered by the colonies in exchange. The British West Indies in the first part of the 18th Century were the most important trading partner for Great Britain so Parliament was attentive to their requests. However, rather than acceding to the demands to prohibit the colonies from trading with the non-British islands, Parliament passed the prohibitively high tax on the colonies for the import of molasses from these islands. [3] Historian John C. Miller noted that the tax:
...threatened New England with ruin, struck a blow at the economic foundations of the Middle colonies, and at the same time opened the way for the British West Indins -- whom the continental colonists regarded as their worst enemies -- to wax rich at the expense of their fellow subjects on the mainland.[4]
Largely opposed by colonists, the tax was rarely paid, and smuggling to avoid it was prominent. If actually collected, the tax would have effectively closed that source to New England and destroyed much of the rum industry. Yet smuggling, bribery or intimidation of customs officials effectively nullified the law. [5] Miller wrote:
Against the Molasses Act, Americans had only their smugglers to depend upon -- but these redoubtable gentry proved more than a match for the British. After a brief effort to enforce the act in Massachusetts in the 1740’s, the English government tacitly accepted defeat and foreign molasses was smuggled into the Northern colonies in an ever-increasing quantity. Thus the New England merchants survived -- but only by nullifying an act of Parliament.[6]
The growing corruption of local officials and disrespect for British Law caused by this act and others like it like the Stamp Act or Townshend Acts eventually led to the American Revolution in 1776. This Act was replaced by the Sugar Act in 1764. This act halved the tax rate, but was accompanied by British intent to actually collect the tax this time.
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[edit] Potential Economic Impact
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The potential economic impact of this Act on the New England rum industry is difficult to determine since the Act was never enforced.[citation needed] While some authors such as Miller have speculated on the impact, it should be noted that this tax was not particularly high in relation to other taxes imposed on spirits.[citation needed] Massachusetts was already imposing a six pence per gallon tax on rum. In Britain, the tax on gin was raised in 1729 to five shillings per gallon and with the Gin Act 1736 to twenty shillings per gallon. In Britain, between 1760 and 1765 the wholesale excise taxes per gallon on spirits was increased from 1s 6d to 3s 6d. Britain imposed a duty of four shillings and nine pence per gallon on strong beer.
This Act also contained the provision that foreign rum was to be taxed at nine pence per gallon to protect the New England rum industry. The tax on foreign rum imports was never effectively collected. Even though the foreign importation of rum become illegal in 1765, in 1770 New England illegally imported 539,000 gallons of rum from St. Croix. In calculating the impact on the price of rum based upon the tax on molasses it needs to be remembered that one gallon of molasses can be used to produce multiple gallons of rum.
[edit] See also
- Sugar Act of 1764
[edit] Notes
[edit] Bibliography
- Draper, Theodore. A Struggle For Power:The American Revolution. (1996) ISBN 0-8129-2575-0
- Middlekauff, Robert. The Glorious Cause: The American Revolution, 1763-1789. (2005) ISBN 13:978 0-19-516247-9
- Miller, John C. Origins of the American Revolution. (1943)
