Navigation Acts

The Navigation Acts were a series of English laws that restricted colonial trade to England. They were first enacted in 1651 and throughout that time until 1663,[1] and were repealed in 1849. They reflected the policy of mercantilism, which sought to keep all the benefits of trade inside the Empire, and to minimize the loss of gold and silver to foreigners. They prohibited the colonies from trading directly with the Netherlands, Spain, France, and their colonies. The original ordinance of 1651 was renewed at the Restoration by Acts of 1660, 1663, 1670, and 1673, with subsequent minor amendments. The Acts formed the basis for English overseas trade for nearly 200 years. Additionally the Acts restricted the employment of non-English sailors to a quarter of the crew on returning East India Company ships.

The major impetuses for the Navigation Acts were the ruinous deterioration of English trade in the aftermath of the Eighty Years' War, and the concomitant lifting of the Spanish embargoes on trade between the Spanish Empire and the Dutch Republic. The end of the embargoes in 1647 unleashed the full power of the Amsterdam Entrepôt and other Dutch competitive advantages in world trade. Within a few years, English merchants had practically been overwhelmed in the trade in the Iberian Peninsula, the Mediterranean and the Levant. Even the trade with English colonies (partly still in the hands of the royalists, as the English Civil War was in its final stages and the Commonwealth of England had not yet imposed its authority throughout the English colonies) was "engrossed" by Dutch merchants. English direct trade was crowded out by a sudden influx of commodities from the Levant, Mediterranean and the Spanish and Portuguese empires, and the West Indies via the Dutch Entrepôt, carried in Dutch ships and for Dutch account.[2]

The obvious solution seemed to be to seal off the English and Scottish markets to these unwanted imports. A precedent was the Act the Greenland Company had obtained from Parliament in 1645 prohibiting the import of whale products into England, except in ships owned by that company. This principle was now generalised. In 1648 the Levant Company petitioned Parliament for the prohibition of imports of Turkish goods "...from Holland and other places but directly from the places of their growth."[3] Baltic traders added their voices to this chorus. In 1650 the Standing Council for Trade and the Council of State of the Commonwealth prepared a general policy designed to impede the flow of Mediterranean and colonial commodities via Holland and Zeeland into England.[4]

On the whole, the Acts of Trade and Navigation were obeyed, except for the Molasses Act of 1733, which led to extensive smuggling because no effective means of enforcement was provided until the 1750s. Stricter enforcement under the Sugar Act of 1764 became one source of resentment of Great Britain by merchants in the American colonies. This in turn helped push the colonies to start the American Revolution in the late 18th century, even though the consensus view among modern economic historians and economists is that the "costs imposed on [American] colonists by the trade restrictions of the Navigation Acts were small."[5]

Historical precedents

Some principles of English mercantile legislation pre-date both the passage of the 1651 navigation act and the settlement of its early foreign possessions. A 1381 act passed under King Richard II provided "that, to increase the navy of England, no goods or merchandises shall be either exported or imported, but only in ships belonging to the King's subjects." The letters patent granted to the Cabots by Henry VII in 1498, stipulated that the commerce resulting from their discoveries must be with England, (specifically Bristol).[6] Henry VIII established a second principle by statute, that such a vessel must be English-built and a majority of the crew must be English-born. Legislation during the reign of Elizabeth I also dealt with these questions and resulted in a large increase for English merchant shipping.[7] Soon after actual settlements had been made in America, these early requirements illustrate the English theory then-held regarding the governmental control of maritime commerce.[8]

With the establishment of overseas colonies a distinct colonial policy began to develop, and the principles embodied in the early Navigation and Trade Acts also had some more immediate precedents in the provisions of the charters granted to the London and Plymouth Company, in the various royal patents later bestowed by Charles I and Charles II, as well as in the early regulations concerning the tobacco trade, the first profitable colonial export. An order in council of October 24, 1621 prohibited the Virginia colony to export tobacco and other commodities to foreign countries.[9] The London Company lost its charter in 1624; the same year a proclamation, followed by orders in council, prohibited the use of foreign ships for the Virginia tobacco trade.[7] These early companies held the monopoly on trade with their plantation; this meant that the developed commerce was to be England's. The Crown's purpose was to restrict for England the future commerce with America; it is well shown in the patent granted by Charles I to William Berkeley in 1639, by which the patentee was "to oblige the masters of vessels, freighted with productions of the colony, to give bond before their departure to bring same into England ... and to forbid all trade with foreign vessels, except upon necessity."[8]

As early as 1641 some English merchants urged that these rules be embodied in an act of Parliament, and during the Long Parliament, movement began in that direction. The Ordinance for Free Trade with the plantations in New England was passed in November 1644. In 1645, to both conciliate the colonies and encourage English shipping, the Long Parliament prohibited the shipment of whalebone, except in English-built ships;[10] they later prohibited the importation of French wine, wool, and silk from France;[11] More generally and significantly on 23 January 1647, they passed the Ordinance granting privileges for the encouragement of Adventurers to plantations in Virginia, Bermudas, Barbados, and other places of America; it enacted that for three years no export duty be levied on goods intended for the colonies, provided they were forwarded in English vessels.[7] Adam Anderson notes this law also included "security being given here, and certificates from thence, that the said goods be really exported thither. and for the only use of the said plantations;" He concludes: "Hereby the foundation was laid for the navigation acts afterward, which may be justly termed the Commercial Palladium of Britain."[12]

The English were well aware of their inferior competitive trading position. Three acts of the Rump parliament in 1650 and 1651 are notable in the historical development of England's commercial and colonial programs. These include the first Commission of Trade to be established by an Act of Parliament on 1 August 1650, to advance and regulate national trade.[13] The instructions to the named commissioners included consideration of both domestic and foreign trade, the trading companies, manufactures, free ports, customs, excise, statistics, coinage and exchange, and fisheries, but also the plantations and the best means of promoting their welfare and rendering them useful to England. This act's statesmanlike and comprehensive instructions, was followed by the October act prohibiting trade with pro-royalist colonies and the first Navigation Act of the following October. These acts formed the first definitive expression of England's commercial policy. They represent the first attempt to establish a legitimate control of commercial and colonial affairs, and the instructions indicate the beginnings of a policy which had the prosperity and wealth of England exclusively at heart.[14] The 1650 act prohibiting trade with royalist colonies was more encompassing however, because it included that all foreign ships were prohibited from trading with any English Plantations, without license, and it was made lawful to seize and make prizes of any ships violating the act. While this act, sometimes referred to as the Navigation Act of 1650, was hastily passed as a war measure during the English Civil Wars, it would be followed by a carefully conceived act in the following year.[8]

The Navigation Act was passed on 9 October 1651[15] by the Rump Parliament led by Oliver Cromwell. It authorised the Commonwealth to regulate trade within the colonies.[16] It reinforced a long-standing principle of government policy that English trade should be carried in English vessels. It was a reaction to the failure of an English diplomatic mission to The Hague seeking a joining of the Commonwealth by the Republic of the Seven United Netherlands, after the States of Holland had made some cautious overtures to Cromwell to counter the monarchical aspirations of stadtholder William II of Orange. The stadtholder had suddenly died, however, and the States were now embarrassed by Cromwell taking the idea too seriously. The English proposed the joint conquest of all remaining Spanish and Portuguese possessions. England would take America and the Dutch would take Africa and Asia. But the Dutch had just ended their war with Spain and already taken over most Portuguese colonies in Asia, so they saw little advantage in this grandiose scheme and proposed a free trade agreement as an alternative to a full political union. This again was unacceptable to the British, who would be unable to compete on such a level playing field, and was seen by them as a deliberate affront.

The Act banned foreign ships from transporting goods from outside Europe to England or its colonies, and banned third-party countries' ships from transporting goods from a country elsewhere in Europe to England. These rules specifically targeted the Dutch, who controlled much of Europe's international trade and even much of England's coastal shipping. It excluded the Dutch from essentially all trade with England, as the Dutch economy was competitive with, not complementary to the English, and the two countries therefore exchanged few commodities. This Anglo-Dutch trade, however, constituted only a small fraction of total Dutch trade flows. The Act is often mentioned as a major cause of the First Anglo-Dutch War, though it was only part of a larger British policy to engage in war after the negotiations had failed. The English naval victories in 1653 (the Battles of Portland, the Gabbard and the Scheveningen) showed the supremacy of the Commonwealth navy in home waters. However, farther afield the Dutch predominated and were able to close down English commerce in the Baltic and the Mediterranean. Both countries held each other in a stifling embrace.[17]

The Treaty of Westminster (1654) ended the impasse. The Dutch failed to have the Act repealed or amended, but it seems to have had relatively little influence on their trade. The Act offered England only limited solace. It could not limit the deterioration of England's overseas trading position, except in the cases where England herself was the principal consumer, such as the Canaries wine trade and the trade in Puglian olive oil. In the trade with the West Indies, the Dutch kept up a flourishing "smuggling" trade, thanks to the preference of English planters for Dutch import goods and the better deal the Dutch offered in the sugar trade. The Dutch colony of New Netherlands offered a loophole (through intercolonial trade) wide enough to drive a shipload of Virginian tobacco through.[18]

The Navigation Acts

The 1651 Act (like other laws of the Commonwealth period) was declared void on the Restoration of Charles II, having been passed by 'usurping powers'. Parliament therefore passed new legislation. This is generally referred to as the "Navigation Acts", and (with some amendments) remained in force for nearly two centuries.

The Navigation Act 1660 (passed on 13 September) added a twist to Oliver Cromwell's Act: ships' crews had to be three-quarters English, and "enumerated" products not produced by the mother country, such as tobacco, cotton, and sugar were to be shipped from the colonies only to England or other English colonies. Ship captains were required to post a bond to ensure compliance and could recoup the funds upon arrival.[19]

The Navigation Act 1663 (also called the Act for the Encouragement of Trade, passed on 27 July) required all European goods bound for America (or other colonies) to be shipped through England first.[19] In England, the goods would be unloaded, inspected, paid duties, approved, and finally reloaded. The trade had to be carried in English vessels ("bottoms"), which included those of its colonies. Furthermore, imports of 'enumerated commodities' (such as sugar, rice, and tobacco) had to be landed and pay tax before going on to other countries. This increased the cost to the colonies, and increased the shipping time. "England" here includes Wales, though it was little involved in trade to distant parts. After the Act of Union 1707, Scotland enjoyed the same privileges.

This Act entitled colonial shipping and seamen to enjoy the full benefits of the exclusive provisions. There was no bar put in the way of colonists who might wish to trade in their own shipping with foreign plantations or European countries other than England, provided they did not violate the enumerated commodity clause.[20] "English bottoms" included vessels built in English plantations (i.e. colonies), for example in America. Further Navigation Acts were passed in 1673 to close a loophole and in 1696 to strengthen enforcement.[19]

The Acts were in full force for a short time only. After the Second Anglo-Dutch War, which ended disastrously for England, the Dutch obtained the right to ship commodities produced in their German hinterland to England as if these were Dutch goods. Even more importantly, England conceded the principle of "free ship, free good" which provided freedom from molestation by the Royal Navy of Dutch shipping on the high seas in wars in which the Dutch Republic was neutral. This more or less gave the Dutch freedom to conduct their "smuggling" unhindered as long as they were not caught red-handed in territorial waters controlled by England. These provisions were reconfirmed in the Treaty of Westminster (1674) after the Third Anglo-Dutch War.[21]

Molasses Act 1733

The 1733 Molasses Act levied heavy duties on the trade of sugar from the French West Indies to the American colonies, forcing the colonists to buy the more expensive sugar from the British West Indies instead. The law was widely flouted, but efforts by the British to prevent smuggling created hostility and contributed to the American Revolution. The Molasses Act was the first of the Sugar Acts. The Act was set to expire in 1763, but in 1764 it was renewed as the Sugar Act, which caused further unrest among the colonists.

Repeal

The Navigation Acts were repealed in 1849 under the influence of a free trade philosophy. The Navigation Acts were passed under the economic theory of mercantilism, under which wealth was to be increased by restricting colonial trade to the mother country rather than through free trade. By 1849 "a central part of British import strategy was to reduce the cost of food through cheap foreign imports and in this way to reduce the cost of maintaining labour power" (van Houten). Repealing the Navigation Acts along with the Corn Laws eventually served this purpose (towards the end of the century), but also led to the end of the formal empire in favour of an informal empire, in which private enterprises under the British banner extended trading relations and opened new markets. The East India trading company is an excellent example of this, gaining full provincial control over Bengal and its sub-regions with the 1765 Treaty of Allahabad, while being governed privately rather than directly by the British government.

Effects on Britain

The Acts caused Britain's shipping industry to develop in isolation. However, it had the advantage to English shippers of severely limiting the ability of Dutch ships to participate in the carrying trade to England. By reserving British colonial trade to British shipping, the Acts may have significantly assisted in the growth of London as a major entrepôt for American colonial wares at the expense of Dutch cities. The maintenance of a certain level of merchant shipping and of trade generally also facilitated a rapid increase in the size and quality of the Royal Navy, which eventually (after the Anglo-Dutch Alliance of 1689 limited the Dutch navy to three-fifths of the size of the English one) led to Britain becoming a global superpower, which it remained until the mid-20th century. That naval might, however, never limited Dutch trading power — because the Dutch enjoyed enough leverage over overseas markets and shipping resources (combined with a financial power that was only overtaken by Britain during the 18th century) to enable them to put enough pressure on the English to prevent them from sustaining naval campaigns long enough to wrest maritime concessions from the Dutch.[22]

Effects on American colonies

The Navigation Acts, while enriching Britain, caused resentment in the colonies and contributed to the American Revolution. The Navigation Acts required all of a colony's imports to be either bought from England or resold by English merchants in England, no matter what price could be obtained elsewhere.

Historian Robert Thomas (1965) argues that the impact of the Acts on the economies of the 13 American colonies was minimal; the cost was about ₤4 per ₤1000 of income per year. The average personal income was about ₤100 per year.[23] However Ransom (1968) says that the net burden imposed by the Acts was small in size, yet their overall impact on the shape and growth rate of the economy was significant. That was because the Acts differentially affected different groups, helping some and hurting others.[24] Walton concludes that the political friction caused by the Acts was more serious than the negative economic impact, especially since the merchants most affected were politically most active.[25] Sawers (1992) points out that the political issue is what would have been the future impact of the Acts after 1776 as the colonial economy matured and was blocked by the Acts from serious competition with British manufacturers.[26] In 1995, a random survey of 178 members of the Economic History Association found that 89 percent of economists and historians would generally agree that the "costs imposed on [American] colonists by the trade restrictions of the Navigation Acts were small."[27]

Notes

  1. ↑ V Bevan, The Development of British Immigration Law (1986) 91
  2. ↑ Israel (1997), pp. 305–309
  3. ↑ Israel (1997), p. 309
  4. ↑ Israel (1997), pp. 309–310
  5. ↑ Whaples, Robert (March 1995). "Where Is There Consensus Among American Economic Historians? The Results of a Survey on Forty Propositions". The Journal of Economic History. Cambridge University Press. 55 (1): 140. JSTOR 2123771. doi:10.1017/S0022050700040602 – via JSTOR. (Registration required (help)).
  6. ↑ 1498 - The letters patent of King Henry the Seventh Granted unto Iohn Cabot and his Three Sonnes, Lewis, Sebastian and Sancius for the the Discouerie of New and Unknowen Lands; March 5
  7. 1 2 3 Charles McLean Andrews, Colonial Self-Government, 1652-1689, p.10 (1904)
  8. 1 2 3 Chapter III - The Commercial Policy of England Toward the American Colonies: the Acts of Trade, in Emory R. Johnson, T. W. Van Metre, G. G. Huebner, D. S. Hanchett, History of Domestic and Foreign Commerce of the United States - Vol. 1, Carnegie Institution of Washington, 1915.  – via Questia (subscription required)
  9. ↑ Charles M. Andrews, British Committees, Commissions and Councils of Trade and Plantations 1622-1675, 1908
  10. ↑ 6 May 1645 Ordinance to prevent the importation by foreigners of whale oil, fins or gills, commonly called whalebone.
  11. ↑ 28 August 1649 Act prohibiting the importation of any Wines of the Growth of France, and all manufactures of wool and silk made in France.
  12. ↑ Adam Anderson, An historical and chronological deduction of the origin of commerce: from the earliest accounts. ..., Vol. 2, p.404. Published 1787
  13. ↑ August 1650: An Act for the Advancing and Regulating of the Trade of this Commonwealth.
  14. ↑ Charles M. Andrews, British Committees, Commissions and Councils of Trade and Plantations 1622-1675, Chapter II, Control of Trade and Plantations During the Interregnum, p.24 (1908)
  15. ↑ Blair Worden (1977). The Rump Parliament 1648-53. Cambridge UP. p. 299.
  16. ↑ Pestana, Carla Gardina (2004). The English Atlantic in an Age of Revolution: 1640-1661. Cambridge, Massachusetts and London, England: Harvard University Press. p. 120.
  17. ↑ Israel (1997), p. 316
  18. ↑ Israel (1997), p.310-311
  19. 1 2 3 Purvis, Thomas L. (23 April 1997). A dictionary of American history. Wiley-Blackwell. p. 278. ISBN 978-1-57718-099-9. Retrieved 26 July 2011.
  20. ↑ Craven, p. 35
  21. ↑ Israel (1997), pp. 316–317
  22. ↑ Israel (1997), pp. 317–318
  23. ↑ Thomas, Robert P. (1964). "A Quantitative Approach to the Study of the Effects of British Imperial Policy of Colonial Welfare: Some Preliminary Findings". Journal of Economic History. 25 (4): 615–638. JSTOR 2116133.
  24. ↑ Ransom, Roger L. (1968). "British Policy and Colonial Growth: Some Implications of the Burden from the Navigation Acts". Journal of Economic History. 28 (3): 427–35. JSTOR 2116467.
  25. ↑ Walton, Gary M. (1971). "The New Economic History and the Burdens of the Navigation Acts". Economic History Review. 24 (4): 533–542. doi:10.1111/j.1468-0289.1971.tb00192.x.
  26. ↑ Sawers, Larry (1992). "The Navigation Acts revisited". Economic History Review. 45 (2): 262–284. doi:10.1111/j.1468-0289.1992.tb01301.x.
  27. ↑ Whaples, Robert (March 1995). "Where Is There Consensus Among American Economic Historians? The Results of a Survey on Forty Propositions". The Journal of Economic History. Cambridge University Press. 55 (1): 140. JSTOR 2123771. doi:10.1017/S0022050700040602 – via JSTOR. (Registration required (help)).

References

Econometric studies

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