Sugar Act

The Molasses Act 1733 (6 Geo. 2. c. 13) was passed by Parliament largely at the insistence of large plantation owners in the British West Indies. Molasses from French, Dutch, and Spanish West Indian possessions was inexpensive. Producers of sugar from the British West Indies priced sugar much higher than their competitors, and they had no need for the large quantities of lumber, fish, and other items offered by the colonies in exchange. Sometimes colonists would pay Molasses Act taxes because they were rather low depending on where they resided and how much money they had. In the first part of the 18th century, the British West Indies were Great Britain's most important trading partner, so Parliament was attentive to their requests. However, rather than acceding to their demands to prohibit the colonies from trading with the non-British islands, Parliament passed a prohibitively high tax on the colonies on molasses imported from those islands. If actually collected, the tax would have effectively closed that source to New England and destroyed much of the rum industry. Instead, smuggling, bribery or intimidation of customs officials effectively nullified the law. During the Seven Years' War, known in Colonial America as the French and Indian War, the British government substantially increased the national debt to pay for the war. In February 1763, as the war ended, the ministry headed by John Stuart, the Earl of Bute, decided to maintain a standing army of ten thousand British regular troops in the colonies. Shortly thereafter, George Grenville replaced Bute. Grenville supported his predecessor's policy, even more so after the outbreak of Pontiac's War in May 1763. Grenville faced the problem of not only paying for these troops but servicing the national debt. The debt grew from £75,000,000 before the war to £122,600,000 in January 1763, and almost £130,000,000 by the beginning of 1764. George Grenville did not expect the colonies to contribute to the interest or the retirement of the debt, but he did expect the Americans to pay a portion of the expenses for colonial defense. Estimating the expenses of maintaining an army in the Continental colonies and the West Indies to be approximately £200,000 annually, Grenville devised a revenue-raising program that would raise an estimated £79,000 per year. ==Passage==

The Molasses Act 1733 (6 Geo. 2. c. 13) was set to expire in 1763. The Commissioners of Customs anticipated greater demand for both molasses and rum as a result of the end of the war and the acquisition of Canada. They believed that the increased demand would make a sharply reduced rate both affordable and collectible. When passed by Parliament, the new Sugar Act 1764 halved the previous tax on molasses. In addition to promising stricter enforcement, the language of the bill made it clear that the purpose of the legislation was not to simply regulate the trade (as the Molasses Act had attempted to do by effectively closing the legal trade to non-British suppliers) but to raise revenue. American historian Fred Anderson wrote that the purpose of the Act was "to resolve the problems of finance and control that plagued the postwar empire". To do this "three kinds of measures" were implemented – "those intended to make customs enforcement more effective, those that placed new duties on items widely consumed in America, and those that adjusted old rates in such a way as to maximize revenues." ==Effect on the American colonies==

The act was passed by Parliament on 5 April 1764, New England ports especially suffered economic losses from the Sugar Act as the stricter enforcement made smuggling molasses more dangerous and risky. Also they argued that the profit margin on rum was too small to support any tax on molasses. Forced to increase their prices, many colonists feared being priced out of the market. The British West Indies, on the other hand, now had unrestricted exports. With supply of molasses well exceeding demand, the islands prospered with their reduced expenses while New England ports saw revenue from their rum exports decrease. Additionally, the West Indies had been the primary colonial source for hard currency, or specie, and as the reserves of specie were depleted the soundness of colonial currency was threatened. Two prime movers behind the protests against the Sugar Act were Samuel Adams and James Otis, both of Massachusetts. In May 1764 Samuel Adams drafted a report on the Sugar Act for the Massachusetts assembly, in which he denounced the act as an infringement of the rights of the colonists as British subjects: In August 1764, fifty Boston merchants agreed to stop purchasing British luxury imports, and in both Boston and New York City there were movements to increase colonial manufacturing. There were sporadic outbreaks of violence, most notably in Rhode Island. Overall, however, there was not an immediate high level of protest over the Sugar Act in either New England or the rest of the colonies. That would begin in the later part of the next year when the Stamp Act 1765 (5 Geo. 3. c. 12) was passed. The act was replaced with the Revenue Act 1766 (6 Geo. 3. c. 52), which reduced the tax to one penny per gallon on molasses imports, British or foreign. This occurred around the same time that the Stamp Act 1765 was repealed. The whole act was repealed by section 1 of, and the schedule to, the Statute Law Revision Act 1867 (30 & 31 Vict. c. 59), which came into force on 15 July 1867. ==See also==