What were the Currency Act and the Sugar Act?

Sugar nippers

Sugar nippers, courtesy of Jane Rees

The British government moved quickly at the end of the long war with France to regain control of its finances. In April 1763, George Grenville replaced Lord Bute as the Prime Minister. Grenville, a former First Lord of the Treasury, wanted the American colonies to contribute to the costs of maintaining a British Army in North America after the war. Grenville saw this as only fair since the taxes on the British people had increased dramatically during the war. One of the first measures passed to raise revenue from the American colonies was a tax on sugar. Grenville designed the American Revenue Act of l764, commonly known as the Sugar Act, to replace the Sugar and Molasses Act of 1733 which was to expire. The earlier act had imposed a tax of six pence per gallon on molasses which was imported from the French West Indies or the Dutch West Indies. Molasses was an important ingredient in the manufacture of rum which was one of New England’s most important businesses. The Sugar and Molasses Act of 1733 was not planned as a revenue bill but as a means to regulate trade. It was intended to encourage trade with the British West Indies at the expense of the French and Dutch West Indies. Due to wide-spread smuggling and bribery, the tax on molasses from the French and Dutch West Indies was rarely collected. On April 5, 1764, the British Parliament passed the American Revenue Act of 1764. While the new act cut the tax on molasses in half, Grenville anticipated that more aggressive collection of the duties would bring in more money. The act further empowered customs officials to have all violations of the law tried in Vice Admiralty courts rather than general courts. Vice Admiralty courts had jurisdiction over maritime issues, while general courts handled felony cases in the colonies. Vice Admiralty courts, unlike general courts, did not use juries, and Grenville recognized that colonial juries were often very sympathetic to popular local merchants involved in smuggling. The Sugar Act would meet with major resistance in New England where the manufacture of rum from molasses had become a major industry.

Another economic measure passed by Parliament which affected the colonies was the Currency Act of 1764 which prohibited the American colonies from giving bills of credit the same status as legal tender. Bills of credit was a local solution to the lack of silver and gold coin in the colonies. These instruments were supported by the credit of the government which issued them and not by gold and silver specie. The Currency Act stopped colonial merchants from paying their British creditors in devalued paper money issued by colonial governments. Many in the colonies blamed the act for causing widespread economic failure after British merchants rejected payment for their goods in devalued bills of credit and demanded to be paid in hard currency. While many colonists blamed the Currency Act for causing the recession at the war’s end, there were few wide-spread protests over this measure in the colonies. Great Britain had forbidden the printing of colonial currency in certain colonies in earlier years and many viewed the act as an extension of those earlier currency laws.

Complaints against the Sugar Act were also fairly low-key though there was a great deal of grumbling among merchants in New England. Samuel Adams, a popular leader in Boston’s rowdy political clubs, organized some of the earliest resistance to the tax and urged the Massachusetts General Assembly to go on record opposing the tax. Some Boston merchants agreed to boycott the purchase of British luxury goods in retaliation. This step began nonimportation, or the boycott of British goods, as a tool of colonial protest. A five-member Committee of Correspondence was appointed in June 1764 in Massachusetts to coordinate action and exchange information with other colonies. These groups, organized for the purpose of coordinating written communication with other colonies, proved important in disseminating information about British activities and coordinating common protests. Possibly, the protests over the Sugar Tax were low-key as many in the colonies saw the new Sugar Act as simply an extension of the earlier Molasses Act of 1733 and not as a means to raise revenue. More probably, many merchants thought they would be able to circumvent the payment of this tax as they had avoided the earlier Molasses Act by bribery, intimation, and stealth. They did not appreciate Grenville’s plans to stop smuggling and enforce trade laws.