Taxation in Colonial America

Taxation in Colonial America

Copyright Date: 2008
Pages: 968
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    Taxation in Colonial America
    Book Description:

    Taxation in Colonial Americaexamines life in the thirteen original American colonies through the revealing lens of the taxes levied on and by the colonists. Spanning the turbulent years from the founding of the Jamestown settlement to the outbreak of the American Revolution, Alvin Rabushka provides the definitive history of taxation in the colonial era, and sets it against the backdrop of enormous economic, political, and social upheaval in the colonies and Europe.

    Rabushka shows how the colonists strove to minimize, avoid, and evade British and local taxation, and how they used tax incentives to foster settlement. He describes the systems of public finance they created to reduce taxation, and reveals how they gained control over taxes through elected representatives in colonial legislatures. Rabushka takes a comprehensive look at the external taxes imposed on the colonists by Britain, the Netherlands, and Sweden, as well as internal direct taxes like poll and income taxes. He examines indirect taxes like duties and tonnage fees, as well as county and town taxes, church and education taxes, bounties, and other charges. He links the types and amounts of taxes with the means of payment--be it gold coins, agricultural commodities, wampum, or furs--and he compares tax systems and burdens among the colonies and with Britain.

    This book brings the colonial period to life in all its rich complexity, and shows how colonial attitudes toward taxation offer a unique window into the causes of the revolution.

    eISBN: 978-1-4008-2870-8
    Subjects: History, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
    (pp. xi-xvi)
    (pp. xvii-xxii)
    (pp. 1-18)

    On may 13, 1607, twenty-seven-year-old Captain John Smith, leading theSusan Constant, theGodspeed, and theDiscovery, made landfall in Jamestown, Virginia. The London Company, sponsors of the voyage, had been granted a charter by King James I of England to establish a colony in the part of America called Virginia. To foster its development, James exempted the company from all taxes for seven years on all goods, chattel, armor, munitions, and furniture exported from England to the colony. A second charter of 1609 exempted the company’s employees and agents from all customs and taxes in Virginia for twenty-one years....

  6. PART ONE Founding the American Colonies
    • [PART ONE Introduction]
      (pp. 19-22)

      All countries and territories have constitutions, written or unwritten, formal or informal, explicit or implicit. A constitution is a system of fundamental laws and principles that prescribes the nature, functions, and limits of a government or another institution. In most countries, the constitution consists of a single document or a set of documents.

      The United Kingdom is an example of a country that does not have a formal written constitution that can be found in a single document or set of documents. The British system of government and laws has evolved on the basis of such documents as the Magna...

      (pp. 23-41)

      Beginning in the fifteenth century, dreams of gold, silver, spices, and other trading opportunities prompted European adventurers to explore and claim vast tracts of land in Africa, Asia, and the Americas for their sovereigns and hefty rewards for themselves. The Portuguese, Spanish, French, Dutch, Swedes, Danes, and English engaged in the world’s greatest land rush. The Portuguese and Spanish divided up most of Latin America.¹ The French seized portions of Canada and several Caribbean islands. The Swedes and Danes occupied parts of Delaware and several Caribbean islands. Dutchmen briefly ruled New York and settled two groups of Caribbean islands. The...

      (pp. 42-55)

      During the middle third of the seventeenth century, the seeds of five new American colonies took root. All were proprietary ventures. One began as migrants from Virginia sought new land in what became North Carolina. The founding of these colonies rested on charters granted by the English Crown and, in the case of Delaware, the Swedish Crown.

      On june 10, 1632, King Charles I granted the Charter of Maryland to Cecilius Calvert, Baron of Baltimore and son of George Calvert, the first Baron of Baltimore, “that he may transport, by his own industry and expense, a numerous colony of the...

      (pp. 56-63)

      The last two of the original thirteen colonies to receive charters were Pennsylvania in 1681 and Georgia in 1732.¹ Both were proprietary ventures with markedly different objectives. Pennsylvania was to become home to “a holy experiment” to Quakers and other religious dissenters who felt persecuted in the British isles. Georgia was to give debtors new life as freemen in the New World.²

      On march 4, 1681, Charles II granted thirty-six-year-old William Penn a “Charter for the Province of Pennsylvania.”³ The territory encompassed land lying north of Maryland, south of New York, and extending five longitudinal degrees westward from the Delaware...

    • APPENDIX List of Tax Incentives in Founding and Settlement of the American Colonies
      (pp. 64-64)
  7. PART TWO Turmoil in England—Growth in the Colonies, 1607–1688
    • [PART TWO Introduction]
      (pp. 65-70)

      Part ii traces the history of taxation of the American colonies from the founding of the Jamestown settlement in Virginia in 1607 to the Glorious Revolution of 1688 in England. The seventeenth century witnessed dramatic change in England. The English constitution, its system of government and politics, was transformed from administration by the authority and prerogative of the Crown and Privy Council to supremacy of Parliament in military and fiscal matters. The seventeenth century witnessed the beheading of King Charles I, the English Civil War, the Long Parliament under the control of the Cromwells, the Restoration of Charles II, and...

    • CHAPTER 4 Constitutional Government and Politics in England, 1607–1688
      (pp. 71-91)

      In 1607 the English constitution and government consisted of the Crown, the Privy Council, an executive and advisory body of high officeholders, and two houses of Parliament, a hereditary House of Lords and an elected House of Commons. By 1688, the supremacy of Parliament was firmly established in principle, with the Commons taking the lead in the most important matter of taxation. Nevertheless, except for the period of Puritan rule under Oliver Cromwell and his son in mid-century, Parliament generally accorded primary responsibility for the American colonies to the Crown, the Privy Council, and the various executive departments of government....

    • CHAPTER 5 Imperial Governance: Constitutional and Commercial Policy, 1607–1688
      (pp. 92-117)

      The constitutions of the American colonies, which stipulated governance, the rights of settlers, security arrangements, land grants, relations with the mother country, and other institutions and policies, derived initially from English royal authority.¹ All lands in America discovered by English subjects became possessions of the Crown, which had the right to give portions of its territories to persons and organizations of its choice to be administered in accordance with royal decrees. Crown charters granted to corporations, proprietors, and settlers who broke off from Massachusetts to establish their own communities in Connecticut and Rhode Island, or the application of direct royal...

    • CHAPTER 6 The Colonial Constitution, 1607–1688
      (pp. 118-143)

      The development of the colonial constitution from the founding of the Virginia colony in 1607 to the Glorious Revolution of 1688 was a period of gradual, but only partial, consolidation of crown control over a disparate collection of corporate, proprietary, self-settled, and royal colonies. As the period came to a close, many in the English government wanted to impose a standard system of royal administration over its American colonies. To that purpose, the Crown endeavored to revoke the charters of the corporate and proprietary colonies, especially in New England, or secure their surrender. The achievement of royal government in most...

    • CHAPTER 7 Taxation of the New England Colonies, 1620–1688
      (pp. 144-198)

      The first wave of colonists to settle Massachusetts was granted exemption from subsidies and customs in New England for seven years and preferential treatment on goods shipped to and from England and its dominions for twenty-one years. These preferences were also enjoyed by disgruntled migrants who left Massachusetts and founded Connecticut and Rhode Island, as well as the inhabitants of the coastal New Hampshire settlements who came under the jurisdiction of Massachusetts until New Hampshire became a royal colony in 1680. Nonetheless, some taxation was required for these colonial governments to pay public salaries, build some infrastructure, and provide some...

    • CHAPTER 8 Taxation of the Middle Colonies, 1624–1688
      (pp. 199-227)

      The middle colonies of New Netherland, which became New York, New Sweden, later Delaware, New Jersey, and Pennsylvania all struggled to finance the cost of colonial administration, not to mention generating profits for their founding investors. Apart from Pennsylvania, each was partially hamstrung by tax exemptions contained in its founding charter, exemptions granted by the Dutch and Swedish companies to lure settlers to New Netherland and New Sweden, and the New Jersey proprietors’ waiving of quitrents for six years. The result was to be expected. The directors and governors of the middle colonies struggled to make ends meet.

      The middle...

    • CHAPTER 9 Taxation of the Southern Plantation Colonies, 1607–1688
      (pp. 228-266)

      The systems of taxation of Virginia, Maryland, and the Carolinas differed substantially from those of the New England and middle colonies. The southern colonies were overwhelmingly rural, settled on widely dispersed plantations, and, save North Carolina, dependent on a single crop. Unlike the freemen in the other colonies, they relied on indentured labor during the seventeenth century, gradually switching to slave labor. The only towns of any magnitude were Baltimore and Charleston, which were scarcely more than villages. Nor were Virginia and Maryland starved for revenue thanks to taxes on tobacco, which also supplied the English government with considerable customs...

    • APPENDIX Taxation in the American Colonies, 1688
      (pp. 267-270)
  8. PART THREE War in Europe—Opportunity in the Colonies, 1688–1714
    • [PART THREE Introduction]
      (pp. 271-274)

      Part iii traces the history of taxation of the American colonies from the beginning of the Glorious Revolution of 1688 to the end of the Stuart Dynasty. The revolution brought William and Mary of the Netherlands’ House of Orange to England. Their installation as king and queen of England entailed a bargain with Parliament that made it preeminent in matters of law, finance, and, when it chose, colonial regulation. Between 1688 and 1714, when Queen Anne died without a surviving heir, England fought King William’s War during 1689–97 (the war in Ireland and with France, known in Europe as...

    • CHAPTER 10 Constitutional Government and Politics in England, 1688–1714
      (pp. 275-300)

      With the Glorious Revolution, Parliament became supreme in matters of law, finance, and control over the military. The Crown, Privy Council, and other officers of state still managed or directed the daily affairs of English and colonial administration, but they were strictly subject to the laws and appropriations of Parliament. The Crown still chose its ministers, but Parliament could pressure it to remove and replace them with more favorable persons. Political parties, more properly factions, of Whigs and Tories began to supplant families and court favorites as leaders in Parliament.

      Parliamentary supremacy was important in colonial America for two main...

    • CHAPTER 11 Imperial Governance: Constitutional and Commercial Policy, 1688–1714
      (pp. 301-324)

      The glorious Revolution did not alter the ideas that underpinned England’s imperial system. The core beliefs of mercantilism—a favorable balance of trade, accumulation of specie, monopolizing markets in the colonies for English exports, expansion of shipbuilding, and access to naval stores and other commodities England did not produce—remained the accepted doctrine of English commercial policy. But there were flaws in the trade acts and gaps in the structure of their enforcement. To remedy these problems, Parliament moved to strengthen England’s commercial empire and ensure the collection of duty. These tasks grew in importance with the rising expense of...

    • CHAPTER 12 The Colonial Constitution, 1688–1714
      (pp. 325-354)

      During the reigns of William and Anne, the British government rewrote the constitutions of several American colonies, notably those of Massachusetts, Maryland, and the Jerseys; Pennsylvania rewrote its own.

      Massachusetts had long been a primary target of English reformers. Its Puritan theocracy was an affront to Anglican England. Its lax enforcement of the Navigation Acts, indeed its complicity in illicit trade, challenged England’s monopoly of imperial commerce. When news of William’s overthrow of James II reached New England, Massachusetts took matters into its own hands. On April 18, 1689, several thousand colonists seized and imprisoned Governor Edmund Andros and other...

    • CHAPTER 13 Taxation of the New England Colonies, 1688–1714
      (pp. 355-398)

      By 1688 the basic structure of New England taxation was largely in place. The principal sources of provincial revenue were the poll and property taxes, collected in fractions or multiples of the country rate, with small fractions assessed for counties, towns, and churches. These were augmented with retail excises and duty on alcoholic beverages, merchandise, and provisions, tonnage, and labor contributions. Normal peacetime taxes ranged between one and two rates, resulting in very low tax burdens.

      Payment was typically in commodities fixed at legislated rates, with discounts up to a third or more for coin. An important development occurred in...

    • CHAPTER 14 Taxation of the Middle Colonies, 1688–1714
      (pp. 399-415)

      New york was restored as a royal province in 1691. Although it developed factious politics in the aftermath of Jacob Leisler’s execution, the legislature sustained a regular system of revenue that proved adequate until military requirements during Queen Anne’s War led to the issue of paper money. Pennsylvania and Delaware, which established a separate legislature in 1704 but retained a common governor with Pennsylvania, barely developed a fiscal regime. The Jerseys were chaotic until their reunification under royal rule in 1702, and opposition to Crown-appointed governors stalled the establishment of a fiscal regime until the second decade of the eighteenth...

    • CHAPTER 15 Taxation of the Southern Plantation Colonies, 1688–1714
      (pp. 416-436)

      The impact of the Glorious Revolution differed among the southern plantation colonies. Virginia remained on a stable path, Lord Baltimore’s proprietary of Maryland was seized by the Crown, and the two Carolinas remained unsettled until their surrender to the Crown in 1729. The power of Governor Philip Ludwell of Carolina to appoint a deputy governor for North Carolina in 1691 is considered the beginning of the separation of North and South Carolina. The lengthy distance that representatives of North Carolina would have to travel to attend a single Carolina legislature in Charles Town (hereafter Charleston) required separate assembles for each...

    • APPENDIX Tax Burdens in the American Colonies, 1714
      (pp. 437-440)
  9. PART FOUR Salutary Neglect in the Colonies, 1714–1739
    • CHAPTER 16 Imperial Governance and the Colonial Constitution, 1714–1739
      (pp. 445-453)

      In contrast with the chronic warfare that dominated the reigns of William and Mary and Anne, the next quarter century under George I (1714–27) and George II (1727–60) was one of comparative peace. In succeeding Queen Anne, George Ludwig, a minor German princeling who could not speak English, began the reign of the House of Hanover. George was a great-grandson of the marriage of a daughter of James I and an elector of Hanover a century before. To the benefit of the emerging Whig party, George was dependent on his ministers, to whom he left the business of...

    • CHAPTER 17 Taxation of the New England Colonies, 1714–1739
      (pp. 454-489)

      During the era of salutary neglect, reproduction and immigration more than doubled the population of New England from 137,414 to 282,442, with Negro slaves numbering a modest 3 percent. As the period began, the tax system in New England was well developed, consisting of poll and property taxes, duties and excises, and modest parish, education, and county taxes. Imperial taxes were of little importance as New England shipped few enumerated products to Britain. The Molasses Act of 1733 collected little money and died almost aborning. Bills of credit became the primary means of financing government expenditure, with taxes assessed for...

    • CHAPTER 18 Taxation of the Middle Colonies, 1714–1739
      (pp. 490-518)

      Salutary neglect served the middle colonies well. Their population more than doubled from 82,989 to 213,189 and their economies continued to grow and diversify.

      Paper money played an increasingly important role in supplying a medium of exchange and dictating the scope and composition of taxation during the era of salutary neglect.¹ Outside New York, interest on bills of credit became the largest source of revenue in the middle colonies. Paper currency of the middle colonies largely sustained its value, rising sharply against New England and Carolina issues, depreciating only modestly against silver and sterling. (See table 17.A.)

      Recall the early...

    • CHAPTER 19 Taxation of the Southern Plantation Colonies, 1714–1739
      (pp. 519-555)

      The southern plantation colonies, increased to five with the founding of Georgia in 1732, developed along a completely different track from that of New England and the middle colonies—that of increasing reliance on slave labor. Between 1714 and 1739, the total population rose from 163,000 to 387,177. By 1739 the Negro population constituted about a third of this number.

      The growth of plantations is reflected in the export of tobacco and rice. Tobacco exports of 29,248,000 pounds in 1714 from Virginia and Maryland to England fell sharply to 17,783,000 in 1715, recovered to 28,305,000 in 1716, and thereafter rose...

    • APPENDIX Taxes in the American Colonies, 1739
      (pp. 556-558)
  10. PART FIVE War, Debt, Money, and Taxes:: Prelude to Imperial Intervention, 1739–1763
    • CHAPTER 20 Imperial Governance and the Colonial Constitution, 1739–1763
      (pp. 563-574)

      A quarter century of peace and salutary neglect came to an end on October 23, 1739, when Prime Minister Robert Walpole declared war on Spain. Twenty-four years later, decades of war with France were temporarily suspended with the signing of the Treaty of Paris on February 10, 1763. War preoccupied the last two decades of the reign of King George II (1727–60) and the first three years of George III (1760–1820). During this period, British monarchs lost what remaining power they had enjoyed—that of picking their ministers—to Whig personalities who could command a majority in the...

    • CHAPTER 21 Taxation of the New England Colonies, 1739–1763
      (pp. 575-623)

      The population of New England continued its rapid growth. Having doubled during the era of salutary neglect, it grew another 64 percent between 1739 and 1763, from 282,442 to 462,678. Rising population put increased pressure on the limited land available for settlement and farming in Massachusetts, Connecticut, and Rhode Island. Available acreage per family in Connecticut had steadily declined from 486 acres in 1680 to 208 in 1740. It fell further to 131 by 1760.¹ The relative shortage of land resulted in a shift from land-extensive grain farming to more land-intensive meat and dairy production. By 1750 all of Connecticut’s...

    • CHAPTER 22 Taxation of the Middle Colonies, 1739–1763
      (pp. 624-656)

      The opportunity to acquire land in Pennsylvania and New York resulted in a faster rise in population of those colonies compared with New England’s more densely populated limited land area. During 1739–63 the inhabitants of the middle colonies, including New Jersey and Delaware, increased 118.7 percent, from 213,189 to 466,304. Pennsylvania led the way, reaching 200,000. Philadelphia became the leading center of commerce and finance in the colonies, growing from 13,000 in 1743 to 23,750 in 1760, becoming the third largest commercial city in the British Empire surpassed only by London and Bristol, with New York City expanding from...

    • CHAPTER 23 Taxation of the Southern Plantation Colonies, 1739–1763
      (pp. 657-712)

      The population of the southern plantation colonies more than doubled from 387,177 in 1739 to 799,591 in 1763. The Negro population increased from a third to just over 40 percent, signifying the central role of the plantation economy in the production of tobacco, indigo, rice, naval stores, and other primary products for export.

      The southern colonies were active in the War of Jenkins’ Ear but only somewhat in King George’s War, with New England and New York bearing the brunt of the expeditions to Canada. When the French and Indian War broke out in 1754, Virginia was at the forefront...

  11. PART SIX An American Tax, 1763–1775
    • [PART SIX Introduction]
      (pp. 713-716)

      The treaty of paris, signed on February 10, 1763, temporarily concluded hostilities between Britain and France. France surrendered all its possessions in North America east of the Mississippi River save the two small islands of St. Pierre and Miquelon located a few miles off the southeast coast of Newfoundland. From Spain Britain received East and West Florida, which became the fourteenth and fifteenth American colonies, but they were returned to Spain at the conclusion of the American Revolution. Britain secured several Caribbean islands, giving it command of the sea lanes in the West Indies, leaving France with the sugar-producing islands...

    • CHAPTER 24 British Politics, Imperial Governance, and Colonial Government and Politics, 1763–1775
      (pp. 717-748)

      The twelve years between the signing of the Treaty of Paris on February 10, 1763, and the midnight ride of Paul Revere on April 18, 1775, were riven with rising tension and anger between the colonists and their British overlords. During these tumultuous years the British government was in a state of flux, a revolving door of six ministries in the short span of 1762–70. Political infighting between Whig groups disrupted the conduct of colonial policy. Debt- and tax-weary Britons came to believe that their prosperous American colonies should bear some share of the cost of imperial protection, in...

    • CHAPTER 25 British Taxation of the American Colonies, 1763–1775
      (pp. 749-765)

      Chapter 24 set forth the specific taxes imposed by Parliament on the American colonies. Chapter 25 reviews a new currency restriction imposed on the colonies and then quantifies the several taxes imposed by Parliament. It examines the costs and success of British regulatory and revenue measures against the benefits afforded by membership in the British Empire, which included Parliament’s grants of bounties on colonial products imported into Great Britain, drawbacks on products exported from Britain to America, bounties on British exports to the colonies, credit facilities and marketing arrangements supplied by British merchants, and Royal Navy protection.

      Public and private...

    • CHAPTER 26 Taxation of the New England Colonies, 1763–1775
      (pp. 766-796)

      New england was largely settled in 1763, with a population numbering 462,678. Over the next dozen years, it grew to 577,928, a modest increase of 24.9 percent compared with previous periods. New England remained largely rural, with a sprinkling of several hundred small towns. The only city of any real size was Boston. The 1764 census of Massachusetts counted 15,520 Bostonians, which increased to about 16,000 on the eve of the Revolution, just over 6 percent of the provincial population.¹ The next largest town was Marblehead with 4,954 residents, followed by Salem and Dartmouth, each with over 4,000. Most had...

    • CHAPTER 27 Taxation of the Middle Colonies, 1763–1775
      (pp. 797-825)

      The middle colonies continued their population growth. Between 1763 and 1775, New York expanded from 130,000 to surpass 186,000, a rise of 43 percent in the short span of twelve years. Pennsylvania’s population increased by 41 percent, from just over 200,000 to 283,000. Delaware and New Jersey grew at much slower rates, the former from 34,000 to 40,000, an increase of about 18 percent, and New Jersey from 100,000 to 128,000, an increase of 28 percent. The trade of all three was funneled through Philadelphia, making it the preeminent economic city in the middle colonies.

      Parliament passed the Currency Act...

    • CHAPTER 28 Taxation of the Southern Plantation Colonies, 1763–1775
      (pp. 826-864)

      The dominant feature of the southern economy remained the production of a handful of crops, tobacco, rice, and indigo, that rested on the backbreaking work of slaves. By 1775, the Negro populations of the five southern colonies surpassed 73,000 in Maryland, 204,000 in Virginia, 80,000 in North Carolina, 86,000 in South Carolina, and 15,000 in Georgia. In order, Negroes constituted 32, 41, 34, 56, and 40 percent, respectively, of the population of the southern colonies. Virginia and South Carolina were most heavily dependent on slave labor, and even Georgia, which began its trusteeship period with a ban on imported slaves,...

    (pp. 865-870)

    From the first settlement at Jamestown to the midnight ride of Paul Revere, the British colonies in North America grew from a few hundred adventurous souls, most of whom failed to survive the first winter in the New World, to nearly two million free colonists whose leaders chose to rebel against the strongest military power in the world. Many British subjects must have sensed a promising future in the New World. Despite the prospect of civil war between Britons and Americans, the largest numerical migration from the British Isles to the American colonies during any five-year period of the colonial...

    (pp. 871-890)
    (pp. 891-914)
  15. INDEX
    (pp. 915-946)