Penguin History of the United States of America (21 page)

But it was the economic consequences of the Seven Years War, above all, that were to shape the future. The usual wartime boom (produced by military purchasing) was followed by the usual post-war slump. All the former belligerents had to grapple with monster deficits left by the struggle, and to do so with very inadequate means. The governments of the old order, in fact, were in an impossible situation. As Norman Hampson has remarked, ‘It was the cost of warfare, irrespective of its success, in an age when the destructive capacity of government had got ahead of the economic productivity of societies, that subjected all the Powers to new stresses. The attempts of governments to raise more money in turn set off new social conflicts.’
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Louis XV’s efforts to solve his money problems led him on to his final and most dramatic clash with his
parlements
. The deficit incurred by the victorious power was to lead to revolution in North America.

In April 1763, two months after the Peace of Paris, Lord Bute resigned. His nerve (always feeble) had been destroyed by ill-health, by the outcry of the mob, by the abuse hurled at him as a Scotchman,
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as a royal favourite, as the architect of a pusillanimous treaty (William Pitt’s pet allegation) and above all (though of course it was not said openly) as the man who had dislodged the Walpolean Whigs from the seats of power and profit which they had enjoyed for forty years. George III was bitterly disappointed at thus losing his ‘Dearest Friend’, who, after encouraging his King to believe that, together, they would bring back the reign of public virtue, had despaired of the project and was now leaving him in the lurch;
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but he made the best of it in welcoming Bute’s chosen successor as First Lord of the Treasury (in effect, prime minister), George Grenville (1712–70). Grenville was a rising star whom George and Bute had earlier brought into power as leader of the House of Commons in succession to Pitt – which had caused Pitt, who was his brother-in-law, to disown him. The King no doubt supposed he was taking on a loyal ally. He and his unfortunate subjects were to pay dearly for this natural mistake.

Grenville was one of the most formidable politicians of his day. After Pitt’s elevation to the Lords in 1766 he dominated the Commons as no one else could. This was not because of his charm or eloquence, for he was quite without either quality: his speeches went on for ever, and a discerning
follower said that ‘he was to a proverb tedious’. But the same man noted that ‘though his eloquence charmed nobody, his argument converted’. Logical, accurate and overwhelmingly well-informed, he was always the expert. He had further virtues as an administrator, being cautious, upright and, above all, ceaselessly hard-working. He was too greedy for personal profit from office, otherwise we could say that today he would have made an excellent senior civil servant under a strong minister. As a statesman in any age he would have been a disaster, for he was an impolitician, entirely lacking that sagacity which was, for example, a leading characteristic of Dr Franklin. He was tactless, unimaginative, stubborn, void of judgement and self-satisfied as only they can be who never stop talking: they have time to hear, but not to listen to criticism. His worst trait from the King’s point of view was that, having been kept out of power for years, he was now determined to be master, and badgered his wretched sovereign ceaselessly for tokens of subjection. In the end George got rid of him, and summed him up as no better than a clerk in a counting house. But by the time of his fall he had done irreparable damage.

As a good clerk he had a horror of debt and immediately set about reducing the country’s vast liabilities. He pared cheese with the zeal and folly that England expects of the Treasury. If he lacked Mr Gladstone’s hawk’s eye for detail, he had all his recklessness in military and naval affairs, starving the army of men and the navy of money. The evil results of this policy were to become evident in the War of the American Revolution: meantime Grenville grew very popular with backbenchers hoping for reductions in the land-tax. Nothing would have pleased the minister more than to be able to oblige them; but he was well aware that at the moment it looked as if he would be obliged to raise another tax instead (for he refused to borrow). Peace has its deficits as well as war.

Grenville may not have had the imagination to realize that a militarily enfeebled England invited attack, and another expensive war; but he could not overlook one that was actually raging. In America in May 1763 the North-Western Indians went on the warpath, inspired by the Ottawa leader Pontiac; the whole frontier, from the Great Lakes far southwards, was in flames, and the British army had.to stamp them out. The Pontiac rising was just the sort of sudden crisis that the Empire might expect in the future and for which, therefore, it would have to be always ready (as it had not been in 1763) – ready with soldiers, ready financially. The French and Catholic colony of Quebec had no settled form of government and might rebel at any moment. British soldiers in America were needed to keep the older colonies in order, should they get restive. They might also be used to make the fur-traders behave, deter squatters on Indian land and put down smuggling. In the opinion of General Amherst, the British commander in North America, garrisons ought to be maintained in Newfoundland, Cape Breton, Prince Edward Island, Nova Scotia and the Floridas. ‘The Whole,’ he rightly commented, ‘is an Immense Extent.’ There were also the garrisons
of Gibraltar and Minorca to think of. Grenville estimated that the annual cost of supporting these forces would be £372,774, most of which would be spent in North America. The only questions that remained were, where and how to raise this sum?

It was easy to decide that the British taxpayer, already the most heavily mulcted in the Western world, should not be further burdened. Had Great Britain been a militarist absolute monarchy like France, her government might have calculated that the power and wealth accruing from the empire of North America would in the end richly repay the Treasury for any immediate outlays: further taxation or further borrowing might have seemed easily acceptable policies. But the achievements of the previous century and a half made such calculations impossible. Paradoxically, the comparative modernity of British institutions made adaptation to modern needs harder. In an absolute monarchy glory, power and profit (if any) redounded in the first place to the King, who could thus take the long view, if he chose, or was able to (two conditions not often fulfilled); but in a constitutional monarchy, where the purse was firmly controlled by a tax-paying gentry, it was much harder to see what would be gained by sacrificing the present to the future. It was not a case of choosing to lose America rather than spend £372,774 per annum: it had not come to that yet, though it shortly would. Rather it seemed to the English neither just nor necessary that they alone should bear all the cost of an imperial organization from which the Americans profited, in immediate terms, so much more than they (it was not Yorkshire which Pontiac threatened, after all). The notion that they ought in prudence to sacrifice their immediate rights and interests to the larger good of the Empire had no attraction for them. The taxpayers’ strike which was to bring the Empire down may be said to this extent to have begun on the eastern Atlantic shore.

Besides, the existing governmental machinery made further taxation in England almost impossible. Great Britain enjoyed unusually advanced financial arrangements (one of the reasons for her triumph over France); but, like all other states of the old order, she could never make her full economic resources available to her rulers. In 1763 she was at the end of such resources as were available. A tax on cider, determined upon by Bute, provoked ‘tumults and riots’ in the West Country.
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It incorporated an excise, a hated name since the storm which had forced Walpole to withdraw his similar scheme in 1733; more important, it seemed extraordinary, to a country newly at peace, that additional levies should be imposed. Times were bad, and for some years got worse: it was thought that some 40,000 persons were in prison for debt in 1764. Decidedly, further exactions were out of order. In the view of Grenville, and indeed of most people who thought about the matter, it was high
time that the Americans assumed a share of the burden of their own defence.

There remained the question of what duties to levy, and how. Here another matter was relevant. It had not escaped the government’s notice, during the war, that it was not only very difficult to get the colonies to pay anything directly for the war effort – Pitt had had to promise reimbursement before even Massachusetts would raise a penny – the extensive colonial trade with the enemy had probably prolonged the long and expensive war and had certainly strengthened the foe significantly. This mightily enraged William Pitt. Never mind that the New Englanders’ traffic with the French was essential to enable them to exist, let alone play their part in financing the great struggle: Pitt could only see that it gave the French the essential supplies they needed to continue to fight. It was a paradox of the kind that ministers hate to face: without New England the French in the New World must have collapsed much sooner; yet without the French the Americans could not have fought at all. Pitt, instinctive autocrat that he was, could not endure the thought that the Navigation Acts were being systematically flouted; worse, that the customs officers in the New World eked out their miserable pay by accepting fees from smugglers in lieu of full payment of the tariff (the going rate at Boston was id. a gallon of rum when the duty was notionally 6d.); he may even (while in office) have had some sympathy with Grenville’s view that the whole system was very expensive to administer and brought in next to nothing to cover the costs. He and others denounced this ‘lawless set of smugglers’ and their ‘illegal and most pernicious trade’, and the Royal Navy was ordered to enforce the Acts. It seemed a necessary step towards victory. But like other wartime measures in other wars, this decision was to have a long peacetime history. Without realizing it Pitt had diverted the mercantile system from its role as an instrument for regulating and encouraging trade – the only one in which it made any sense – to one of raising a revenue. It was an example eagerly followed by the Grenville ministry. ‘Preventing smuggling is to be a favourite object of the present administration,’ announced Thomas Whately, Grenville’s Man Friday at the Treasury. The navy was kept at work, and strict administrative measures were taken to enforce the Navigation Acts (not before time: colonial administration had grown dreadfully slack). And the Acts were now definitely to be exploited for raising a revenue, the money gained to be spent on the imperial establishment in North America. To increase the take, new articles of trade were enumerated.

It was estimated that this new policy, embodied in the so-called Sugar Act (1764), would bring in some £45,000 per annum – a good return, but not nearly enough to cover the costs of empire. To fill the gap Grenville took up a measure that had often been proposed – a colonial stamp duty. Legal documents, such as wills and conveyances, could be required, to be valid, to carry a stamp,
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for which the party involved would have to pay
the government. Such a duty had been imposed in England for years and had proved a dependable, cheap and easy source of revenue. In America too it would, no doubt, prove, Grenville thought, ‘equal, extensive, not burdensome, likely to yield a considerable revenue, and collected without a great number of officers’. Accordingly, in March 1764, at the same time as he announced his other colonial measures, Grenville proposed, and carried, a resolution in the House of Commons that a stamp tax might be imposed by Parliament on the colonies; and he explicitly asserted, without being challenged, that Parliament had the right thus directly to tax the colonists. He was unambiguous: ‘Mr Grenville strongly urg’d not only the power but the right of Parliament to tax the colonies, and hop’d in God’s Name as his expression was that none would dare dispute their sovereignty’; he added that if a single man doubted Parliament’s right, ‘he would take the sense of the House, having heard without doors hints of this nature dropped’. No one responded.

This was the first great error which brought on the American crisis. It was even more tragic than fatuous. Whom the gods wish to destroy they first make unsound of judgement. Grenville had clearly noted – how could he not? – the restiveness of the colonies under his policies and the criticisms of his course that were already current in England ‘without doors’. Instead of taking warning, he decided to brazen it out – a reaction that was to be all-too-universal among the English in the coming years. To the colonists’ cry, just beginning to be heard, that they might not be taxed by a Parliament in which they were not represented, he would answer with a Stamp Act, which the faithful Whately hailed as ‘a great measure… on account of the important point it establishes, the right of Parliament to lay an internal tax upon the colonies’. Smugly insular, administrative and self-assured, incapable of questioning his own rectitude, he next committed another mistake. His stamp duty resolution, by committing Parliament to an assertion of its right to tax the colonists, made it difficult, if not impossible, for that proud and touchy institution even to consider changing its mind if challenged; while by deferring the introduction of a bill for a year (that is, until 1765) he gave himself time to draw up a good measure based on reliable information about colonial conditions, in which his administrative abilities could display themselves to advantage. It was a clever scheme, but unfortunately open to misconstruction. Jasper Mauduit, the agent in England of Massachusetts, misunderstood it. He wrote home to tell the assembly that ‘the stamp duty you will see, is deferr’d till next year. I mean the actual laying it: Mr Grenville being willing to give the provinces their option to raise that or some equivalent tax. Desirous as he express’d himself to consult the ease, the quiet, and the goodwill of the colonies.’ Mauduit’s mistake is understandable: Grenville’s wisest course would have been to behave in just this way. Some of the colonies (notably Massachusetts) were willing at least to discuss alternative means of raising the needed monies: Pennsylvania’s agent, Dr Franklin, thought they might meet in a ‘general
Congress’ for the purpose. (Presumably he was hoping to revive his Albany Plan.) But nothing could be done without a clear and official statement from Grenville of how much money he wanted. No such statement was ever forthcoming. Grenville had made up his mind to have a stamp tax.