The Sugar Act of 1764 levied taxes on imports to British colonies in North America. In doing so, the act marked a change in British colonial policy—an empire-shaking change—from commercial and trade regulation only, to taxation by Parliament. There was an earlier Sugar Act that established a foundation for the act of 1764.
The First Sugar Act (Molasses Act): 1733
The backstory begins early in the eighteenth century when British sugar colonies—islands in the West Indies—appealed to Parliament for help against competing French and Dutch sugar islands. In addition to sugar, all these islands exported molasses, a by-product of sugar production. Molasses was essential to the northern American colonies, being distilled there into rum, an export necessary to obtain specie for further trade. The American colonies imported molasses from all the sugar islands, most often in exchange for fish, lumber, horses, and other supplies necessary for the livelihood of the largely single-crop plantations. The British islands, not faring well against the competition, resented that the continental colonies supplied the French and Dutch with these indispensable provisions. The sugar planters complained that the American colonies should not be allowed to import foreign molasses. The Americans claimed good reason for doing so: the trade was necessary since the British islands could not produce sufficient molasses to meet the American needs.
Securing and Encouraging the Trade
In 1731 and 1732, friends of the sugar islands put forth bills in Parliament to prohibit the importation of foreign molasses into the North American colonies. Each bill passed the House of Commons, but failed in the House of Lords (as unduly restricting trade). In 1733, the advocates of prohibition adopted a different strategy: a bill to place a high duty on importation of foreign molasses, a duty that would effectively serve as a prohibition. By proposing a bill that levied duties (on other items in addition to molasses), they expected the House of Lords to defer to the House of Commons.
The new strategy resulted in passage of the Molasses Act of 1733 (6 George II c. 13): An Act for the better Securing and Encouraging the Trade of his Majesty’s Sugar Colonies in America. (This is the same title as the two earlier bills, exposing the essential intent of the act: prohibition, not revenue.) The act placed a six pence per gallon duty on the importation of foreign molasses to North America. Supporting the sham of a money bill, the preamble has words of art usually associated with taxation: “have given and granted unto your Majesty.” Debate on the bill further muddied the water. The sponsor of the bill, when challenged about its intent, said, “The duties proposed would not prove an absolute prohibition, but [they are intended] as something that should come very near it.”
Here is the molasses duty:
That from and after [December 25, 1733] there shall be raised, levied, collected and paid . . . upon all [foreign] molasses . . . the sum of sixpence . . . for every gallon thereof.
The high duty never did much to restrict American commerce, the Americans quietly smuggling the molasses they needed. The strategy was successful since the British, during a long period later called “wise and salutary neglect,” made little effort to enforce the act.
Revenue from America: Enforce and Renew
In 1763, Great Britain was deeply in debt as a result of the Seven Year’s War, and at the same time saw a need to maintain an expensive military force in North America to control the new territory acquired as a consequence of victory in that war. British leaders decided to draw revenue from the apparently wealthy American colonies: first, enforce payment of the duties of the Molasses Act; second, in 1764, renew the about-to-expire act and reduce the molasses duty to a level no longer prohibitory—hence encouraging legal duty-paid importation of molasses in preference to continued smuggling.
Enforcement began with Secretary of State Egremont admonishing the colonial governors in a July circular letter “to put an effectual Stop to the clandestine Running of Goods into any place within your Jurisdiction.” The Board of Trade also got involved, sending instructions to the governors in October.
His Majesty has commanded us to require and enjoin you, in the strictest manner,to make the suppression of the clandestine and prohibited trade with foreign nations, and the improvement of the revenue, the constant and immediate objects of your care.
Governor Bernard of Massachusetts responded on December 26, 1763. He posed a perceptive question about the Molasses Act.
This Act has been a perpetual stumbling-block to the Custom-house officers; and it will be most agreeable to them to have it in any ways removed. The question seems to be, whether it should be an Act of Prohibition, or an Act of Revenue.
Colonial assemblies gave direction such as the following to their agents in London.
The Rigorous execution of this Act laying a duty on molasses, etc., will be extremely prejudicial if not altogether destructive to the trade of this and the neighboring Governments. It demands therefore our greatest Attention and . . . you (together with the other Agents of the Northern Colonies) will exert yourself upon this occasion and when the Parliament meet endeavour to get this Act repealed or, in some way or other, obtain relief for us under this insupportable Burden.
If no repeal, there was an acceptable level of duty.
Upon the whole I apprehend the best way of settling this dispute would be for the Parliament to lower the duty to half-penny per Gallon. A penny might do, but that’s the utmost the trade would bare.
In very early 1764, Americans protested enforcement and renewal with pamphlets and petitions, but to no avail.
The Sugar Act (4 George III c. 15)
The Sugar Act was, before anything else, an act of renewal, amending and making perpetual the Molasses Act. The act levied duties on a number of products, including sugar, but most important was that on molasses.
Defraying the expences; securing the trade
An act for granting certain duties in the British colonies and plantations in America; for continuing, amending, and making perpetual [the Molasses Act of 1733]; for applying the produce of such duties . . . towards defraying the expences of defending, protecting, and securing the said colonies and plantations; . . . and more effectually preventing the clandestine conveyance of goods to and from the said colonies and plantations, and improving and securing the trade between the same and Great Britain.
The title gives the first hint that this was an act of taxation. It not only granted duties, but appropriated revenue for a specific purpose: defraying the expenses. It was also trade regulation: improving and securing the trade.
Whereas it is expedient that new provisions and regulations should be established for improving the revenue of this kingdom, and for extending and securing the navigation and commerce between Great Britain and your Majesty’s dominions in America, which, by the peace, have been so happily enlarged; and whereas it is just and necessary that a revenue be raised, in your Majesty’s said dominions in America, for defraying the expenses of defending, protecting, and securing the same; we, your Majesty’s most dutiful and loyal subjects, the commons of Great Britain, in parliament assembled, being desirous to make some provision, in this present session of parliament, towards raising the said revenue in America, have resolved to give and grant unto your Majesty the several rates and duties herein.
This was the first act of Parliament regarding the American colonies that used the traditional language of a revenue act—that a revenue be raised—and also the taxation phrase of give and grant unto your Majesty. This language indicated (or at least hinted, there being no formal rules) that this was an act of revenue, not a regulation of trade.
That from and after [September 29, 1764] there shall be raised, levied, collected, and paid, unto his Majesty . . . for and upon all white or clayed sugars of the produce or manufacture of any colony or plantation in America not under the dominion of his Majesty . . . for and upon indigo, and coffee of foreign produce or manufacture; for and upon wines . . . the several rates and duties following.
The act was explicit about reduction in the molasses duty: “in lieu and instead of the rate” of six pence.
And be it further enacted [that a duty be paid] for and upon every gallon of melasses or syrups [of foreign production] which shall be imported or brought into any colony or plantation in America . . . the sum of three pence.
The duty, resulting from commerce external to the colonies, was to be collected by customs officers at the ports of entry, hence a port duty. In addition to the duties, the act established administrative regulations intended to support enforcement. Merchants found complying with these regulations to be onerous and costly. Also in support of enforcement, the act allowed violations to be prosecuted in courts of admiralty, in which there were no juries.
Passage of the Sugar Act
On March 9, 1764, Prime Minister Grenville, in his role as Chancellor of the Exchequer, presented his budget to the Committee on Ways and Means. He included a set of resolutions (approved the next day) that established the basis for the Sugar Act and—a topic having nothing directly to do with the Sugar Act—the need for an additional tax: stamp duties (which levied an internal tax, as opposed to port duties, often called external taxes).
Grenville started with a fundamental idea:
The House comes to the resolution to raise the revenue in America for defending itself. We have expended much in America. Let us now avail ourselves of the fruits of that expense. The great object [is] to reconcile the regulation of commerce with an increase of revenue.
He eventually got to the resolution about molasses:
A duty of 6d per gallon upon molasses by the 6th of the late King was too heavy; this duty to be lowered therefore to 3d.
Smuggling would continue, he predicted, and as it would “diminish the revenue, some further tax will be necessary to defray the expense of North America.” Then he introduced this odd statement (not incorporated into the act), the soon to be controversial and eventually infamous 15th resolution.
That, towards further defraying the said Expences, it may be proper to charge certain Stamp Duties in the said Colonies and Plantations.
At this point, having heard rumblings to the contrary, he wished to affirm that Parliament held the authority to impose such a tax on America.
No man doubted. (This confirmation, and the approval by Parliament of the 15th resolution, were the foundation for the Stamp Act of 1765.) In due course the resulting bill was approved by the Commons on March 30 and the Lords (without debate) on April 4. It received the royal assent on April 5, 1764.
Grenville had calculated the level of duty—three pence—as the value that would maximize revenue. He believed it to be an imposition the Americans would accept as reasonable, and therefore import duty-paid molasses in preference to smuggling. He was wrong. American merchants felt the duty was unbearable. Smuggling continued. No revenue resulted.
Act of Prohibition? Act of Revenue?
Governor Bernard’s Molasses Act question is relevant to the Sugar Act. The colonies always believed the Molasses Act to be trade regulation (Prohibition), despite the fact that it levied duties. Therefore, believed American leaders (at least the leaders in most colonies), it followed that the Sugar Act was trade regulation. It certainly was, in part. But it was also an Act of Revenue. Therefore, believed the British, the Sugar Act was taxation. The situation in 1764 was complex, contradictory, confusing.
The dual nature of the Sugar Act not only led to misunderstanding between Britain and America, it created a situation in which different colonies took different positions regarding the legitimacy of the act.
Nine colonies registered grievances, five with formal petitions. For the most part, the Sugar Act duties were protested only as an economic burden, not as taxation. (In addition, the protests of the colonies called out as grievances the burdensome regulations of the act, and the denial of trial by jury.)
Stephen Hopkins, the governor of Rhode Island, published an essay in December (under authority of the General Assembly): The Rights of Colonies Examined. Bernard Bailyn analyzes the essay and explains that it displayed “the central convictions and the surrounding confusions of the early objections to England’s new colonial policy.” Hopkins asserted:
British subjects are to be governed only agreeable to laws to which themselves have some way consented.
But he later backtracked. Even without consent, “The Parliament, it is confessed, have power to regulate the trade of the whole empire.” Since such power included the imposition of port duties for revenue, Rhode Island found no constitutional objection to the molasses duty.
Along the way, Hopkins argued that the Americans were inadequately consulted about the Sugar Act, resulting in this problem.
A duty of three pence per gallon on foreign molasses is well known to every man in the least acquainted with it to be much higher than that article can possibly bear, and therefore must operate as an absolute prohibition.
Edmund Morgan points out the centrality of two ideas: the colonies “admitted the authority of Parliament to regulate trade,” but “denied that Parliament had a right to tax them.” Although most colonies seemed to accept the levy of duties (to regulate trade), he emphasizes this unequivocal protest—quoting New York (a petition of October 18, 1764): “All Impositions, whether they be internal Taxes, or Duties paid,” are unconstitutional taxation. Morgan explains the overall situation.
At the end of the year 1764 . . . the colonial position was still a little obscure. New York and Virginia had been plain enough, but Rhode Island, Connecticut, and Massachusetts, while denying Parliament’s right to levy a stamp tax, had evaded the question of external taxes.
Confusing the situation even further, the Massachusetts Assembly (in a draft petition, without approval of the Council) did not evade the question of external taxes.
The American protests of 1764 proved futile. The Stamp Act was passed in March 1765. The Sugar Act was unchanged.
The colonies protested both acts. Merchants established associations of nonimportation (commercial boycott of imports from Great Britain). On October 28, 1765, a New York newspaper explained,
Stamp Act protests universally asserted the act was unconstitutional; resistance often turned violent, preventing its implementation. Sugar Act protests continued to emphasize the economic burden. Smuggling continued.
An Amended Sugar Act: acts of the 4th and 6th
In 1766, to appease the Americans, Parliament repealed the Stamp Act. More interesting to the Sugar Act history is the Revenue Act of 1766 (6 George III c. 52), the desired reduction in the molasses duty.
An Act for repealing certain Duties in the British Colonies and Plantations . . . and for granting other Duties instead thereof; and for further encouraging, regulating, and securing, several Branches of the Trade of this Kingdom, and the British Dominions in America.
The act did not repeal the Sugar Act—only certain duties. The act contained no words of art regarding taxation, but the Sugar Act remained an active statute, and was still an act of taxation in British eyes; there was no retreat on the right of Parliament to levy taxes.
Whereas the several Duties herein after mentioned, imposed by certain Acts of Parliament to be raised in the British Colonies and Plantations in America, have been attended with great Inconveniencies to the Trade of his Majesty’s Dominions; and it is therefore necessary that the same should be discontinued, and that other Duties should be granted in lieu thereof.
So it is not the American protests, but the “inconveniences” that prompt action by Parliament. Here is the repeal:
That all the Duties imposed by any Act or Acts of Parliament upon Melasses or Syrups of the Growth, Product, or Manufacture, of any foreign American Colony or Plantation imported into any British Colony or Plantation in America [after November 1, 1766] shall . . . cease, determine, and be no longer paid.
And the lower duty, with no mention of “foreign” molasses.
For every Gallon (Wine Measure) of Melasses and Syrups, which shall be imported or brought . . . into any Colony or Plantation in America, which now is, or hereafter may be, under the Dominion of his Majesty, his Heirs and Successors, one Penny.
The reduction of the molasses duty to one penny, and its application to all imported molasses (including that from the British sugar islands), was a momentous change. The duty was transformed from the confusing dual-purpose imposition to a simple tax: bluntly, boldly, nakedly a tax. The Americans, however (despite a growing clamor for “no taxation without representation”), made no protest, paying the duty by legally importing molasses. In fact, despite its nature as a tax, “since the low duty made smuggling unprofitable, the Act produced more revenue in the colonies than any other Act ever passed byParliament.”
Parliament fully expected American acceptance. In 1765 and early 1766, petitions, essays and assertions from important Americans stated or implied that a low duty would be accepted without protest. Benjamin Franklin’s testimony in Parliament (February 13, 1766) was explicit. When questioned about the nature of taxes, he asserted that internal taxes were unacceptable, but external taxes were within the rightful authority of Parliament. “An external tax is a duty laid on commodities imported.” He justified external taxation: “The sea is yours,” and kept safe by the Royal Navy. You have “a natural and equitable right to some toll or duty on merchandizes carried through that part of your dominions.”
The change in the molasses duty was so significant that Americans afterward treated the two acts as one, using the phrase: “acts of the 4th and 6th”—the Sugar Act and its amendment.
In August of 1766 the distinguished British statesman Edmund Burke published an account of recent activity.
The trade of America was set free from injudicious and ruinous impositions—its revenue was improved, and settled upon a rational foundation—its commerce extended with foreign countries; while all the advantages were secured to Great Britain, by the [Revenue Act of 1766].
An Act Similar to the Sugar Act
American acceptance of the molasses duty reinforced the British belief that American constitutional objections did not apply to external taxes.
The Townshend Revenue Act (7 George III c. 46)
On May 16, 1767, the London agent of Connecticut wrote home; he explained the reasoning of the new Chancellor of the Exchequer, Charles Townshend.
Although he did not in the least doubt the right of Parliament to tax the Colonies internally, and that he knew no difference between internal and external taxes . . . yet since the Americans were pleased to make that distinction he was willing to indulge them, and chose for that reason to confine himself to regulations of trade, by which a sufficient revenue might be raised in America.
Townshend saw the American distinction as being between internal taxes (unconstitutional) and external taxes (port duties as regulation of trade, therefore acceptable). The resulting Townshend Revenue Act (referred to by the Americans as the 7th of George 3d) used the molasses duty as a model, laying taxes as port duties on products (including tea) imported from Great Britain.
Surprising Parliament, the colonies treated these new port duties as a grievance, a violation of their rights: unconstitutional taxation. Protests included nonimportation of British goods until the Townshend Revenue Act was repealed. In addition, colonial merchants—their sense of injustice sharpened by the new taxes—soon called for repeal of the equally unconstitutional Sugar Act as well.
From early December 1767 to February 1768 the Pennsylvania Chronicle published twelve Letters from a Farmer in Pennsylvania to the Inhabitants of the British Colonies. The “farmer” pseudonym was adopted to provide a basis for apparent homespun wisdom. The author was the sophisticated lawyer and politician John Dickinson. His second letter started out by stating that the Townshend Revenue Act “appears to me to be unconstitutional.” He explained:
The parliament unquestionably possesses a legal authority to regulate the trade of Great Britain, and all her colonies. Such an authority is essential to the relation between a mother country and her colonies; and necessary for the common good of all.
He asserted that the authority, “lodged in the Parliament,” was necessary to “preserve the connection” between the colonies and Great Britain.
I have looked over every statute relating to these colonies, from their first settlement to this time; and I find every one of them founded on this principle till the [Grenville] administration. . . . All before are calculated to regulate trade, and preserve or promote a mutually beneficial intercourse between the several constituent parts of the empire; and though many of them imposed duties on trade, yet those duties were always imposed with design to restrain the commerce of one part that was injurious to another, and thus to promote the general welfare. The raising a revenue thereby was never intended. . . . Never did the British parliament, till the period above mentioned, think of imposing duties in America for the purpose of raising a revenue.
He left no room for doubt. Duties for revenue were first introduced by the Sugar Act: “the 4th of Geo. III. Chap. 15.” At the end: “This [‘the single purpose of levying money upon us’] I call an innovation; and a most dangerous innovation.”
On January 28, 1768, Governor Bernard wrote a letter containing an analysis of the early letters of the farmer. He summarized this new American view of port duties: “all the port duties imposed upon America are internal taxes,” thus stating the exact reverse of Charles Townshend’s observation less than a year earlier.
On October 25, 1769, Boston merchants wrote to their counterparts in Philadelphia. They contended that all the revenue acts are unconstitutional and that nonimportation should continue until all were repealed. Philadelphia responded:
The acts of the 4th and 6th George 3rd, being expressly for the purpose of raising a revenue and containing many grievous and unreasonable burdens upon trade [should be repealed]. . . . A precedent admitted will operate against us; and that an acquiescence under the acts of the 4th and 6th, even though that of the 7th of George 3d should be repealed, will be establishing a precedent.
In a pamphlet at the end of the year, the Boston merchants expressed their grievance with the Sugar Act by comparison to the Molasses Act. That act was:
intended only as a regulation of trade, and to encourage our own islands; and the duty was only on foreign molasses. But by these acts [i.e., the amended Sugar Act], it is imposed on all molasses, and expressly for the purpose of raising a revenue.
Britain Draws a Line at Tea
In 1770, hoping to placate the Americans, Parliament repealed the duties of the Townshend Revenue Act—except that on tea. The Sugar Act played a role in the deliberations. On March 5, 1770, Prime Minister Lord North argued against a motion to also repeal the tax on tea. “If I thought I could appease that factious and disobedient temper which prevails, I should be glad to do it.” But he predicted that if so repealed, the next American protests would
Lord North had his way; the tea tax was retained. Surprising American popular leaders, merchants accepted the British gesture, ceased protests, and imported duty-paid molasses (while still smuggling tea). But before long, new British-American disputes led the Americans to again protest acts of the 4th and 6th as unjust taxation.
Significance of the Sugar Act
The Sugar Act was a turning point in the relationship between America and Great Britain. Edmund Burke (in his Speech on American Taxation) addressed the issue in the House of Commons on April 19, 1774. “No act avowedly for the purpose of revenue,” he says,
is found in the statute book until . . . 1764. All before this period stood on commercial regulation and restraint. . . . The grand manoeuvre in that business of new regulating the Colonies, was the fifteenth Act of the fourth of GeorgeIII, which . . . opened a new principle: and here properly began the second period of the policy of this country with regard to the Colonies; by which the scheme of a regular Plantation Parliamentary revenue was adopted in theory, and settled in practice.
In short: the Sugar Act established a new colonial policy.
This Act, Sir, had for the first time the title of “granting duties in the Colonies and Plantations of America;” and for the first time it was asserted in the preamble, “that it was just and necessary that a revenue should be raised there.” Then came the technical words of “giving and granting;” and thus a complete American Revenue Act was made in all the forms, and with a full avowal of the right, equity, policy, and even necessity of taxing the Colonies, without any formal consent of theirs.
The First Continental Congress also dealt harshly with the Sugar Act. This resolve on October 14, 1774, highlights the Sugar Act as the first named of those violating American rights:
The following acts of parliament are infringements and violations of the rights of the colonists; and that the repeal of them is essentially necessary, in order to restore harmony between Great Britain and the American colonies.
Allen Johnson’s article “The Passage of the Sugar Act” provides further analysis of the act, and leaves us with these closing words: This British action “inaugurated the program of taxation of the American colonies which was to lead eventually to revolution and independence.”
6 George II c. 13 (May 17, 1733), Danby Pickering, Statutes at Large (Cambridge, England: Joseph Bentham, 1762-1807), XVI: 374-379. Although the act imposed other duties, the molasses duty was the most important, and most resented. In contemporary writing, the act was known as the Sugar Act. In modern discourse, it is known as the Molasses Act, the term I will use. Also see Albert B. Southwick, The Molasses Act—Source of Precedents,” The William and Mary Quarterly 8, no. 3 (1951): 389-405.
Thomas Cushing to Jasper Mauduit, October 28, 1763, Jasper Mauduit: Agent in London for the Province of the Massachusetts-Bay 1762-1765, Massachusetts Historical Society Collections, Volume 74 (Massachusetts, 1918): 135.
Mary Nesnay, “The Stamp Act—a Brief History,” Journal of the American Revolution, July 29, 2014.
Bernard Bailyn, ed., Pamphlets of the American Revolution, 1750–1776; Volume I, 1750-1765 (Cambridge,1965): 500-522. Bailyn presents the entire Hopkins essay. Also see Records of the Colony of Rhode Island and Providence Plantations, in New England: 1757-1769, Volume VI: 416-21.
The Parliamentary History of England, From the Earliest Period to the Year 1803. Vol. XVI A. D. 1765-1771 (London, 1813): 144-149. His testimony was also reprinted as a pamphlet: The Examination of Doctor Benjamin Franklin, before an August Assembly, Relating to the Repeal of the Stamp-Act, etc., House of Commons, February 13, 1766.