Financial costs of the Seven Years' War facts for kids
The Seven Years' War (1756-1763) was a huge global conflict. It cost a lot of money for countries like Great Britain, Kingdom of Prussia, Austria, France, and Sweden. Fighting a long war on many continents meant Britain's national debt almost doubled. This financial pressure led Britain to try new taxes in the Thirteen Colonies, which helped cause the American Revolution.
Contents
Who Fought and What It Cost Them
Great Britain's Money Troubles
Before the war, British leaders were worried about how much debt the country already had. By 1756, Britain's national debt was about £74.6 million. This was already a very large amount compared to the country's total income. One leader, Philip Stanhope, even wrote that their biggest danger came from their "expense" because of the huge national debt.
Britain had spent a lot of money on wars for many years before this one. The Seven Years' War made their debt much worse. On average, Britain spent about 75% of its government money on the military between 1685 and 1813.
During the Seven Years' War, Great Britain spent more than £45 million just on its navy. This was about a quarter of all the money it spent on the war.
By the end of the war, Britain's national debt had grown to £132.6 million. The payments just to cover the interest on this debt were more than half of the British Government's entire budget.
How the Thirteen Colonies Were Affected
At the start of the war, businesses in the Thirteen Colonies did very well. American merchants sold supplies to British troops. They also bought many goods using cheap loans from British banks. Imports into the American Colonies grew a lot during these years. For example, imports were worth £168,246 in 1757 and jumped to £707,998 by 1760.
However, things changed when Britain started focusing its war efforts more on the Caribbean and less on Canada in the 1760s. The economies in the American colonies began to slow down. American merchants had bought too many goods using credit. When the demand for war supplies dropped, they found it hard to sell these extra goods. This made it difficult for them to pay back their loans. Also, shipping costs went up when Spain joined the war, because insurance companies charged more.
In 1766, Benjamin Franklin told the British Parliament that American colonists had spent millions of pounds helping with the war effort.
France's Financial Struggles
France also helped its allies with money. For example, it gave Sweden over 11 million silver riksdalers (a type of currency) in aid during the war.
France lost many ships during the war. The Royal Navy and British privateers (private ships allowed to attack enemy ships) captured 1,165 French merchant ships. This caused a big problem for France's trade. Shipping insurance costs went way up. Before the war, insuring a ship crossing the Atlantic cost about 3% of its value. During the war, this cost rose to ten times that amount, and even up to 60% by the end of the war.
Because of the war, France could not import as many raw materials from its colonies as before. This meant French factories had to slow down or stop, leading to more people losing their jobs.
In 1758, British forces captured French areas in Senegal and Gambia. This hurt France's economy in two ways. France lost its supply of gum senega, which was important for its silk industry. It also lost a key trading post used for sending enslaved people to the Caribbean. This slowly weakened France's sugar production in its colonies like Guadeloupe and Martinique.
Great Britain took almost all of French Canada during the war. However, France was allowed to keep its Caribbean colonies. The Duc de Choiseul, a French leader, believed that the profits from the sugar trade in the Caribbean would make up for losing Canada. He thought this was especially true since the fur trade in Canada had already declined. For example, Guadeloupe alone produced more sugar than all of Britain's Caribbean colonies combined.
Still, the war greatly hurt France's trade income. The profitable trade of sugar and molasses between France's Caribbean colonies and Britain's North American colonies stopped when the war began. This led many merchants to start smuggling goods. Some estimates say that France's colonial trade dropped by 81% after the Seven Years' War. Other estimates put the loss as high as 90%.
The table below shows how much France's overseas trade decreased during the war. The numbers are average yearly values in millions of livres (French currency).
Year | America and W. Africa |
India | Europe | Ottoman, Levant, N. Africa |
Total Overseas Trade |
---|---|---|---|---|---|
1740–48 | 62.1 | 22.5 | 288.8 | 34.4 | 407.8 |
1749–55 | 100.4 | 37.5 | 389.8 | 54.8 | 582.5 |
1756–63 | 27.7 | 9.7 | 325.5 | 37.3 | 437.6 |
1764-76 | 147.1 | 30.2 | 448.1 | 59.2 | 684.6 |
Spain's Challenges
Protecting Chile's Coast
Spain's wars in the late 1700s showed how hard it was for the empire to send help and money to its colonies. This meant that local people in places like Chile had to pay more to defend themselves. They also had to join local militias (citizen armies) more often. This was different from what the Spanish king wanted, as he wanted all power to be in the central government.
Spain did make some promises to help with defense. In Chiloé, Spanish leaders promised freedom from the encomienda (a system of forced labor) to local indigenous people. This was if they settled near the new fort of Ancud (built in 1768) and helped defend it. This increased local involvement in defense eventually weakened the king's power and helped lead to independence movements later on.
Sweden's Financial Strain
Before the war, Sweden's government was already spending more money than it took in each year. The National Bank of Sweden covered these deficits. So, when the war started, Sweden did not have enough money saved up. Sweden kept taking loans from the National Bank during the war. These loans made up 44% of the government's income. The Swedish East India Company also lent 2 million sd. to the government in 1762 and 1763.
Prices for goods went up a lot during the war because of inflation. In 1755, there were 13.8 million sd. in circulation. By 1763, this had grown to 44 million sd.. For example, a barrel of herring in Uppsala cost 12 sd. in 1756 but 27 sd. by 1763.
Sweden also got money from its ally, France. France paid Sweden eight times between 1757 and 1761. The largest payment was in 1759, when France paid 3,797,699 sd.. In total, France paid over 11 million sd. during these years.
To raise more money, Sweden's government started a national public lottery in 1758 and 1759. This lottery raised 5,800,000 sd.. People who won the lottery were paid with government bonds (promises to pay money later) instead of cash.