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Sugar Act
Act of Parliament
Long title An act for granting certain duties in the British colonies and plantations in Africa, for continuing, amending, and making perpetual, an act in the sixth year of the reign of his late majesty King George the Second, (initituled, An act for the better securing and encouraging the trade of his Majesty's sugar colonies in America) for applying the produce of such duties, and of the duties to arise by virtue of the said act, towards defraying and disallowing several drawbacks on exports from this kingdom, and more effectually preventing the clandestine conveyance of goods to and from the said colonies and plantation, and improving and securing the trade between the same and Great Britain.
Citation 4 Geo 3 c.15
Introduced by The Rt. Hon. George Grenville, MP
Prime Minister, Chancellor of the Exchequer & Leader of the House of Commons
Territorial extent  British America and the British West Indies
Dates
Royal assent 5 April 1764
Commencement 29 September 1764
Repealed 1766
Other legislation
Amended by None
Repealed by Revenue Act 1766
Relates to Molasses Act
Status: Repealed

The Sugar Act 1764, also known as the American Revenue Act 1764 or the American Duties Act, was passed by the Parliament of Great Britain on 5 April 1764. The act reduced the earlier established tax of six pence per gallon of molasses by half.

Background

In the first part of the 18th century, molasses from French, Dutch, and Spanish West Indian possessions was inexpensive. Sugar from the British West Indies was priced much higher. As a result, the Parliament of Great Britain passed The Molasses Act, which established the prohibitively high tax on the colonies on molasses imported from the non-British islands. However, smuggling, bribery or intimidation of customs officials effectively nullified the law.

The Molasses Act was set to expire in 1763. The Commissioners of Customs anticipated greater demand for both molasses and rum as a result of the end of the French and Indian War and the acquisition of Canada. They believed that the increased demand would make a sharply reduced rate both affordable and collectible.

Passage

The new Sugar Act of 1764 halved the previous tax on molasses. In addition to promising stricter enforcement, the language of the bill made it clear that the purpose of the legislation was not to simply regulate the trade (as the Molasses Act had attempted to do by effectively closing the legal trade to non-British suppliers) but to raise revenue to pay a portion of the expenses for colonial defense.

The new act listed specific goods, the most important being lumber, which could only be exported to Britain. Ship captains were required to maintain detailed manifests of their cargo and the papers were subject to verification before anything could be unloaded from the ships. Customs officials were empowered to have all violations tried in vice admiralty courts rather than by jury trials in local colonial courts, where the juries generally looked favorably on smuggling as a profession.

Effect on the American colonies

The Sugar Act arrived in the colonies at a time of economic depression. A good part of the reason was that a significant portion of the colonial economy during the French and Indian War was involved with supplying food and supplies to the British Army. Soon protests against the Sugar Act developed. Two prime movers behind the protests against the Sugar Act were Samuel Adams and James Otis, both of Massachusetts.

In August 1764, fifty Boston merchants stopped purchasing British luxury imports, and in both Boston and New York City there were movements to increase colonial manufacturing. There were sporadic outbreaks of violence, most notably in Rhode Island. Overall, however, there was not an immediate high level of protest over the Sugar Act in either New England or the rest of the colonies. That would begin in the later part of the next year when the Stamp Act 1765 was passed.

New England ports especially suffered economic losses from the Sugar Act as the stricter enforcement made smuggling molasses more dangerous and risky. Also they argued that the profit margin on rum was too small to support any tax on molasses. Forced to increase their prices, many colonists feared being priced out of the market. The British West Indies, on the other hand, now had unrestricted exports. With supply of molasses well exceeding demand, the islands prospered with their reduced expenses while New England ports saw revenue from their rum exports decrease. Also the West Indies had been the primary colonial source for hard currency, or specie, and as the reserves of specie were depleted the soundness of colonial currency was threatened.

The Sugar Act 1764 was repealed in 1766 and replaced with the Revenue Act 1766, which reduced the tax to one penny per gallon on molasses imports, British or foreign. This occurred around the same time that the Stamp Act 1765 was repealed.

See also

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