Often misunderstood, the Navigation Act was not born of a punitive measure against a rebellious colony; such as the Coercive Acts of 1774 (labeled the Intolerable Acts by American patriots) which punished Massachusetts after a band of rowdy Bostonians dumped a fortune of East Indian tea in the harbor. The legislation that established England’s Laws of Trade was born in 1651, when England still shared the New World with the French, Swedes, and the Dutch. Not limited to British North America, it included all English colonies, including Africa and Asia. By the mid-sixteen hundreds, the Dutch proved to be England’s greatest competitor on the high seas. The two nations regularly skirmished, lobbing cannon balls at each other’s ships as they flexed their financial muscle worldwide. This legislative gem was initially designed by Parliament to damage Dutch commerce and influence. Seems it was effective, for within a year after the act’s passage, the First Anglo-Dutch War of 1652 erupted.
Simply put, the Navigation Act deemed that prescribed cargoes could only be transported to and from British colonies via English vessels. If a foreign government’s company or merchant desired to effect trade with British colonies, all financial arrangements had to be transacted through an English trading corporation or financial institution. The goods would be shipped directly to England whereupon a duty would be levied by the crown before shipping the product to the colonies on English ships. So too, if colonials wished to provide their resources to a foreign country or agent, they had to go through an English trading partner and all goods had to leave the colony via English ships. The Navigation Act therefore was created to affect a total monopoly on all colonial trade for the benefit of British merchants, shippers, and of course the crown’s coffers through duties paid to the government. By 1660, Parliament added teeth to the measure to include limits on shipping and purchasing specific goods to and from all foreign governments. The added act enumerated sugar, tobacco, cotton, wool, indigo, rice, and ginger.
The Navigation Acts served to enrich all England’s intermediate parties; British merchants, financial institutions, shippers, and the English government, at the expense of the farmers and producers of both the colonies and foreign nations. Left at the short end of the straw, it meant higher costs for the ‘little guy’ at both consumer and production ends of the chain, resulting in far less cash in their purse than had they been allowed to deal directly with each other. The desire by colonials pay less for imported merchandise and get more for their exports opened the door for those who could benefit financially by bypassing the Navigation Act entirely. Smuggling became both profitable and hugely popular, overwhelmingly supported by colonials.
Smuggling morphed into an entire new industry which padded the pockets of wealthy colonial shippers and merchants. John Hancock, foremost founder and president of the Continental Congress, became the richest man in Boston mainly from proceeds his family received through smuggling. Foreign ships delivered their merchandise to their perspective or neutral West Indies colonies. American ships in turn loaded the ‘contraband’ material onto their merchantmen to be off loaded at some ‘out of the way’ bay along the North American coast. Duty-free, the goods were then transported to ‘secretive’ warehouses which in turn found their way to both merchants and farmers. So too, colonial exports were loaded onto both American or foreign ships anchored off the coast, to be transported to either West Indies ports, or even directly to the country buying the goods. Again, duty free and dealing directly with the foreign purchasers resulted in a higher return for the colonial produced goods.
As a result, because of smuggling, Americans became used to paying less for desired merchandise while receiving more for their produced resources. This in turn helped to increase the quality of living throughout the colonies, which became among the highest in the world by the mid-seventeen hundreds. Two important aspects allowed the smuggling trade to enjoy decades of continual growth. Custom agents regularly accepted bribes to turn a blind eye to these shipments of ‘contraband’ and, the English government was lax in enforcing the act; their navy stretched thin by frequent wars and an ever expanding world-wide trade.
Eventually, with the need for cash to reinvigorate a treasury dwindled by war, particularly the Seven Years’ War (French and Indian War in America) England began to crack down on smugglers. Patrols along shipping routes and shorelines were increased while custom agents were better scrutinized to weed out those accepting bribes. Americans suddenly had to pay more for an increased number of goods that were harder and harder to smuggle. Prices soared because the demand was high and the supply limited, as well as what was available came with an increased price tag after shipping costs and paid custom fees.
In England, legislatures and government became solidly behind a system of Mercantilism defined as the economic theory in which trade generates wealth and is stimulated by the accumulation of profitable balances, which a government should encourage by means of protectionism. In other words, claim as much of the world as possible through colonization, proclaim that the colony’s generated resources are shipped directly to the mother country, sell back needed materials and manufactured goods to the colonists at exorbitant costs, and hoard as much hard currency as possible, such as gold and silver, while maintaining a monopoly by way of force.
Therefore over time, draconian acts emerged to raise additional revenue while maintaining a monopoly on trade. The Molasses Act and more importantly, the Iron Act, sprouted after the industrial revolution took hold in England. Factories were forbidden in the colonies, therefore all manufactured goods had to supplied by England and shipped by her merchantmen fleet. Discord among colonists, especially with each generation separated from mainland England, grew like a festering sore whose infectious lesion intensified, inflicting economic pain and discomfort. More Americans believed they were being treated unfairly and by the 1760’s, vocal protests became more frequent, often centered on the hated custom officials.
As research author Webb Garrison writes, “The backbone of England’s colonial policy, the Navigation Acts created increasingly burdensome conditions in all regions where Britain had outposts. Only in the New World was opposition sufficiently vocal and organized to set once loyal British subjects to firing muskets at the King’s soldiers in the 1770’s.” Eventually, the British and American colonials came to blows after England was lax in enforcing their Navigation Acts, allowed their custom agents to enrich themselves through decades of bribery, and then cracked down on Americans who had enjoyed several generations of among the world’s highest economic lifestyle, much of it through successful smuggling operations.
