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The Grenville Program, 1763-1765

In April 1763 George III had to abandon his chief minister and confidant, the hated Lord Bute, and turn the government over to George Grenville, leader of the largest Whig block in parliament and brother-in-law of William Pitt. Grenville's strengths were his knowledge of trade and public finance, a penchant for hard work and administrative detail, a systematic mind, and, in an era of corruption, integrity. His weaknesses were a cold personality and a limited conception of broad political and constitutional issues. It was said that Grenville lost the American colonies because he read the dispatches from America and was well acquainted with the growing economic maturation and apparent ability of the colonies to bear heavier taxes. George III, who disliked Grenville immensely, the more so because he had been forced to accept the Whigs, described him as a man "whose opinions are seldom formed from any other motives than such as may be expected to originate in the mind of a clerk in a counting house." An astute observer might have told George that with the national debt at £146,000,000 and rising, a man with the logical mind of a counting clerk might be the answer. Still it was this logical mind "For imposing taxes on us without our concent...." which was Grenville's undoing. As British historian Ian Christie notes, "all the various provisions of the years 1763 to 1765 made up a logical, interlocking system. Its one fatal flaw was that it lacked the essential basis of colonial consent."10

Three overriding colonial problems faced Grenville: a new governmental policy for the former French and Spanish North American territories; a means to defend these territories from the avowed intentions of the French and Spanish to reestablish control; and a means to pay the costs of imperial government and defense.

Western Lands and Defense

There was an immediate need for English government in the former English and French lands. In October 1763 the Board of Trade proposed, and the king in council established, a temporary program for western lands. Under the Proclamation of 1763 a governor-general would run Quebec (an attempt to get the French colonists to use an elected assembly failed), the French were confirmed in their land grants, and the Roman Catholic Church was retained. East and West Florida became separate colonies. In the disputed lands beyond the Appalachians into which English settlers had moved as soon as General Forbes occupied Fort Duquesne in 1758 and where the Indians under Chief Pontiac were in rebellion against these incursions, no English settlers were allowed until permanent treaties could be worked out with tribes owning the lands.

The Grenville ministry had several aims for its western lands policy. The Proclamation of 1763 would separate the Indians and whites while preventing costly frontier wars. Once contained east of the mountains, the colonials would redirect their natural expansionist tendencies southward into the Carolinas, Georgia, and Florida, and northward into Nova Scotia. Strong English colonies in former Spanish and French territories would be powerful deterrents to future colonial wars. There is no indication Grenville believed the Americans would be more easily governed if contained east of the mountains. His prime aim was orderly, controlled, peaceful, and inexpensive growth.

The Proclamation of 1763 hurt Virginia land speculators more than individual colonists. For the Ohio Land Company whose stockholders were mostly Northern Neck and Maryland gentry, including the Washingtons and Lees, it was a crushing blow to their hopes for regaining the Forks of the Ohio and lands on the southern bank of the Ohio granted to them by the crown in 1749. The rival Loyal Land Company led by Speaker Robinson, Attorney-General Randolph, and the Nelsons, lost their claims to the Greenbriar region, but with less invested, they had less to lose. Also dashed were the hopes of many French and Indian War veterans who had been paid in western land warrants for their service. Many veterans ignored the proclamation, went over the mountains, squatted on the lands, and stayed there with the concurrence of amiable Governor Fauquier. Most Virginians were little injured by the order for they fit into Grenville's plan for colonial growth. The general flow of Virginia migration after 1740 was southward along the Piedmont into the Carolinas or southwestward through the Valley of Virginia, not north and northwest to the Forks of the Ohio. In 1768 and 1770 by the treaties of Fort Stanwix (N.Y.) and Fort Lochaber (S.C.) the Six Nations and Cherokee Indians gave up their claims to the Kentucky country as far west as the Tennessee River. The Virginian occupation, led by John Donelson and Daniel Boone, quickly moved in through the Cumberland Gap. Not until the Quebec Act of 1774 thwarted their claims to land north of the Ohio did Virginians react strongly against British land policy.

To defend the new territories and maintain the old, Grenville proposed retaining 10,000 British troops in America, stationing them mainly in Halifax, Boston, New York, Philadelphia, and the West Indies from which they could be moved to trouble spots as needed. The British had learned from the unpredictable response by the colonies during the French and Indian War and the nearly disastrous Pontiac Rebellion in early 1763 that the colonies would not, or could not, provide cooperatively for their own defense even in the face of clear danger. There were too many inter-colonial rivalries and there was stubborn adherence to the English tradition that local militia was not to serve outside its own jurisdiction or for long periods of time. Moreover, the western lands were primarily an imperial responsibility. Thus, the decision was made to station British troops in America.11

In April 1765 parliament passed the Quartering Act, similar to one in England, requiring colonies, if requested, to provide quarters in barracks, taverns, inns, or empty private buildings. Although the act did not apply directly to them, Virginians sided with the hard-hit New Yorkers who bitterly denounced it as another form of taxation without representation. So strong was the reaction in New York that her assembly virtually shut down rather than acquiesce. Finally the New Yorkers gave in, making the Quartering Act to New York what the Stamp Act was to Virginia, a symbol of "oppression and slavery." What parliament could do to one colony she could do to all.

A New Revenue Program

At the heart of the Grenville program were his financial schemes. The program had three parts: 1) to strengthen and enforce existing Acts of Trade; 2) to ease inflation and stabilize colonial trade with a uniform currency act; and 3) to raise additional revenue by applying stamp taxes to the colonies. Even then Grenville expected to raise only about one-half the expenses the new empire required. The rest would have to come from British sources.

To close the loopholes in the Navigation Acts and make them profitable, Grenville submitted the American Revenue Act of 1764, popularly known as the Sugar Act. Although the sugar trade provisions were the most dramatic example of a redirection in the Navigation Acts, the American Revenue Act contained radical departures from past attitudes and practices. Heavy duties were applied to foreign goods allowed to enter the colonies directly, including white sugar, Madeira wine, and coffee. Many goods formerly allowed to enter the colonies directly were placed on the list of enumerated articles which must pass through England before being shipped to the colonies. The act, although slightly reducing the duty on French West Indian foreign molasses, contained strict provisions for its collection omitted from the laxly enforced Molasses Act of 1733. The British fleet was stationed along the American coast to assist the customs service in enforcing the act.

Parliament created a new vice-admiralty court to sit at Halifax without a jury as an alternative to the colonial vice-admiralty courts whose juries were notoriously biased against the customs officers and whose judges often were colonials engaged in illicit trade.

In the Sugar Act, Grenville and parliament took the existing Navigation Acts and reasserted parliamentary authority over imperial trade, reaffirmed the 17th Century colonial philosophy that the colonies existed to promote the welfare of the mother country and the empire, granted trade monopolies to British merchants and manufacturers where none existed before, and discriminated in favor of one set of colonies, the British West Indies, and against another set, the North American colonies. To this was added a new principle—the Navigation Acts should not only regulate trade, they should produce revenue. Cleverly designed within the constitutional system, the Sugar Act brought howls of protests from New England and Middle Colony traders, smugglers and legitimate operators alike, who had flourished under the benevolence of "salutary neglect" for the past half-century. For many Americans the new act with its favoritism to British and West Indian merchants, its use of the navy as law enforcer, and the founding of a vice-admiralty court in Nova Scotia with jurisdiction over all America was an abuse of parliament's power. As events developed the Sugar Act was a failure. The old act designed for regulatory purposes, cost approximately three times as much to enforce as the revenues collected; the new act, expected to produce annual revenues of about £100,000, averaged about £20,000 in revenues at an annual cost of over £200,000.

The Currency Act of 1764

Virginians, only indirectly effected by the Sugar Act, were deeply effected by the second part of the Grenville program—the Currency Act of 1764. During the French and Indian War Virginia had printed several paper money issues to finance the war and provide currency in the specie-short colony. The various issues, eventually totaling over £500,000, circulated for a fixed number of years and then were to be redeemed upon presentation to the treasurer, Speaker John Robinson. As the war lengthened and the number of paper money issues increased, considerable confusion developed over the amount of money outstanding, the rate of exchange, and its use as legal tender for personal debts as well as public taxes. Although backed by the "good will" of the General Assembly, this money (called "current money") was discounted when used to pay debts contracted in pounds sterling. Although the official exchange rate set by the assembly was £125, Virginia current money equalled £130-£165 per £100 sterling, averaging £155-£160 in 1763 and early 1764. The citizens were compelled by law to accept inflated Virginia paper currency as legal tender for debts which they had contracted in pounds sterling. The fiscal problems were most critical in Virginia, but they also existed in most colonies outside New England whose colonies parliament restricted under a currency act in 1751. In response to pleas from London merchants, Grenville devised and parliament passed the Currency Act of 1764, prohibiting the issuing of any more paper money and commanding all money in circulation to be called in and redeemed.

The result in Virginia was sheer consternation, especially among the hard-pressed Tidewater planters. In the process of calling in the money a severe currency shortage developed and some financial hardship occurred at the same time the Stamp Act took effect. More significant than the economic impact was the political impact of the Currency Act on Virginia politics and the political fortunes of key Virginians. Among the many Virginians caught up in the Currency Act none was more involved than Speaker John Robinson. At his death in May 1766 an audit revealed massive shortages in his treasurer's account books resulting from heavy loans to many Tidewater gentry and political associates. The Robinson scandal brought about a redistribution of political leadership in Virginia and brought into the leadership circle the Northern Neck and Piedmont planters who formerly were excluded.12

The third facet of the Grenville revenue plan was the infamous Stamp Act. Grenville and his aides perceived the tax bill as a routine piece of legislation which would extend to the colonies a tax long used in Britain. Grenville announced in March 1764 the ministry's intention to present to the commons a stamp tax bill at the February 1765 session of parliament. He "hoped that the power and sovereignty of parliament, over every part of the British dominions, for the purpose of raising or collecting any tax, would not be disputed. That if there was a single man doubted it, he would take the sense of the House...." As another observer put it, "Mr. Grenville strongly urg'd not only the power but the right of parliament to tax the colonys and hop'd in Gods Name as his Expression was that none would dare dispute their Sovereignty."13 The House of Commons, as quick as the Virginia House of Burgesses to proclaim its sovereignty rose to Grenville's bait and declared in a resolution of March 17, 1764 that "toward defending, protecting, and securing the British colonies and Plantations in America, it may be proper to charge certain Stamp Duties in the said Colonies and Plantations...." In that simple phrase parliament declared its full sovereignty over the colonies and from it never retreated.

Virginia and the Stamp Act, 1764

That Grenville might have hoped that the "power and sovereignty of Parliament … would not be disputed" suggests the degree to which he did not comprehend 18th Century colonial constitutional developments. Virginia reaction was immediate, clear, unequivocal, and illustrative of just how deeply ingrained were Virginia's constitutional positions about the limits of parliamentary authority. In 1759 the General Assembly had elected a joint committee to correspond regularly with its London agent and to instruct him on matters of policy and legislation pending in England. This committee was meeting on July 28, 1764, in Williamsburg drafting instructions to agent Edward Montagu on the Sugar Act when word arrived from Montagu about the commons resolution. The Committee of Correspondence's reply was instantaneous:

That no subjects of the King of great Britain can be justly made subservient to Laws without either their personal Consent, or their Consent by their representatives we take to be the most vital Principle of the British Constitution; it cannot be denyed that the Parliament has from Time to Time … made such Laws as were thought sufficient to restrain such Trade to what was judg'd its proper Channel, neither can it be denied that, the Parliament, out the same Plentitude of its Power, has gone a little Step farther and imposed some Duties upon our Exports....

P.S. Since writing the foregoing Part … we have received your letter of the parliam'ts Intention to lay an Inland Duty upon us gives us fresh Apprehension of the fatal Consequences that may arise to Posterity from such a precedent.... We conceive that no Man or Body of Men, however invested with power, have a Right to do anything that is contrary to Reason and Justice, or that can tend to the Destruction of the Constitution.14

Navigation Acts were acceptable, Stamp Acts were a "Destruction of the Constitution."

In May Grenville met with the colonial agents in London and possibly suggested (his intent has been disputed) that a stamp tax might not be imposed if the colonial legislatures came up with alternative taxes. At least Montagu thought this is what Grenville suggested. The Virginia committee even told Montagu in its July letter, "if a reasonable apportionm't be laid before the Legislature of this Country, their past Compliance with his Majesty's several Requisitions during the late expensive War, leaves no room to doubt that they will do everything that can be reasonably expected of them." It made no difference, for even before the agents could receive replies from their various colonies, Grenville had fixed upon the stamp act itself. This was probably just as well for the Virginians, once they reflected on the requisition scheme, came to believe that taxes imposed by the General Assembly to offset a threatened tax by parliament were as unpalatable and unconstitutional as a tax passed by parliament.

On December 18, 1765, the Virginia General Assembly confirmed the constitutional stance taken by its committee in July. Unanimously the House of Burgesses and the council sent a polite address to the king, an humble memorial to the House of Lords, and a firm remonstrance to the commons. The commons' resolution of March 17 was against "British Liberty that Laws imposing Taxes on the People ought not be made without the Consent of Representatives chosen by themselves; who at the same time that they are acquainted with the Circumstances of their Constituents, sustain a Proportion of the Burthen laid upon them."15 From this position, Virginia never retreated.

By the time parliament took up the Stamp Act in February 1765, the die was already cast. Members of parliament were outraged by the presumptuous claims of the colonial assemblies to sovereignty co-equal with itself. Only a few members questioned the wisdom of the act. Issac Barré won fame as a patriot member of parliament for his eloquent defense of the colonies as he called on the Commons to "remember I this Day told you so, that same Spirit of Freedom which actuated that people at first, will accompany them still." Yet even Barré would not deny parliament's right to pass the tax. The House of Commons refused even to receive the petitions from the colonial legislatures and passed the act into law on March 22, 1765.

Covering over 25 pages in the statute book, the Stamp Act imposed a tax on documents and paper products ranging from nearly all court documents, shipping papers, and mortgages, deeds, and land patents to cards, dice, almanacs, and newspapers, including the advertisements in them. Charges ranged from 3d to 10s, with a few as high as £10, all to be paid in specie. Virtually no free man in Virginia was left untouched by the tax. Edmund Pendleton, upon hearing of its passage, lamented "Poor America".

The law was to become effective on November 1, 1765.

The Stamp Act Resolves, May 1765

That the May 1765 session of the Virginia General Assembly became one of the most famous in the state's history was totally unanticipated by all political experts. The only reason Governor Fauquier called the session was to amend the frequently revised tobacco planting and inspection law. The Stamp Act already had been taken care of by the remonstrance in December. A new issue did develop when Governor Fauquier announced that all outstanding Virginia paper currency must be redeemed by March 1st, after which it no longer would be legal tender. As the money poured into the treasurer's office, it rapidly became apparent what Richard Henry Lee had suspected as early as 1763 and what many debt-ridden Tidewater planter-burgesses personally knew—Robinson was tens of thousands of pounds short in his accounts. The shortage, which turned out to be £106,000, derived from the speaker-treasurer's habit of lending his fellow planters tax funds to pay private debts to British merchants. The speaker, whom Jefferson called "an excellent man, liberal, friendly, and rich", had anticipated improvement in the economic climate would bring the money in. Meanwhile he could always rely on his own great private fortune. He failed to count on the continued economic depression, the passage of the Currency Act, or the living standards of his debtors. Something had to be done and quickly.

While the tobacco revision was working its way through committees, the speaker and his debtor-burgess friends devised a public loan office plan to take up the debts, provide an alternative source for funds, and relieve Robinson of his burden. Such a plan would have raised the ire of Richard Henry Lee, but the burgess from Westmoreland was sitting out this supposedly "short, uneventful meeting." He had made a monumental error in political judgment, having applied to the crown to be the Stamp Act agent in Virginia. Robinson knew this and quietly warned Lee that he should stay home. Robinson did not anticipate the unlikely duo which would bring down the public loan office. Leading the opposition in the House was Patrick Henry, first-term burgess from Louisa County. Directing his attack against favoritism and special interest legislation, Henry, who had developed a thriving legal trade representing creditors against debtors, knew whereof he spoke when he exclaimed, "What, sir, is it proposed then to reclaim the spendthrift from his dissipation and extravagance, by filling his pockets with money?" Robinson had the votes and carried the house, but lost in the council whose members disliked all public finance schemes. Chief opponent was Richard Corbin, wealthy, receiver-general of royal revenues and later Tory. In words nearly identical to Henry's, Corbin noted, "To Tax People that are not in Debt to lend to those that are is highly unjust, it is in Fact to tax the honest, frugal, industrious Man, in order to encourage the idle, the profligate, the Extravagant, and the Gamester". Council defeated the loan plan. With the tobacco laws revised and the loan scheme defeated and only routine legislation in committee, most burgesses left town.

Exactly when or why Patrick Henry, George Johnston of Fairfax, and John Fleming of Cumberland decided to offer the Stamp Act Resolves is lost in obscurity. Our sources are principally Thomas Jefferson, then a college student at William and Mary, Paul Carrington, a pro-Henry burgess from Charlotte County, and an unknown French traveler who stood with Jefferson at the house chamber doors. Jefferson and Carrington did not record their thoughts until a half-century later, during which the sequence of events became blurred by time. The Frenchman, who stood with Jefferson at the house chamber doors, missed the subtleties of the language and parliamentary procedure. One thing is clear—men who heard Patrick Henry never forgot the impression he made on them.

Governor Fauquier suggested that many burgesses were not satisfied with the remonstrance against the Stamp Act in December. Although he described the remonstrance as "very warm and indecent", he told the Board of Trade the original version was much more inflammatory and its language was "mollified" so that the Assembly could convey its opposition to the Stamp Tax without giving the "least offense" to crown and parliament. Fauquier also observed that economic uncertainties had made Virginians "uneasy, peevish, and ready to murmur at every Occurrence." Henry suggests that he drew up the Resolves when he found no one else was willing to do so after hearing of the actual passage of the Tax Act. Whatever the reason, Henry and his associates were ready to abandon the niceties of formal address and constitutional subtleties and to give "offense", especially in view of parliament's refusal to hear the remonstrance.

Only 39 of the 119 elected burgesses were sitting on May 29, 1765 when Patrick Henry introduced and George Johnston seconded seven resolutions for consideration by the house. The first five stated:

Resolved, That the first Adventurers and Settlers of this his Majesty's Colony and Dominion brought with them and transmitted to their Posterity and all other his Majesty's Subjects since inhabiting in this his Majesty's said Colony, all the Privileges, Franchises and Immunities that have at any time been held, enjoyed, and possessed by the people of Great Britain.

Resolved, That by two royal Charters granted by King James first the Colonists aforesaid are declared intituled to all the Privileges, Liberties, and Immunities of Denizens and natural-born Subjects, to all Intents and Purposes as if they had been abiding and born within the Realm of England.

Resolved, That the Taxation of the People by themselves or by Persons chosen by themselves to represent them, who can only know what Taxes the People are able to bear, and the easiest Mode of raising them, and are equally affected by such Taxes Themselves, is the distinguishing Characteristic of British Freedom and without which the ancient Constitution cannot subsist.