Intolerable Acts & Tea Act – Pre American Revolution Monetary System
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Intolerable Acts & Tea Act – Pre American Revolution Monetary System

u.s. monetary history chapter 5 the
Intolerable Acts of King George and the Sons of Liberty when we last saw the
colonies they just successfully financed the French and Indian War without the
use of inflationary monetary policies as shown by the prior chapter not all Fiat
paper money was a failure such as the Pennsylvania colonial script we’ll
explore how the colonies lost the freedom to print interest-free paper
money and the axle would threaten to dry the colonies of their last remaining
medium of exchange silver species the refusal of King George to allow the
colonies to operate an honest money system which freed the ordinary man from
the clutches of the money manipulators was probably the prime cause of the
revolution Benjamin Franklin the British government for much of the
fiscal burden during the French and Indian War which was known to the rest
of the world as the Seven Years War most of the fighting did not take place in
the Americas but across the globe as it was considered to be the first true
world war the fighting would leave the British with 150 million pounds of debt
the interest payments alone sucked up half of the national budget King George
would look to the colonies as an untapped revenue source the colonies had
been forced by the English Parliament to return the species and retire all paper
notes with the currency Act of 1764 in colonies like Pennsylvania where paper
money had not been abused there was protest the paper money had
not stalled trade and was highly praised by Benjamin Franklin in a pamphlet a
modest inquiry to the nature and necessity of paper money the difference
between the success with the paper money was usually based on the government’s
ability to use it sparingly and not use it as a means to inflate their way out
of debts this act required the colonies to retire the colonial paper script and
made it no longer legal tender for public debts meaning it can no longer
serve as a taxable currency this was largely in an effort to move the
colonies to a system that could be taxed for silver species the reason was to be
able to pay the debts to the central bank in London the Bank of England that
had loaned the British government species hard money usually in the form
of silver and would be required to pay some of its debts in kind meaning that
the British government needed to import more species in the form of taxes from
the colonies banning the use of colonial paper money was the first step to
extracting the species England was broken and taken large amounts of debt
to sustain the fighting throughout the Seven Years War the colonies had been
under the protection of the British military and were able to use emergency
Fiat paper issues redeemed through taxes shortly thereafter to finance served
militias for defense Britain had long left the Americas well enough alone and
the colonies enjoyed unprecedented freedoms for the time period this is
largely due to the way that the colonies had been settled unlike the Spanish
operations in South America they were funded and overseen by the government
the British colonies had been settled by those who were willing to risk their own
lives and capital without the direct supervision of the British government of
course there was exceptions like the early settlements of James town this
freedom led the colonies to have a distaste for the new controls over their
economies that took the form of new taxes these taxes and acts would include
the proclamation of 1763 the bard sellers from moving west of the
Appalachian Mountains this took back land they had been given
to settlers for their assistance during the French and Indian War this was also
seen by the call as limiting future generations ability
to expand and obtain prosperity many of the colonists to include George
Washington ignored and settled or purchased land west of the Appalachians
the Sugar Act of 1764 this act reduced the price of the original tax but it was
still angering the colonists as Parliament intended to enforce the laws
unlike prior smuggling had been commonplace and people could easily
avoid paying taxes on goods throughout most of the colonial history now they
had to try harder and smuggling became even more risky and profitable the Stamp
Act of 1765 taxed printed materials including legal documents magazines
playing cards newspapers and many other forms of paper used throughout the
colonies these taxes were required to be paid in British sterling and not in
colonial paper money and was supposed to raise one hundred thousand pounds
annually this is when the colonies protests began to escalate they would
hold protests and the Sons of Liberty would create and organize non import
agreements with merchants essentially a boycott of British goods the colonists
even went so far as to intimidate the tax collectors with violence this could
go as far as tarring and feathering the British government would act with
unusual restraint throughout all these demonstrations allowing the local
governments to function as normal none of the protesters or organizers
were arrested or kept from holding public office no papers or printing
presses were barred or seized and radical groups like the Sons of Liberty
were allowed to operate unimpeded the British tyranny during this time was
sparse and barely the things that would incite revolution looking back at this
time it is easy to think that all of these acts created a clear line of
revolution but during the time it was far from so many still saw themselves as
part of England and simply wanted the right to govern themselves and the
pattern would emerge after the passing of a new act there would be protests
heated arguments tar and feathering intimidation of tax collectors would
return to a relatively calm state once again with the tension rising again with
the next act to return to relatively normal levels
once again shortly thereafter each act caused only slightly more pain than last
and had a relatively short adjustment period after the Stamp Act this would
begin to change all tax collectors of the Stamp Act had resigned from the post
for fear of their lives there is little to no revenue gained from this and
Parliament repealed it in 1766 the day after they would pass the declaratory
act would assert Parliament’s control over all matters concerning the colonies
stating that the Parliament had authority to make laws in the colonies
in all cases whatsoever following this they would
pass the town stood Act of 1767 this would tax glass paint tea paper and
other imports to the colonies once again this would be met with even higher
levels of resistance in the colonies the British government was growing tired of
the resistance to taxes and was still in desperate need of additional tax revenue
they begin to crack down on smuggling and began to move troops from the
frontiers to the coast lines this would create even higher levels of friction
and many confrontations leading to the Boston Massacre in 1770 where five were
killed this in and of itself was still not enough to spark revolution what
would spark the beginning of the grand crescendo that would lead the american
colonies to the road to revolution was the Tea Act of 1773 the Tea Act was
meant to solve three problems and provide a service to the colonies one it
was an attempt to keep the British East India Trading Company from going
bankrupt the collapse of such a big company would have largely negative
effects on the British economy many in Parliament were heavily invested in the
company personally as well this would also provide an increased tax revenue
with the tea sold and the service to the colonies they would enjoy cheaper tea
even after the tax than the tea that was currently smuggled into the colonies why
tea because the British East India Trading Company was sitting on a large
surplus in their warehouses the problem Parliament would give the British East
India Trading Company a total monopoly over the sale of tea in the colonies the
English thought the colonists would easily accept this as it would reduce
the price of tea however this would not go over so well in the colonies as they
were conditioned to expect the worst from these new Acts they saw this as the
first step to carving up the trade and freedom of their markets if the tea
market could be cut out and given to the East India Trading Company what would be
next lumber iron tobacco and here’s where we
take a step back in time to 1690 for a breaking in the normal taxation without
representation narrative traditionally taught in schools with the creation of
the British National Bank the Bank of England it was created as a privately
owned bank with its own stockholders the creation of the bank was out of
desperation the government had just lost a crushing naval defeat to the French in
1690 and needs to rebuild its Navy to remain a key player in the world stage
the British government was not known to be a fiscally sound institution as the
prior hundred years had shown with monarchs like King Charles the first who
had simply taken money out of the mint where the merchants kept their silver
and called it a loan his predecessor King Charles
second would default on an unrelated loan payment in 1676 creating an
economic crisis in Britain many of these fiscal problems were
likely to have been spawned from the fact that the king and old institution
of traditions and the Parliament of new Republican traditions clashed constantly
the English government required 1.2 million pounds to reconstruct their Navy
however the credit being so poor they could not secure a loan they turned to
an alternate option for funding the creation of the Bank of England it was
privately owned and not a legal part of Parliament or any other government body
the Bank of England was given the possession of the government’s balances
and was the only limited liability company granted the right to issue
banknotes it would raise the money for the loan as such it would loan the
government’s P XI in return for government bonds then would use the
bonds as collateral to issued more banknotes they could lend out to the
government and wanting parties this was one of the world’s first fractional
reserve banks because the same coin of species was being used to back multiple
banknotes in this manner the English government was able to secure a loan for
1.2 million by giving up a part of their sovereignty to a private organization
the bank would grow an influence over the next century and we become more and
more influential over Parliament’s actions in a very insidious cycle would
begin to emerge war would break out and the Bank of England would facilitate the
war effort through loans the loans would grow ever larger and this would push the
government to raise taxes on the people to service the debts rinse wash repeat
moving out of the 17th century and into the 18th century England had been
involved in external Wars roughly every 11 years however in the 18th century
they would enter a major conflict excluding small internal rebellions
every four years this is a common trend among nations that adopt national banks
because every war is a bankers war the effort takes four bank to make a small
loan to an individual is the same as it takes to make a larger one to a country
loaning to a country is indirectly loaning money to every citizen in the
country through taxes the liability of the debt is held and paid by everyone
within the borders the most profitable time to be a banker is during war and
when a large bank gains power within government what are the conclusion other
than war could there be those that sought to shear away from the taxation
of Britain were not merely for the cause of taxation without representation to
avoid the devastation that the escalating government debt required to
be repaid by depleting its citizens of the
Deas and wealth Thomas Jefferson put it bluntly if the American people ever
allow a private bank to control the issue of their currency first by
inflation than by deflation the banks and corporations that will grow up
around it will deprive the people of all property until their children wake up
homeless on the continent that their fathers conquered the issuing of paper
should be taken from the banks and restored to the people to whom it
properly belongs I sincerely believe that this banking establishment is more
dangerous than standing armies and that the principle of spending money to be
paid by the posterity under the name of funding it is but swindling few charity
on a large scale the colonies understood that if they did not get out from under
the monetary control of the central bank and government burdened with its debt
they would be deprived of their wealth and prosperity that they enjoyed for so
long slowly losing their liberties to taxes and bankers and now we return to
the colonies who have just received word the part of their economy has been
carved up and served to the East India Trading Company in 1773
seven ships filled with tea left for the colonies the ships that arrived in New
York and Philadelphia were stopped by the Sons of Liberty and were not
permitted to unload the cargo and were forced back to Britain with a tea still
on board ships that arrived in Charleston South Carolina were unloaded
and the Sons of Liberty kept the tea under lock and key
however in Boston the governor put his foot down and was set on having the tea
unloaded and sold as a law required this was met with protests and within a few
days time the Boston Tea Party would take place on December 13th 1773 one
hundred twenty men painted their faces and dressed as Indians stormed the ships
the beaver the Darth Moth that were whalers and the Eleanor there was a
full-rigged ship ten thousand pounds sterling worth of tea was dumped in the
harbor about 1 million in today’s money upon hearing the news King George stated
the dyes now cast the colonies must submit or triumph in response even those
in Parliament that had previously voiced leniency with the colonies would be
enraged intimidating tax collectors protests tar and feather earrings were
tolerable but this direction of tea that was a much-needed link to tax revenue
and the saving of the East India Trading Company from bankruptcy was too far in
response to the problem that would pass the Intolerable Acts of 1774 known as a
coercive acts in England the act would shut down the Boston Harbor until the
10,000 pounds were repaid this would bring the Massachusetts economy to a
standstill radical reorganization of the
Massachusetts government taking away the historic self-governments of the colony
allowing the governor to quarter soldiers
in taverns and vacant houses a move that signal a future influx of troops to the
region the Sons of Liberty would capitalize this and organize the First
Continental Congress in 1774 it would be organized to help against further
threats of Liberty in the colonies and established a colonial wide boycott of
British goods the Congress would encourage towns to create militias and
stockpile arms this would give birth to this historic Minutemen that would be
ready to fight within a minutes notice join us in our next video where King
George will declare the New England colonies and his state of rebellion the
first shots of the revolution we fired as British redcoats make their way to
destroy a stockpile of weapons munitions near Boston that had been set up as a
part of the Continental Congress’s efforts this has been money recall and
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