Navigation Acts

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Navigation Acts were intended to protect English (later British) commerce from foreign competition. This assumed that the volume of world trade was finite and that any gain by one country could only be at the expense of another. The great Act of 1651 was aimed at the Dutch carrying trade. It required that all imports should be carried in ships either owned by English subjects or owned by the nationals of the country from which the goods came. The Navigation Acts were abolished in 1849, a final step towards making Britain a free trade economy.

Navigation Acts had their origin in Britain's regulation of its coastal trade, which was extended to the British colonies as they developed. Parliament enacted the first Navigation Act in 1660, although this legislation had its roots in earlier policy. By the close of the seventeenth century, Parliament had put other Navigation Acts in place and had installed colonial officials to enforce them through a system of admiralty courts, which had jurisdiction in cases involving trade law. The purpose of the Navigation Acts was two fold: to protect British shipping against competition from the Dutch and other foreign powers, and to grant British merchants a monopoly on colonial commodities such as Tobacco and Sugar. The Navigation Acts came about in the context of Mercantilism, the dominant economic system of the time among the European powers. According to mercantilist thought, a nation could measure its wealth in bullion, or its accumulated supply of gold. According to conventional wisdom, because there existed a finite supply of gold in the world, there also existed a finite supply of wealth. An imperial power acquired colonies for the purpose of expanding its wealth—preferably through the discovery of gold, but also through the production of natural resources, which colonists would ship to the mother country, where manufacturers would process these raw materials into wealth-producing finished products. According to the mercantilist economic model, therefore, a system of open trade could only result in the loss of wealth. To retain material wealth in the imperial realm, a trading power had to utilize its colonies' resources within a closed-trade system, such as the one that the Navigation Acts implemented.

Under these acts, British colonies in Asia, Africa, and America could import and export goods only in English vessels, and three-fourths of each crew was to be English. Other clauses stipulated that England could import products from its colonies in Asia, Africa, or America on English vessels and that goods from foreign countries could arrive in England only on English vessels or on the vessels of the country from which the goods originated. In effect, the Navigation Acts gave English subjects (defined as anyone living within the British realm) and English ships a legal monopoly of all trade between various colonial ports and between these ports and England. Even the trade between colonial ports and foreign countries was limited to English vessels. Thus, foreign vessels were excluded entirely from colonial ports and could trade only at ports in the British Isles.

Another field of legislation related to commodities. The Navigation Acts "enumerated" certain colonial products, which could be exported from the place of production only to another British colony or to England. At first the list included tobacco, sugar, Indigo, Cotton, Wool, ginger, and fustic and other dyewoods. Later, Parliament extended the list to include Naval Stores, Hemp, Rice, Molasses, Beaver skins, Furs, Copper ore, Iron, and Lumber. In addition, the colonies could import Asian goods and European manufactures only from England—although an exception was made in the case of Salt or wine from the Azores or the Madeira Islands and food products from Ireland or Scotland. Parliament implemented a system of bonds to enforce the trade of enumerated commodities under the Navigation Acts. These bonds required the master of the vessel to comply with the provisions of the acts. Such arrangements operated so as to give American shipowners a practical monopoly of the trade between the continental and West Indian colonies. Residents of Great Britain in turn had a general monopoly of the carrying of the heavy enumerated goods from the colonies to the British Isles.

Colonists were largely limited to buying British manufactures. This was not necessarily a disadvantage, because an elaborate system of export bounties was provided so that British goods were actually cheaper in the colonies than similar foreign goods. These bounties averaged more than £38,000 per year for the ten years preceding the Revolution. From 1757 to 1770 the bounties on British linens exported to the colonies totaled £346,232 according to British treasury reports. In addition to bounties, there was a series of rebates, or drawbacks, of duties on European goods exported to the colonies. These, too, ran into formidable sums. Those to the West Indies alone amounted to £34,000 in 1774. The average payments from the British treasury in bounties and drawbacks on exports to the colonies in 1764 amounted to about £250,000 sterling per year.

Closely related to the Navigation Acts was another series of measures called the Trade Acts, which are usually confused with the Navigation Acts proper. Most of these were enacted after 1700, and they gradually developed into a complicated system of trade control and encouragement. The general plan was to make the entire British Empire prosperous and the trade of one section complementary to that of other sections. The Trade Acts employed a variety of measures to encourage the colonial production of goods desired in Britain. These laws gave colonial tobacco a complete monopoly of the home market by prohibiting its growth in England and imposing heavy import duties on the competing Spanish tobacco. The Trade Acts encouraged production of other colonial goods through tariff duties, which discriminated sharply in favor of the colonial product and against the competing foreign product. The legislation also granted rebates for some colonial commodities for which production exceeded British demand. Rebates facilitated the flow of these items through British markets to their foreign destinations. In other cases, regulations permitted exports of surplus colonial products, such as rice, directly to foreign colonies and to southern Europe without passing through England. In still other cases, Parliament allowed direct cash bounties on such colonial products as hemp, indigo, lumber, and Silk upon their arrival in England. These alone totaled more than £82,000 from 1771 to 1775. Naval stores also received liberal bounties, totaling £1,438,762 from 1706 to 1774, and at the time of the Revolution were averaging £25,000 annually.

Overall, the navigation system was mutually profitable to colonies and mother country. Resistance to the acts emerged periodically, however. In the late seventeenth century, for example, colonists complained that James II used the Navigation Acts to hamper colonial economic autonomy. Colonists also resisted British attempts to use trade law as taxation measures. Occasionally, parliamentary prohibitions discouraged colonial industries if they threatened serious competition with an important home industry. Notable examples include prohibitions of the intercolonial export of hats made in the colonies (1732; see Hat Manufacture, Colonial Restriction on) and wool grown or manufactured in the colonies (1699). In this case, the powerful Company of Felt-Makers in London became alarmed at the increasing number of hats that colonial manufacturers were distributing throughout the British colonies and in southern Europe. In response to these complaints, Parliament passed legislation that regulated apprenticeships for hatmakers and slowed the growth of this industry. In another instance, Parliament—responding to English manufacturers who feared colonial competition—forbade the establishment of new mills to produce wrought iron and steel (1750). The same legislation encouraged the production and export of pig iron and bar iron, which benefitted both the colonies and the mother country. Laws such as these produced some local complaint, although they evidently affected few people, because many ignored the more restrictive aspects of the regulations.

More common than resistance to the law was simple negligence—either by ignoring specific restrictions, as hat and iron manufacturers often did, or by Smuggling. Evidence indicates that smuggling flourished in the colonies throughout the seventeenth and eighteenth centuries. Parliament's delays in empowering customs agents, the distance between Britain and its colonies, and the length and complex geography of the North American coastline all made thorough enforcement of the Navigation and Trade Acts nearly impossible. As a result, foreign goods proliferated throught the colonies, and many colonial materials left North America on foreign vessels. Other evidence of smuggling included the frequent abuse of customs agents and the preponderance of bribery, forgery, and other fraud among customs agents and colonial merchants alike. Smuggling was so prevalent that, in the mid-eighteenth century, measures such as the Revenue Act (also known as the Sugar Act, 1764) and the Tea Act (1773), which reduced duties in the legitimate trade while cracking down on smugglers, sparked some of the fiercest patriot resistance.

As long as the trade and navigation laws were limited to the regulation of trade and the promotion of the total commerce of the empire, they generally found support in eighteenth-century America. The enumerated products came largely from the colonies that remained loyal. The bounties went largely to the colonies that revolted. The New England shipping industry depended greatly on the protection that the Navigation Acts ensured. Consequently, the First Continental Congress approved the navigation system in its resolutions, and Benjamin Franklin offered to have the acts reenacted by every colonial legislature in America and to guarantee them for a hundred years if Britain abandoned efforts to tax the American colonies.

Bibliography

Andrews, K. R., et al. The Westward Enterprise: English Activities in Ireland, the Atlantic, and America, 1480–1650. Detroit, Mich.: Wayne State University Press, 1979.

Carr, Lois Green, et al., eds. Colonial Chesapeake Society. Chapel Hill: University of North Carolina Press, 1988.

Church, R. A., ed. The Coal and Iron Industries. Oxford: Blackwell, 1994.

Kammen, Michael G. Empire and Interest: The American Colonies and the Politics of Mercantilism. Philadelphia: Lippincott, 1970.

McCusker, John J., and Kenneth Morgan, eds. The Early Modern Atlantic Economy. New York: Cambridge University Press, 2000.

McCusker, John J., and Russell R. Menard. The Economy of British America, 1607–1789. Chapel Hill: University of North Carolina Press, 1985.

The Navigation laws enforced a system of economic management designed to ensure that England's colonial trade was controlled for the benefit of the mother country. There was nothing unique in this arrangement, later referred to as mercantilism, since all the major European powers operated similar systems. Unfortunately, the weak state of England during the second quarter of the seventeenth century meant that much of its colonial trade had been taken over by foreign powers, notably the Dutch. Accordingly, in 1651 the Commonwealth Parliament introduced the first Navigation Act, which required that all plantation goods imported into England be shipped in vessels owned and (three-quarters) manned by Englishmen or in vessels belonging to the country of origin. The expectation was that these restrictions would exclude the Dutch from England's colonial commerce while increasing England's wealth and naval power. The immediate result was the first Anglo-Dutch Naval War of 1652–1654.

Despite the successful exclusion of the Dutch from the carrying trade, it was quickly perceived that the act of 1651 was deficient because it still allowed colonial goods to be shipped directly to Europe in the vessels of other nations, resulting in a loss of revenue and trade to the mother country. Accordingly, a new bill was drafted in 1660 that not only banned foreign vessels from English colonial ports but declared that certain high-value commodities such as sugar, tobacco, cotton, and indigo must be shipped to England before being reexported elsewhere. However, because the colonies were not only exporters of raw materials but also importers of finished goods, a third Navigation Act was deemed necessary in 1663 to ensure that foreign manufactures reached the colonies only via England, where they first could be taxed, to make them less competitive with English products, while at the same time raising revenue for the crown.

While the acts of 1660 and 1663 constituted the heart of the system of navigation laws, further measures proved necessary over time. In 1673 a fourth act was passed to bring the colonies into line regarding the enumerated duties, notably the one penny duty on a pound of tobacco and the five shilling duty on a hundredweight of white sugar, which up to this time were collected only in England. Then in 1696 a new administrative agency, the Board of Trade, was established to monitor the system more effectively. Simultaneously, special vice-admiralty courts were created to punish those breaking the acts of trade.

Until this time the colonies had been seen primarily as producers of exotic goods and consumers of British manufactures. Now a new consideration began to influence British imperial policy: the need to protect metropolitan producers from colonial competition. In 1699 the Woollen Act was passed, which banned the export of colonial woolen garments to Britain. It was followed in 1732 by the Hat Act and in 1750 by the Iron Act, both similarly aimed at prohibiting (or at least regulating) the production of finished articles in the colonies. These acts, however, were poorly enforced and largely unnecessary since colonial output was rarely of sufficient quality to challenge British manufacturers.

Opinions vary about the economic effects of the Navigation Acts. Most historians believe that the system on balance was beneficial to the colonies: the advantages of being part of an expanding British economy greatly outweighed the disadvantages of these poorly enforced trade restrictions. In any case, there were few complaints about the Navigation Acts in the American Declaration of Independence of 1776. Indeed, the Americans, finding that economic independence was not necessarily as attractive as political independence, sought to negotiate partial reentry into Britain's mercantilist system after the Peace Treaty of 1783.

Bibliography

Appleby, Joyce Oldham. Economic Thought and Ideology in Seventeenth Century England. Princeton, 1978.

Dickerson, Oliver M. The Navigation Acts and the American Revolution. New York, 1963.

Egnal, Marc. New World Economies: The Growth of the Thirteen Colonies and Early Canada. New York, 1998.

Mc Cusker, John J., and Russell R. Menard. The Economy of British America, 1607–1789. Chapel Hill, N.C., 1985.

Shepherd, James F., and Gary M. Walton. Shipping, Maritime Trade, and the Economic Development of Colonial North America. Cambridge, U.K., 1972.

—RICHARD MIDDLETON

Wikisource has original text related to this article: Navigation Acts

The English Navigation Acts were a series of laws which restricted the use of foreign shipping for trade between England (after 1707 Great Britain) and its colonies, which started in 1651. At their outset, they were a factor in the Anglo-Dutch Wars. Later, they were one of several sources of resentment in the American colonies against Great Britain, fuelling the flames of the American Revolutionary War.

Contents 1 Early legislation 2 Background 3 Navigation Ordinance 1651 4 The Navigation Acts 4.1 Molasses Act 1733 4.2 Repeal 5 Effects 6 Notes 7 References

Early legislation

Statutes had periodically been passed concerning shipping and the regulation of English trade since 1381.^[1] Examples of the latter were the charters establishing Staple ports.

This section requires expansion.

Background

The major impetus for the Navigation Acts was the ruinous deterioration of English trade in the aftermath of the Eighty Years War, and the concomitant lifting of the Spanish trade-embargoes on trade between the Spanish Empire and the Dutch Republic. The end of the embargoes in 1647 unleashed the full power of the Amsterdam Entrepôt and other Dutch competitive advantages in world trade. Within a few years, English merchants had practically been overwhelmed in the trade on the Iberian Peninsula, the Mediterranean and the Levant. Even the trade with English colonies (partly still in the hands of the royalists, as the English Civil War was in its final stages and the Commonwealth of England had not yet imposed its authority throughout the English colonies) was "engrossed" by Dutch merchants. English direct trade was crowded out by a sudden influx of commodities from the Levant, Mediterranean and the Spanish and Portuguese empires, and the West Indies via the Dutch Entrepôt, carried in Dutch bottoms and for Dutch account.^[2]

The obvious solution seemed to be to seal off the English and Scottish markets to these unwanted imports. The precedent was the Act the Greenland Company had obtained from Parliament in 1645 prohibiting the import of whale products into England, except in ships owned by that company. This principle was now generalized. In 1648 the Levant Company petitioned Parliament for the prohibition of imports of Turkish goods "...from Holland and other places but directly from the places of their growth."^[3] Baltic traders added their voices to this chorus. In 1650 the Standing Council for Trade and the Council of State of the Commonwealth prepared a general policy designed to impede the flow of Mediterranean and colonial commodities via Holland and Zeeland into England.^[4]

Navigation Ordinance 1651

For further detail of the background see First Anglo–Dutch War.

The Navigation Act bill was passed in October 1651 by the Parliament of the Commonwealth of England led by Oliver Cromwell, reinforcing a longstanding principle of government policy that English trade should be carried in English vessels. It was reaction to the failure of an English diplomatic mission to The Hague seeking a joining of the Commonwealth by the Republic of the Seven United Netherlands, after the States of Holland had made some cautious overtures to Cromwell to counter the monarchal aspirations of stadtholder William II of Orange. The stadtholder had suddenly died however and the States were now embarrassed by Cromwell taking the idea quite too seriously. The English proposed the joint conquest of all remaining Spanish and Portuguese possessions. England would take America and the Dutch Africa and Asia. As the Dutch, however, had just ended their war with Spain and already taken over most Portuguese colonies in Asia, they saw little advantage in this grandiose scheme and proposed a free trade agreement as an alternative to a full political union. This again was unacceptable to the British, who would be unable to compete on such a level playing field, and was seen by them as a deliberate affront.

The Act banned foreign ships from transporting goods from outside Europe to England or its colonies and banned third party countries' ships from transporting goods from a country elsewhere in Europe to England. These rules specifically targeted the Dutch who controlled a large section of Europe's international trade and even much of England's coastal shipping. It excluded the Dutch from essentially all trade with England, as the Dutch economy was competitive, not complementary with the English, and the two countries therefore exchanged few commodities. This Anglo-Dutch trade, however, constituted only a small fraction of total Dutch trade flows. The Act is often mentioned as a major cause of the First Anglo-Dutch War, though it was only part of a larger British policy to engage in war after the negotiations had failed. The English naval victories in 1653 (the Battle of Portland, the Battle of the Gabbard and the Battle of Scheveningen) showed the supremacy of the Commonwealth navy in home waters. However, farther afield the Dutch predominated and were able to close down English commerce in the Baltic and the Mediterranean. Both countries held each other in a stifling embrace.^[5]

The Treaty of Westminster (1654) ended the impasse. The Dutch acknowledged the Act in this peace, but it seems to have had very little influence on their trade. For England the Act offered only limited solace. It could not limit the deterioration of England's overseas trading position, except in the cases where England herself was the principal consumer, like the Canaries' wine trade and the trade in Puglian olive oil. In the trade with the West Indies the Dutch kept up a flourishing "smuggling" trade, thanks to the preference of English planters for Dutch import goods and the better deal the Dutch offered in the sugar trade. The Dutch colony of New Netherland offered a loophole (through intercolonial trade) wide enough to drive a shipload of Virginian tobacco through.^[6]

The Navigation Acts

The 1651 Act (like other legislation of the Commonwealth period) was declared void on The Restoration of Charles II, having been passed by 'usurping powers'. Parliament therefore passed new legislation. This is generally referred to as the "Navigation Acts", and (with some amendments) remained in force for nearly two centuries.

The Navigation Act 1660 added a twist to Oliver Cromwell's act; ships' crews had to be three-quarters English, and "enumerated" products not produced by the mother country, such as tobacco, cotton, and sugar were to be shipped from the colonies only to England or other English colonies.

The Navigation Act 1663 (also called the Act for the Encouragement of Trade) required all European goods bound for America (or other colonies) to be shipped through England or Wales first. In England, the goods would be unloaded, inspected, paid duties, and reloaded. The trade had to be carried in English bottoms (i.e. vessels), which included those of its colonies. Furthermore, imports of 'enumerated commodities' (such as sugar, rice, and tobacco) had to be landed and pay tax before going on to other countries. This increased the cost to the colonies, and increased the shipping time.

This Act entitled colonial shipping and seamen to enjoy the full benefits of the exclusive provisions. There was no bar put in the way of colonists who might wish to trade in their own shipping with foreign plantations or European countries other than England, provided they did not violate the enumerated commodity clause.^[7]

"English bottoms" included vessels built in English plantations (i.e. colonies), for example in America.

The Acts were in full force for a short time only. After the Second Anglo-Dutch War, which ended disastrously for England, the Dutch obtained the right to ship commodities produced in their German hinterland to England as if these were Dutch goods. Even more importantly, England conceded the principle of "free ship, free good" which provided freedom of molestation by the Royal Navy of Dutch shipping on the high seas, even in wars in which the Dutch Republic was neutral. This more or less gave the Dutch freedom to conduct their "smuggling" unhindered as long as they were not caught red-handed in territorial waters controlled by England. These provisions were reconfimed in the Treaty of Westminster (1674) after the Third Anglo-Dutch War.^[8]

Molasses Act 1733

The 1733 Molasses Act levied heavy duties on the trade of sugar from the French West Indies to the American colonies, forcing the colonists to buy the more expensive sugar from the British West Indies instead. The law was widely flouted, but efforts by the British to prevent smuggling created hostility and contributed to the American Revolution. The Molasses Act was the first of the Sugar Acts. The act was set to expire in 1763, and in 1764 was renewed as the Sugar Act, which caused unrest with the colonists.

Repeal

The Navigation Acts were repealed in 1849 under the influence of a laissez-faire philosophy. The Navigation Acts were passed under the economic theory of mercantilism under which wealth was to be increased by restricting trade to colonies rather than with free trade. By 1849 "a central part of British capital's import strategy was to reduce the cost of food through cheap foreign imports and in this way to reduce the cost of maintaining labour power"(van Houten). Repealing the Navigation Acts along with the Corn Laws served this purpose, but also led to the break up of the formal British Empire.

Effects

The introduction of the legislation caused Britain's shipping industry to develop in isolation. However, it had the advantage to English shippers of severely limiting the ability of Dutch ships to participate in the carrying trade to England. The Navigation Acts, by reserving British colonial trade to British shipping, may have significantly assisted in the growth of London as a major entrepôt for American colonial wares at the expense of Dutch cities. The maintenance of a certain level of merchant shipping and of trade generally also facilitated a rapid increase in the size and quality of the Royal Navy, which eventually (after the Anglo-Dutch Alliance of 1689 limited the Dutch navy to three-fifths of the size of the English one) led to Britain becoming a global superpower until the mid 20th Century. That naval might, however, never was sufficient to limit Dutch trading power. The reason was that the Dutch trading system rested on such a degree of leverage over overseas markets and shipping resources, combined with a financial power that was only overtaken by Great Britain during the 18th century (after the Glorious Revolution), that it enabled the Dutch to put sufficient pressure on the English to prevent them from sustaining naval campaigns of sufficient length to wrest maritime concessions from the Dutch.^[9]

The Navigation Acts, while enriching Britain, caused resentment in the colonies and contributed to the American Revolution. The Navigation Acts required all imports either to be sold in England or bought from England no matter what price could be obtained elsewhere. The rationale was the theory of Mercantilism: the more money one country or colony has, the more power it will hold. The colonists resorted to smuggling. Writs of assistance were issued to enforce the Navigation Acts.

Notes

1. ^ "Navigation Acts, Britannica Concise". http://concise.britannica.com/ebc/article-9055084/Navigation-Act. Retrieved 2007-09-04. 
2. ^ Israel (1997), pp. 305-309
3. ^ Israel ((1997), p. 309
4. ^ Israel (1997), pp. 309-310
5. ^ Israel (1997), p. 316
6. ^ Israel (1997), p.310-311
7. ^ Craven, p. 35
8. ^ Israel (1997), pp. 316-317
9. ^ Israel (1997), pp. 317-318

References

• 'Charles II, 1660: An Act for the Encourageing and increasing of Shipping and Navigation.', Statutes of the Realm: volume 5: 1628-80 (1819), pp. 246-50. URL: [1]. Date accessed: 27 April 2007.
• 'Charles II, 1663: An Act for the Encouragement of Trade', Statutes of the Realm: volume 5: 1628-80 (1819), pp. 449-52. URL: [2]. Date accessed: 27 April 2007.
• 'Corporate Canada: an historical outline', Gerry van Houten, pg 42-43, 1991, Progress Books
• Craven, Wesley Frank, The Colonies in Transition, 1968
• Israel, J.I. (1997), "England's Mercantilist Response to Dutch World Trade Primacy, 1647-74," in: Conflicts of Empires. Spain, the Low Countries and the struggle for world supremacy 1585-1713. Hambledon Press, ISBN 1-85285-161-9, pp. 305-318
• Navigation Act 1651 at British-Civil-Wars.co.uk
• 'October 1651: An Act for increase of Shipping, and Encouragement of the Navigation of this Nation.', Acts and Ordinances of the Interregnum, 1642-1660 (1911), pp. 559-62. URL: [3]. Date accessed: 27 April] 2007.

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