Jan 12, 2019 3 min read

The Treaty of Paris, ending the American Revolution and recognizing America as a sovereign nation, was ratified this week (Jan. 14) in 1784.

The revolution’s causes are well known. Great Britain, having spent a fortune defending its colonial subjects from imperial nations such as France and Spain, and from hostile Indian tribes, thought it only fair that the colonists pay a share of that cost. Thus, did the British Parliament, with King George III’s blessing, pass a series of revenue acts – Sugar Act, Stamp Act, Tea Act, Townshend Acts, etc. – designed to raise badly needed revenue from the American colonists.

Those colonists, of course, objected, claiming that this was taxation without representation. At the time Americans considered themselves full British citizens, with the same rights as their cousins across the Atlantic Ocean, and British law and custom forbade Parliament from passing laws affecting British citizens unless those citizens were represented in Parliament regarding such laws. Therefore, since American colonists were not represented in Parliament, by law they could not be taxed.

What is ironic about this disagreement is that the revenue acts helped bring about the American Revolution, yet in terms of revenue collected they were abject failures. In almost every case the cost of administering the acts was far greater than the revenues collected, which is one reason none of them lasted long.

Another reason they didn’t last long was that, angered at these revenue acts, Americans began boycotting British goods. The potential cost of this lost trade with America dwarfed the potential income from the revenue acts, because British merchants hugely profited from sending more expensive finished products to America in return for less expensive, and less profitable, colonial raw materials American merchants shipped to Great Britain.

And in hindsight, it was stupid to insist on keeping the American colonies. The staggering costs in blood and treasure of the wars Britain had fought in America, either fighting for the colonists or fighting against them, far exceeded the financial return, as King George III – of all people – recognized after the war ended. In a letter to a friend he concluded that America as a British colony had been much more trouble than an independent American nation would be because Britain could expect the same lucrative trade arrangement with an independent America, yet it would involve none of the costs of either defending them or fighting to keep them.

“It is to be hoped that we shall reap more advantages from their trade as friends than we could ever derive from them as colonies,” he concluded.

It would prove to be incredible foresight on his part, but also a quintessential – and very expensive – example of 20-20 hindsight.

Bruce G. Kauffmann’s email address is bruce@historylessons.net.