Recovering Britain’s War Debt: Whigs and the Stamp Act


By Allen Guelzo, Ph.D., Gettysburg College

The 1763 Treaty of Paris, by which France gave up its Canadian territories to Britain, ended the Great War for the Empire. There was great rejoicing in Britain at this, but Britain’s war debt was now ₤122 million!

The map is crop of a larger map of North America, showing how British possessions in North America increased after the 1763 Treaty of Paris.
Detail of a 1763 map shows British possessions in North America after the Treaty of Paris. (Image: Sayer, d’Anville, and Didier/Public domain)

The War Debt

To finance a war that had seen the sending of regular British troops to North America for the first time in any substantial numbers, the king’s government amassed a war debt of over ₤122 million. The debt charges alone cost approximately ₤4.5 million a year, which amounted to 60 percent of the British government’s revenues.

By the Treaty of Paris, France withdrew from its territories in North America. This allowed the British to demobilize large parts of the army, but even a skeleton force of just 20 battalions of redcoat infantry would still cost the government over ₤200,000 a year. Half of this force would have to be stationed in North America to police the new Canadian provinces and the Native American population there.

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Absolutism versus Parliament in Britain

The crisis over the war debt coincided with an equally severe crisis over the landscape of British politics. The 1600s was not only the age of mercantilism; it was the age of absolutism. Absolutism was the ideology of monarchs who believed—whether by divine right or by sheer necessity—that the only legitimate form of government was a monarchy where all national political power was centralized in the king’s hands.

The kings of France were probably the most successful of all the kings of Europe in establishing an absolute monarchy. In England, the Stuart monarchs attempted to impose the same kind of absolutism that the French had imposed on England. In England, however, the response was, first in 1642 and then in 1688, political revolution and the overthrow of the king.

In 1642, it had been Charles I who was overthrown. In 1688, in the Glorious Revolution, Parliament overthrew King James II. Curiously, it was the turbulence of these revolutions that seemed to strengthen the arguments of the absolutists.

The absolutists argued that only a powerful, centralized monarchy could save a country from political anarchy. At the same time, it was the triumph of these revolutions in the 1640s and the 1680s that persuaded many English thinkers that absolutism was the enemy to English liberty.

The Whigs and the Tories

Portrait of Whig writer John Locke by Godfrey Kneller.
John Locke was one of the earliest English writers to talk about the dangers of absolute monarchy. (Image: Kneller/Public domain)

By the early 1700s, this disagreement had resolved itself, more or less, into two political ideologies in England: Whig and Tory. The word ‘Whig’ seems to have been derived from ‘whiggamore’, a word that is suggestive of somebody from the countryside.

The Whigs liked to think of themselves as the people of the country representing the real, authentic spirit of the English people—ruled by a simple, strict Protestantism and concerned with the promotion of the good of rural communities.

Four Propositions of ‘Whiggery’

In the hands of political writers like John Locke, James Harrington, and Algernon Sidney, ‘Whiggery’ was distilled into four simple propositions. First, that liberty is ‘natural’, because all human beings are born with a set of natural rights, and are born with those rights in a state of perfect liberty.

The second proposition was that, for the sake of protecting their liberty and property, people agree to give up some small part of their liberty and property to create governments that will help them protect the rest of their liberty and property.

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The third proposition of Whig political thinking is that liberty can be destroyed by a corrupt political elite, who strive to concentrate power in themselves and to corrupt others. However, they believed that, since governments are created by the people themselves for a practical end, corrupt governments can be changed by the people.

The fourth proposition in Whig thinking was that because liberty was easily corrupted by power. Thus, it should be allied with virtue, to resist the allure of power. This virtue could be either natural, like modesty, productive work, and self-restraint, or religious.

Though some radical Whigs wanted to get rid of kings and make England a republic, not all Whigs were opposed to monarchy. John Locke, for instance, insisted that the three-way structure of the British government—the King, House of Lords, and the House of Commons in Parliament—was the most perfectly balanced system for the protection of liberty that one could imagine.

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George Grenville and the Stamp Act

George Grenville, was appointed the prime minister of Great Britain soon after the Great War ended. Though a Whig, Grenville was committed to the mercantilist outlook. (Image: Hoare/Public domain)

As soon as the Great War for Empire was over, King George III appointed veteran Parliamentarian George Grenville his new chief of government. Though a Whig, Grenville was certainly committed to the mercantilist outlook.

He believed that the money Britain had spent so freely to defend America ought to be recouped by taxing the Americans. ‘We have expended much in America’, Grenville told Parliament on March 9, 1764. ‘Let us now avail ourselves of the fruit of that expense’.

Grenville’s solution to the debt crisis was for Parliament to lay a series of direct taxes on the colonies, especially the Stamp Act, which required printed documents (including even newspapers and diplomas) to carry a revenue stamp.

All of the legislation was in place by March of 1765, and the Stamp Act was to come into effect on the first of November. But George Grenville had severely underestimated the opposition to the Stamp Act in America. This was the beginning of the rejection of the Empire by the Americans.

Commonly Asked Questions about Britain’s American War Debt and the Stamp Act

Q. What was the financial problem facing Britain in 1763?

To finance the Great War for Empire that had seen the sending of regular British troops to North America for the first time in any substantial numbers, the British government had amassed a war debt of over ₤122 million, which they could not recover by taxing British citizens.

Q. What did the Whigs think about monarchy?

Whigs believed that absolutism was the enemy to English liberty. Some Whigs wanted to remove monarchy, but others thought that the English monarchy was well balanced by the Parliament.

Q. What was George Grenville’s solution to the war debt problem?

Grenville’s solution to the debt crisis was for Parliament to lay a series of direct taxes on the colonies, especially the Stamp Act, which required printed documents (including even newspapers and diplomas) to carry a revenue stamp.

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