By Rundassa Eshete*

When the Americans were getting ready to fight for their freedom, Britain was world’s military and economic superpower. The thirteen American states were British’s colony just like Oromia and other states are Tigreans colony today.

In addition to other colonies it had, Britain defeated France and took away more territories east of the Mississippi River as well as all of Canada and Spain surrendering its claim to Florida. Given the sheer magnitude of the British military and its empire, the actions taken by the Americans for independence was the most fascinating thing to think about.

How did the Americans able to achieve a victory over what was at the time the world’s preeminent military power? What were the consequences of achieving independence? These and many other questions forces us to look into economic, legal, military, political, and social matters that helped the Americans during their liberation struggle from British.

Economic Causes of the Revolutionary War

As apart of the British empire, 13 colonial states of America were protected from foreign invasion by the British military. Just like todays Oromia under the Tigre colonial rule, America’s 13 states adhered to the British rules and regulations that required the colonized states that;

1. All trade within the empire be conducted on ships which were constructed, owned and largely manned by British citizens. Certain enumerated goods whether exported or imported by the colonies had to be shipped through England regardless of the final port of destination.

2. Under the terms of the Proclamation of 1763 and the Quebec Act of 1774 the americans were not allowed to settle or to trade with the Indians without the permission of the British government.

3. The americans had pay high taxes during the war between Britain and France

With 10,000 standing army in North America, the largest military on the face of the earth during that time, Britain continue to acquire new territories and enforced its new land policy in the West. Forts were to be built which would become the new centers of trade with the Indians.

When the Sugar Act of 1764 past by the Britain against the Americans, the Americans opposed these rules initially in a variety of peaceful forms.

First, they attempted to exert some influence in parliament through petition and lobbying. However, it was the economic boycott that became by far the most effective means of altering the new British economic policies. In 1765 representatives from nine colonies met at the Stamp Act Congress in New York and organized a boycott of imported English goods. The boycott was so successful in reducing trade that English merchants lobbied Parliament for the repeal of the new taxes. In 1776 Parliament soon repealed both the Stamp and Sugar Acts.

In response to the Townshend Acts of 1767 a second major boycott started in 1768 in Boston and New York and subsequently spread to other cities leading Parliament in 1770 to repeal all of the Townshend duties except the one on tea. In addition, Parliament decided at the same time not to renew the Quartering Act.

The Americans appeared to have successfully overturned the new British post war tax agenda. However, Parliament had not given up what it believed to be its right to tax the colonies. On the same day it repealed the Stamp Act, Parliament passed the Declaratory Act stating the British government had the full power and authority to make laws governing the colonies in all cases whatsoever including taxation. Policies not principles had been overturned.

Three years after the repeal of the Townshend duties British policy was once again to emerge as an issue in the colonies. This time the American reaction was not peaceful. It all started when Parliament for the first time granted an exemption from the Navigation Acts.

In an effort to assist the financially troubled British East India Company Parliament passed the Tea Act of 1773, which allowed the company to ship tea directly to America. A small group of colonists/Americans responded by boarding three British ships in the Boston harbor and throwing overboard several hundred chests of tea owned by the East India Company

Once done Parliament then went on to pass the Quebec Act as a continuation of its policy of restricting the settlement of the West.

On September 5, 1774 American delegates conveyed to the British government a list of grievances that demanded the repeal of thirteen acts of Parliament. What happened then was a sequence of events that led to a significant increase in the degree of American resistance to British polices. The British government decided it was time to impose a military solution to the crisis. Boston was occupied by British troops. In April a military confrontation occurred at Lexington and Concord.

Within a month the delegates decided to fundamentally change the nature of their resistance to British policies. By then, the Americans purchased arms and munitions. To pay for all of this they established their own currency. In October as American forces closed in on Quebec the King of England in a speech to Parliament declared that the colonists having formed their own government were now fighting for their independence. It was to be only a matter of months before the Americans formally declared their indpendence.

It turned out that making a case for the avoidance of British taxes as a major incentive for independence proved difficult. The reason was that many of the taxes imposed were later repealed. The actual level of taxation appeared to be relatively modest. After all, the Americans soon after adopting the Constitution taxed themselves at far higher rates than the British had prior to the Revolution. Rather it seemed the incentive for independence might have been the avoidance of the British regulation of colonial trade. Unlike some of the new British taxes, the Navigation Acts had remained intact throughout this period.

The colonized Americans had both strengths and weaknesses in terms of undertaking a revolution. The American population was two million while the British population was six million. The hurdles confronting the Americans in achieving independence were indeed formidable. The British military had an array of advantages. With virtual control of the Atlantic its navy could attack anywhere along the American coast at will and would have borne logistical support for the army without much interference. A large core of experienced officers commanded a highly disciplined and well-drilled army in the large-unit tactics of eighteenth century European warfare. By these measures the American military would have great difficulty in defeating the British. Its navy was small. The American Army had relatively few officers proficient in large-unit military tactics. Lacking both the numbers and the discipline of its adversary the American army was unlikely to be able to meet the British army on equal terms on the battlefield.

But frustrated without a conclusive victory, the British altered their strategy. During 1777 a plan was devised to cut off New England from the rest of the colonies, contain the American Army, and then defeat it. An army was assembled in Canada under the command of General Burgoyne and then sent to and down along the Hudson River. It was to link up with an army sent from New York City. Unfortunately for the British the plan totally unraveled as in October Burgoyne’s army was defeated at the battle of Saratoga and forced to surrender.

With the victory at Saratoga the military side of the war had improved considerably for the Americans. However, the financial situation was seriously deteriorating. The states to this point had made no voluntary payments to the American congress. At the same time the new currency which the Americans printed had to compete with a variety of other currencies for resources. Each American states were printing their own individual currencies to help finance expenditures. Moreover the British in an effort to destroy American funding system had undertaken a covert program of counterfeiting the American dollar. These dollars were printed and then distributed throughout the former colonies by the British army and agents loyal to the Crown.
Altogether this expansion of the nominal money supply in the colonies led to a rapid depreciation of American dollar. inflation enhanced by any negative impact upon output resulting from the disruption of markets along with the destruction of property and loss of able-bodied men. By the end of 1777 inflation had reduced the specie value to about twenty percent of what it had been when originally issued. This rapid decline in value was becoming a serious problem for America in that up to this point almost ninety percent of its revenue had been generated from currency emissions.

The British defeat at Saratoga had a profound impact upon the nature of the war. The French government still upset by their defeat by the British in the Seven Years War and encouraged by the American victory signed a treaty of alliance with the Americans in early 1778. Fearing a new war with France the British government sent a commission to negotiate a peace treaty with the Americans. The commission offered to repeal all of the legislation applying to the colonies passed since 1763. The Americans rejected the offer. The British response was to give up its efforts to suppress the rebellion in the North and in turn organize an invasion of the South. The new southern campaign began with the taking of the port of Savannah in December. Pursuing their southern strategy the British won major victories at Charleston and Camden during the spring and summer of 1780.

As the American military situation deteriorated in the South so did the financial circumstances. Inflation continued as American congress and the states dramatically increased the rate of issuance of their currencies. At the same time the British continued to pursue their policy of counterfeiting the dollar. In order to deal with inflation some states organized conventions for the purpose of establishing wage and price controls. With its currency rapidly depreciating in value the American Congress increasingly relied on funds from other sources such as state requisitions, domestic loans, and French loans of specie. As a last resort they authorized the army to confiscate property.

Fortunately for the Americans, the British military effort collapsed before the funding system of Congress. In a combined effort during the fall of 1781 French and American forces trapped the British southern army under the command of Cornwallis at Yorktown, Virginia. Under siege by superior forces the British army surrendered on October 19. The British government had now suffered not only the defeat of its northern strategy at Saratoga but also the defeat of its southern campaign at Yorktown. Following Yorktown, Britain suspended its offensive military operations against the Americans. The war was over. All that remained was the political maneuvering over the terms for peace.

The Revolutionary War officially concluded with the signing of the Treaty of Paris in 1783. Under the terms of the treaty the United States was granted independence and British troops were to evacuate all American territory. While commonly viewed by historians through the lens of political science, the Treaty of Paris was indeed a momentous economic achievement by the United States. The British ceded to the Americans all of the land east of the Mississippi River which they had taken from the French during the Seven Years War. The West was now available for settlement. To the extent the Revolutionary War had been undertaken by the Americans to avoid the costs of continued membership in the British Empire, the goal had been achieved. As an independent nation the United States was no longer subject to the regulations of the Navigation Acts. There was no longer to be any economic burden from British taxation.

THE FORMATION OF A NATIONAL GOVERNMENT

When you start a revolution you have to be prepared for the possibility you might win. This means being prepared to form a new government. When the Americans declared independence their experience of governing at a national level was indeed limited. In 1765 delegates from various colonies had met for about eighteen days at the Stamp Act Congress in New York to sort out a colonial response to the new stamp duties. Nearly a decade passed before delegates from colonies once again got together to discuss a colonial response to British policies. This time the discussions lasted seven weeks. The primary action taken at both meetings was an agreement to boycott trade with England. After having been in session only a month, delegates at the Second Continental Congress for the first time began to undertake actions usually associated with a national government. However, when the colonies were declared to be free and independent states Congress had yet to define its institutional relationship with the states.

The Articles of Confederation

Following the Declaration of Independence, Congress turned to deciding the political and economic powers it would be given as well as those granted to the states. After more than a year of debate among the delegates the allocation of powers was articulated in the Articles of Confederation. Only Congress would have the authority to declare war and conduct foreign affairs. It was not given the power to tax or regulate commerce. The expenses of Congress were to be made from a common treasury with funds supplied by the states. This revenue was to be generated from exercising the power granted to the states to determine their own internal taxes. It was not until November of 1777 that Congress approved the final draft of the Articles. It took over three years for the states to ratify the Articles. The primary reason for the delay was a dispute over control of land in the West as some states had claims while others did not. Those states with claims eventually agreed to cede them to Congress. The Articles were then ratified and put into effect on March 1, 1781. This was just a few months before the American victory at Yorktown. The process of institutional development had proved so difficult that the Americans fought almost the entire Revolutionary War with a government not sanctioned by the states.

Difficulties in the 1780s

The new national government that emerged from the Revolution confronted a host of issues during the 1780s. The first major one to be addressed by Congress was what to do with all of the land acquired in the West. Starting in 1784 Congress passed a series of land ordinances that provided for land surveys, sales of land to individuals, and the institutional foundation for the creation of new states. These ordinances opened the West for settlement. While this was a major accomplishment by Congress, other issues remained unresolved. Having repudiated its own currency and no power of taxation, Congress did not have an independent source of revenue to pay off its domestic and foreign debts incurred during the war. Since the Continental Army had been demobilized no protection was being provided for settlers in the West or against foreign invasion. Domestic trade was being increasingly disrupted during the 1780s as more states began to impose tariffs on goods from other states. Unable to resolve these and other issues Congress endorsed a proposed plan to hold a convention to meet in Philadelphia in May of 1787 to revise the Articles of Confederation.

Rather than amend the Articles, the delegates to the convention voted to replace them entirely with a new form of national government under the Constitution. There are of course many ways to assess the significance of this truly remarkable achievement. One is to view the Constitution as an economic document. Among other things the Constitution specifically addressed many of the economic problems that confronted Congress during and after the Revolutionary War. Drawing upon lessons learned in financing the war, no state under the Constitution would be allowed to coin money or issue bills of credit. Only the national government could coin money and regulate its value. Punishment was to be provided for counterfeiting. The problems associated with the states contributing to a common treasury under the Articles were overcome by giving the national government the coercive power of taxation. Part of the revenue was to be used to pay for the common defense of the United States. No longer would states be allowed to impose tariffs as they had done during the 1780s. The national government was now given the power to regulate both foreign and interstate commerce. As a result the nation was to become a common market. There is a general consensus among economic historians today that the economic significance of the ratification of the Constitution was to lay the institutional foundation for long run growth. From the point of view of the former colonists, however, it meant they had succeeded in transferring the power to tax and regulate commerce from Parliament to the new national government of the United States.

*The author can be reached at: biyyaoromo@gmail.com