The Stamp Act of 1765 was a direct tax imposed by the British Parliament on the colonies of British America. The act required that many printed materials in the colonies be produced on stamped paper produced in London, carrying an embossed revenue stamp. The purpose of the tax was to help pay for troops stationed in North America after the British victory in the Seven Years' War.
The Stamp Act met great resistance in the colonies, and the First Congress of the American Colonies, also known as the Stamp Act Congress, was held in 1765 to devise a unified protest against British taxation. The colonies sent no representatives to British Parliament, and therefore had no influence over what taxes were raised, how they were levied, or how they would be spent. Many colonists considered it a violation of their rights as Englishmen to be taxed without their consent—consent that only the colonial legislatures could grant. Colonial assemblies sent petitions and protests. The Stamp Act reflected the first significant joint colonial response to any British measure by petitioning Parliament and the King.
Opposition to the Stamp Act was not limited to the colonies. British merchants and manufacturers, whose exports to the colonies were threatened by colonial economic problems exacerbated by the tax, also pressured Parliament. The Act was repealed on March 18, 1766 as a matter of expedience, but Parliament affirmed its power to legislate for the colonies "in all cases whatsoever" by also passing the Declaratory Act. There followed a series of new taxes and regulations, likewise opposed by the colonists.
The British victory in the Seven Years' War (1756–1763), known in British America as the French and Indian War, had been won only at a great financial cost. During the war, the British national debt nearly doubled. Post-war expenses were expected to remain high because the Bute ministry decided in early 1763 to keep ten thousand British regular soldiers in the American colonies. The primary reason for retaining such a large force was that demobilizing the army would put 1,500 officers, many of whom were well-connected in Parliament, out of work. This made it politically prudent to retain a large peacetime establishment. However, because the British were averse to maintaining a standing army at home, it was necessary to garrison most of the troops elsewhere.
George Grenville—who became prime minister in April 1763—had to find a way to pay for this large peacetime army. Raising taxes in Britain was out of the question, since there had been virulent protests in England against the Bute ministry's 1763 cider tax, with Bute being hanged in effigy. The Grenville ministry therefore decided that Parliament would raise this revenue by taxing the American colonists without their consent. This was something new as Parliament had previously passed measures to regulate trade in the colonies, but it had never before directly taxed the colonies to raise revenue.
Parliament announced in April 1764 when the Sugar Act was passed that they would also consider a stamp tax in the colonies. Although opposition to this possible tax from the colonies was soon forthcoming, there was little expectation in Britain. Members of Parliament and American agents in Great Britain, such as Benjamin Franklin, did not expect the intensity of the protest that the tax would generate.
The Sugar Act was to a large extent a continuation of past legislation related primarily to the regulation of trade. While it was termed an external tax, its stated purpose to collect revenue directly from the colonists for a specific purpose was entirely new. The novelty of the Stamp Act was that it was the first internal tax, that is, a tax based entirely on activities within the colonies, levied directly on the colonies by Parliament. Because of its potential wide application to the colonial economy, the Stamp Act was judged by the colonists to be a more dangerous assault on their rights than the Sugar Act was.
Taxation and Representation
The theoretical issue that would soon hold center stage was the matter of taxation without representation. The counter to this argument was the theory of virtual representation. Thomas Whately enunciated this theory in a pamphlet that readily acknowledged that there could be no taxation without consent, but the facts were that at least 75% of British adult males were not represented in Parliament because of property qualifications or other factors. Since members of Parliament were bound to represent the interests of all British citizens and subjects, colonists, like those disenfranchised subjects in the British Isles, were the recipients of virtual representation in Parliament. This theory, however, ignored a crucial difference between the unrepresented in Britain and the colonists. The colonists enjoyed actual representation in their own legislative assemblies, and the issue was whether these legislatures, rather than Parliament, were in fact the sole recipients of the colonists' consent with regard to taxation.