The Repeal of the Stamp Act
The Stamp Act was nullified before it went into effect and was repealed by parliament on March 18, 1766 under the Marquis of Rockingham.
In the summer of 1765 King George III fired George Grenville and replaced him with Charles Watson-Wentworth, Marquis of Rockingham. For the new Prime Minister the only alternative to repealing the tax was a long and costly civil war with the American colonies. Britain, as the world greatest power, could not give up on the decision to uphold the tax and give in to mobs and activist in its colonies. Under those circumstances the Marquis of Rockingham had to find a face saving excuse to repeal the tax. The King was not in favor of a repeal but he wanted a modification that would keep the tax only on dice and playing cards, however more difficult to enforce. Rockingham threatened to resign and the king conceded to repeal the Stamp Act entirely.
Three pieces of legislation made the repeal of the Stamp Act possible putting an end to the crisis. The first one was interpreted as a face saving motion. It was the Declaratory Act which affirmed that Parliament had the “full power and authority to make laws and statutes of sufficient force and validity to bind the colonies and people of America…in all cases whatsoever”. The text did not mentioned “taxes” and Rockingham resisted pressure to include “taxes” along with “laws and statutes” in the document. The omission of the word “taxes” affirmed the position of the colonist and drew a clear distinction between British legislation (which they could) and taxation (which they could not).
The second one was an economic legislation which labeled the Stamp Act as detrimental to commercial interest of Britain. The boycott to British goods had been felt in many industries across the Atlantic as well as in the trade of West Indies natural resources. The American colonies had resorted to smuggling needed goods from French and Spanish traders.
The third was the Revenue Act which reduced the duty on molasses from three pence to one penny per gallon on all molasses imported from foreign or British territories. This duty generated more revenue than any other duty or tax in the colonies. Few protested this act as it was not seen as internal taxation but external taxation on trade.
In summary, the repeal of the Stamp Act was successful because Britain realized the distinction between internal and external taxes. Parliament had tried to extend its authority over the colonies’ internal affairs and failed but continued to collect duties in its ports to regulate trade and as revenue. In other words, external taxes did not affect the principle of “no taxation without representation”.