Financial costs of the Seven Years' War

Last updated

The Seven Years' War (1756-1763) brought great financial burdens on Great Britain, Kingdom of Prussia, Austria, France, and Sweden. The costs of fighting a protracted war on several continents meant Britain's national debt almost doubled from 1756 to 1763, and this financial pressure which Britain tried to alleviate through new taxation in the Thirteen Colonies helped cause the American Revolution. [1] [2] [3]

Contents

Belligerents

Great Britain

British ships during the Seven Years' War. The British government spent around PS45 million on the Royal Navy during the conflict. British ships in the Seven Years War before Havana.jpg
British ships during the Seven Years' War. The British government spent around £45 million on the Royal Navy during the conflict.

On the eve of the conflict, British statesmen feared war would increase Britain's national debt to dangerous levels, which by 1756 was £74.6 million. [5] Philip Stanhope wrote a letter to a friend in 1756 warning that "our greatest danger arises from our expense, considering the present immense National Debt." [6] Britain's national debt was already quite large by the start of the war: near the beginning of the 18th century it had around 80% of Gross National Product. [7] Given that Britain had already spent substantial amounts of money on warfare throughout the late 17th and early 18th century, the Seven Years' War would exacerbate Britain's indebtedness (military spending as a percentage of central government spending averaged 74.6% between 1685 and 1813). [8]

Great Britain spent more than £45 million on the navy during the war - around a quarter of its entire war expenditure. [4]

By the end of the war, Britain's national debt stood at £132.6 million. [9] Interests payments on the debt exceeded half of the British Government's budget. [10] By December 1762, British naval debt had increased to £5,929,125 from £3,072,472 in 1749. [11]

Thirteen Colonies

Commercial activity boomed in the Thirteen Colonies during the early years of the conflict. American merchants sold war supplies to British troops, and bought large stocks of materiel through cheap credit provided by British financiers. [12] Imports into the American Colonies increased substantially. In 1757 there were £168,246 worth of imports; in 1758, £260,953; in 1759, £498,161; and in 1760, £707,998. [12]

Once the British war effort started to focus more on the Caribbean and less on Canada in the 1760s, however, the American colonies' economies started to decline. American merchants had become over-supplied with consumer goods which they had bought with credit from British financiers. When the war effort in Canada eased up, the merchants found they could no longer sell the surplus goods so easily. American merchants found it difficult to repay the loans when the market for war materiel dried up. Additionally, merchants' operating costs rose when shipping insurance firms increased premiums to factor in the risks after Spain entered the war. [13]

In 1766, Benjamin Franklin said in an address to Parliament that American colonists had spent millions of pounds contributing to the war effort. [14]

France

France gave financial support to its allies. It gave a total of 11 million silver riksdalers (sd.) in subsidies to Sweden during the war. [15]

France lost thousands of livres worth of shipping during the war. Royal Navy ships and British privateers took 1,165 French merchant ships as prizes. [16] Great Britain did not make any substantial fiscal gains taking French ships during the war, however. According to Larry Neal, the taking of prizes "contributed a derisory share to the country's foreign trade" which peaked at 10% of Britain's international trade in 1757. [16] France's shipping loses caused a sharp rise in maritime insurance costs. Before the war maritime insurance for merchant ships crossing the Atlantic Ocean costed roughly 3% of the declared value. During the first year of the war insurance rates costed ten times that and went up to 60% by the end of the war. [17] The conflict prevented France from importing as much raw materials from its colonies as it had prior to 1756, which resulted in increased unemployment as French industry halted due to a lack of raw materials. [18]

British forces captured French enclaves in Senegal and Gambia in 1758 which dealt two blows to the French economy: France lost its gum senega reserves necessary for its silk industry, and it lost a key trading station used for exporting slaves to the Caribbean, which gradually weakened France's sugar production in Guadeloupe and Martinique. [19]

Great Britain annexed nearly all of French Canada during the war, but allowed France to keep its Caribbean colonies. [20] The Duc de Choiseul, who was involved in the post-war negotiations which stripped France of its Canadian colonies, believed that the profits from the sugar trade in France's Caribbean colonies would make up for the loss of Canada, especially given that the fur trade had already collapsed earlier. [21] Guadeloupe, for instance, produced more sugar than all of Britain's Caribbean possessions. [22] See: A few acres of snow.

Nevertheless, the war did disrupt France's trade income. [23] The lucrative sugar and molasses trade between France's Caribbean colonies and Britain's North American colonies fell apart when the war broke out, leading many merchants to turn to smuggling. [24] French colonial trade declined by 81% following the Seven Years' War, according to one estimate. [25] Another estimate puts France's colonial trade losses at 90%. [26]

The following table shows France's average yearly value of overseas trade (in millions of livres) indicating a significant decline in trade during the Seven Years' War, especially from its American colonies. [27]

A French livre note from the mid-18th century. FRA-A20a-La Banque Royale-10 livres Tournois (1720).jpg
A French livre note from the mid-18th century.
YearAmerica
and
W. Africa		IndiaEuropeOttoman,
Levant,
N. Africa		Total
Overseas
Trade
1740–4862.122.5288.834.4407.8
1749–55100.437.5389.854.8582.5
1756–6327.7 (-72.4%)9.7 (-74%)325.5 (-16.5%)37.3 (-31.9%)437.6 (-24.9%)
1764-76147.130.2448.159.2684.6

Spain

Chile

Spain's international wars in the second half of the 18th century evidenced the empire's difficulties in reinforcing its colonial possessions and provide them with economic aid. This led to an increased local participation in the financing of the defense and an increased participation in the militias by the Chilean-born. [28] Such development was at odds with the ideals of the centralized absolute monarchy. The Spanish did also formal concessions to strengthen the defense: In Chiloé Spanish authorities promised freedom from the encomienda those indigenous locals who settled near the new stronghold of Ancud (founded in 1768) and contributed to its defense. The increased local organization of the defenses would ultimately undermine metropolitan authority and bolster the independence movement. [28]

Sweden

Prior to the war Sweden's government ran yearly deficits financed by the National Bank of Sweden, so it had inadequate cash reserves upon the outbreak of hostilities. [29] Sweden continued to take loans from the National Bank during the war and these accounted for 44% of its income. [30] The Swedish East India Company lent 2 million sd. to the government in 1762 and 1763. [31]

Inflation increased during the war. In 1755 there were 13.8 million sd. in circulation and 44 million sd. in circulation by 1763, affecting prices for all goods. [32] A barrel of herring in Uppsala, for instance, costed 12 sd. in 1756 and 27 sd. by 1763. [32]

Sweden also relied on war subsidies from its ally France. France paid subsidies to Sweden eight times between 1757 and 1761. The largest single subsidy was that of 1759 when France paid 3,797,699 sd. In total, France paid over 11 million sd. during these years. [15]

Sweden's government established a nation-wide public lottery to raise funds in 1758 and 1759 which raised 5,800,000 sd. The winnings from the lottery were paid as government bonds rather than cash. [15]

Related Research Articles

<span class="mw-page-title-main">William Pitt, 1st Earl of Chatham</span> Prime Minister of Great Britain from 1766 to 1768

William Pitt, 1st Earl of Chatham, was a British Whig statesman who served as Prime Minister of Great Britain from 1766 to 1768. Historians call him "Chatham" or "Pitt the Elder" to distinguish him from his son William Pitt the Younger, who also served as prime minister. Pitt was also known as "the Great Commoner" because of his long-standing refusal to accept a title until 1766.

<span class="mw-page-title-main">French and Indian War</span> North American theater of the worldwide Seven Years War

The French and Indian War (1754–1763) was a theater of the Seven Years' War, which pitted the North American colonies of the British Empire against those of the French, each side being supported by various Native American tribes. At the start of the war, the French colonies had a population of roughly 60,000 settlers, compared with 2 million in the British colonies. The outnumbered French particularly depended on their native allies.

<span class="mw-page-title-main">Colonial history of the United States</span>

The colonial history of the United States covers the period of European colonization of North America from the early 16th century until the incorporation of the Thirteen Colonies into the United States in 1776 during the Revolutionary War. In the late 16th century, England, France, Spain, and the Dutch Republic launched major colonization expeditions in North America. The death rate was very high among early immigrants, and some early attempts disappeared altogether, such as the English Lost Colony of Roanoke. Nevertheless, successful colonies were established within several decades.

<span class="mw-page-title-main">Sugar Act</span> British legislation imposing import duties on American colonies

The Sugar Act 1764 or Sugar Act 1763, also known as the American Revenue Act 1764 or the American Duties Act, was a revenue-raising act passed by the Parliament of Great Britain on 5 April 1764. The preamble to the act stated: "it is expedient that new provisions and regulations should be established for improving the revenue of this Kingdom ... and ... it is just and necessary that a revenue should be raised ... for defraying the expenses of defending, protecting, and securing the same." The earlier Molasses Act 1733, which had imposed a tax of six pence per gallon of molasses, had never been effectively collected due to colonial evasion. By reducing the rate by half and increasing measures to enforce the tax, Parliament hoped that the tax would actually be collected. These incidents increased the colonists' concerns about the intent of the British Parliament and helped the growing movement that became the American Revolution.

In American history, salutary neglect was the 18th-century policy of the British Crown of avoiding the strict enforcement of parliamentary laws, especially trade laws, as long as British colonies remained loyal to the government and contributed to the economic growth of their parent country, England and then, after the Acts of Union 1707, Great Britain. The term was first used in 1775 by Edmund Burke.

<span class="mw-page-title-main">Swedish overseas colonies</span> Colonies controlled by Sweden

Swedish overseas colonies consisted of the overseas colonies controlled by Sweden. Sweden possessed overseas colonies from 1638 to 1663, in 1733 and from 1784 to 1878. Sweden possessed five colonies, four of which were short lived. The colonies spanned three continents: Africa, Asia and North America.

<span class="mw-page-title-main">Tobacco Lords</span> Group of 18th-century Scottish merchants

The Tobacco Lords were a group of Scottish merchants active during the Georgian era who made substantial sums of money via their participation in the triangular trade, primarily through dealing in slave-produced tobacco that was grown in the Thirteen Colonies. Concentrated in the port city of Glasgow, these merchants utilised their fortunes, which were also partly made via the direct ownership of slaves, to construct numerous townhouses, churches and other buildings in Scotland.

The Rule of 1756 or Rule of the War of 1756 was a policy of the Kingdom of Great Britain, and later the United Kingdom of Great Britain and Ireland that was promulgated during the Seven Years' War (1756–1763). It ruled that Britain would not trade with neutral nations who were also trading with the enemy.

<span class="mw-page-title-main">Second Hundred Years' War</span> Early modern military conflicts, 1689 to 1815

The Second Hundred Years' War is a periodization or historical era term used by some historians to describe the series of military conflicts around the globe between Great Britain and France that occurred from about 1689 to 1815, including several separate wars such as the Nine Years' War, the War of the Spanish Succession, the War of the Austrian Succession, the Seven Years' War, the American Revolutionary War and the French Revolutionary and Napoleonic Wars. The Second Hundred Years' War is named after the Hundred Years' War, which occurred in the 14th and 15th century. The term appears to have been coined by J. R. Seeley in his influential work The Expansion of England (1883).

<span class="mw-page-title-main">Conquest of New France</span> British military conquest of New France

The conquest of New France – the military conquest of New France by Great Britain during the Seven Years' War of 1756–1763 – started with a British campaign in 1758 and ended with the region being put under a British military regime between 1760 and 1763. Britain's acquisition of Canada became official with the 1763 Treaty of Paris that concluded the Seven Years' War.

<span class="mw-page-title-main">Seven Years' War</span> Global war among European powers (1756–1763)

The Seven Years' War (1756–1763) was a global conflict involving most of the European great powers, fought primarily in Europe and the Americas. One of the opposing alliances was led by Great Britain and Prussia. The other alliance was led by France, backed by Spain, Saxony, Sweden, and Russia. Related conflicts include the 1754 to 1763 French and Indian War, and 1762 to 1763 Anglo-Spanish War.

<span class="mw-page-title-main">Great Britain in the Seven Years' War</span> Role Great Britain played in the Seven Years War

Great Britain was one of the major participants in the Seven Years' War, which in fact lasted nine years, between 1754 and 1763. British involvement in the conflict began in 1754 in what became known as the French and Indian War. However the warfare in the European theatre involving countries other than Britain and France commenced in 1756. Britain emerged from the war as the world's leading colonial power, having gained all of New France in North America, ending France's role as a colonial power there. Following Spain's entry in the war in alliance with France in the third Family Compact, Britain captured the major Spanish ports of Havana, Cuba and Manila, in the Philippines in 1762, and agreed to return them in exchange for Spanish Florida. The Treaty of Paris in 1763 formally ended the conflict and Britain established itself as the world's pre-eminent naval power.

<span class="mw-page-title-main">France in the Seven Years' War</span> The European countrys role as party to the 1755-63 global conflict

France was one of the leading participants in the Seven Years' War, which in fact lasted nine years between 1754 and 1763. France entered the war with the hope of achieving a lasting victory against Prussia, Britain, and their German allies and with the hope of expanding its colonial possessions.

<span class="mw-page-title-main">Franco-Austrian alliance</span> Military alliance between France and Austria

The Franco-Austrian Alliance was a diplomatic and military alliance between France and Austria that was first established in 1756 after the First Treaty of Versailles. It lasted for much of the remainder of the century until it was abandoned during the French Revolution.

<span class="mw-page-title-main">Treaty of Versailles (1757)</span> Agreement between Austria and France

The Treaty of Versailles was a diplomatic agreement signed between Austria and France at the Palace of Versailles on 1 May 1757 during the Seven Years' War. It expanded on the 1756 Treaty of Versailles, which had established the Franco-Austrian Alliance. It is thus commonly known as the Second Treaty of Versailles.

<span class="mw-page-title-main">Louisbourg Expedition (1757)</span>

The Louisbourg Expedition (1757) was a failed British attempt to capture the French Fortress of Louisbourg on Île Royale during the Seven Years' War.

The Anglo-Prussian Convention was agreed on 11 April 1758 between Great Britain and the Kingdom of Prussia and formalised the alliance between them that had effectively existed since the Convention of Westminster in 1756.

The American Revolutionary War inflicted great financial costs on all of the combatants, including the United States, France, Spain and the Kingdom of Great Britain. France and Great Britain spent 1.3 billion livres and 250 million pounds, respectively. The United States spent $400 million in wages for its troops. Spain increased its military spending from 454 million reales in 1778 to over 700 million reales in 1781.

The Seven Years' War, 1754–1763, spanned four continents, affecting Europe, the Americas, West Africa, and India and the Philippines, in Asia.

This is a timeline of the 18th century.

References

  1. ↑ Land 2010, p. 17.
  2. ↑ "French and Indian War". Encyclopaedia Britannica. 26 October 2018. Retrieved 29 November 2018.
  3. ↑ Niall Ferguson (2012). Civilization: The Six Killer Apps of Western Power(London: Penguin), p. 115.
  4. 1 2 Baugh 1988, pp. 159–60.
  5. ↑ Land 2010, p. 35.
  6. ↑ Land 2010, p. 16.
  7. ↑ Land 2010, p. 33.
  8. ↑ Land 2010, p. 28.
  9. ↑ Land 2010, p. 36.
  10. ↑ "Confronting the National Debt: The Aftermath of the French and Indian War". US History I (OS Collection). OER Services. Retrieved 28 November 2018.
  11. ↑ Land 2010, p. 49.
  12. 1 2 Berg 1946, p. 186.
  13. ↑ Anderson 2000, pp. 588–89.
  14. ↑ Walter Isaacson (2004). Benjamin Franklin: An American Life (Simon & Schuster), pp. 229-30.
  15. 1 2 3 Winton 2012, p. 24.
  16. 1 2 Neal 1977, p. 28.
  17. ↑ Boulle 1974, p. 53.
  18. ↑ Boulle 1974, p. 54.
  19. ↑ Borneman 2006, p. 177.
  20. ↑ Colin G. Calloway (2006). The Scratch of a Pen: 1763 and the Transformation of North America (Oxford: Oxford University Press), p. 8
  21. ↑ Sophus A. Reinert and Pernille Roge (2013), The Political Economy of Empire in the Early Modern World (Houndmills: Palgrave Macmillan), p. 206
  22. ↑ Borneman 2006, pp. 170–71.
  23. ↑ James C. Riley (1986), The Seven Years War and the Old Regime in France: The Economic and Financial Toll (Princeton: Princeton University Press), p. 104
  24. ↑ Borneman 2006, pp. 171–72.
  25. ↑ Thomas M. Doerflinger (1976), "The Antilles Trade of the Old Regime: A Statistical Overview", Journal of Interdisciplinary History6 (3), p. 401
  26. ↑ Robert Louis Stein (1979), The French Slave Trade in the Eighteenth Century: An Old Regime Business. Madison, Wisc, p. 109
  27. ↑ Boulle 1974, p. 50.
  28. 1 2 Ossa Santa Cruz, Juan Luis (2010). "La criollización de un ejército periférico, Chile, 1768-1810". Historia . 42 (II): 413–448. Archived from the original on 1 February 2016. Retrieved 27 January 2016.
  29. ↑ Winton 2012, p. 21.
  30. ↑ Winton 2012, p. 22.
  31. ↑ Winton 2012, p. 25.
  32. 1 2 Winton 2012, p. 23.

Bibliography

Baugh, Daniel (1988). "Why did Britain Lose Command of the Sea?". In Black, Jeremy; Woodfine, Philip (eds.). The British Navy and the Use of Naval Power in the Eighteenth Century. Leicester: Leicester University Press. pp. 149–69.

  • Berg, Harry (1946). "Economic Consequences of the French and Indian War for the Philadelphia Merchants". Pennsylvania History. 13 (3): 185–193.
  • Borneman, Walter R. (2006). The French and Indian War: Deciding the Fate of North America. New York: Harper Collins.
  • Boulle, Pierre H. (1974). "Patterns of French Colonial Trade and the Seven Years' War". Histoire social/Social History. 7 (13): 48–86.
  • Land, Jeremy (2010). The Price of Empire: Britain's Military Costs During the Seven Years' War (PDF) (Master's thesis). Appalachian State University.
  • Neal, Larry (1977). "Interpreting Power and Profit in Economic History: A Case Study of the Seven Years' War". The Journal of Economic History. 37 (1): 20–35. doi:10.1017/S0022050700096698. JSTOR   2119442.
  • Winton, Patrik (2012). "Sweden and the Seven Years War, 1757-1762". War in History. 19 (1): 5–31. doi:10.1177/0968344511422308.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.