Navigation Acts

The Navigation Acts, or more broadly the Acts of Trade and Navigation, were a series of English laws that developed, promoted, and regulated English ships, shipping, trade, and commerce with other countries and with its own colonies. The laws also regulated England's fisheries and restricted foreign—including Scottish and Irish—participation in its colonial trade. The first such laws enacted in 1650 and 1651 under the Commonwealth of England under Oliver Cromwell.
With the Restoration in 1660, royal government passed the Navigation Act 1660, and then further developed and tightened by the Navigation Acts of 1663, 1673, and 1696. Upon this basis during the 18th century, the acts were modified by subsequent amendments, changes, and the addition of enforcement mechanisms and staff. A major change in the purpose of the acts began in the 1760s, with the aim of generating revenue, i.e., taxes, from the colonies, rather than solely regulating trade. Colonists in North America saw the change in royal policy as trampling their rights as Englishmen and resisted what they considered taxation without representation, and significant changes in the implementation of the acts themselves.
The acts generally prohibited the use of foreign ships, required the employment of English and colonial mariners for 75% of the crews, including East India Company ships. The acts prohibited colonies from exporting certain products to countries other than Britain and those countries' colonies, and mandated that imports be sourced only through Britain.
Overall, the acts formed the basis for English British overseas trade for nearly 200 years, but with the development and gradual acceptance of free trade, the acts were eventually repealed in 1849. The laws reflected the European economic theory of mercantilism which sought to keep all the benefits of trade inside their respective empires, and to minimize the loss of gold and silver, or profits, to foreigners through purchases and trade. The system would develop with the colonies supplying raw materials for British industry, and in exchange for this guaranteed market, the colonies would purchase manufactured goods from or through Britain.
The major impetus for the first Navigation Act was the ruinous deterioration of English trade in the aftermath of the Eighty Years' War, and the associated lifting of the Spanish embargoes on trade between the Spanish Empire and the Dutch Republic. The end of the embargoes in 1647 unleashed the full power of the Amsterdam Entrepôt and other Dutch competitive advantages in European and world trade. Within a few years, English merchants had practically been overwhelmed in the Baltic and North Sea trade, as well as trade with the Iberian Peninsula, the Mediterranean and the Levant. Even the trade with English colonies was "engrossed" by Dutch merchants. English direct trade was crowded out by a sudden influx of commodities from the Levant, Mediterranean and the Spanish and Portuguese empires, and the West Indies via the Dutch entrepôt, carried in Dutch ships and for Dutch account.
The obvious solution seemed to be to seal off the English markets to these unwanted imports. A precedent was the act the Greenland Company had obtained from Parliament in 1645 prohibiting the import of whale products into England, except in ships owned by that company. This principle was now generalized. In 1648 the Levant Company petitioned Parliament for the prohibition of imports of Turkish goods "...from Holland and other places but directly from the places of their growth." Baltic traders added their voices to this chorus. In 1650 the Standing Council for Trade and the Council of State of the Commonwealth prepared a general policy designed to impede the flow of Mediterranean and colonial commodities via Holland and Zeeland into England.
Following the 1696 act, the acts of Trade and Navigation were generally obeyed, except for the Molasses Act 1733, which led to extensive smuggling because no effective means of enforcement was provided until the 1760s. Stricter enforcement under the Sugar Act 1764 became one source of resentment among merchants in the American colonies towards Great Britain. This, in turn, helped push the American colonies to rebel in the late 18th century, even though the consensus view among modern economic historians and economists is that the "costs imposed on colonists by the trade restrictions of the Navigation Acts were small."

Historical precedents

Some principles of English mercantile legislation pre-date both the passage of the Navigation Act 1651 and the settlement of England's early foreign possessions. A 1381 Act passed under King Richard II provided "that, to increase the navy of England, no goods or merchandises shall be either exported or imported, but only in ships belonging to the King's subjects." The letters patent granted to the Cabots by Henry VII in 1498 stipulated that the commerce resulting from their discoveries must be with England. Henry VIII established a second principle by statute: that such a vessel must be English-built and a majority of the crew must be English-born. Legislation during the reign of Elizabeth I also dealt with these questions and resulted in a large increase in English merchant shipping. Soon after actual settlements had been made in America, these early requirements illustrate the English theory then held regarding the governmental control of maritime commerce.
With the establishment of overseas colonies a distinct colonial policy began to develop, and the principles embodied in the early Navigation and Trade Acts also had some more immediate precedents in the provisions of the charters granted to the London and Plymouth Company, in the various royal patents later bestowed by Charles I and Charles II, as well as in the early regulations concerning the tobacco trade, the first profitable colonial export. An Order in Council of 24 October 1621 prohibited the Colony of Virginia to export tobacco and other commodities to foreign countries.
The London Company lost its charter in 1624; the same year a proclamation, followed by Orders in Council, prohibited the use of foreign ships for the Virginia tobacco trade. These early companies held the monopoly on trade with their plantation; this meant that the commerce developed was to be England's. The Crown's purpose was to restrict to England the future commerce with America; it is well shown in the patent granted by Charles I to William Berkeley in 1639, by which the patentee was "to oblige the masters of vessels, freighted with productions of the colony, to give bond before their departure to bring same into England... and to forbid all trade with foreign vessels, except upon necessity."
As early as 1641 some English merchants urged that these rules be embodied in an act of Parliament, and during the Long Parliament, movement began in that direction. The Ordinance for Free Trade with the plantations in New England was passed in November 1644. In 1645, both to conciliate the colonies and to encourage English shipping, the Long Parliament prohibited the shipment of whalebone, except in English-built ships; they later prohibited the importation of French wine, wool, and silk from France. More generally and significantly on 23 January 1647, they passed the Ordinance granting privileges for the encouragement of Adventurers to plantations in Virginia, Bermudas, Barbados, and other places of America; it enacted that for three years no export duty be levied on goods intended for the colonies, provided they were forwarded in English vessels. Adam Anderson noted that this law also included "security being given here, and certificates from thence, that the said goods be really exported thither, and for the only use of the said plantations". He concluded: "Hereby the foundation was laid for the navigation acts afterward, which may be justly termed the Commercial Palladium of Britain."
The English were well aware of their inferior competitive trading position. Three acts of the Rump Parliament in 1650 and 1651 are notable in the historical development of England's commercial and colonial programs. These include the first Commission of Trade to be established by an Act of Parliament on 1 August 1650, to advance and regulate the nation's trade. The instructions to the named commissioners included consideration of both domestic and foreign trade, the trading companies, manufacturers, free ports, customs, excise, statistics, coinage and exchange, and fisheries, but also the plantations and the best means of promoting their welfare and rendering them useful to England. This act's statesmanlike and comprehensive instructions were followed by the October act prohibiting trade with pro-royalist colonies and the first Navigation Act the following October. These acts formed the first definitive expression of England's commercial policy. They represent the first attempt to establish a legitimate control of commercial and colonial affairs, and the instructions indicate the beginnings of a policy which had the prosperity and wealth of England exclusively at heart.
The 1650 Act prohibiting trade with royalist colonies was broader, however, because it provided that all foreign ships were prohibited from trading with any English plantations, without license, and it was made lawful to seize and make prizes of any ships violating the act. This Act, sometimes referred to as the Navigation Act 1650, was hastily passed as a war measure during the English Civil Wars, but it was followed by a more carefully conceived Navigation Act 1651 the following year.

Navigation Act 1651

The Navigation Act 1651, long titled An Act for increase of Shipping, and Encouragement of the Navigation of this Nation, was passed on 9 October 1651 by the Rump Parliament led by Oliver Cromwell. It authorized the Commonwealth to regulate England's international trade, as well as the trade with its colonies. It reinforced long-standing principles of national policy that English trade and fisheries should be carried in English vessels.
The act banned foreign ships from transporting goods from Asia, Africa or America to England or its colonies; only ships with an English owner, master and a majority English crew would be accepted. It allowed European ships to import their own products, but banned foreign ships from transporting goods to England from a third country elsewhere in the European sphere. The act also prohibited the import and export of salted fish in foreign ships, and penalized foreign ships carrying fish and wares between English posts. Breaking the terms of the act would result in the forfeiture of the ship and its cargo. These rules specifically targeted the Dutch, who controlled much of Europe's international trade and even much of England's coastal shipping. It excluded the Dutch from essentially all direct trade with England, as the Dutch economy was competitive with, not complementary to the English, and the two countries, therefore, exchanged few commodities. This Anglo-Dutch trade, however, constituted only a small fraction of total Dutch trade flows.
Passage of the act was a reaction to the failure of the English diplomatic mission to The Hague seeking a political union of the Commonwealth with the Republic of the Seven United Netherlands, after the States of Holland had made some cautious overtures to Cromwell to counter the monarchical aspirations of stadtholder William II of Orange. The stadtholder had suddenly died, however, and the States were now embarrassed by Cromwell taking the idea too seriously. The English proposed the joint conquest of all remaining Spanish and Portuguese possessions. England would take America and the Dutch would take Africa and Asia. But the Dutch had just ended their war with Spain and already taken over most Portuguese colonies in Asia, so they saw little advantage in this grandiose scheme and proposed a free trade agreement as an alternative to a full political union. This again was unacceptable to the English, who would be unable to compete on such a level playing field, and was seen by them as a deliberate affront. The act is often mentioned as a major cause of the First Anglo-Dutch War, and though there were others, it was only part of a larger English policy to engage in war after the negotiations had failed. The English naval victories in 1653 showed the supremacy of the Commonwealth navy in home waters. However, farther afield the Dutch predominated and were able to close down English commerce in the Baltic and the Mediterranean. Both countries held each other in a stifling embrace.
The Treaty of Westminster ended the impasse. The Dutch failed to have the act repealed or amended, but it seems to have had relatively little influence on their trade. The act offered England only limited solace. It could not limit the deterioration of England's overseas trading position, except in the cases where England herself was the principal consumer, such as the Canaries wine trade and the trade in Puglian olive oil. In the trade with America and the West Indies, the Dutch kept up a flourishing "smuggling" trade, thanks to the preference of English planters for Dutch import goods and the better deal the Dutch offered in the sugar trade. The Dutch colony of New Netherlands offered a loophole wide enough to drive a shipload of Virginian tobacco through.