War and Debt.

The British Empire triumphed in the Seven Years' War, winning undisputed control of North America and control of the world's oceans. However, the war was extremely expensive, and maintaining the empire and the seas required a military force in North America and a navy. The war itself left England with a debt of £122,603,336, requiring an annual interest payment £4,409,797, or about half of the nation's annual budget. With the British people already heavily taxed, Parliament sought other sources of revenue.

Colonial Trade.

One lucrative source of revenue, Parliament realized, would be the trade of the American colonies. Because the colonies benefited from British military power, and in fact the war had been fought to protect the colonists, it seemed only fair that the colonists share the burden of debt. Britain had never enforced regulations on colonial trade, and though the American colonists...