|Long title||An Act for the Encourageing and increasing of Shipping and Navigation.|
|Citation||12 Cha. II. c. 18|
|Territorial extent||Kingdom of England and English overseas possessions|
|Commencement||various, 1 December 1660 to 1 September 1661|
|Repeals||An Act for increase of Shipping, and Encouragement of the Navigation of this Nation, 9 October 1651|
The Navigation Acts, or more broadly the Acts of Trade and Navigation, was a long series of English laws that developed, promoted, and regulated English ships, shipping, trade, and commerce between other countries and with its own colonies. The laws also regulated England's fisheries and restricted foreigners' participation in its colonial trade. While based on earlier precedents, they were first enacted in 1651 under the Commonwealth. The system was reenacted and broadened with the restoration by the Act of 1660, and 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. Additionally, a major change in the very purpose of the Acts in the 1760s – that of generating a colonial revenue, rather than only regulating the Empire's trade – would help lead to major rebellions, 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 specific, enumerated, 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 (and later) 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trade for nearly 200 years, but with the development and gradual acceptance of free trade, the Acts were eventually repealed in 1849.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 (partly still in the hands of the royalists, as the English Civil War was in its final stages and the Commonwealth of England had not yet imposed its authority throughout the 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 of Great Britain by merchants in the American colonies. 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 [American] colonists by the trade restrictions of the Navigation Acts were small."
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 (specifically Bristol). 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 Virginia colony 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 of 1650, was hastily passed as a war measure during the English Civil Wars, but it was followed by a more carefully conceived Act the following year.
The Navigation Acts were repealed in 1849 under the influence of a free trade philosophy. The Navigation Acts were passed under the economic theory of mercantilism, under which wealth was to be increased by restricting colonial trade to the mother country rather than through free trade. By 1849 "a central part of British import strategy was to reduce the cost of food through cheap foreign imports and in this way to reduce the cost of maintaining labour power" (van Houten). Repealing the Navigation Acts along with the Corn Laws eventually served this purpose (towards the end of the century).
The Acts caused Britain's (before 1707, England's) shipping industry to develop in isolation. However, it had the advantage to British shippers of severely limiting the ability of Dutch ships to participate in the carrying trade to Britain. By reserving British colonial trade to British shipping, the Acts may have significantly assisted in the growth of London as a major entry port for American colonial wares at the expense of Dutch cities. The maintenance of a certain level of merchant shipping and of trade generally also facilitated a rapid increase in the size and quality of the Royal Navy, which eventually (after the Anglo-Dutch Alliance of 1689 limited the Dutch navy to three-fifths of the size of the English one) led to Britain becoming a global superpower, which it remained until the mid-20th century. That naval might, however, never limited Dutch trading power – because the Dutch enjoyed enough leverage over overseas markets and shipping resources (combined with a financial power that was only overtaken by Britain during the 18th century) to enable them to put enough pressure on Britain to prevent them from sustaining naval campaigns long enough to wrest maritime concessions from the Dutch.
The Navigation Acts, while enriching Britain, caused resentment in the colonies and contributed to the American Revolution. The Navigation Acts required all of a colony's imports to be either bought from Britain or resold by British merchants in Britain, regardless of the price obtainable elsewhere.
Historian Robert Thomas (1965) argues that the impact of the Acts on the economies of the Thirteen Colonies was minimal; the cost was about £4 per £1,000 of income per year. The average personal income was about £100 per year. However, Ransom (1968) says that although the net burden imposed by the Acts was small in size, their overall impact on the shape[clarification needed] and growth rate of the economy was significant since the Acts differentially affected different groups, helping some and hurting others.
Walton concludes that the political friction caused by the Acts was more serious than the negative economic impact, especially since the merchants most affected were politically the most active. The Navigation Acts were also partially responsible for an increase in piracy during the late 17th and early 18th centuries: merchants and colonial officials would buy goods captured by pirates below market value, and colonial Governors such as New York's Fletcher would commission privateers who openly admitted they intended to turn pirate.
Sawers (1992) points out that the political issue is what would have been the future impact of the Acts after 1776[clarification needed] as the colonial economy matured and was blocked by the Acts from serious competition with British manufacturers. In 1995, a random survey of 178 members of the Economic History Association found that 89 percent of economists and historians would generally agree that the "costs imposed on [American] colonists by the trade restrictions of the Navigation Acts were small."
The acts were resented in Ireland and damaged its economy, as they permitted the importation of English goods into Ireland tariff-free and simultaneously imposed tariffs on Irish exports travelling in the opposite direction. Other clauses completely prohibited the exportation of certain goods to Britain or even elsewhere, resulting in the collapse of those markets. The Wool Act 1699, for example, forbade any exports of wool from Ireland (and from the American Colonies) so as to maximise the English trade.
"Free trade or a Speedy Revolution" was a slogan of the Irish Volunteers in the late 18th century.