Conceived in Liberty Volume 2 - Ludwig von Mises Institute

large extent because the English corn laws served to exclude Northern wheat,
and imports of salted food were prohibited for the benefit of English producers.
Boston became the great center of "triangular trade" with the West
Indies: New England merchants exchanged fish and lumber for sugar and
molasses, and then traded the latter to England in exchange for English
manufactures. After 1715, this triangular arrangement was further refined:
the North (Newport, Boston, New York) began heavily participating in
the slave trade. Northern ships would acquire Negro slaves in West Africa,
transport the slaves to the West Indies where they were in heavy demand,
and then exchange them for sugar and molasses. The molasses would be
processed into rum in New England distilleries, and the rum carried to West
Africa to pay for the slaves. By 1750, in fact, there were sixty-three distilleries
in Massachusetts and thirty in Rhode Island. And by 1771, American
slave ships reached a capacity of fully one-fourth of England's mighty
slave fleet.
Before 1700, the Northern colonists had conducted their trade with the
British West Indies, but after that date production on these islands became
less efficient and more costly. Burdened by old exhausted soil and
inefficient absentee plantations, the British West Indies planters found themselves
outproduced and outcompeted at every turn by the other West Indian
islands, especially the French islands of Guadeloupe, Martinique, and San
Domingo. The French West Indies raised sugar at lower costs on newer and
more fertile soil, and their management was far more efficient.
Thwarted in the voluntary competition of the marketplace, the British
planters turned to the coercive arm of the state to try to shackle the burgeoning
American-French West Indies trade. The British West Indian
planters, led by the sugar planters of Barbados, organized a powerful lobby
in London centered in the Jamaica Coffee House, and agitated for prohibition
of the French West Indies trade. In this they were allied to the London
association of sugar bakers. Finally, after several years of successful agitation
in the House of Commons, the planters obtained passage in both houses of
Parliament of the Molasses Act of 1733. The Molasses Act levied prohibitively
high duties on any foreign sugar, molasses, or rum imported into the
English colonies. The Northern colonies protested bitterly that the subsequent
great increase in the price of sugar and molasses, and the lowered
price of their own staples in the narrow markets of the English West Indies,
would be their ruination. How indeed could the Northerners purchase
English manufactures (as England and its manufacturers desired) if they
could earn no purchasing power, if colonial manufacturing and the vital
trade with the French West Indies were to be banned ?
The Molasses Act would certainly have dealt a grave blow to the economy
of the Northern colonies. But there was one great saving grace: no
British regulation was more cheerfully evaded and less adequately enforced.
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