Sugar Act Explained — Section 13

April 5, 1764

Section 13 of the Sugar Act of 1764 explains the requirements for merchants to qualify for refunds on shipments of goods from Great Britain to the American Colonies. It also requires shipments to the colonies to go to Britain first to be checked and verified.

Sugar Act, 1764, Date, Taxes, Reaction, Grenville Acts, AHC

George Grenville, Prime Minister and Chancellor of the Exchequer, was responsible for the Sugar Act of 1764, starting the movement in the 13 Colonies against Taxation Without Representation.

Understanding the Sugar Act of 1764

This entry is part of a series that explains the Sugar Act of 1764, including, rules, regulations, and penalties. To learn more, see History of the Sugar Act and Facts About the Sugar Act. Vocabulary, key people, and primary documents related to the Sugar Act are listed at the bottom of this article.

Section 13 — Requirements for Refunds

XIII. Provided always, and it is hereby further enacted, That upon the entry of any such wine for exportation to any British colony or plantation in America, and before any debenture shall be made out for allowing the drawback thereon, the exporter shall give bond, with sufficient security, to his Majesty, his heirs and successors, to be approved of by the collector, or other principal officer of the customs at the port of exportation, in treble the amount of the drawback payable for the goods, that the same, and every part thereof, shall (the danger of the seas and enemies excepted) be really and truly exported to, and landed in, some British colony or plantation in America, and that the same shall not be exported, or carried to any other place or country whatsoever, nor relanded in any part of Great Britain, Ireland, or the islands of Guernsey, Jersey, Alderney, Sark, or Man or either of them: and such bonds shall not be delivered up nor discharged, until a certificate shall be produced, under the hands and seals of the collector or other principal officer of the customs at the port or place where such goods shall be landed, testifying the landing thereof: and the condition of such bond shall be, to produce such certificate in eighteen months from the date of the bonds (the dangers of the seas and enemies excepted.) And it is hereby further enacted by the authority aforesaid, That from and after the first day of May, one thousand seven hundred and sixty four, no part of the rate or duty, commonly called The old subsidy, shall be repaid or drawn back for any foreign goods of the growth, production, or manufacture, of Europe, or the East Indies, which shall be exported from this kingdom to any British colony or plantation in America (wines, white callicoes, and muslins, only excepted;) any law, custom, or usage, to the contrary notwithstanding.

Explanation

Section 13 of the Sugar Act of 1764 outlines specific conditions and requirements for exporters seeking to receive a drawback (refund) on duties paid for goods exported to the American Colonies. The key points are:

  1. Bond Requirement — Exporters must provide a bond (a formal agreement to pay) with adequate security to the Crown. The bond amount is three times the value of the drawback (refund) they are claiming.
  2. Export Conditions — The exporter must ensure the goods are genuinely exported to and landed in a British colony in America and not taken to any other place or relanded in Britain, Ireland, or certain nearby islands.
  3. Certificate of Landing — The bond will not be returned or canceled until the exporter provides a certificate from the customs officer at the destination port, confirming the wine has been landed there.
  4. Timeframe — The certificate must be produced within 18 months from the bond’s date, excluding risks from sea dangers or enemies.
  5. Exclusion of Old Subsidy Drawback — From May 1, 1764, no part of the old subsidy (an earlier tax) will be refunded for foreign goods from Europe or the East Indies exported to British colonies in America, except for wines, white calicoes, and muslins.

Context

Drawbacks (or refunds) were an important part of the Sugar Act as they influenced the economic strategy of the British government in regulating colonial trade and generating revenue. Before the Sugar Act, merchants could reclaim taxes paid on goods exported from Great Britain to the American Colonies. This refund system helped make foreign goods more affordable and competitive in the colonial markets. 

While refunds were still available under the revised Sugar Act, a more complex, time-consuming process for merchants to be eligible for refunds was put in place. The most significant measure was that all shipments going to the American Colonies had to go to Great Britain first, to have shipments checked and verified. This system also included: 

  • Documentation — The Sugar Act introduced an elaborate system of bonds and cockets to accurately document the cargo of vessels and ports of call. This system was meant to make it more difficult for merchants to engage in smuggling by providing a detailed paper trail that customs officials could use to verify the legality of goods being traded.
  • Naval Enforcement — Naval officers were instructed to assist in collecting customs duties and patrolling American waters smugglers. This was intended to establish ongoing enforcement of the Sugar Act, however, many officers abused their authority. This contributed to the Gaspee Affair (1772).
  • Admiralty Courts — Accusations of violating the Sugar Act were to be prosecuted in the Admiralty Courts. These courts did not use juries, and the judges had full authority. Parliament considered these courts more reliable than common law courts and would ensure strict enforcement of the law. However, the financial incentives provided to judges by the Sugar Act increased the likelihood they would seize cargo regardless of the evidence.
  • Customs Officer Accountability — The Sugar Act required British Customs Officers to perform their duties in person or forfeit their jobs. Before this, Customs Officers usually lived in England and hired someone in the American Colonies to perform the duties of the position. Requiring Customs Officers to live in the Colonies was intended to reduce corruption and increase effectiveness. However, customs officers were given immunity from counter-suits by merchants, encouraging them to enforce the regulations without fear of legal repercussions.
  • Colonial Governor Reporting — Colonial Governors were required to report on smuggling. They were also required to swear an oath that they would enforce the Sugar Act.

Vocabulary

These terms and definitions provide more context for students studying the Sugar Act. For more on the Sugar Act as it relates to the AP US History curriculum, see Sugar ACT APUSH Review.

  • Bond — A formal agreement to pay a certain amount as a guarantee.
  • Calicoes — A type of cotton fabric printed with a pattern.
  • Certificate of Landing — A document from customs officials confirming that goods have been received at the destination.
  • Collector — A customs officer responsible for collecting duties and taxes.
  • Debenture — A document acknowledging a debt, in this context, used for claiming drawbacks on duties.
  • Drawback — A refund of duties paid on imported goods when they are subsequently exported.
  • Entry — The process of recording the importation or exportation of goods with customs.
  • Exportation — The act of sending goods to another country for sale.
  • Goods — Items or products for sale or trade.
  • Heirs — People legally entitled to the property or rank of another upon that person’s death.
  • Landed — Brought to shore or to a port after being transported by sea.
  • Muslins — Lightweight cotton cloth in a plain weave.
  • Notwithstanding — In spite of; regardless of.
  • Principal Officer — The chief officer in charge of customs at a port.
  • Relanded — Unloaded and brought back to shore in a country after being shipped out.
  • Security — Something given as a pledge for the fulfillment of an obligation.
  • Subsidy — A grant or contribution of money.
  • Sufficient — Adequate to meet the needs or requirements.
  • Testifying — Giving evidence or proof.

Key People

  • Samuel Adams — Adams helped lead opposition to the Sugar Act in Massachusetts. Went on to become a leader of the Boston Sons of Liberty and one of the most influential men behind the movement for independence.
  • George Grenville — Prime Minister and Chancellor of the Exchequer. Responsible for the design of the Sugar Act and introducing it to Parliament.
  • Stephen Hopkins — Governor of Rhode Island. Critic of the Sugar Act and its impact on the Rhode Island economy and colonial rights.
  • James Otis — Early advocate of the rights of Americans as British subjects. Argued against Writs of Assistance (1761) in the Paxton Case.

Primary Documents

Citation Information

The following information is provided for citations, including APA Style, Chicago Style, and MLA Style.

  • Article Title Sugar Act Explained — Section 13
  • Date April 5, 1764
  • Author
  • Keywords Sugar Act, What did Section 13 of the Sugar Act do
  • Website Name American History Central
  • Access Date June 21, 2024
  • Publisher R.Squared Communications, LLC
  • Original Published Date
  • Date of Last Update June 7, 2024

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