How did England recoup the extreme debt it had at the end of the Seven Years' War?
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The Treaty of Paris ending military action was signed on February 10, 1763. England gained control of a great deal of territory in the New World, among other colonial areas, but also faced significant expenses in the aftermath of the war. Parliament and its leaders quickly made the decision to levy taxes on the American colonies to raise the money to pay off the debt.
The Sugar Act of 1764 was the first tax to be enacted for this purpose. Colonial merchants immediately objected to the additional expenses to their businesses created, and soon after charged that the taxes were against the British Constitution because they were "taxation without representation."
In 1765, the Stamp Act created even more outrage in the colonies. Parliament was forced to repeal the Stamp Act without collecting significant revenue from its provisions. However, the Declaratory Act passed in 1766 gave Parliament
full power and authority to make laws and statutes of sufficient force and validity to bind the colonies and people of America ... in all cases whatsoever.
The British saw this as giving them the legal right to establish taxes on the colonies as needed to raise funds to rebuild the British treasury regardless of issues of representation of the colonies in Parliament. To colonists who were already resentful of British interference in their business affairs, this was seen as another indication to completely suppress development of the colonies as independent entities.
England did raise some funds through these and other taxes levied against the American and other colonies. England also contributed to the sentiment that led to another involvement in a war, the American Revolutionary War, as a result of the taxes.
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